Foreign Affairs Committee on Nov. 28th, 2016

[The Chair (Hon. Robert Nault (Kenora, Lib.)), Liberal, Bob Nault]

Colleagues, I'd like to bring this meeting to order.

Pursuant to the order of reference of Thursday, April 14, 2016, and section 20 of the Freezing Assets of Corrupt Foreign Officials Act, our statutory review of the act continues.

This afternoon two witnesses will be joining us.

Mr. Thomas Juneau is here in person. He is an assistant professor at the University of Ottawa.

We also have Richard Nephew, who is the senior research scholar, Center on Global Energy Policy, Columbia University. He's on video conference from New York, New York.

Welcome to both of you.

As per our process, we will allow you to make some opening comments, and then we'll go into questions from the committee members.

Mr. Juneau, I'll start with you. Then we'll go to Mr. Nephew. Then we'll go to questions from the committee members.

I'll turn the floor over to you, Mr. Juneau

[Dr. Thomas Juneau, Assistant Professor, University of Ottawa, As an Individual]

Thank you very much.

My presentation today will focus on the role of sanctions as a tool of foreign policy. More specifically, I will discuss how imposing sanctions can have some short-term benefits, but constrain future options and end up bringing more costs than gains.

My starting point at the beginning is that the government's commitment to re-establish diplomatic relations with Iran is good policy. It is in Canada's interest to regain its foothold in Iran for diplomatic, consular, commercial, and strategic reasons. Being back in Tehran will provide Ottawa with valuable eyes and ears on the ground; facilitate the management of difficult consular cases; better position Canada to develop trade ties with one of the Middle East's largest economies; and allow the government to develop channels of communication with a key regional power.

Having a Canadian channel in Tehran could also potentially position Ottawa as a source of information for Washington, which is obviously not there, and potentially as a messenger. It is not a coincidence that in 2012 Washington was not happy with Canada's decision to suspend bilateral ties.

Reopening Canada's embassy in Tehran is much easier said than done, in large part because of the legacy of actions taken by the previous government. As I have said in other circumstances before, it booby-trapped Canada's bilateral relations with Iran. This is in part—not completely, but in part—why after one year into the current government, relations have not been re-established and progress has been at best very slow.

Particularly the previous government passed the Justice for Victims of Terrorism Act which, alongside modifications to the State Immunity Act, empowers victims to sue perpetrators of terrorism, and countries listed as supporting them, for loss or damage that occurred as a result of a terrorist act committed anywhere in the world. The Conservative government designated two countries on the list of state sponsors, Syria and Iran.

This process allows for the seizure of property owned by Iran in Canada in connection with a judgment against it. There currently are about 10 cases before the courts, including many initiated by American citizens.

From the Conservative government's perspective, this was successful policy. If you define success as institutionalizing a political goal and raising costs for those seeking to reverse that outcome, it worked. It has made re-establishing relations very difficult.

Moving ahead, Ottawa faces two scenarios: to keep Iran on the list or to remove Iran from the list of state sponsors of terrorism. The first scenario appears more likely for now. Foreign Affairs minister Stéphane Dion has said publicly that the government has no intention of removing Iran from the list, at least not until there is significant improvement on the democracy and human rights front in Iran, which is very unlikely in the short to mid-term.

It's not entirely clear what procedural hurdles Iran's listing as a state sponsor of terrorism poses. Notably, Global Affairs Canada has said publicly that it does not prevent contact with Iranian authorities, and that it does not, on paper at least, prevent the re-establishment of diplomatic relations. But it's the politics of the issue that make it very difficult. Moving to re-establish diplomatic relations with Iran without delisting it would expose the Liberal government to criticism from the Conservatives, and from others, that it is engaging a regime that sponsors terrorism. Technically, this would be accurate as criticism, since Iran, it is a fact, provides material support to groups that are listed as terrorist entities by Canada, especially Hamas and Hezbollah.

