Trade Sanctions – the cure or the disease?

The other day I watched the third presidential debate between Mitt Romney and Barack Obama. From this it was clear the Mr. Romney would like to place increasing sanctions pressure on Iran. Similar EU recently published a new decision on further measures against Iran including ban on gas imports into EU, oil tanker construction and metals dealing.

It seems that trade sanctions is an easy to use – and widely accepted – tool when there is a conflict.


This blog post is not a political one. My intention simply is add a few comments around trade and trade sanctions:


To me trade is a wonderful thing! I am bound to say that of course – I have been somehow involved in trade the whole of my working life. So of course I love trade. The life in trade has however taught me many good lessons. The most important one is that trade is based on relationship and trust! You may have all kind of security instruments (like an LC or demand guarantee) – but if you do not trust your counterpart you should not (and most likely will not) do the transaction! And in most cases – the buyer and the seller actually want to do the transaction – therefore they want to act in a sound and good manner. They want the first transaction to work well – so that the relationship can grow … and many good transactions can follow – for a mutual benefit. This is the core of trade – but what follows is actually equally important: If the trade is cross-boarder, cross-nation, cross-culture etc. then relationships are building between different cultures. Relationships means one part opens to the other part – and vice versa. When different cultures open to each other – away goes prejudice and in comes understanding and a nuanced view on the other part! So in essence: trade bridges different cultures!


This was of course the positive side of trade – and I know quite well that there is a negative side as well … say; national trade barriers, protectionism – and of course fraud and crooks …. The world is a complex place – where only few things are black and white!


Still I will argue that trade bridges different cultures! Trade is a culture opener. If people make an effort trade can strengthen relationship and dialogue between nations – between cultures.


This is why I get so sad every time I hear about trade sanctions. Trade sanctions are a “closer” – it only builds the conflict. I accept that there are huge conflicts in the world today – and I do not claim to have the answer to solve them – of course! However – conflict can be defined as “to come into collision or disagreement; be contradictory, at variance, or in opposition; clash” – from that it follows that it takes – at least – two parties to have a conflict. And it takes the same parties to solve the conflict.


I will argue that the main conflicts we have in the world today are based differences in culture – they are clashes of culture. More often than not conflicts based on differences in culture come out of prejudice and lack of understanding. These are things that trade can be material in solving. So when trade sanctions are applied one of the best means to solve or soften a conflict is effectively dismantled. Actually trade sanctions do the exact opposite: it grows the conflict. To say it straight: trade sanctions are an immature way of dealing with a conflict!


This is why I get so sad every time I hear about trade sanctions.


Take care of each other – and the LC!



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