With the approval vote in the United Nation Security Council of the P5 + 1 Iranian agreement, a smorgasbord of eager trading partners claw themselves
out of the woodwork. The liquid black gold rush is on. With the rescinding of sanctions put into motion, over time the wheels
of commerce will be put back on track. No matter what the U.S. Congress does, the flood from international trade will start
making deals with Iran.
A sample of some
of these activities follows:
1) Even before sanctions are lifted, foreign investors try to tap into Iran
“Multinational
mobile phone companies, car makers and hospitality firms are seen as the most primed to benefit from the lifting of sanctions.
Bank of America Merrill
Lynch said it sees Turkey and the United Arab Emirates as likely beneficiaries from Iranian foreign trade, which could increase
to $200 billion by 2020 from $80 billion now.”
2) Corporate winners from the nuclear agreement
“Citi
Research analyst Chris Wetherbee said the opening of Iran is a "net positive" for international tanker firms, because
Iran's aging fleet won't be able to compete, and more energy supplies will be on the market.”
"All of the major banking institutions in the industrial world will try
to finance and facilitate increased trade with Iran," Christopher Whalen, senior managing director at Kroll Bond Rating
Agency, told CNBC. "It's a big country, (and) they are very Western-focused. Iranians are consumers of everything. You
can anticipate anything from industrial equipment to consumer products will definitely be bought, and will definitely be financed."
3) Lifting of Iran sanctions positive for Indian oil refiners: India Ratings
“Lower
crude oil prices following the Iran nuclear deal will contribute positively to the Indian economy, across the oil and gas
value chain barring domestic upstream players, India Ratings and Research has said.
A decline in oil prices could lower LNG (liquefied natural
gas) prices and this is likely to benefit end-consumer industries such as fertilizer and petrochemicals, it said.”
4) Pakistan Hopes to Benefit from Iran Deal, With Chinese Help
“Now,
with the prospect of sanctions on Iran lifting in the near future, Pakistan is hoping to become one of the early beneficiaries
of a nuclear deal between Iran and six world powers by finally completing the Iran-Pakistan pipeline.
But funding for the expensive project, expected to cost about $2 billion, is
another problem for cash-strapped Pakistan. That is why it is trying to piggyback this project on another one
funded mostly by its rich neighbor, China.
China will provide 85 percent of the $2 billion required to build a liquid natural gas terminal
at Pakistan’s southern port city Gwadar. The project includes a 700 kilometer long pipeline to other areas of
the country.”
5) Russia may benefit most from West’s agreement with Iran
“Washington
will live to regret this decision as its once greatest allies in the region, Saudi Arabia, Qatar, the United Arab Emirates,
as well as Egypt and even Turkey, start to feel as though they were betrayed by the United States.
Looking to counter what the Gulf Arabs perceive
as a genuine threat, logic dictates they are likely to turn to Russia for a fresh alliance and to help them counter the Iranian
threat.”
6) Lifting of sanctions brings hopes for Iran Air fleet frozen in time
“Trapped
in isolation with outdated planes, Iran Air – a carrier dragged down by decades of economic restrictions – finally
felt a gust of hope last week thanks to the international nuclear accord and a potential lifting of sanctions.
Once the deal is implemented,
the Islamic republic will be able to replace its vintage aircraft, some of which are almost 30 years old.”
All these examples share in a common interest that
comes from commerce. Nonetheless, buying and selling is seldom a strict barter arrangement. The banking system and currency
conversion for payment and settlement becomes a necessary component. The lifting of sanctions is really reducible to reestablishing
the financial clearing function.
While
the creation of the BRICS trading block provides a workable competing opportunity for Iran to engage, the necessity to transact
with Western companies becomes obvious.
Replacement
of an airline fleet means buying from Western companies like Boeing and Airbus. Hoping that Russia or China would be
able to construct an alternative is just not practical.
The Asian ship builders like South Korea may be looking for future tanker orders, since competitive fabrication companies
are producing the most functional naval transports.
Finally, the consumer electronic sector sees the Iranian market as a prime target long restricted from all the gadgets
that facilitate global communication.
The
United States will lag behind most other countries from trading with Iran for a simple reason. Iranian unwelcoming attitudes
towards America will translate into doing business with anyone but the Yankee devil, whenever possible.
While Iranian youth may be far more open to reinstituting commercial relations
with America, the political regime holds fast to fighting the imperial globalization of Western corporatism.
In order to grease the gears of advantageous international
commerce, the energy sector will still lead an Iranian economic reintegration. Marking the difference between mutually beneficial
business transactions from corporatist exploration and plunder of natural resources, should be the task for going forward.
Set aside the politics of the neo-feudalism
version of 21st colonialism and reopen the prospects of reducing tension and hatred by abolishing sanctions as
a destructive tool for foreign policy.
All
sincere parties benefit and profit from cordial business relations. Iran’s desire to have sanctions eliminated offers
hope that better relationships and positive interaction can progress.
The overwhelming approval of foreign nations to break the embargo of NeoCon “axis of
evil” propaganda demonstrates that promoting “good business” is preferable to detrimental isolation and
damaging hostilities.
The proper standard
to adopt was established by George Washington in his Farewell Address.
“Harmony,
liberal intercourse with all nations, are recommended by policy, humanity, and interest. But even our commercial policy should
hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences; consulting the natural course
of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing; establishing (with powers
so disposed, in order to give trade a stable course, to define the rights of our merchants, and to enable the government to
support them) conventional rules of intercourse, the best that present circumstances and mutual opinion will permit, but temporary,
and liable to be from time to time abandoned or varied, as experience and circumstances shall dictate; constantly keeping
in view that it is folly in one nation to look for disinterested favors from another; that it must pay with a portion of its
independence for whatever it may accept under that character; that, by such acceptance, it may place itself in the condition
of having given equivalents for nominal favors, and yet of being reproached with ingratitude for not giving more. There can
be no greater error than to expect or calculate upon real favors from nation to nation. It is an illusion, which experience
must cure, which a just pride ought to discard.”
Sanctions violate “conventional rules of intercourse”.
International affairs never remain constant. Notwithstanding, the wisdom of President Washington, the current political and
economic culture is hell bent on breaking the rules for favorable commerce. Resumed trade with Iran will offer a positive
opportunity to lower the antagonistic tension and restart rehabilitative dialogue.
James Hall – July 22, 2015
