U.S. Economic Sanctions: Lessons from the Iranian Experience

Askari, Hossein; Forrer, John; Teegen, Hildy; Yang, Jiawen
July 2001
Business Economics;Jul2001, Vol. 36 Issue 3, p7
Academic Journal
The United States has been the world's only major country to make frequent use of economic sanctions to change what it perceives as the objectionable policies of other countries. Although the global economic, financial, and military influence of the U.S. enables it to use sanctions as an instrument of foreign policy, the efficacy of sanctions is still in great doubt. Using Iran as an example, over a period of twenty years U.S. sanctions have bad a significant economic cost for the U.S. as well as for Iran. Direct merchandise trade between the U.S. and Iran has declined significantly, but the more important costs of sanctions to each country are due to factors such as missed foreign direct investment (FDI) opportunities, which will ultimately have long-term negative consequences for both countries. For the future, largely because of the expected growing importance of the World Trade Organization (WTO), the use of sanctions by the U.S. is likely to diminish.


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