WITHIN REASON

The trouble with trade sanctions is that they hurt us as much as our enemy

Why economic sanctions are still imposed even though they rarely work.

Pis ta chi os once were red. You may remember that. Or you may think that’s nuts (sorry). But in the pre-Reagan era, they came here dyed, from Iran, to conceal their unlovely mottling. And if you’ve only ever had boring beige pistachios, you’ve been dragged into a 30- year-old U.S .-led sanctions regime you never signed up for.

The sanctions have done almost nothing to moderate the mullahs of Tehran, but they have made healthy snacking more expensive. They’ve also allowed farmers in California, New Mexico and Arizona to corner the North American pistachio market that in the ’70 sb el on ge den ti rely to Iranian imports, which have been either banned or just made impractical by restrictions on Iran’s currency and shipping. U.S. pistachio exports to Canada rose from virtually zero back then, to more than 17,000 tonnes in 2013. And the price of those U.S. pistachios has more than doubled in the past 20 years.

But if it makes you feel any better, Iranian consumers have been hurt, too: with sanctions driving down their currency and driving up inflation, recent Persian New Year festivities (March 20, this year; mark your calendar) have been light on expensive pistachios. So at least consumers everywhere are feeling the pain, while Iran remains a belligerent rogue state. And that’ s really the nut( sorry again) of the sanctions problem: They often achieve very little, while imposing hard ship in the wrong places.

Economists are fond of saying, “When goods don’ t cross borders, soldiers will ,” the premise being that the best promoter of peace is open trade( the McDonald’ s theory of war—that no two countries sufficiently middle-class and comfy enough to host the Golden Arch es will rouse to fight each other—is similar, but has proven unreliable ). But when we impose sanctions, we propose the exact opposite: That blocking trade will advance peace. And yet, there’ s far more evidence for the economists’ argument. Best guess es are that sanctions have succeeded maybe a third of the time, and they worsen the problem more often than not by consolidating defiant support among nationalists of their targeted regime.

The utter failure of long-standing sanctions in cajoling concessions from North Korea, Cuba, Iraq, Iran, Sudan, Libya, Burma, Putin’s Russia and others far outweighs the few cases where proponents claim they made a difference. The crash in oil prices had immeasurably more of an impact on weakening Tehran and Moscow’ s power. And if you think sanctions helped bring Iran to a nuclear deal, you maybe unaware of the myriad ways Iran deftly manoeuvred around them. If drug smugglers can skirt even the tight est border controls—and they do, everywhere —so can smugglers of oil and airplane parts. As The Economist reported from Tehran in 2013,“Almost any good can be found in Iran, at a price .”

Unfortunately, those steep er costs for consumers and businesses are the only result of sanctions we can measure for certain. And Canada bears them, too, and not justin pistachios. Ailing Bombardier Inc. was recently stung by our sanctions regime, having lost out on Iranian sales because Ottawa was slower than other governments in lifting prohibitions. Surely there are plenty of oilfield service contractors in Alberta, far less busy than they’d like, who would welcome a chance to sign some new Mid east clients.

Presumably, we keep trying sanctions, despite their general futility, because they’re the only idea we’ ve come up with to inflict pain on our adversaries, short of bloody war, and not because we abhor trading with brutal, dangerous or violent regimes. We don’t sanction Saudi Arabia, China or Pakistan (we even occasionally send aid), and ending sanctions doesn’ t mean we suddenly support Iran. Consumers can still make a personal choice to name, shame and boycott companies or countries whose global dealings they detest. Should Iranian pistachios return, I won’ t buy them. However feeble that protest may be, it’ s arguably no worse than sanctions.

BEST GUESSES ARE THAT SANCTIONS HAVE SUCCEEDED MAYBE A THIRD OF THE TIME, AND THEY WORSEN THE PROBLEM MOREOFTEN THAN NOT