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NFTC President Testifies That Unilateral Iran Sanctions Legislation Would Come at a “Heavy Price”
Date: 4/8/2008

Reinsch Calls on Congress to Fund High Level U.S. Diplomat

Washington, DC – In testimony delivered today before the Senate Finance Committee, National Foreign Trade Council (NFTC) President and USA*Engage Co-Chair Bill Reinsch expressed serious concern about the unilateral approach to sanctions contained in the Iran Counter-Proliferation Act of 2007 (S. 970). During his testimony, Reinsch noted that unilateral sanctions are rarely effective, would limit any progress made on the U.S. diplomatic front, and would endanger multilateral diplomacy by putting in place unilateral sanctions with extraterritorial reach.
 
“There is no question that Iran’s behavior poses grave concerns for the United States and our allies. Iran’s pursuit of a nuclear program is deeply troubling, and its documented support for terrorist organizations is unacceptable. These are serious problems that require the sustained attention of and involvement of the United States,” Reinsch said in his testimony. “But it is important to consider which approach is most likely to change the behavior we all want to see changed. By picking fights with our allies and limiting the ability of this and future presidents to negotiate directly with Iran, legislation like S. 970 would make it more difficult for the United States to address the threats posed by Iran.”
 
Reinsch cautioned, “Members of this Committee, as well as the Committee on Banking, Housing and Urban Affairs, must balance the need to stand strong against Iran’s unacceptable behavior against the risk of doing something counterproductive in an effort to address it.  Passing S. 970 would come at a heavy price.”
 
Citing a recent report from the Peterson Institute for International Economics, Reinsch noted that historically unilateral sanctions fail to achieve their intended purpose and are therefore largely ineffective in changing the behavior of sanctioned regimes. “Given that the regime has learned how to survive decades of sanctions, more pressure by the United States alone is very unlikely to convince Iran to change its behavior. Instead, the best hope of altering Iran’s behavior is through vigorous and unified multilateral pressure in concert with our allies and Security Council partners, combined with direct diplomacy with Iran,” Reinsch stated.
 
Reinsch discussed provisions included in S. 970, which would be counterproductive to efforts aimed at building multilateral support within the international community to put pressure on Iran. Among these, he noted Section 8 of the legislation, which would expand current U.S. unilateral sanctions to foreign companies and “would effectively penalize entities and individuals in the very countries whose cooperation we need to effectively counteract Iran’s behavior.”

In addition to endangering multilateral diplomacy, Reinsch argued that S. 970 also limits U.S. diplomatic efforts by including a provision that calls for codifying existing Executive Order prohibitions on all exports except food and medicine, and all Iranian imports. “Codifying these prohibitions would remove the ability of a U.S. president to offer incentives or to respond to positive developments in Iran in a timely fashion,” Reinsch stated. He also noted that this approach presents a number of humanitarian concerns, as exports like life-saving medical devices could be banned, negatively impacting the people of Iran.

A better approach, Reinsch said, would be to fund a high-level special envoy for Iran with the authority to engage in direct bilateral talks in partnership with the international community.  As he noted, “The United States has made some progress negotiating an end to North Korea's nuclear weapons program through direct diplomatic engagement. When it comes to Iran, there is already a framework for cooperation – security talks in Baghdad – and precedent – the United States and Iran cooperated in the past to support democratic governance in Afghanistan.”

“I will guarantee you that if S. 970 is enacted it will have serious unintended consequences which will be manifested rather quickly, and which would make our efforts to change Iran’s behavior significantly more difficult.  I strongly urge the Committee to reject this approach and instead to endorse diplomatic efforts with our allies and with Iran that are much more likely to result in a positive outcome,” Reinsch concluded.

To read the full testimony, please visit www.usaengage.org.

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USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.

The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.