This scenario, in any case, faces another major difficulty: From Iran's perspective it is not appealing at all. I am not aware of definitive formal public statements by the Islamic republic on this. But clearly, logically, it is reluctant to be seen as endorsing or playing along with a Canadian process that designates it as a state sponsor of terrorism. Besides the political dimension from Iran's perspective, reopening embassies would expose Iranian assets in Canada to seizure by Canadian courts if relations were re-established.

According to a second scenario, which doesn't seem likely for now at least on the basis of what we know but it's still worth discussing, Ottawa could delist Iran. Procedurally, this is straightforward. The designation on the list of state sponsors of terrorism is the product of a decision by cabinet. Iran could, in principle, be removed from the list by an order in council with no legislative action required. This could be done either through a biennial ministerial review planned for by the law or if Iran applies in writing and makes a request to the Minister of Foreign Affairs that it no longer be listed.

The second possibility is very unlikely, as I just cannot see Iran legitimizing the process by sending us a letter asking us to delist it. Delisting Iran would raise the additional issue of what to do with ongoing cases before Canadian courts under the Justice for Victims of Terrorism Act.

Domestically, the challenges are primarily political for the Liberal government, since this would equate to a statement that the government considers Iran not to be a sponsor of terrorism. This would expose the government, politically, to criticism that it is soft on terrorism, but it would also be inaccurate, since Iran, and this is a fact, supports groups that are on the Canadian list of terrorist identities, like Hamas and Hezbollah.

There's another layer of challenge that has to be added to explain the slow pace of progress. After one year, publicly at least, we have seen virtually no progress in discussions between Canada and Iran. The reality is that this is just not a priority for either country. Canada barely registers in Iran. The Conservative government's hostility towards Iran, for example, labelling Iran as the greatest threat to international peace and security, was met in Iran, to the very limited extent that it was noticed, with a mixture of puzzlement and head-scratching.

Under the right conditions, many elements in the Iranian regime would be willing to reopen embassies in the two countries. Moderates around President Rouhani could be willing to use this to showcase it as a success in their strategy of engagement. At the same time, Iran's foreign policy agenda is overflowing, and it is very difficult for a country like Canada to get even a bit of attention in this very busy agenda.

It's not clear where things go from here, given obstacles to the two scenarios I mentioned, listing or delisting Iran. I would suggest two other scenarios looking ahead.

A third one is that discussions get bogged down in the technicalities and legalities, mostly but not exclusively as a legacy of the Justice for Victims of Terrorism Act. The issue slips down the agenda in Tehran and Ottawa, and basically you have a perpetuation of the status quo. I don't have a crystal ball. I'm not willing to make a 100% certainty prediction, but I would not be surprised if after four years of the current government we still don't have embassies in Ottawa and Tehran, simply because of the complexities mentioned here.

A fourth outcome could see the emergence of a compromise between the two sides, to save face by trying to figure out a way to satisfy some of their priorities, not all of them. What format such a compromise could take, I don't know. The U.S. and Cuba have had interests sections, not embassies, for decades, or at least they used to. Is that a possibility? I don't know. Perhaps something in the middle will have to be explored if something is to happen before four years.

To conclude, the hurdles imposed by the former government are surmountable, but it will take time and it imposes costs. This may count as a success for the previous government, from the perspective of defending a non-engagement, but it is bad public policy for the country as a whole. It prevents Canada from achieving its limited but real objectives in its relations with Iran at the diplomatic, consular, strategic, and trade levels. This is even more the case since Canada already lags behind most of its European allies in re-establishing or rebuilding relations with Iran. We start with a handicap. We don't have the historical, diplomatic, and trade presence that other countries—not only like France and Germany, but even smaller ones like Italy and Austria—have in Iran. We are steadily losing ground.

This shows, and I'll conclude on this, that sanctions are a risky foreign policy instrument, to be used with prudence and with the awareness of possible longer-term consequences. Sanctions may allow a state to achieve shorter-term goals. In this case, with Iran over the years, the goal was to weaken it, to try to compel it to change its behaviour. In this case, they did have a fair bit of success. But sanctions also become entrenched institutionally, bureaucratically, and politically. They can then become much more difficult to lift than their built-in procedures would suggest, because of this entrenchment. When that happens, as I think is the case here, the gains made in the past are replaced by costs in the present and in the future.

