Essay on “US-Iran Controversy” competitive exam essay.

US-Iran Controversy

Given the resurgence of anti-Iranian feelings ex-pressed mainly through an activist Congress, dominated by the Republicans — in the US, President Bill Clinton’s latest decision to impose a total ban on US trade and investment with Iran is not surprising. It came as a necessary corollary to Mr. Clinton’s earlier executive order which prevented the Houston-based Con-coco Inc from developing two off-shore oil fields for Iran. Mr. Clinton may have his own reasons, even compulsions, to act the way he is acting vis-a-vis Iran towards which the US has been following a trade embargo, of a peculiar variety, ever since the 1979 Khomeini led Islamic Revolution. The US president is even legally empowered to do so on grounds of threats to National Security. But the real issue will the policy succeed? Herein lies Mr. Clinton’s real task.

So far, the US trade embargo against Iran had been partial, in the sense that the US companies were prevented from marketing Iranian oil directly in the US markets. They were, however, allowed to resell Iranian oil in the world market. In fact, last year, this amounted to buying almost 20 per cent Iranian crude oil valued at $3 billion to $4 billion. US exports to Iran were valued at $326 million. Now given such a trade balance, which favoured the US, the recent announcement (which becomes effective after July) will do more harm to the US companies than to the authorities in Teheran. The cooperation of America’s major industrial allies within the G-7, especially Germany and Japan, to go along with the ban, appears to be the premise on which Mr. Clinton hopes to succeed. On this count too, the situation is far from encouraging. Despite pressure, the allies are not prepared to sacrifice their commercial Japan has already expressed its reluctance. In fact, it appears that Tehran might upstage Washington in wooing Tokyo. I an amazing tactical shift, Iran has been seriously working to re place the US dollar with the Japanese yen as the main currency within the OPEC oil dealings. On the question of pressurising chin and Russia—other two important trade partners of Iran the Clinton administration is not making any progress. Both countries have rejected the American logic. Russia, too, appears determined to go ahead with its nuclear-deals with Iran, which are perfectly legal and within the provisions of the NPT.

Mr. Clinton’s logic that trade embargo should be used as a pressure tactic to dissuade Iran from pursuing nuclear programmes and sponsoring “international terrorism”, does not have man); takers, except his own people and policy-makers. Even within the American foreign-policy set-up, there is a division—with the state department supporting the ban, and commerce and energy departments opposing it. Mr. Clinton’s policy may not succeed, mostly because in an age of free global competition about which the us itself has been trumpeting so much—trade relations will be guided more by market conditions of demand and supply, than any fixed paranoia about a particular national regime. The European and African companies may be even eagerly waiting to step in and upgrade their trade transactions with Iran. Not the least is its impact on world oil supplied, which will increase the overall energy costs worldwide.

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