Fundamental of International Buisness - Essay Example

Times are changing. Middle Eastern regimes that were once hostile to the United s are falling, and a newer, younger generation of Middle Easternconsumers, eager to use their purchasing power to buy American goods, is coming of age. Now is the time for those of us in the business community to convince our American leaders that the time is ripe to heal past wounds and finally lift the remaining trade sanctions against Iran.Iran is a $3 billion a year food market (the Iranian) and before sanctions were put in place, Iran was the largest importer of U.S. rice.

Iran exports millions of tons of wheat each year and its sugar exports annually exceeds 500,000 tons (the Iranaian). American businesses are banned from purchasing these products or selling U.S goods to Iran.If we were in the carpet importing business, there would be nothing to bar us from importing and selling Persian rugs from Iran. We are in the grain business, however, and U.S. law thereby prohibits us from conducting business with the country, which many know best for its militant takeover of the U.S. embassy in Tehran in 1979 and the subsequent taking of hostages.

Many in the businesses community believe that the sanctions on trade with Iran not only hurt the Iranian people, they also cost American companies billions of dollars in lost revenues and jobs. The sanctions also expand the diplomatic divide between the US and many of its allies and hinder the ability for US businesses to participate in the world marketplace.Earlier this month, the Tehran Times published an article in which it announced that Irans Petropars Company has developed an offshore oilfield in the Caspian Sea and is in negotiation with a Turkish company as a contractor.

That company will likely see profits in the billions of dollars as a result of this joint venture.Aside from the business aspect of renewing trade with Iran, there is also the humanitarian aspect. Many experts say sanctions hurt those very parts of the population which they are designed to protect.“A distinction between the Iranian people and the Iranian regime is long overdue. Aiming at sabotaging the Iranian economy will in the end only hurt the Iranian people who are not accessories to the deeds of their undemocratic regime.

Similar economic sanctions have failed elsewhere. For example, seven years of rigorous sanctions against Iraq has unfortunately not caused a change in government, only immense suffering on the people," an editorial in the Iranian reads.Following the 1979 embassy takeover, the U.S. government responded swiftly, barring any and all trade with Iran until its cleric regime was removed. Over the years, sanctions have been eased, but for the most part, trade is forbidden by law.U.S. law reads: "On March 17, 2000, the Secretary of State announced that sanctions against Iran would be eased to allow U.S. persons to purchase and import carpets and food products such as dried fruits, nuts, and caviar from Iran.

This change was implemented through amendments to the ITR at the end of April 2000. Corporate criminal penalties for violations of the Iranian Transactions Regulations can range up to $500,000, with individual penalties of up to $250,000 and 10 years in jail. Civil penalties of up to $11,000 may also be imposed administratively. "According to the Iranian Trade Association, a nonprofit alliance of Iranian-American business people, 70% of Irans current population was nine years old or younger when militants took U.S. citizens hostage, and much has changed in that time, including the regime.

Regardless, sanctions placed on the country 20 years ago remain in effect. According to the Iranian-Trade Association, since the 1997 election of a new Iranian president, Iran has expanded trade with some of Americas biggest trade rivals-Japan, France and Hong Kong. As well, most counties allow trade between Iran and their countries."The diplomatic gains of this type of foreign trade policy is questionable. However, the consequences of the sanctions are clear. U.S. companies have been deprived of the opportunity to interact with the lucrative Iranian marketplace.

Other countries continue to expand on their economic interests in Iran while U.S. Companies continue to incur significant losses and immeasurable opportunity costs" the ITA says.Along with regime changes, the younger generation sees the benefit of participating in a global economy. Just this week Saudi Arabia became a member of the World Trade Organization and Iranian officials announced that for the first time, Iran would send a delegate to the WTO conference in Hong Kong this month. "The delegation is represented by some members of the cabinet from commerce, agriculture and foreign affairs ministries as well as parliamentary economic committee members and plenipotentiary trade office representatives.

They will also be present in committee and commission sessions," the Tehran Times reported this week.Those in the American business community would be fools not to take advantage of this new global village and reestablish trade and diplomatic ties with Iran. Understandably, government officials do not want to allow trade of goods or services that could be used by the Iranian army or threaten the U.S. But lifting the sanctions on all other kinds of trade would be mutually beneficial to both countries.

Resuming trade with Iran would open up a new market for American and Iranian business people. Perhaps business is a language that could heal the wounds caused all those years ago and bring peace and stability to a nation trying hard to find its place in the world. Web Resources The World Trade Organization, www.wto.org Office of Foreign Assets Control, U.S. Department of the Treasury http://www.treas.gov/offices/enforcement/ofac/sanctions/iran.txt The Iranian Trade Association http://www.iraniantrade.

org The Tehran Times, online addition, http://www.tehrantimes.com The Iranian http://www.iranian.com/sections.html