Thank you.

[The Chair, Liberal, Bob Nault]

Thank you very much, Mr. Juneau.

Now we'll go to Mr. Nephew.

[Richard Nephew, Senior Research Scholar, Center on Global Energy Policy, Columbia University, As an Individual]

Thank you very much for the invitation to speak with you today. I'm honoured to be asked to address this committee and to offer my views.

You asked in particular for my thinking with respect to Canadian and international sanctions against Iran in the context of your legislative review. I took a careful look at the questions you are asking during this review. I believe I am best equipped to address three in my statement, and I look forward to addressing any others with your questions. I'll prioritize how effective sanctions are in compelling behaviour change on the part of state and non-state actors, what the relationship is between the imposition of sanctions and a variety of international goals, and whether unilateral sanctions are more or less effective than multilateral ones.

To the first, I believe strongly that sanctions can be quite effective if they support an underlying policy that is sensible, coherent, and achievable. For non-state actors, the ambition of sanctions is much more narrow—simply denying access to resources and capabilities that can be used for harm. In this they're essentially as effective as any other law enforcement tool or device.

For states, to be kind, this is not always the case. Sanctions are all too often looked at by international leaders as a tool to be employed when nothing else seems to work and when a policy-maker wishes to appear decisive. Most of the sanctions regimes imposed in Africa over the past two decades bear this hallmark: measures preventing use of the global economy by insurgents who are not using it; measures freezing the assets of entities that have none; and embargoes on weapons and goods that only smugglers provide, in any event. These kinds of sanctions are imposed mostly to assuage the consciences of the sanctioners and to demonstrate to their population that they've done something about the problem. All too often these sanctions are embedded in policies that have no chance of success, or where there is little interest on the part of senior officials to press forward with implementation...and ultimately seeking diplomatic resolutions to the problem at hand.

To my mind, the critical variable is not the form of sanction used or the manner in which it is employed, but rather the consistency of the sanction with the overall policy and degree to which that policy is accorded appropriate seriousness and status in the sanctioning government. In the case of Iran, I believe sanctions were effective because they were part of a policy that was embraced the world over, attentively pursued by senior officials of all the major countries and balanced with a sense of strategic purpose and desired outcome that everyone could understand. That policy, with sanctions as the leverage, created a situation that Iran needed to escape, the only escape being the nuclear agreement that we reached.

Seen through this lens, it is possible to answer the second question about the applicability of sanctions to broader multinational goals. In my view, they have become a primary tool for international statecraft, because they offer a source of leverage for addressing problems that might otherwise have to rely on force. In this, sanctions are a significant tool for maintaining international peace and security and for addressing the various threats to the international order, such as proliferation, terrorism, and violations of human rights.

To be truly effective in addressing global problems, however, they have to be multilateral in effect. This is less because the underlying problems are multilateral in nature—though certainly it helps to accord legitimacy to sanctions as a tool in fixing them—and more because the nature of the global economy demands partnerships to achieve effectiveness. Witness the U.S. embargo on Cuba. True, for a few years in the 1960s Cuba had a rough time, but with the Soviet decision to support the Cubans, they were able to persevere until the 1990s, when Venezuela took over.

Iran is another case in point. U.S. sanctions were exhausted in 1995, but starting in 1996 the United States was able to apply pressure by taking away the option for Iran to evade the punishment by going to non-U.S. sources for goods, services, and technology.

One could imagine a scenario in which one country so completely governs the economic future of another—China and North Korea, say—and therefore has the ability to implement sanctions pressure akin to a global embargo on its own, but those cases are exceedingly rare in the global economy today. This demands intense co-operation and coordination among partners or, failing that, an overriding ability on the part of one state to compel the economic behaviour of other entities.

