Changes in US policy toward Iran and Cuba mean new economic opportunities for German companies. However, Chinese businesses can act more quickly, DW’s Frank Sieren writes.
The United States has changed its foreign policy strategy. Cooperation has replaced isolation when it comes to countries such as Cuba and Iran. The US government had already started testing the waters last year in its policy toward Cuba. The July 14 deal on Iran’s nuclear program was the next logical step. North Korea would be another appropriate candidate for engagement. Considering that the United States had seen both Iran and Cuba its enemies for decades, it’s all going very fast now.
Diplomatic ties were resumed between the United States and Cuba soon after Cuban President Raul Castro and his US counterpart, Barack Obama, shook hands at the Panama Summit on April 10. After 33 years, the White House removed Cuba from its list of state sponsors of terrorism in May. Now, both countries have reopened their embassies in the other. At this rate, Cubans can hope that the last remaining trade, finance and travel restrictions will be lifted and that relations will normalize.
Obama does not only want to revolutionize US foreign policy: This is a question of continuing to wield interest in the region. China, currently the US’s main economic rival, has long had a presence in Cuba and had already established itself as the country’s most important trading partner after Venezuela. This was particularly visible during Chinese President Xi Jinping’s official visit to Cuba last summer. Xi brought with him new loans and deals to build up the infrastructure and invest in renewable energies. China’s money is also supposed to help toward building a new port in Santiago de Cuba.
It will be a while until the United States and Cuba build a similar relationship.
German companies hestitant
It will take even longer for the US with Iran. The mutual distrust lies deep. For Germans, relations are easier than for the United States but harder than for China. This is the case despite the fact that before sanctions were imposed on Iran to curb its enrichment of uranium, German companies did particularly good business and were once the country’s most important trading partners. Chinese businesses took over that role six years ago. However, this could well change again. Last week, German Finance Minister Sigmar Gabriel became the first Western politician since the nuclear deal to travel to Tehran with a big business delegation (pictured).
Of course, Gabriel was received by Iran’s top brass, including the president, the oil minister and the head of the central bank. The Association of German Chambers of Commerce and Industry (DIHK) estimates that German exports to Iran already lie in the range of 2 to 3 billion euros ($2.2-3.3 billion). However, it will not be easy to stand up to the Chinese. With the Germans, the devil is in the details. While the heads of Germany’s business associations, such as Ulrich Grillo (Federation of German Industries), Reinhold Festge (German Engineering Association) and Eric Schweitzer (DIHK) were almost all represented, the heads of major firms were more cautious. Only Linde AG sent its CEO to Tehran. Daimler and Volkswagen were represented by their top lobbyists. At the moment, German companies cannot make many promises.
The US Congress still needs to back the nuclear deal, and there is plenty of resistance. German companies cannot afford to fall out with the Americans: The US market is far too important to them. Moreover, what if Iran were to violate the conditions? German-Iranian cooperation would have to be cut short and the stock market would fall. On top of that, there is the fact that Iran remains a country without freedom of the press and speech, a country in which people are still stoned to death. In this regard, German business people and managers also have to take public opinion into account. There are also the fears expressed by Israeli officials, which have great influence on US politicians.
This is not an issue for Chinese businesspeople and managers. Beijing has their backs covered. Gabriel cannot do this. China’s government simply believes that economic cooperation is always better than sanctions. Of course, the Iranians like this. In April, as the nuclear agreement loomed large, an Iranian delegation led by Oil Minister Bijan Zanganeh made its way to Beijing. Cooperation with the world’s most important buyer of Iranian oil had to be resumed as soon as possible. For other countries, it’s a more painstaking path. They cannot go from defense to attack quite so fast. The Chinese are playing a faster game.