Sanctions against Iran cost the U.S. as much as $175.3 billion in lost export opportunities over 18 years, according to a new report from the National Iranian American Council.
Losing out on selling to Iran has cost the U.S. an average of between 51,043 and 66,436 jobs for every year between 1995 and 2012, according to the study from NIAC, a critic of U.S. sanctions policy that represents Iranian American before lawmakers. The study, released exclusively to the Wall Street Journal, calculated the losses based on how much trade would be expected between two economies the size of U.S. and Iran, accounting for distance. “If we’re going to discuss whether sanctions are worth the price, you need know the price,” said Trita Parsi, president of NIAC. “Especially as we are talking about whether to move forward with this policy.”
Mr. Parsi said sanctions against Iran have escalated the crisis and hardened the regime’s hand. U.S. policy makers have argued that ramping up sanctions helped push Iran to negotiate and may have persuaded Iranians to elect President Hassan Rouhani, viewed as more moderate than the previous leadership.
A U.S. Department of Treasury spokeswoman said in an email that successive administrations and congresses have viewed the costs of Iran sanctions “well worth bearing, particularly when faced with the prospect of an Iranian nuclear weapon.” The spokeswoman said the $175 billion represented less than 1% of U.S. exports over the period. And that trade would not likely have materialized, in any case “given the commercial risks associated with doing business with a country whose government is the foremost state sponsor of terrorism and is a rampant abuser of human rights,” she said.
The U.S. is considering the future of trade sanctions against Iran. After ramping up financial penalties against Iran for nearly a decade, Western nations agreed to temporarily ease the sanctions in January in the hopes of pushing towards an agreement that would end Iran’s ability to build nuclear weapons. But the partial relief of sanctions ends July 20 and it’s so far unclear whether the U.S. will deem the progress in the talks sufficient to further extend them.
Suzanne Maloney, an Iran expert at the Brookings Institution, said that the price and benefits of U.S. sanctions against Iran were often debated in the past. But the rhetoric of former Iranian president Mahmoud Ahmadinejad, who said he doubted the Holocaust, and a crackdown against protesters following Iran’s 2009 election shifted the discussion and made cost less of an issue. “These factors galvanized a moral case for isolating Iran–it’s no longer treated as just a policy discussion,” Ms. Maloney said.
Numbers like these are unlikely to tilt Iran policy said Kimberly Elliott, a trade policy expert at the Center for Global Development. Ms. Elliott conducted a similar study on the costs of sanctions in the 1990s that had little effect on policy, she said. Ms. Elliott says because the costs of lost trade to Iran aren’t paid directly, like military action, they’re unlikely to be accounted for. The numbers are also too small to have much impact on policy thinking, Ms. Elliott said. “The costs are relatively small and they’re off budget,” Ms. Elliott said. “When you have something of this high of importance as Iran, the cost to U.S. exports shouldn’t be at the top of the list of things that are important,” Ms. Elliott said.
Mr. Parsi said dismissing costs is bad policy. “Dismissing a conversation of costs is something very similar to how the Iranian government has handled [the nuclear crisis] and I don’t think that’s something to emulate.”
Write to Joel Schectman at firstname.lastname@example.org