Trump win could make it hard for Canadian firms to do business in Iran

Canadian companies operating in Iran, or considering sales after an easing of sanctions against Tehran this year, are being warned by trade experts that a Donald Trump presidency could kill their ability to do business there.

This is one of many areas where the Republican president-elect’s policies will have economic repercussions for Canada. Airplane maker Bombardier Inc., for instance, is chasing deals in Iran, a country on the hunt for hundreds of commercial aircraft after Tehran agreed to give up parts of its nuclear program in exchange for a scaling back of sanctions.

Mr. Trump was hostile to the nuclear pact that Barack Obama and other world leaders signed with Iran in 2015 and at different points during his presidential campaign, he threatened to dismantle the deal or demand it be so aggressively enforced that Tehran might walk away from it. His running mate, Mike Pence, speaking in October, vowed the deal would be “ripped up” after consultation with American allies.

Related: Bombardier says Trump presidency is unlikely to affect operations

Canada lifted some sanctions against Iran in early 2016, a move that followed a rollback of punitive measures by European countries and the U.S., as well. This came after the United Nations confirmed Tehran was complying with the 2015 accord aimed at curbing Iran’s ambitions for nuclear weapons.

Sanctions experts caution that fallout from a Trump-led effort to kill the Iranian nuclear deal could very well lead to Washington imposing new economic and trade sanctions against Iran .

Even if Canada takes no action to retighten sanctions , the U.S. could make it harder for foreign firms to do business in Iran.

“Canadian businesses with U.S. parent companies or subsidiaries, or which use U.S.-made inputs should be very cautious when pursuing opportunities in Iran,” said Cyndee Todgham Cherniak, a Toronto-based international trade lawyer. “What may be permissible under Canadian law may become impermissible under U.S. law in 2017.”

Foreign Minister Stéphane Dion declined to discuss how Canada might respond to Mr. Trump’s Iranian policy Thursday, saying he will wait to see what actions the American leader takes. “I would not speculate about what the president-elect would do,” he said in an interview. “We did not comment during the campaign on the different declarations of the two [leading] candidates. So we’ll see what the new president will propose to the world.”

It’s still difficult doing business with Iran for Canadian companies but oil-field services firms have in the past conducted significant business there.

By 2013, Canadian sanctions had risen to the point where virtually all business with Iran was prohibited. But in the past, and before 2010, when Canadian measures began to ramp up, engineering firms from Canada were also heavily engaged in Iran.

Canadian firms have been rediscovering Iran in recent months.

“Companies are gingerly trying to get back into the market. Others are already in the market,” said Milos Barutciski, a trade-law expert with Bennett Jones in Toronto. “There is a lot of work heading back there now that was unlawful for basically six years.”

Roland Paris, a former top foreign-policy adviser to Prime Minister Justin Trudeau, said there are compelling commercial reasons for Mr. Trump to consider keeping trade channels open with Iran. In September, the U.S. Treasury Department granted aircraft makers licences to deliver new planes to Tehran, including 80 being sold by Boeing Co. to Iran’s national air carrier.

“Those are presumably the kinds of jobs that president Trump will want to keep in the United States,” Mr. Paris said.

With reports from Geoffrey York in Johannesburg


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