Feasibility of Launching the ‘Sanctioned Club’ against Trump

2019/04/22 | Economy, News, Opinion

Strategic Council Online: If a coalition of countries under US sanctions and in trade war is forged with the primary aim of maintaining free and fair trade; then the coalition can be formed with the help of countries involved in a trade war who are eager to maintain bargaining power against the United States and even extend its scope to more countries. Reza Majidzadeh - Researcher on Political Economy of Development

Despite approaching the end of his presidency, Donald Trump still insists on continuing his policies and insisting on the trade war and economic sanctions. The list of countries under the sanctions and at trade war with the US has not been cut short, and if Trump is re-elected by the American people, it’s likely that the list will become longer. By increasing his illegal measures in the international arena, Trump has tried to cover up his recent scandals and distract the public opinion. But, as a countermeasure, will the countries under the US sanctions or a trade war with Washington be able to form a club or a front against Trump and its policies? What factors could ensure the success of such a coalition?

To form such a coalition, there are two key considerations: first, there is an understanding of a common interest in coping with the great and bullying player and the other is adopting a strategic approach to the coalition.

There are different reasons why countries are subjected to US sanctions or engage in a trade war with Washington. The repercussions of these sanctions too differ from country to country. Some like Turkey, have tactical retreats and, depending on their opposition to the Syrian Kurds or their confrontation with those associated with Fethullah Gülen, have challenges with the United States. Some others proceed with the bargaining process individually. On the other hand, the United States has a high bargaining power due to the high volume of foreign trade and the advantage of its technology, and despite Trump’s unconventional and unreasonable practices, Washington enjoys the power to unite in foreign policy.

In the strategic partnership model, a coalition is formed when the value added for each individual player in the event of joining the coalition is greater than the added value of the actor in the mode of unilateral action, and this value has a stable outlook.

The US sanctions against Iran have two trade and financial aspects; its trade aspect is more related to the limitation of trade of state-owned or companies depending on the ruling establishment including military organizations for foreign trade; but financial sanctions include both groups of Iranian private and public entities so that some foreign banks do not provide financial services to Iranian clients. The ban on oil sales is also the most important part of the trade embargo, the volume of which is changing according to the list of exempted states. Therefore, for Iran alone, the added value of a coalition or the formation of the sanctioned club, such as the successful experience of creating OPEC in 1968 will depend, as a minimum, on the possibility of international trade, the sale of oil and the necessary financial transactions.

If we focus only on the US-sanctioned countries then the realization of such a value-added is unlikely; besides, the balance of bargaining power between the United States and the sanctioned countries in the event of a coalition or club will continue to benefit the United States, and the possibility of aligning the bargaining power of coalition nations is little.

But if the analysis span from the sanctioned countries is extended to countries at trade war then the prospect of added value and bargaining power will greatly improve as many countries of the world out of concern over US punitive measures are skeptical about helping counter the sanctions; but if a coalition of the sanctioned and at trade war countries is forged with the primary goal centered on maintaining free and fair trade, then the coalition can be realized with the help of the countries at trade war, and willing to maintain bargaining power against the United States, and even its scope can be extended to more countries. But there are still serious obstacles, among them clash of interests and devastating conflicts in the region that reduce the possibility of realizing this profit-centered balance and increase the continuity of risk-centric equilibrium.

Therefore, the success of such a coalition depends on a tangible political approach based on the creation of cooperative relationships. Creating cooperative relationships largely depends on the prospect of mutual dependence and mutual trust, which shows another precondition for the formation and sustainability of this coalition. But designing a mechanism to create a belief in the continuation of Trump’s unreasonable actions in the future will increase the chance of a positive response to the coalition proposal.

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