NFTC Releases Report on Impact of Lifting U.S. Sanctions on Iran
The National Foreign Trade Council (NFTC) has released the results of an economic study commissioned by USA*Engage entitled "Normalization of Economic Relations: Consequences for Iran’s Economy and the United States." The study, prepared by economists Dean DeRosa and Gary Hufbauer, explores the effects of lifting U.S. sanctions on Iran and how such a shift in policy could impact the world economy, the U.S. and Iranian economies, U.S. multinational corporations, the international oil-and-gas sector and the price of oil.
The study reports the following conclusions:
- In the medium-term, lifting U.S. sanctions and liberalizing Iran’s economic regime would increase Iran's total trade annually by as much as $61 billion, adding 32 percent to Iran’s GDP.
- In the oil-and-gas sector, output and exports would expand by 25-to-50% (adding 3% to world crude oil production).
- Iran's non-oil trade would expand by between $17 billion and $35 billion.
- Iran would enjoy new service imports from the U.S. and the E.U. of about $1 billion, followed by substantial foreign investment in Iran’s service sector once economic policies are liberalized.
- The U.S. would also gain appreciably from normalization.
- Provided no offsets to production occur elsewhere in the OPEC area, increased oil production by Iran could reduce the world price of crude petroleum by 10%, saving the U.S. annually between $38 billion (at the 2005 world oil price of $50/bbl) and $76 billion (at the proximate 2008 world oil price of $100/bbl).
- Opening Iran’s market place to foreign investment could also be a boon to competitive U.S. multinational firms operating in a variety of manufacturing and service sectors.
Labels: Sanctions; Iran