President Trump and Iran Have Set Europe a Stiff Challenge

Federica Mogherini and Hassan Rouhani

by Peter Jenkins

President Trump’s decision to pull the United States out of the July 2015 nuclear agreement with Iran, known as the Joint Comprehensive Plan of Action (JCPOA), had been predictable for nearly four months. On 12 January he had set conditions for remaining a party to the deal that were bound to be unacceptable to Iran. He had also bared his (characteristic) belief that he could get a better deal by scrapping the JCPOA and subjecting Iran to crippling sanctions.

Less predictable was Iran’s response to the decision. Some of the statements coming out of Iran since January had suggested that the JCPOA would be of no value to Iran if the United States pulled out. But, when the time came, Iran’s President and Foreign Minister reacted cautiously. In effect, they have given the other parties to the JCPOA – France, Germany, the UK, the EU, Russia and China – several weeks to convince them that without the United States Iran will still receive sufficient benefits for it to be worth Iran’s while to continue to honor the deal.

The benefits they have in mind are economic. In 2015 their hope was that the JCPOA would not only allow Iran to resume its position as a leading oil exporter, but also would enable it to purchase modern aircraft from Airbus and Boeing, and would bring in substantial European investments.

In the two years since the JCPOA came into effect that hope has been realised only in part. Iranian oil exports have returned to levels that were common before the imposition of harsh sanctions in 2012; but so far Iran has only taken delivery of a small number of modern aircraft and only a few European investments have materialised.

Now even that scale of benefits is under threat from the secondary sanctions that President Trump intends to impose on Europe and the rest of the world to inhibit trade with and investment in Iran. Essentially this is due to the role of the dollar as the world’s reserve currency and to the importance of the US market to most large firms – and to the fact that Airbus cannot export without US licenses.

This means that convincing Iran that it will still receive sufficient benefits will be a stiff challenge. The EU can promise to re-introduce a blocking regulation with which, in 1996, it countered a US secondary ban on investment in Iran’s oil and gas sectors, but European bankers and corporate executives are unlikely to see that as adequate protection against the penalties that the United States may impose on those who do business with Iran. EU leaders can try to muster the political resolve to threaten President Trump with retaliatory measures against US firms operating in Europe, but that may not have the desired effect.

So, in parallel to doing their best to protect Europe from US sanctions, EU leaders will have to persuade Iranian counterparts that the JCPOA benefits Iran in other ways.

That may not be impossible. The JCPOA was and is about much more than trade, investment and sanctions. It enables Iran to assure the world that its nuclear intentions are peaceful and legitimate. It confers moral prestige on Iran. It contributes to securing for Iran the geopolitical backing of Russia and China, especially useful when the White House is in such belligerent hands. It denies the United States and Israel reasonable grounds for claiming that Iran poses a nuclear threat which must be eliminated by the use of force.

Some may wonder whether Europe would be better advised to take an easy way out: siding with President Trump against Iran. The reasons why this seems not to have appealed to European leaders – so far at least – probably include the following.

Releasing Iran from the nuclear restrictions it accepted in 2015, by terminating the JCPOA, would result in Iran reverting to the production of enriched uranium on a much larger scale than under the JCPOA (with which Iran has been fully compliant). This would be Iran’s way of putting pressure on President Trump to reconsider last week’s decision. The trouble is that it would lead Israel, in particular, to clamor for the destruction of Iran’s nuclear facilities, entailing, potentially, dire consequences for global oil supplies and heavy human costs.

There is no reason to think that President Trump is right when he claims that imposing crippling sanctions would lead Iran to concede a better deal. It was not sanctions that led Iran to concede the JCPOA in 2015 (after two years of negotiation) but the United States’ conceding that Iran has a sovereign right to enrich uranium under international safeguards to produce fuel for nuclear reactors (a concession which President Obama liked to obscure by exaggerating the effectiveness of sanctions).

The surest way of guarding against Iran being tempted to misuse its facilities to produce weapon grade enriched uranium after JCPOA restrictions have “sunsetted” (which President Trump claims to fear) is to draw Iran into normal relations with the West, and thereby maximize the costs that Iran would incur if ever it went back on its nuclear non-proliferation pledges.

