As EU foreign policy chief Catherine Ashton and Iran’s lead envoy Saeed Jalili meet in Istanbul on May 15, the six global powers negotiating with Tehran face an increasingly inconvenient truth: while sanctions are having a devastating effect on Iran’s economy, they have not changed Tehran’s nuclear calculus. Although some policymakers and pundits privately concede this point, there is no consensus as to why. Hardliners tend to argue that sanctions are not tough enough and must be intensified. Elements on the left argue that sanctions must be given time to make an impact.
In reality, both sides miss the real reasons that have rendered sanctions unsuccessful – by failing to offer a credible exit from the sanctions pain, neither the Iranian government nor stakeholders in the Iranian system believe that a change in nuclear policy will lead to the alleviation of their economic suffering.
The current sanctions policy is based on a shaky assumption – the belief that economic pain and dissatisfaction among political elites automatically will result in pressure on the Iranian regime to change its nuclear course. This assumption does not hold. The economic pain imposed on Iran is intense – but directionless.
In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.
There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.
And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game.
The deals in questions, the Trans-Pacific Partnership (TPP) and the US-European Union “Free Trade” Agreement are both being pushed as major openings to trade that will increase growth and create jobs. In fact, eliminating trade restrictions is a relatively small part of both agreements, since most tariffs and quotas have already been sharply reduced or eliminated.
The United States has used its leverage over the international financial system to create the most comprehensive unilateral sanctions regime in history. The move against Iran has played a key role in convincing the European Union to implement its own set of unilateral sanctions—all with the central objective of changing Tehran’s nuclear calculus and forcing it to agree to a deal that it otherwise would refuse.
Those associated with the regime openly acknowledge that sanctions are having a devastating impact on the Iranian economy, but they have not achieved their stated objective: shifting Iran’s nuclear stance. For this to happen, the regime’s stakeholders must start building narratives that enable such policy shifts, and subsequently lobby the government for those shifts.