To some extent, this is what happened with Iran from 2006 to 2013. But as my friends in Washington may soon find out if they try to go it alone with sanctions pressure on Iran, they are dramatically overstating the power of the U.S. economy to dominate the economic, political, and legal decisions of others. Foreign partners of the United States have the ability to block adherence of their companies to U.S. sanctions legally, and those same companies have banks and can de-risk themselves from the U.S. market if sufficiently concerned about the impact of sanctions. I fear that without co-operation in the future, this is precisely the scenario that will take place with Iran.

Sanctions can be useful and effective, but they have to be wielded properly, with clear goals and an ability to bring the desired leverage to bear on the desired target. This takes care, patience, and sophisticated analysis. Sanctions are not what you do when you can't think of anything else. They're what you use to create leverage to solve problems.

To the specific case that my fellow witness was referring to earlier, as an American looking humbly at the Canadian system, I can see right here a difficulty in the Canadian terrorism sanctions that goes right to this argument. Without the ability to sustain international pressure on Iran to change its support for terrorism and support for things like Hezbollah, Canada is to some extent harming itself and its ability to move forward with the relationship with Iran that it may not wish to do at this point any further. I think that ultimately, as Canada looks to address this issue in the broader sanctions regime, it's worth thinking about the degree to which its effectiveness in implementing sanctions, and the multilateral nature of most of them, can be brought to bear on this particular problem as well.

Thank you again and I look forward to your questions.

[The Chair, Liberal, Bob Nault]

Thank you very much, Mr. Nephew.

We're going to go straight to questions and we'll start with Mr. Allison.

[Dean Allison, Conservative, Niagara West, ON]

I'll just start by thanking both the witnesses for their testimony.

Mr. Nephew, I'm going to ask you some questions.

Before I start, I noticed we got a press release that there were 15 people added to sanctions just before our committee started, so I don't know if that was just timely for us, or what that was. That's interesting. I note that.

You had some testimony before the Senate foreign relations committee in July talking about sanctions, and talking about the agreement one year later. I think it's fair to say that you said you think we're safer than we were a year ago. Obviously, the election hadn't happened at that point in time at your federal level. I guess my question is, what are some of the greatest risks around the joint comprehensive plan of action as it relates now to Mr. Trump, who as president-elect has said he's not really that supportive of what's going on.

I realize that one of the things you talked about in your testimony is the whole issue of uncertainty. The fact remains that even in Iran it's around complicated environmental...it's tough to deal with. They're concerned about setbacks and all these other things that could happen.

Just give us your lay of the land today in terms of that action plan and what you think the U.S. will do. It's what you said as well. It's easy to say that you're going to do this and do that, but it's tougher to execute. I think both of you said in your testimony that doing it unilaterally isn't nearly as effective as multilaterally. If you could just give me your comments around that, that would be great.

[Richard Nephew]

Sure, I'd be happy to.

Before the election, I said there were three primary challenges to the JCPOA: politics in Washington, politics in Iran, and then the practical issues of implementation. I think with Trump's election, we've seen one of those issues brought immediately to the fore. Ultimately, Trump was more measured than a number of other Republican candidates for president in how they spoke about this issue. He implied on the one hand that he felt the deal was a disaster because Iran was left with too much nuclear capability. On the other hand he was upset that the United States wasn't in the market to sell surface-to-air missiles the way Russia was, and that perhaps there were economic benefits that weren't tapped by the United States.

I think it's pretty clear that the advisers he's assembling are hostile to the Islamic Republic of Iran and hostile to JCPOA. I think that very soon, in 2017, there will be an effort to renegotiate the JCPOA or to threaten U.S. withdrawal from it. I think that would be very complicated, to say the least, because of politics in Tehran.

Ultimately, the presidential elections coming up in May in Iran may be the final nail in the coffin. A lot of folks in Washington don't believe that Iran has politics. I can assure you they do. Those politics are going to be hostile to any attempt by the United States to force changes, especially the sorts of very severe changes that I would imagine Trump would demand.

