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Whither the Iran nuclear deal after the Trump exit?

Editorial by Marc Finaud

The decision of President Trump to “withdraw” from the Iran Nuclear Deal (JCPOA) opens a period of uncertainty and instability not only in the Middle East but in the relations between, on the one hand, the US, Israel, and Saudi Arabia, and on the other hand, the EU, Russia, and China. Will the bid for a more ambitious, more constraining agreement with Iran succeed, or will the deliberate attempt to push Tehran towards confrontation lead to military intervention and regime change? Past experiences of external intervention in the ‘Broader Middle East’ do not augur well of the future.

When campaigning for President of the United States, Donald Trump made no mystery of his intention to “tear up” the Iran Nuclear Deal concluded by his predecessor with Tehran and the other members of the P5+1 group in July 2015. Despite repeated reports by the International Atomic Energy Agency (IAEA) that Iran was faithfully implementing the accord, and despite warnings from many experts, including generals, diplomats and former leaders from his own party or administration as well as Israel, he decided to fulfil his pledge. Let’s look first at his motives before analysing the consequences of that decision.

The main reasons of the Trump decision

The first set of reasons behind this withdrawal was psychological and ideological: undo as much as possible what was achieved by the Obama administration. The US doctrine regarding Iran shifted from pragmatic multilateralism and policy change to ideological unilateralism and regime change. Indeed, in spite of all accusations voiced in the presidential statement of 8 May 2018, the JCPOA had achieved its goal, which was preventing Iran from developing a nuclear weapon through a system of constraints on Tehran’s civil nuclear programme monitored by an unprecedented verification regime. Thus any allegations that Iran was violating its obligations were not based on facts. The argument that the main flaw of the JCPOA was that it did not include any constraints on other issues besides the nuclear programme (ballistic missiles, influence in the Middle East, support to terrorism, etc.) was at best dishonest: initially Iran wanted to negotiate on those issues but it was the US that preferred to stick to the nuclear programme out of fear of paving the way to normalization that would have been rejected by conservatives both in the US and Iran.[1]

The second set of motives for Trump’s decision was geostrategic: exert maximum pressure on Iran and consolidate the strategic alliance with Israel and Saudi Arabia to dominate the Middle East. Again, this goal is a consequence of the Trump administration’s approach to international relations: to attain political objectives not through reciprocal agreements but through sanctions, isolation, and eventually military force. The implications of the US withdrawal for the expected agreement on the denuclearization of North Korea are immense: the US President and his closest advisors, Mike Pompeo and John Bolton, are convinced that Kim Jong-un has accepted to renounce nuclear weapons as a result of years of sanctions and pressure. This remains to be demonstrated (as recent reactions by Pyongyang to the joint US-South Korean military exercises show), and may have unintended consequences as described below.

The third series of reasons why Trump took such a decision may lie in economic and commercial considerations. As a result of the lifting of sanctions against Iran, as approved by the UN Security Council, many companies from European countries, Russia or China had begun to conclude contracts for modernising the Iranian economy, its infrastructure, means of transport, energy sector, etc. Since US companies were still hampered by remaining US sanctions, the Trump administration declared a form of trade and investment warfare on their competitors. A total lack of economic rationality: penalize all businesses, including American interests, rather than give the Iranian economy some prospect of growth. Now the threat of secondary sanctions against companies from the rest of the world dealing with Iran can appear as a sort of blackmail against their governments to force them either to contribute to choking the Iranian economy or put pressure on Tehran to accept more constraints. The EU already possesses the legal tools to shield its companies from such sanctions, but applying them would indeed lead to a transatlantic trade war.

The consequences of the US withdrawal

The main result of the Trump administration’s move to denounce the JCPOA is that it now feels free to reinstate the sanctions that had been lifted as a result of the agreement and even add new ones. The President rushed to sign a memorandum ordering the US Treasurer to take such steps. However, the power of the President is not unlimited in this field, and he will need some decisions by Congress, which he is not absolutely certain to obtain. The time limits for new sanctions to enter into force will vary between 90 and 180 days, and the expectation in Washington is that, during that period, either countries and companies wary of penalties will withdraw from business contracts with Iran, or their governments will redouble efforts to convince Tehran to accept a more comprehensive and constraining agreement. If the goal of such a ‘new deal’ is sincere on the part of the Trump administration, the EU may work to that end as French President Macron has proposed. Iran’s leadership has stated its willingness to continue implementing the JCPOA in exchange for “guarantees” from the EU that its economic interests will be protected. In any case, it is likely that Russian and Chinese companies will feel less threatened than the European ones; American sanctions would then hurt US allies more. As shown during the previous period of sanctions against Iran, only those measures supported by the UN Security Council were effective (because binding on all states) while the US and EU unilateral oil sanctions did not prevent other countries from continuing trading with Iran.

Another serious consequence of the US withdrawal, prompted by the Israeli government’s activism, is to embolden the radicals in each camp. In Iran, moderate President Rouhani, who was elected on a platform of sanctions relief, is accused of being incapable of delivering on that promise and standing up to the US; he is challenged among others by the Islamic Revolutionary Guard Corps, which is seeking to take advantage of its military presence in Syria and threaten Israel. The massive strikes recently conducted by the Israeli forces have raised the risk of direct military confrontation between the two countries to such an unprecedented level that it triggered a Russian mediation. But the danger of escalation is still looming.

As mentioned previously, the final consequence of the US move may affect the credibility and the capacity of the Trump administration to strike a serious and effective agreement on the denuclearization of the Korean Peninsula. Either Trump, eager to get the credit for making peace with Pyongyang, is content with a superficial, unverified accord, and his critique of the JCPOA for insufficiency of its verification provisions will appear retroactively futile. Or he insists on getting more stringent provisions that those in the JCPOA, and it is unsure that the North Korean regime will ever accept them, or if it does, the price extracted from the US in compensation may be unacceptable for Washington.

In any case, the whole solidity of the global non-proliferation system will be affected. Here again an alternative: either North Korea accepts a complete, verifiable, and irreversible elimination of its weapons of mass destruction, and the proof will be made that the only way to succeed is a combination of sanctions with multilateral negotiations leading to win-win outcomes, as in the case of the JCPOA; but Pyongyang will have achieved its goal (US recognition) only after having developed nuclear weapons, thus giving other countries tempted to do the same a strong incentive. Or Trump fails to convince Kim to get rid of his nuclear weapons, mainly because the US continues to insist that its own nuclear weapons are needed to ensure its security and that of its allies such as South Korea and Japan, and having torn up the JCPOA will appear as part of a strategy to give preference to nuclear domination over any serious non-proliferation effort. Added to the lessons of external intervention into the countries that did abandon nuclear weapons arsenals or programmes (Iraq, Libya, Ukraine), that lesson will be meditated with interest by potential proliferators.

[1] See: Marc Finaud and Dina Esfandiary, The Iran Nuclear Deal: Distrust and Verify, Geneva Paper Research Series No. 18, April 2016.

Note: the author, Marc Finaud, is Senior Programme Advisor in GCSP's Emerging Security Challenges Programme. He expresses personal views.