Europe, Iran Baffled by US Position on Nuclear Deal

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by Mohammad Ghaderi and Javad Heiran-Nia

During his presidential campaign, Donald Trump called the Joint Comprehensive Plan of Action (JCPOA) “the worst deal ever” for the US. In his first State of the Union address in January, Trump called on Congress to “fix the terrible flaws” of the Iran nuclear deal. The president has threatened to withdraw from the accord if Congress and Europe fail to amend it by May 12.

Since the Iranian Revolution of 1979, nothing has put Europe at loggerheads with the US like the JCPOA. The fate of the deal seems to lie in the negotiations between Europe and the US. Although European countries have pressured Washington to preserve the Iran deal, they agree with the US over Iran’s missile program and its potential role in regional conflicts, and thus, they have formed a joint working group with Washington.

Richard Nephew, the lead sanctions expert for the US team negotiating with Iran, said in an interview, “I do not think that Europe, much less Iran, will accept these conditions. I think that European officials would be pleased to have the kinds of measures agreed to by Iran, but the fact that Iran will not agree—and certainly not in this context—will mean that the Europeans will reject the attempt as prejudicial to the JCPOA.”

He also added, “I do not think that the EU will be able to meet Trump’s demands. He will either have to back down from his demands, which is possible but increasingly hard to believe, or there will be a confrontation.”

In the past three months, European states have gone to great lengths to convince the Trump administration and Congress that a stronger pact with Iran is not possible on the ruins of the existing JCPOA. To them, the deal is of high importance and its decertification would distract from focusing on Iran’s regional and missile program activities as well as its human rights issues.

In keeping the deal, Europe focuses more on its political and security implications than its economic benefits. Europeans are apprehensive that the decertification of the deal could lead to exacerbation of tensions in the region, unlimited enhancement of Iran’s nuclear program, and the credibility of multilateral agreements in the international arena.

At the same time, Europe feels threatened by Iran’s close ties with Russia and China and the possibility that, in response to Western pressure, Iran may establish firmer anti-Western allies. Europe has realized that only diplomacy and trust, not isolation, can help resolve issues with Tehran.

However, Europe also worries about damaging its extensive relations with the US. Nonetheless, Europe might be willing to accept the cost of angering Washington over the JCPOA if it means avoiding a situation in which Iran were to resume its nuclear program and the United States or Israel used military force to stop it.

Of course, Europe loathes having to choose between Tehran and Washington, and thus it will spare no efforts to avoid the choice. It might therefore opt for a middle road. Europe might try to please both parties of the deal by persuading Trump to retain the accord and Iran to limit missile ballistic programs and regional activities.

Iran’s Perspective

Iran hoped that the JCPOA would lead to the lifting of sanctions and opportunities for economic growth and normalization through foreign investments in the country’s various sectors. However, Trump’s wavering over the JCPOA certification every 90 days has scared off many international investors from Iran’s market.

According to an exclusive Crisis Group survey of more than 60 senior managers at multinational companies actively pursuing opportunities in Iran, the majority—83 percent—remain jittery about the prospect of the United States reimposing unilateral sanctions, and 79 percent have delayed plans to enter the Iranian market since the JCPOA came into force in 2016. Trump’s decertification of the nuclear deal in October, even though it had no immediate practical consequences, has adversely affected the future planning of nearly half of the companies polled.

Iran has repeatedly declared that the JCPOA is “non-negotiable.” It has also pointed out that the deal is not just between P5+1 but is rather backed by the international community and endorsed by the United Nations Security Council in Resolution 2231. Thus, decertification of the accord pits Trump against the UN and the world.

If Iran decides to withdraw from the deal, it would stand alone against the US and Europe, an unattractive scenario that would send Iran back to square one.

If the US were to withdraw from the JCPOA, Iran could choose to remain committed to its obligations with the remaining signatories of the deal, assuming that the other European states do the same. If the accord survived without the US, that would isolate Washington and open doors to Iran for the next round of cooperation with Europe.

Denis Chaibi, head of the Iranian taskforce at the EU’s external action service, has said that if the United States withdraws from a nuclear deal with Iran, the EU may reinstate former regulations to protect its companies that are trading with Iran. For instance, the EU instituted “blocking regulations” in 1996 as a countermeasure to the US and its extraterritorial economic sanctions against Cuba and Iran. EU governments argued that sanctions benefited US foreign policy interests at the expense of European sovereignty. The regulation still holds, but the EU hasn’t taken advantage of it on Iran.