We might not get to the third issue, which is the practical implementation issue. There have already been some technical problems on both sanctions relief and the nuclear side. I think those have been managed thus far, but they require a sense of trust and co-operation among the parties. They have that with Obama and Rouhani. I don't think they have that necessarily with Trump and his replacement.

I think the JCPOA is in for a very serious test in the next six months. My hope, candidly, is that Trump listens to some other outside experts who are going to tell him, as I have, that renegotiation, I think, is a mirage, and that you have to accept the benefits you have with the deal, rather than chase after that mirage. But I'm not confident that this is going to be the choice taken.

[Dean Allison, Conservative, Niagara West, ON]

Although you were optimistic about it, I think one of the things you did suggest was that you cannot be complacent at all. In other words, you thought the deal made some sense, and it would make the world a safer place, but you said very clearly, don't be complacent and to make sure there are checks and balances.

Based on the fact that we think Iran came to this conclusion because of economic issues, etc., what are your thoughts in terms of the long term? Is this something that, in your opinion, they're going to hold to in the short term while they restart some of their economic issues? We've already seen their GDP bounce back after years and years of decline. Do you think they're playing that game? It's kind of hard to figure out what they're doing, but what are your thoughts, and will the world continue to look hard at what they're doing? We've already looked at heavy water and some of these other things that have been produced.

What are your thoughts around making sure that people follow through and they're actually doing what they say they're supposed to be doing?

[Richard Nephew]

Enforcement is absolutely essential here. The deal itself is only as good as what it prevents, and if it doesn't prevent Iranian nuclear expansion, then it's a problem, and it isn't as worth preserving at that point.

I think the real issue is that no one has yet shown me, anyway, anything with confidence that says we'll get the same positive result with regard to Iran's nuclear program without having the JCPOA. I think my biggest fear is that we'd be jettisoning something that's working even if there are some implementation issues that, again, are fairly reserved in their consequence. I mean, a little bit too much heavy water in Iran's current nuclear context is fairly insignificant towards the nuclear weapons purpose and far less significant than what they might do if the Iranians have to back out of this.

I think, ultimately, the real issue with the JCPOA is that it was always going to be a fairly tentative agreement since there wasn't buy-in by all the various different factions of all the various different parties. It was most pronounced in Washington and most pronounced in Tehran. The degree to which hardliners in both capitals are of the same mind, looking at one another, and seeing nothing but hostile intent, I think, has been very damaging to the JCPOA. This is why compliance thus far has been so important, and I think that the degree to which Iran has complied, and they have, and the degree to which we've complied on economic relief, and we have, is a positive. I think it will give the Iranians pause before they think about backing away from the deal on their own. My hope is that Washington has the same sort of pause now when it considers what the risks are.

[Dean Allison, Conservative, Niagara West, ON]

Thank you.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Allison.

Mr. Saini, please.

[Raj Saini, Liberal, Kitchener Centre, ON]

Gentlemen, good afternoon to both of you. Thank you very much for coming here.

Mr. Nephew, I'd like to start with you. You've written some articles, and I'd like to quote something that you wrote. You wrote that “...outright resolution should not necessarily be the objective of enhanced sanctions against Russia.”

I'm sure that you have the same thoughts regardless of the targeted country, so can you explain the appropriate role of what sanctions should be and how they can be part of a foreign policy tool for the government?

[Richard Nephew]

I think that sanctions are most useful in creating a desire on the part of another state to change policies that they otherwise want to keep. Ultimately, these are places where we feel like we have an interest, but we don't have a direct stake. It's not like the Russians have invaded western Canada or western United States, so we don't have the ability necessarily to direct force of arms and direct pressure against the Russian government for direct interference with our own affairs, but we want to try to achieve a resolution. Sanctions provide that leverage. They give you something to trade. They give you the ability to say, “If you will stop doing x, or start doing y, we will stop imposing sanctions against you.”

