Aha, Inc.

No carrot, big stick

From a speech by Robert S. Deutsch, director of Office of Northern Gulf Affairs at the U.S. State Department, delivered at the "Iran in Transition" conference organized by the Petro-Hunt Corporation in Dallas on May 2, 1996.

Robert Deutsch's picture I am happy to join you today to talk about U.S. sanctions on Iran. My last trip out of Washington was to northern Iraq, where the Kurds live. That is a place out of the old west where law and order flow from the barrel of a gun. Some of my colleagues tried to keep me from traveling there because of the danger. But I sure am nervous coming to a business-oriented city like Dallas as a proponent of sanctions.

In Washington, and particularly in the new State Department, we don't take recourse to sanctions lightly. We recognize that the well being of our people and America's position in the world depend on a vibrant economy with unfettered access to the international marketplace. So we only adopt sanctions when we determine that they are a necessary response that will significantly advance core U.S. interests.

Ideally sanctions are an effective compliment to our diplomatic efforts to convince aggressive states to abandon their threatening activities. But, in the interim, they limit the ability of aggressors to pursue threatening policies unchecked.

U.S. opposition to specific Iranian behavior is familiar to you. I won't dwell on this issue, but it is clear that Iran's support for terrorism, particularly Tehran's material and political support for groups that employ violence against the Middle East peace process; its pursuit of weapons of mass destruction; its conventional military build-up, which -- if unchecked -- could prove destabilizing to the Persian Gulf; its abuse of the human rights of its citizens; and its efforts to subvert regional governments more than justify a muscular U.S. response.

We believe Iran's behavior in these three areas poses a threat to the interests of the United States and to those of the international community. To address this threat, we have worked hard to limit Iran's access to equipment that could increase its military capabilities.

The United States has worked closely with the 30 other governments participating in the Wassenaar Arrangement to prevent Iran and other countries of concern from acquiring armaments, military equipment or dual-use goods and technology.

We have also taken steps to strengthen the multilateral consensus to restrain trade in items or technology useful to missile programs or to nuclear, biological, and chemical weapons. Because of our efforts, other countries apply export controls to Iran for these items that are stricter than what is mandated by global nonproliferation agreements.

To reinforce international compliance with these agreements, the United States has also adopted laws which punish any entities, U.S. or foreign, which undermine these objectives. For example, to deter transfers of goods useful to weapons of mass destruction programs, the United States imposes trade sanctions against companies or governments that contribute to Iran's capabilities in weapons of mass destruction.

We also impose unilateral sanctions against companies or governments that trade in lethal military equipment of advanced conventional weapons with countries like Iran.

In addition to our effort to limit military capabilities through international agreements and sanctions, the United States seeks to impose economic costs on Iran for its objectionable behavior in order to pressure the Islamic Republic to change those policies. We want to provide the government with a compelling incentive to abandon its unacceptable policies.

Last May (1995), President Clinton imposed a full trade and investment embargo against Iran. With this action, he demonstrated American willingness to deny Iran the benefits of dealing with the United States. Moreover, with this decision, the President signaled to the international community the strength of the American commitment to a policy of economic pressure.

We continue to seek the support of other governments for our policy of economic pressure. We believe coordinated action is the best way exact a concrete price for Iran's behavior. Absent consequences, Tehran will have no incentive to change its unacceptable policies.

But, as we say in the diplomatic world, our efforts to gain the cooperation of other industrialized governments for our policy of economic pressure have not been "fully successful." For example, despite its shared concerns about Iran's behavior, the European Union (EU) argues that its policy of "critical dialogue" -- will result in improvements in Iran's behavior.

Regrettably, Iran benefits from the differences in tactics between us and Europe. The Iranian government believes it can ignore European criticism while engaging in European trade. They view us as isolated from our allies. But the Iranian leadership doesn't understand that -- notwithstanding our tactical differences -- there is a fundamental harmony of views among industrialized countries: We all reject Iranian policies as threatening and unacceptable.

Tehran underestimates the basic strength of democratic institutions and alliances, which can surmount differences in approach in pursuit of shared objectives. Iran would be well advised to heed the criticism of our friends and allies while they still believe dialogue can work.

In our consultations on Iran policy, the EU has stressed that we should not let our common concerns be overwhelmed by our difference in approach toward Iran. We wholeheartedly agree. It is important to keep our focus on our overriding national interests, which is to encourage the development of a stable, peaceful, and productive environment in the Middle East.

For our part, we have no objection to dialogue, but we believe that dialogue without consequences is ineffective. It is clear that Iran's behavior has not improved, and we see few indications that it will anytime soon.

Iran has intensified its efforts to acquire weapons of mass destruction, including nuclear weapons, and the missile systems to deliver them well beyond its borders.

Iran remains the world's leading patron of terrorist opposition groups and the primary state sponsor of assassinations. Despite strong objection from the EU and others after the recent Hamas suicide bombings in Israel, Iranian support for Palestinian rejectionist groups continues. These activities are conducted with the approval of the most senior levels of the Iranian government.

Despite this undeniable pattern of threatening behavior, some countries argue that trade, talk, and time have resulted in a moderation of Iranian policies. The facts simply do not support this claim.

Because of Iran's continued support for these policies and the limited foreign cooperation for our policy of economic pressure, Congress has proposed new sanctions legislation designed to force foreign companies to choose between the Iranian market and the benefits they receive from dealing in the American market.

While the Administration is supportive of sanctions legislation that hurts Iran's economy, we want to ensure that any new sanctions are effective, enforceable, flexible, and consistent with our international obligations. In particular, to increase the economic pressure on Tehran, we seek to block Iran's effort to develop its oil and gas resources with foreign capital.

An infusion of foreign capital would solve some of the economic difficulties facing Iran and facilitate the government's financial support of military and terrorist activities. Given Iran's dependence on oil exports, we are convinced that the difficulty of obtaining foreign capital to improve oil production has the attention of the Iranian leadership.

Iran is an important regional player. We want to convince the Iranian leadership that a change in the government's policies is in Iran's own interest. But we insist on checking Iran's ability to threaten the security of the region and beyond.

By closing Iran's market to U.S. companies, we have lost some business. But the behavior we are trying to change also carries a large potential cost. International cooperation for our approach would undeniably boost our impact. But, in the absence of such support, we will continue -- in a bipartisan fashion -- to exercise American leadership to amplify the message and to increase the cost to Iran.

Until Iran is ready to accept civilized norms of behavior, it will pay a political and economic price for threatening our interests.

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Last Updated: 13-Jul-96
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