Exports to Iran increase despite sanctions

Iranians pass by an anti-U.S. mural in Tehran. Despite sanctions, U.S. exports to Iran have increased dramatically since President Bush took office.


Kai Ryssdal: In fact, it wasn't just securities regulations that were in the news today. The Bush Administration has announced more economic sanctions on Iran. The rules are meant to target Iranian officials and companies accused of helping Tehran develop nuclear weapons.

Meanwhile, an investigation made public today by the Associated Press finds American exports to Iran have actually grown tenfold since President Bush took office.

From Washington, Marketplace's Jeremy Hobson explains how.

Jeremy Hobson: Iran has lived with American sanctions since the 1979 revolution. Some products are still allowed, including agricultural commodities and medicine. That added up to $146 million last year, just a tiny fraction of U.S. exports.

But there are indirect exports as well, says Karim Sadjadpour at the Carnegie Endowment for International Peace.

Karim Sadjadpour: Dubai is kind of the giant swiss cheese hole of these swiss cheese sanctions.

Hobson: So the products go through Dubai and then they can come right into Iran?

Sadjadpour: Exactly. I think anyone who's visited Tehran knows that if you want to find any type of American consumer product, you can.

Sadjadpour says Iranians are willing to pay a premium for American goods they love. All the more reason, he says, why sanctions should not include consumer goods.

Sadjadpour: The more Iranians are exposed to U.S. consumer products, the more they will pressure their government to enter the modern and global economy.

Nile Gardiner at the Heritage Foundation has a different view. He says sanctions need to be strengthened across the board to keep Iran from developing its nuclear program.

Nile Gardiner: It's very important of course to send a very clear message on several different fronts to the Iranians that the west means business.

Still, the official line from the U.S. is that sanctions are not meant to hurt ordinary Iranians. Here's the Treasury Department's Adam Szubin:

Adam Szubin: Our concern is not with the Iranian people. The United States wants the Iranian people to succeed as a nation and to live in peace and be prosperous.

U.S. sanctions do allow for a few things, like rugs, to be shipped here from Iran. But the vast majority of Iran's exports are oil. And as long as other countries buy it, it's the ultimate safety net against any sanctions.

In Washington, I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.
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first of all the Iranian regime has the financial power to by anything they want indirectly through 3rd and 4th party dealers or have other countries such as UAE, Turkey, Syria and even European countries buy for them & ship to Iran Cigaretts mainly come from Pakistan and almost all general consumer goods are mass imported by the regime from China and elsewhere in order to further pressure the small busineses (the weaker the citizens, the stronfger the regime) Also something did not consider here at all which is the main US made imports to iran are tech equipment and software. the Iranian government imports blillions of dollars worth of new computers & parts from companies such as Dell, INTEL, IBM, Microsoft, etc The majority of Iran's air force's Jet airplanes & helicopters are US made bought under the Shah and constantly in need of spare parts and the only place to get them from is the original manufacturers (directly or indirectly) There are a lot of US origin supplies and services being sold to the Iranian government on daily bases (tens of billions anually Also the skyrocketing Iranian duty fees and long holds at the ports makes it almsot impossible to export anything to Iran unless it's done by the regime My opinion, the most effective sanction against the iranian regime is to stop buying their oil, Saudies announced that they could set the oil prices at fixed price by increasing production even if Iranian oil is out of the picture (demand has also declined) and to impose sanctions on all IRGC and other organizations and hands of the regime including pressuring all the companies owned by them A main source of income for the IRGC is drug trade & drug slaes inside the country and considering over 10 million heroin or opium addicts of ages 16-35, its a powerful tool to keep the people inside careless about political and social issues (satisfying drug addiction is the #1 priority in a heroin addict's life) blockage of drug flow into Iran will be very effective in weakening the regime (i'd consider allowing & advancing a smuggling ring to eleminate the crossing to Turkey through Iran)

While Fareed Zakaria agrees that there is no reason not to use sanctions and embargoes against states such as Iran, he suggests that we also need to “allow a viable way out.” That is to say, we need to negotiate and not merely mandate. Cliff Kupchan essentially agrees. While he acknowledges that President Bush has definitely strained the relationship between Washington and Tehran, he points out that Iran “did agree to suspend enrichment for two years.” Kupchan suggests that there may be more than one way of dealing with Iran. Joel Rosenthal suggests that Ahmadinejad is using the Bush administration’s threats to “rally nationalist sentiment” and take the Iranian people’s focus off domestic problems such as corruption and unemployment. Rosenthal suggests that it’s time the United States allows democracy to change the Iranian regime from the inside. “The United States will have to be much less confrontational” Rosenthal insists, and adds that the “United States wants regime change but may well have to accept that democracy gives people the option to change regimes, but does not mandate such a change.” Richard Betts calls for a calm and clear-headed response to Iran. He reminds us that for all of Iran’s meddling in Iraq, it was Bush that handed Iran an entrance into Iraq. And while we faced a much bigger threat from Mao Zedong in the 1970s, who claimed that China could withstand the loss of hundreds of millions in a nuclear confrontation and still come out standing due to its large population, Betts points out that we’ve “yet to hear anything that chilling from Ahmadinejad.” Betts claims that anyone “who beats the drum for war against Iran fits the classic definition of a fanatic.” Furthermore, Betts assures us that in addition to causing even greater alienation from the Muslim world, a US attack on Iran would most likely only delay Iran’s nuclear capabilities for a few years. This is because the US has “given Tehran ample warning to hide important elements of the necessary infrastructure.” Indeed, Ian Bremmer reports that he heard Iran’s chief nuclear negotiator, Ali Larijani, speak at the Arab Strategy Forum in Dubai, where Larijani “invited other Middle Eastern states to join Iran in a regional security organization that excludes the United States and called on Arab governments to develop nuclear programs to facilitate a nuclear OPEC.” Bremmer agrees with Rosenthal that Ahmadinejad is attempting to win “support at home by taking a harder-line position on the nuclear program.” Bremmer also points out that “Iran isn’t a totalitarian state like North Korea. There’s real opposition in the country to other elements of Ahmadinejad’s political agenda.” Bremmer rejects the Bush administration’s military approach to Iran, suggesting that President Bush needs to “develop a more nuanced and moderate approach, one that stops feeding Ahmadinejad new opportunities to play the defiant champion to the United States” (Gramercy Round, 2007:72-77).
Chester Crocker (2005:55-6) suggests that President Bush has “squandered” America’s opportunity to secure Iran’s cooperation. In a previous era, America could have obtained a “truly global consensus” and presented it to the Iranians. “But the diplomacy of the global war on terror has mortgaged America’s capacity to line up such support.” Ziba Moshaver (2003:284) reports that beyond the US missing its opportunity to partner with European states to win Iran’s cooperation, Iran has taken that opportunity itself, and has “forged a partnership to challenge US attempts at implementing the Bush doctrine.” This partnership (particularly with France and Germany) is aimed at resisting “the US’s desire to change the Middle East regional order to achieve regional hegemony.”

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