Instead of Adding onto Iran Sanctions, Europe Should Prevent Disaster

by Sina Azodi and Tytti Erasto

President Trump’s decision last week to withdraw the United States from the 2015 Iran nuclear deal confirmed the worst fears of European leaders, who had pleaded to the president not to scrap the laboriously negotiated arms control agreement. The EU3 (France, the United Kingdom, and Germany) had reportedly also offered to impose sanctions on Iran’s missile and regional activities if the United States agreed to remain in Joint Comprehensive Plan of Action (JCPOA). Although their efforts to convince the U.S. president failed, Europeans might still try to use the sanctions card to secure exemptions from U.S. extraterritorial sanctions. However, Europe should not overestimate the effectiveness of their own sanctions in influencing either Washington or Tehran. Nor should Europeans underestimate the negative consequences of even partial concessions for the Trump administration’s ill-advised confrontational approach on Iran.

Immediately after President Trump’s announcement, Germany, France, and United Kingdom, who helped broker the deal with Iran, issued a joint statement expressing their dismay and continuing commitment to the JCPOA. There have also been increasing calls—including from the French economy minister and European business leaders—for the EU to put into place measures to protect its companies from the U.S. sanctions re-instated as a result of the U.S. withdrawal from the JCPOA. On Tuesday, the EU foreign policy chief Federica Mogherini announced a nine-point plan to ensure the continuation of Iran’s oil and gas sales and access to international finance.

At the same time, Europeans might be tempted to make a new attempt at accommodating the United States by negotiating exemptions to extraterritorial sanctions—possibly in exchange for new EU sanctions against Iran’s missile program. Targeting Iran’s missiles might seem like a safe way to seek common ground with the United States without interfering with the JCPOA. However, new European missile sanctions—however limited—would likely only lend credence to the Trump administration’s confrontational Iran policy.

Arguably, President Trump’s decision to withdraw from the JCPOA was primarily driven by a short-sighted quest to fulfill his campaign promise to “tear apart” the deal. Nevertheless, his policy is consistent with two traditional U.S. foreign policy approaches towards Iran, neither of which has been particularly successful. One is based on the deeply held assumption that Iran’s behavior is best influenced through coercion. According to this logic, the JCPOA was premature and restoring or increasing coercive pressure could lead to even more far-reaching concessions from Iran. As the President argued on 8 May, “The deal lifted crippling economic sanctions on Iran… at the point when the United States had maximum leverage… A constructive deal could easily have been struck at the time, but it wasn’t.”

The second approach—long advocated by president Trump’s National Security Advisor John Bolton—aims at military intervention and regime change in Iran, based on the fallacy that this would provide the ultimate fix for all problems with the country. From this perspective, the return of the nuclear crisis is actually desirable, as it can help justify military action against Iran in the future. Indeed, the risk of war has significantly increased as a result of President Trump’s decision. By destroying even the rudimentary trust that agreements are respected, that decision has effectively undermined diplomatic options in the U.S. policy towards Iran.

Although Europeans uniformly reject the latter approach, they have at least partially subscribed to the former—in particular the idea that transatlantic unity on sanctions brought Iran to the table to discuss the JCPOA. To the extent that a similar belief in the effectiveness of coercion also underlies the recent calls for new EU sanctions against Iran’s missile program and regional activities, now more than ever it’s important to set the record straight.

First, although selling the JCPOA to the skeptical U.S. audience required presenting it as a result toughness, in reality the deal was made possible by mutual compromise. The U.S. decision to compromise on the issue of uranium enrichment in early 2013 was the result of acknowledging the multiple failures of the previous coercive strategy based on maximalist demands. In the same way that sanctions did not force Iran to give up uranium enrichment in the past, they will not push it to make unilateral concessions on this or other issues at the present time.

Second, Europeans would do well to check the accuracy of U.S.-based threat assessments regarding Iran’s ballistic missile program. Despite all the loose talk about Iranian ICBMs—even by JCPOA supporters—Iran’s missiles are limited to medium range. Iranian officials have also repeatedly announced that the country has no need to extend the missiles’ range, highlighting that their purpose is regional deterrence. This begs the question as to whether the Western policy of punishing Iran for its missile activities, while selling conventional arms to its regional adversaries, is sustainable. Iran has also not tested its missiles for over a year, so why impose sanctions on it now?

In response to U.S. withdrawal, President Hassan Rouhani announced that Iran will remain in the JCPOA if its interests are guaranteed by other parties, mainly the EU3. Ayatollah Khamenei likewise stressed the need for “genuine and practical guarantees” from the Europeans. In practice, this means ensuring that business between Europe and Iran will continue regardless of U.S. penalties—notably though the implementation of the 1996 EU Blocking Statute against extraterritorial sanctions.

This could lead to a transatlantic trade war, in which Europeans have much to lose—particularly if President Trump listens to National Security Advisor John Bolton, who on Sunday threatened Europeans companies with U.S. sanctions if they want to continue their trade with Iran. One of the staunch enemies of the nuclear deal, the Foundation for Defensive of Democracies(FDD), has reportedly also circulated a memo in Capitol Hill, recommending several steps to deter European companies from continuing business with Iran after the deal.

It is clearly beyond the EU’s power to prevent all the damage resulting from the re-imposition of extraterritorial sanctions by the world’s biggest economy. However, the demonstration of political commitment is key here. If legal measures do not succeed in convincing companies to continue trade with Iran, the EU could think of other ways to compensate Iran for the negative effects. Europeans could also seek cooperation with China, Russia, and other countries to strengthen the legal and financial tools against U.S. sanctions. Equally important, the EU should avoid making even partial concessions to the Trump administration’s coercive approach at this delicate time when Iran is re-evaluating the benefits of the JCPOA following U.S. withdrawal.

President Trump’s decision to renege on the UN-backed nuclear deal has set U.S.-Iranian relations on a dangerous collision course, undermining non-proliferation and risking a new war in the Middle East. However, European allies now stand at a critical juncture. Instead of jumping on America’s sanctions train, Europeans can prevent it from heading to disaster. The question is whether they are ready to pay the price of prioritizing international norms and security over short-term economic interests.

Tytti Erasto is a researcher at the Stockholm Peace Research Institute (SIPRI), focusing on nuclear arms control, disarmament and non-proliferation issues. She has previously worked as a Roger L. Hale Fellow at the Ploughshares Fund, Washington D.C., and Stanton Nuclear Security Fellow at Harvard Kennedy School’s Belfer Center. Erästö received her PhD in International Relations from the University of Tampere, Finland, in 2013. Follow her on Twitter @TyttiErasto. Sina Azodi is a Ph.D. student in Political Science and a researcher at University of South Florida’s Center for Strategic and Diplomatic Studies. He previously worked as a Research Assistant at Woodrow Wilson International Center for Scholars. He received his BA & MA from Elliott School of International Affairs, George Washington University. Follow him on Twitter @azodiac83