From the outset it was understood between Iran and the other parties to the nuclear negotiation that the JCPOA would only address concerns about Iran’s nuclear intentions. Had the negotiators attempted also to address Iran’s possession of medium-range (Iran has no intercontinental) ballistic missiles and its alliances with regional foes of Saudi Arabia and Israel (as President Trump now demands), their task would have been impossible. Global norms do not exist in those two domains.

Pacta sunt servanda. The JCPOA was negotiated in good faith. President Trump’s decision to repudiate it is morally indefensible and a dark stain on the record and reputation of the United States. In time it may prove to have harmed the rules-based global order created in 1945. Europe is strongly committed to that order. A good reputation is a vital component of Europe’s soft power.

Reprinted, with permission, from The Ambassador Partnership.

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Peter Jenkins

Peter Jenkins was a British career diplomat for 33 years, following studies at the Universities of Cambridge and Harvard. He served in Vienna (twice), Washington, Paris, Brasilia and Geneva. He specialized in global economic and security issues. His last assignment (2001-06) was that of UK Ambassador to the IAEA and UN (Vienna). Since 2006 he has represented the Renewable Energy and Energy Efficiency Partnership, advised the Director of IIASA and set up a partnership, The Ambassador Partnership llp, with former diplomatic colleagues, to offer the corporate sector dispute resolution and solutions to cross-border problems. He was an associate fellow of the Geneva Centre for Security Policy from 2010 to 2012. He writes and speaks on nuclear and trade policy issues.

SHOW 9 COMMENTS

9 Comments

  1. Amb Jenkins reminds us that it wasn’t the sanctions that brought Iran to the negotiating table; rather Iran was there all along. It was the US dropping the “Zero Enrichment” precondition that allowed the deal to occur.

    Sadly the proponents of the deal, instead of admiting that there was never any evidence of an Iranian nuclear weapons program in the first place and that the hype was all unjustified, instead chose to sell the deal as having “Stopped” Iran from acquiring nukes. This played right into the hands of the deal opponents who then “concluded” that sanctions must have therefore worked.

    The “Zero Enrichment” imposed by the US was all along intended to prevent any sort of deal from occurring, because the nuclear issue was always just a pretext for regime change.

  2. I think it was an Israeli commentator who made the remark that after what US did to Iraq, if Iran doesn’t go for a bomb, it is crazy. I think he was right. I bow to immense wisdom and knowledge that ambassador Jenkins brings to these pages, but the main goal of JCPOA was to make Iran defenseless when it is attacked. Iran can’t rush for the bomb anymore when US and its henchmen decide to attack. It was all about depriving Iran from that window. Unfortunately, cynicism sometimes is equivalent to realism. International order that existed in limited fashion after the 2nd World war has been replaced by stark realpolitik in our times. Might is right. That same petty bourgeois naivete in 1940’s that thought US is not Britain and as an anticolonial power can be trusted – a dream crashed in 1953 coup – was in display when Rouhani negotiated with Kerry/Obama.

  3. The scientific an realistic approach of the article makes it appreciable and unbiased. US had invested on Iranian rhetoric on exiting the deal while it was only a hollow treat as they are good merchants an had weighted the cost/benefit pragmatically. With Iran remaining the US exit doesn’t yield what they miscalculated. If they insist the USD position in world trade would decline as well as the trust in US. The trust invested by the world in US has been the major reason for America being the first up now and the US undermines the treat from the decline in trust investment by the rest of the world that could change the world geopolitics scene. The trust started by military accomplishments of WWII but started to decline after Vietnam war and the later serial of defeats ending in Syria. Democrats tried wisely to change the trust symbol from militarism to wisdom in which US was considered the wise sage. JCPOA was the accomplishment which was symbols of the US continued leadership in a wise way. However, the militarist fraction couldn’t realize that it was the only way of continued US leadership and flow of trust to US. Like a big dinosaur struggling to remain the leader by his muscles but in a world of information that people had discovered the magic of dialogue.

  4. Insightful article as always, my only problem with the part that says even in the absence of sustained EU economic benefits Iran should stick with the JCPOA, are you out of your mind, why should Iran place so many nuclear restrictions when there is no reciprocity?!! Perhaps Iran should exit the NPT like North Korea and go for broke then the other side will come to its senses. Right now they are counting on grounding Iran’s economy to halt and use military threat because Iran can’t deter them.

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