Published on September 9th, 2010 | by Eli Clifton1
WSJ-Asia Cheers Tightening Iran Sanctions
According to The Wall Street Journal Asia’s editorial board, newly announced cooperation from Japan and South Korea on enforcing UN sanctions against Iran “is worth cheering.”
The editorial board attributed South Korea’s cooperation on sanctions to its “growing up as a democracy,” and Japan’s acquiescence on the issue as a much needed about-face from its “needless tiff with the White House over a troop relocation agreement in Okinawa.”
While glossing over the complexities of both Seoul and Tokyo’s relationships with Washington — which, I think it’s fair to say, amount to a lot more than South Korea “growing up” and Japan’s mea culpa for a “needless tiff” — the seeming tightening of the sanctions regime on Tehran should be put in context.
Reports do seem to confirm that sanctions have had a measurable and noticeable effect on Iran’s trading relationships, but sanctions have also resulted in Iran expanding trading relationships in Latin America and Africa, and looking towards expanding trade with much bigger economies, such as China.
According to All Headline News:
Chinese Transport Minister Liu Zhijun is expected to visit Iran Sunday to sign a $2 billion contract to build a 360-mile-long railway linking key Iranian destinations that could later join to existing Iraq and Syrian railway networks and extending to the Mediterranean Sea.
Experts on U.S.-Iran relations Flynt and Hillary Mann Leverett responded to the little-reported news item on China’s expanding trade relationship with Iran on their blog, The Race for Iran, writing:
None of the initiatives discussed in the news report cited above violate UN sanctions against Iran. In fact, we cannot see how these efforts would even violate U.S. or other unilaterally-defined national sanctions against the Islamic Republic. Nevertheless, there have been other indications in recent weeks that China is not going to let a U.S.-led push to maximize Iran’s international economic isolation get in the way of Sino-Iranian economic ties. India has taken a similar position, see here, and may, like China, be acting to strengthen its economic and strategic ties to Iran.
Indeed, a look at Iran’s trading partners clearly shows the importance of China’s huge economy to Tehran.
According to the CIA World Fact Book, Iran’s Export economy breaks down as follows:
China 16.58%, Japan 11.9%, India 10.54%, South Korea 7.54%, Turkey 4.36% (2009)
And its import economy is also worth examining.
UAE 15.14%, China 13.48%, Germany 9.66%, South Korea 7.16%, Italy 5.27%, Russia 4.81%, India 4.12% (2009)
No doubt Japan and South Korea’s implementation of sanctions will change those statistics, but China and India’s growing regional and global clout would indicate that Tehran’s trading relationships with these regional powerhouses will become an increasingly important component of the Islamic Republic’s foreign trade. As sanctions tighten on Iran’s economy, no one should be surprised to see Tehran turn to alternative, non-western aligned economies to fill the gaps.