July 17, 2015

IT'S A TRADE DEAL:

Ian Bremmer on why the Iran deal is about much more than nuclear weapons (Ezra Klein, July 14, 2015, Vox)

Ian Bremmer: [I] think there are a lot of upsides for the United States that have less to do with the nuclear arrangements themselves than with the nature of a deal with Iran. No one is really talking about this, but the Iranians will be producing, I would say, at least another million barrels of oil on the market by the end of 2016 under this deal. That means prices are going down. That really hurts OPEC, it really hurts the Saudis, but it's an unmitigated good for the US!

And it's not just oil. Iran has a pretty diversified economy. They have 80 million people, they manufacture cars, they have a service sector. This is a country the international community is going to want to invest a lot in. That's an upside.

I wrote about this in my book The J Curve, but one of the ways you open countries is by removing sanctions and investing. This is why Kim Jong Un doesn't want sanctions removed from his country. If North Korea became a functioning part of the international system, his regime would fall pretty quickly. Iran's theocrats also know how dangerous this is. If Iranian expats begin going back to Iran, and Western investment starts flowing in, the likelihood that over a longer period of time the Iranian government opens a little and maybe a lot is much greater.

Now, if you're Obama, you can't make the arguments for regime change and oil, because they're not politically correct, but if you're actually thinking about the impact of the deal over the long term, I think it's fairly clear you'd rather have this deal than not if you're America.

Posted by at July 17, 2015 12:49 PM
  

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