Don’t Wreck the Iran Talks

Iran and the international community are approaching the finish line in negotiations to roll back Iran’s nuclear enrichment program. Even at this late hour, however, American officials are far from unified on Iran policy, with members of Congress communicating deep concern that President Obama’s negotiators will settle for an inadequate deal. Many members of Congress and others are therefore pushing for tough new sanctions that they believe could compel Iran’s capitulation in the next several weeks.

Such a move, however, would be self-defeating. Tougher United States sanctions at this juncture would nearly eliminate Iran’s remaining commerce with Asia and Europe, exacting a significant financial toll on America’s allies in those regions. That could destroy the international coalition that has so successfully isolated Iran, and erode the leverage it derives from presenting a unified front.

It would also be unnecessary. The 25 percent decline in oil prices over the last four months, to about $82 a barrel, has already given Iran a stinging taste of how much worse off its economy could be if it fails to reach a deal. If negotiations were to fail definitively, the international community would be likely to condone sanctions that would squeeze Iran’s oil revenues to nearly zero. And Iran, which requires oil prices of $140 per barrel to balance its budget, is already experiencing shortfalls in the billions.

There is little doubt that sanctions helped bring Iran to the negotiating table. But it was the multilateral nature of those sanctions, rather than the severity of American sanctions alone, that delivered results. The United States first froze Iranian government assets after the seizure of the American Embassy in Tehran in 1979. Since 1987, the United States has made restrictions on trade increasingly comprehensive, in reaction to Iranian attacks on neutral shipping during the Iran-Iraq war, Iran’s support for terrorism, its steps pointing to nuclear proliferation, and other unlawful acts. As a result of these prohibitions, American companies have been sidelined from business in Iran for decades.

In 2006, concerns about Iranian nuclear activities prompted the United Nations Security Council to begin its own sanctions campaign, setting off a cascading series of penalties by member countries. And, in 2010, Congress adopted significantly more restrictive legislation that forced many foreign companies to stop doing business with Iran. The European Union, Japan, South Korea, Australia, the United Arab Emirates and others soon adopted complementary sanctions, closing down even more business.

It is hard to overstate the significance of this multilateral effort. Iran’s oil revenues have plummeted more than 40 percent over the past two years, as its major oil buyers in Europe and Asia have pulled back. Additionally, banking restrictions, in which the European Union and East Asian countries like Japan and South Korea joined, left Iran handcuffed when it tried to find trade financing or export markets abroad. Indeed, many of the most powerful sanctions on Iran came from outside the United States. Examples included the European Union’s move to throw Iranian banks out of the Swift global financial payment messaging system, and Japan’s restrictions on Iranian use of its capital markets and banking services.

The new sanctions on Iran that Congress is considering would come down hard on the very allies that make the international coalition strong. They would penalize those allies for what little trade they still have with Iran, and risk fracturing the international alliance that has been indispensable in keeping pressure on Iran for concessions in nuclear diplomacy. Indeed, they could cause Iran to walk away from the negotiations, convinced that Congress will never tolerate a negotiated deal on its nuclear program.

That could only reduce American leverage with Iran toward getting the result we need, which is to see Iran curb its nuclear program.

We need a better policy — one that would prepare plans for further sanctions as options, but keep them in reserve until Iran rejects nuclear diplomacy or cheats on a deal. That alone would strengthen the international coalition and maximize leverage with Iran. Meanwhile, Congress would be better served by focusing on domestic energy policies that would help keep global petroleum prices low and oil revenues sparse in Tehran. Specifically, it should promote responsible shale oil production and lift the ban on exporting American oil to the global market.

Punishing our allies now in a vain unilateral attempt to force Iran to capitulate is not smart policy. Causing major diplomatic crises and economic problems with the European Union, China, India and Turkey, which would all feel the pain of new sanctions, and whose presence we need among our greatest strategic partners in years to come, is unnecessary and will seriously undermine American interests.

If a satisfactory deal proves unattainable, further sanctions may eventually become necessary. But at this moment, they would be premature and dangerously counterproductive. An undermining of our own national interests would be among their first consequences.

Elizabeth Rosenberg, a senior fellow at the Center for a New American Security, is a former senior sanctions adviser at the Treasury Department. Zachary K. Goldman, the executive director of the Center on Law and Security at N.Y.U. School of Law, is a former policy adviser at the Treasury and the Defense Departments.

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