The Iran nuclear deal and the case for keeping Tehran out of the WTO

Sanctions aimed at a single WTO member, like Iran, constitute discrimination and contradict the spirit of the entire organization.

August 23, 2016 21:43
3 minute read.
us iran flag

A staff member removes the Iranian flag from the stage during the Iran nuclear talks in Vienna, Austria July 14, 2015. (photo credit: REUTERS)

The Iran deal is signed, nuclear-related sanctions are lifted and Iran has announced its intent to pursue full World Trade Organization (WTO) membership. Some WTO members, like Switzerland and the UK, are already expressing support for Iran’s bid. The United States, however, should not be one of them.

The US should oppose Iranian membership until the Iran deal’s restrictions expire.

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Iran first applied to the WTO over 19 years ago. The US, believing Iran sought nuclear weapons in violation of the Nuclear Nonproliferation Treaty (NPT), opposed Iranian accession and delayed the application for several years. When Iran agreed to suspend its nuclear program in 2005, the United States yielded, allowing Iran to become a WTO observer state and begin the process toward full membership.

Iran’s application has progressed little since then.

With recent increased international support, however, Iran is poised to acquire full membership, realistically within the next few years.

WTO membership is a negotiated process that may be, and has been, delayed for any number of reasons, including political disputes. That said, Iran has partially completed the process, is highly motivated to accede and its bid has more international support than ever before. Facilitating Iranian membership is also in the WTO’s interests. Iran remains the largest economy outside the 162 member WTO, and its accession would bring the organization that much closer to universality.

Importantly, WTO membership promises Iran certain treatment from the US and other WTO members.

The WTO and its governing agreements normally prohibit members from discriminating between trade partners. Once Iran becomes a member, the US will be obliged to treat Iran as it would any other trade partner.

While exceptions to this principle exist, they apply only in strict circumstances. Non-discrimination – like reduced trade barriers, predictability, and competition – is a basic principle of the WTO multilateral trade system. Exceptions, even for national security, are rarely successful and generally frowned upon in the WTO regime.

Sanctions aimed at a single WTO member, like Iran, constitute discrimination and contradict the spirit of the entire organization.

Though the US could justify discriminatory sanctions against Iran, such sanctions undermine America’s credibility as a WTO member and provide Iran with a potential cause of action under the WTO dispute resolution system.

While the US lifted some sanctions against Iran after signing the deal, many remain in place – i.e. those imposed by the United Nations (UN) for Iran’s human rights violations, support of terrorism, etc. The US, as a UN member, is obliged to maintain these sanctions, even if that means contradicting its obligations as a WTO member. Thus, Iranian WTO membership creates immediate conflict for the US as a member of both the WTO and the UN.

Iranian WTO membership would become even more problematic if Iran violated the Iran deal, prompting the US to reimpose nuclear-related sanctions – a likely scenario given Iran’s rejection of international norms and legal obligations, particularly regarding nuclear nonproliferation. Iran violates even legally binding international obligations, let alone mere political commitments like the Iran deal. A party to the NPT and a UN member, Iran has repeatedly violated its safeguards agreement and contravened UN Security Council resolutions. Iranian noncompliance becomes even more likely once it accedes and WTO membership ceases to be an incentive.

Given the sanctions still imposed by the US, US obligations as a WTO and UN member, the desire to incentivize Iran’s full compliance with the Iran deal, and Iran’s past noncompliance, the US should wait until the deal expires to support Iranian WTO membership David S. Jonas is a partner at FH+H, a DC-area national security law firm. Formerly the general counsel of the National Nuclear Security Administration and of the Defense Nuclear Facilities Safety Board, he is an adjunct professor at Georgetown University Law Center and the George Washington University Law School, where he teaches Nuclear Nonproliferation Law and Policy.

Elizabeth Urrutia is a law student at George Washington University Law School, specializing in international trade, energy and government contracts.

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