Easier US Sanctions Against Iran Unlikely to Impact Mutual Trade

WASHINGTON DC – The recent easing of US sanctions against Iran is unlikely to have a noticeable impact on mutual trade between the two countries, and reports about the possible opening of an Iran-US chamber of commerce may only be rumors, Iranian officials and newspapers say.

Iran’s Hamshari newspaper reported that most members of the Iranian Chamber of Commerce do not believe that the easing of the economic sanctions will have a great impact on bilateral trade, given its small volume. For the same reason, they believe there is no need for an Iran-US chamber of commerce.

Majid Hariri, the chairman for imports at the chamber, told the newspaper that “some people” may have started a rumor about a joint chamber with the US in hopes of heading the new body.

Tehran signed an historic agreement in November over its controversial nuclear program with a US-led group of five other countries, leading to the easing of some sanctions.

Following the agreement, the head of the Iranian Chamber of Commerce, Industries, Mines and Agriculture, Abolfazl Hejazi, told the English-language Iran Daily that an “Iran-US chamber of commerce will be launched in less than a month.”

“Currently, this is not possible but there are other ways for entrepreneurs to establish trade channels with the US,” said Pedram Sultani, vice president of the Iranian chamber.

Nader Habibi, professor of the Economics of the Middle East at Brandeis University, said that the softening of sanctions would especially impact the auto sector, creating many jobs, and the petrochemical industry, Iran’s second-largest source of revenues after oil exports.

He told Rudaw that the agreement, signed in Geneva, has already had a positive impact on the exchange and stock markets.

“The volume of trade between the US and Iran will not rise in the short-run. But Europeans on the other hand are more eager to expand trade, and in the next 12 months we will see a significant rise in trade,” he said.

“Already, the presidents of Renault and Peugeot, two major European car companies, have visited Iran, as well as a business delegate from Austria; a large flow of such business delegates will flood Iran,” he predicted.

Given the long history of hostility and suspicion between Iran and the US, any change in trade ties “would be slow, but within two years we could see that changed,” he said.

“There are many wealthy Iranians living in the US, and if Iran and the US were to expand trade relations many will be willing to invest in Iran and the opening of a chamber of commerce will be significant,” said Habibi.

He thinks the easing of trade restrictions will also pave the way for broader diplomatic relations in the future.

He said there are discussions already about resuming direct flights between Iran and the US, “which is significant, both symbolically and diplomatically.” Also, Iran inviting Western oil companies to invest is important, but “no doubt there are still a lot of sanctions in place.”

Rodger Payne, Chair and Professor of Political Science at the University of Louisville, Kentucky said that the new deal may help the Iranian economy, but might also raise fears among some of Iran’s neighbors.

“The states that are unhappy either fear that Iran will become more powerful as a result of easing economic sanctions or by secretly continuing its nuclear program in violation of the agreement,” Payne told Rudaw.

He said that some countries may still be in favor of a military strike to stop Iran’s nuclear ambitions, or advocate tougher sanctions. But “the world wants Iran’s oil, so there are limits on just how extensive sanctions can be in this case.”