Economic boycotts of Iran, Cuba hurt U.S., too

The announcement recently of a deal between Iran and the French car-maker Renault for $780 million, to build 150,000 new cars a year for the Iranian market, reminded Americans again of the foregone opportunities involved in the United States’ government’s continued approach to relations with countries like Iran, Cuba, Russia and even North Korea and Syria.

America’s years-long boycotts against these countries are certainly preferable to war and may even be satisfying to those who want America to do something about the regimes in power in these places. It is important not to forget, however, that they cost American companies, banks and even the federal government potentially considerable amounts of money, not to mention the general constraints that they constitute in the normal conduct of international business.

The 2015 agreement by which Iran suspended its nuclear weapons development program in return for relief from economic sanctions should have opened the door for American businesses and financial institutions. Iran’s population is 80 million, and it has a large and vigorous economy.

European companies and the Chinese have not hesitated to jump right in. With the exception of Boeing, which braved the waters of continued U.S. government regulations restraining trade and investment with Iran that are still in place and even growing in spite of the accord, American banks and companies have not been able to respond to the opportunities that the

Iranian market presents.

Another example is Cuba, where the Trump administration appears to be in the process of rolling back some of the openings to that country that his predecessor had put into place. For what is in principle and in appearance a pro-business American administration now, Trump’s government has not been quick to open the gates for U.S. companies and banks interested in becoming active in some of these hitherto closed markets.

The reasons for this blocking posture are generally political. Cuba policy is shifting back to the time that it was shaped by south Florida Cuban exiles. Iran policy is heavily influenced by exiled shah-era figures in Los Angeles, other parts of the West Coast and Israel. U.S. Russia policy is very confused by the investigations into the Russian role in the 2016 elections, the diplomatic expulsions and the military exercises on the Eastern European border between Russia and the West.

Whatever the reasons, it should be a solid tenet of Republican and other American philosophy that the normal conduct of business in and between countries can play a positive role in overall relations with them. American enterprises certainly think so. Washington seems to be forgetting this truth in not making policy changes that reflect the validity of this approach.