Sanctions Plus?
All they are saying is give economic war a chance.


Clifford D. May

Suppose the tough, new sanctions passed into law by the U.S., the E.U., Canada, and Australia do not cause Iran’s Islamist rulers to halt their illicit development of nuclear weapons, curb their sponsorship of terrorism, and reduce their brutalization of their own population. Does that leave us with only terrible options? Does that leave us, as French president Nicolas Sarkozy phrased it, having to choose between an Iran with the bomb and the bombing of Iran?

Not necessarily. A task force convened by the American Foreign Policy Council (AFPC) has produced a report titled “Toward an Economic Warfare Strategy Against Iran.” As the title suggests, the idea is to move to what might be called “sanctions plus” — the deployment of additional economic weapons to leverage “the latent vulnerabilities inherent in the Iranian economy to ratchet up the cost of the regime’s nuclear endeavor.” (Full disclosure: Two researchers from the Foundation for Defense of Democracies, Emanuele Ottolenghi and Mark Dubowitz, were task-force members.)

The report was drafted over a span of months and, during that time, the task force briefed members of Congress. The result: Several recommendations contained in the report were included in the legislation that passed with strong bipartisan support and was signed into law last month, including restrictions on providing technology, goods, and services to Iran’s oil and natural-gas industries, and on doing business with Iranian banks and other entities that have been “designated” (read: terrorist-affiliated).

Of course, passing laws is one thing; enforcing them is another. We will soon know whether President Obama intends to shoot the arrows Congress has put in his quiver or whether he will — not for the first time in recent decades — leave Iran’s rulers laughing at “the Great Satan.”

But there is more that can be done, and the AFPC report recommends deploying several remaining economic weapons.

The new sanctions are intended to cut off much of the gasoline that Iran’s rulers must currently import because they have spent the nation’s wealth on nuclear facilities instead of oil refineries. In response, the regime now plans to reduce its need for gasoline by importing billions of gallons of Brazilian sugarcane ethanol to blend into the fuel mix. The task force suggests diverting that Brazilian ethanol to the U.S. market. What’s preventing that: a 54-cent-per-gallon tariff that the U.S. government currently imposes on imported ethanol. It’s high time to let that tariff expire. American taxpayers have subsidized American corn-ethanol producers long enough. I would add — this is not in the report — that Congress also should require all new automobiles made in America to be “flexible-fuel vehicles.” For about the cost of a seatbelt, your next car could be significantly less dependent on petroleum products. Brazilians have been driving flex-fuel vehicles for years. It’s crazy to let Iran also beat us in the race for fuel diversification and security.

Tehran is planning to build natural-gas pipelines between Iran and its neighbors. The aim is not just to make money but also to “create long-lasting, new economic dependencies that are difficult to break.” Here’s a case where diplomacy can help: Our envoys need to argue against this scheme and help find other ways for such countries as India and Bangladesh to meet their growing energy needs.