From this perspective, they are starting points for a conversation. They are a starting point for diplomacy that gives both sides the ability to claim something good and then back away when they have achieved at least something positive. This is where, on that Russia piece, I think it comes down to a question of what is good enough in terms of a resolution of the situation in Ukraine. That's a decision that the Ukrainian government has to make. They have to tell us when they feel comfortable, in my view, about what their situation is in eastern Ukraine and Crimea. If they said they were satisfied with the situation as is if the Russians back out of eastern Ukraine, then maybe that's a situation that we can live with, even if it's not the absolute initial objective of sanctions as they were imposed by the United States, which also dealt with Crimea and dealt with broader political issues there, too.

My point is that sanctions provide leverage to make a deal. They need to be not looked at as an absolute quid pro quo. They are a part of the diplomatic tool kit.

[Raj Saini, Liberal, Kitchener Centre, ON]

I had a follow-up question, but I can't resist asking you this question, especially since Mr. Allison brought up the point. You talked about JCPOA and about Mr. Trump's recent election. We know that the JCPOA was signed by the P5+1, so if one country dissociates itself from that agreement, how less effective would it be if only one country out of the P5+1 did that?

The second question I have is on something you brought up, or I think Mr. Allison brought up, which is heavy water. We know that right now the Iranian regime have twice exceeded their heavy water requirement. We also know that part of the agreement was to extend the ability for Iran to have a nuclear weapon from two to three months to up to a year. Looking at these things in totality, could you comment on that?

[Richard Nephew]

Sure, I'm happy to.

On the issue of the effectiveness of one country withdrawing, it depends on the one country. The United States had the lion's share of sanctions that were affecting business activity in Europe and Asia, because we threatened access to the U.S. market if countries and companies didn't co-operate with our efforts. Our ability to threaten banks like HSBC, and major Chinese banks, and companies as diverse as European, Asian, and Indian ones, is what gave a lot of those sanctions power. The U.S.'s ability to withdraw from the JCPOA and reimpose all those sanctions puts back all the problems and costs that Iran cut a deal to get out from under.

If Russia, for instance, which didn't have any unilateral sanctions that had any real impact, were to reimpose, that impact on Iran is much less. For the United States, because of the structure of our sanctions, because of the leveraging of the U.S. economy against Iran and these business interests, I think there's an outsized role provided by the U.S. economy, and thereby by the United States. It's not an inherent legal issue, it's a practical issue of what the ramifications are.

Briefly on the issue of heavy water, from a technical perspective, Iran has zero use now for excess heavy water. The reactor they could have used to produce plutonium has had its innards filled with concrete. They don't have the ability to use that heavy water now. If they were to try to start that reactor, it would take them a couple of years and then four years' worth of production of heavy water and use of the reactor to have enough weapons-grade plutonium.

Heavy water from a technical perspective, in my view, is insignificant. It is important from an enforcement perspective. This is what goes to the issue of what's Iran's resolution. They have not been sending out one barrel at a time of heavy water when they've had these overages. They've been sending out tonnes. The idea is they go in an arc up and then go below the threshold, and then they arc up and then go below the threshold. That's a technical process that's constantly ongoing. The only way they would stop that is by stopping production altogether, which the JCPOA didn't envision.

[Raj Saini, Liberal, Kitchener Centre, ON]

Mr. Juneau, I don't want to forget you. Thank you very much for your comments also.

You wrote in one of your articles, “One must not confuse a highly visible—but ultimately no more than tactical and symbolic—victory with the vastly greater costs the program has imposed on Iran.”

What do you think the ultimate goals of the sanctions regime should be and what is the importance of leverage in making sure that we advance our foreign policy goals also?

[Dr. Thomas Juneau]

In the current post-JCPOA context?

[Raj Saini, Liberal, Kitchener Centre, ON]

Yes.

[Dr. Thomas Juneau]

At this point, the JCPOA calls for a lifting of a lot of the sanctions, but not all of them. It's been pretty clear on paper at least that it's the nuclear-related sanctions that are lifted. Other non-nuclear sanctions are not lifted, whether it's for human rights, for support for terrorism, or other issues. Some of that was discussed by the other witness.