Europe’s Double Game

The the European Union has a foot in both camps. For example, after Secretary of State Rex Tillerson’s visit to London and Paris in January, the EU and US formed a special working group on Iran. According to Tillerson, the taskforce is responsible for addressing and correcting the flaws of the JCPOA.

However, just a few days after launch of the taskforce, France announced that it would push French companies to invest in Iran. Although it has been the loudest European critic of Iran’s regional activities and missile tests, France has also maintained strong economic ties with Iran since 1979. The plan offers special export guarantees for Iranian buyers of French goods and services in euros. The purpose of conducting financial operations in euros, and not dollars, is to minimize the effects of U.S. policies, which have discouraged financial institutions outside the US to deal with Iran.

“We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran,” Bpifrance’s chief executive Nicolas Dufourcq has said. “This is a completely separate flow (of money),” he added. “There is no (U.S.) dollar in this scheme, no one holding a US passport.”

The state-owned investment bank Bpifrance has lined up deals worth an estimated 1.5 billion euros.

The European stance plays a huge role in Iran’s final decision on the deal. Regardless of US withdrawal and Europe’s support of the deal, Iran is focused on the benefits from the accord. If those benefits don’t materialize, it would be meaningless for Iran to keep its end of the bargain.

Mohammad Ghaderi is the editor-in-chief of Tehran Times. Javad Heiran-Nia is a visiting fellow at the Persian Gulf Department of the Center for Middle East Studies. Photo: Nicolas Dufourcq. 

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5 Comments

  1. My govt believes that we can intimidate enough European banks and companies from doing any business with Iran to make sanctions the status quo. We are probably right.

    Iran, Russia, and China will become stronger trading partners because of our abusive Treasury Dept. Iran will not develop nuclear weapons but will drop some of the more onerous restrictions.
    1. Buy conventional weapons from Russia, the candy store will now be open. Hypersonic missiles anyone?
    2. Develop nuclear powered naval vessels and native nuclear medicine.
    They will likely continue IAEA monitoring to assure that their nuclear program is non-weapons related.

    We will re-create the pre-2003 Iraq war but this time, we really, really know what we are doing, honest, God is absolutely on our side, no doubt about it.

  2. How do you write intelligently about this issue and not even mention Israel. They are the driving force here. I don’t totally understand their problem other than they want regime change. If they think they have an acceptable replacement, then they have a spy working very deep. Not likely. They have commercial designs the Persians are not cooperating with. Plus they feel they are more fit to rule the Middle East than the barbarians.

  3. There’s nothing “baffling” about it unless you ignore the role of the pro-Israeli lobby and their warmongering.

  4. Israel fans our hatred of Iran but I don’t put it all on them.

    We detest any country that doesn’t bow down to us 100% of the time. We even screamed at France for suggesting that invading Iraq was a bad idea and France goes along with us 99% of the time, nothing less than 100% will do. Does Israel tell us to hate Russia? Some claim that, I don’t see it.

    We are filled with self-righteousness, we can do no wrong but an affront against us is totally unforgivable. We still talk about how they overran our embassy in 1979 while we shot down an airliner killing over 300 but that was an accident. The fact that we sent Robo-ship into their waters making that accident at the very least, criminally negligent homicide, doesn’t matter to us, we refused to apologize and still think nothing of it. We are dying to shoot up one of their boats that are still within miles of their shoreline but 6,000 miles from ours.

    Without question, Netanyahu calls Iran the big satan while condemning them for calling them the little satan but he is just taking advantage of our stupidity.

  5. People who defend Iran keep pointing to others for being tough or unfair but failed to look at Islamic Republic’s track record and behavior. You can stick your head in the sand and refuse to see the truth but the list of misdeeds of the Islamic Republic is long and it keeps getting longer. Russia is the model that the Islamic Republic is molded after. Lieing to the international community. Assassinating political opposition and anyone they please and can get their hands on. Oh and regarding that airplane. The Iranians directed that flight to descend towards a US military vessel in INTERNATIONAL waters. They refused to answer the calls on their Radio. Iranians won’t think twice about murdering their own people if it buys them international sympathy. You who routinely side with these criminal dictators in Russia , Iran, China and North Korea are either completely naive or cohorts and part of the propaganda. Lob Log gets paid by the Islamic Republic to write these articles so it is no surprise that its readers are criminal sympathizers.

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