January 09, 2013
Iran Willing to Resume Nuclear Talks as Sanctions Bite Hard
Iran says it is prepared to return to talks, possibly later this month, with major world powers over its nuclear program. As the country's uranium enrichment program continues, Western countries have tightened economic sanctions against Tehran.
U.S. President Barack Obama last week signed off on a new round of sanctions targeting Iran’s energy and shipping sectors. They build on a range of unilateral and multilateral sanctions against Iranian industry and banks.
The measures are aimed at curbing Iran’s nuclear program. The West claims Iran is trying to build nuclear weapons; Tehran says the program is for civilian purposes.
Iran has indicated it is ready to hold a fresh round talks with international powers - the so-called P5+1 - the United States, Britain, Russia, China, and France, plus Germany.
Jamie Ingram, of IHS Global Insight, says the sanctions are forcing Iran to the negotiating table.
“This is hitting Iranians hard in the pocket,” said Ingram. "Also, with the restrictions on imports, there are growing food shortages.”
EU trade with Iran - even in permitted commodities - has fallen off dramatically in recent months. That’s because European banks fear the wrath of the U.S., says Nigel Kushner, chief executive of W Legal which advises firms on trading with Iran.
“The Americans will have a quiet word with them, one suspects, and asks them not to do it,” said Kushner. "So they won’t do it even though they are permitted to do it. I was speaking yesterday with a Swiss bank who have said, ‘We want to accept payments for medical goods, or humanitarian goods that are going to Iran, but we’re too scared to do it.' ”
Kushner says Iran is looking to countries beyond the jurisdiction of the sanctions to get what it needs.
“It might take longer, it might more cumbersome, and it might cost them more, but they will often look to countries like China, possibly Turkey, who don’t need to comply,” said Kushner.
The banking sanctions are causing the most pain in Iran, says analyst Ali Fathollah-Nejad of the University of London.
“You have huge financial and banking sanctions, which is the eye of the storm from which every other civilian branches of the economy are then crippled,” said Fathollah-Nejad.
He argues the West must put the sanctions up for negotiation at any upcoming talks if a diplomatic solution is to be found.
“In terms of its economic development, in terms of the well-being of its population, in terms of the well-being of its civil society, is something that Iranians inside and outside the country do care a lot about,” said Fathollah-Nejad. "And this is something that has to be put on the table.”
If the talks between Iran and the P5+1 go ahead, analysts expect a focus on short-term confidence-building rather than a solution to the crisis.
The sanctions against Iran, meanwhile, are a hot topic in Washington after President Obama announced his pick of Chuck Hagel to be the new secretary of defense.
Hagel, a former Republican senator, is on record in the past as opposing unilateral sanctions against Iran. And if international talks with Iran fail, Hagel and the Pentagon would find themselves in the midst of a U.S. decision of whether to strike Iran militarily.