At this point, because the relationship with Iran remains adversarial, we may wish for more rapprochement, or no more, but it does remain adversarial. Again, as was discussed by the other witness, sanctions remain an effective tool of leverage for Canada, for the U.S., for the P5+1, for the west as a whole.

I don't recall exactly what was the context when I wrote those words. In my view, the challenge with sanctions that Canada is currently dealing with in the very narrow context of Canada's objectives is that we can't lift some of these sanctions. Even though the built-in procedures to lift these sanctions on paper are relatively straightforward and simple, the politics around them and the path dependency that was built in through the process has institutionalized and has routinized the sanctions in many ways.

Now Canada is stuck with some of these sanctions. The current government wants to lift them, but it is extremely difficult to do so. That is very problematic, I find, for the simple reason that the country has painted itself into a corner, and it can't just say, “Well, I'll walk on the paint.” Canada has cornered itself. It has tied its hands with these sanctions and would like to move forward but can't because it is very difficult. That, I think, is bad policy from a very technical perspective because movement is almost impossible.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Saini.

We'll go to Madam Laverdière, please.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Chair.

Thank you both. Your presentation was very interesting.

My questions are along the same lines as those of Mr. Allison and Mr. Saini regarding U.S. sanctions and the U.S.' participation in a joint comprehensive plan of action.

Mr. Nephew, you mentioned the possibility of renegotiating the agreements. Rather than renegotiating them, do you think the United States would simply withdraw unilaterally? Is that a possible scenario?

[Richard Nephew]

I think it very much is a possible scenario. It's something that some opponents of the nuclear deal have said they want to do. I don't think it's the most likely scenario now. I think that Trump will attempt to say, “I'm a businessman. I do business. We renegotiate deals all the time, and so I'd like to renegotiate this deal.” My biggest concern is that his demands will be so onerous that it will be the equivalent of walking in with an ultimatum: either sign on this dotted line or we walk away. I don't think that will be very effective.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much.

Mr. Juneau, you mentioned in your presentation, which was also very interesting, that imposing sanctions entails risks. The risks you described in general terms, however, are those associated with the Justice for Victims of Terrorism Act.

Can we or should we make a distinction between this very specific act and the usual sanction mechanisms pursuant to other acts? Should the committee draw certain lessons from all of that?

[Dr. Thomas Juneau]

Thank you very much. That is a very good question.

In answer to your question, I must point out that I am not an expert on sanctions in general. My expertise is more in the Middle East, Iran, and Canada's relations with this region. I would be reluctant to comment on sanctions in general because that is not my areas of expertise.

In the specific case of relations with Iran, this must be seen as a missed opportunity. As a result of the constraints that Canada has imposed on itself by creating a mechanism that is now extremely complicated to eliminate, it closes doors for itself. In terms of foreign policy in general, the idea that a state would impose constraints on itself does not make any sense, in my opinion. The state is penalizing itself, without any other country being involved. In general, other countries impose constraints on us, but in this case we have imposed them on ourselves.

In the case of Iran, of course, the missed opportunities are limited, and we must not blow this out of proportion. Canada-Iran relations will never be important to Canada or to Iran. The trade and diplomatic potential is very limited, but there is all the same a ceiling, as low as it is, that we will not attain because of these sanctions. There is some trade potential, but there is also the consular dimension. We saw this in the Homa Hoodfar case, which was resolved a few months ago. We do not know why the case was resolved, it remains a mystery, but we can at least conclude from the publicly available information that not having an embassy in the country certainly did not make things any easier.

There have been consular cases with Iran in the past and there will very likely be others in the future. We have to look at this as a missed opportunity for the country, which runs counter to our national interest.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

When you talk about this missed opportunity and this complex mechanism that we have used and that closes doors for us, you are not referring to the multilateral sanctions we have taken with our partners, but specifically to the Justice for Victims of Terrorism Act, is that correct?