Tag Archive for: US withdrawal from JCPOA

Salvaging the JCPOA: Europe’s unpalatable choices

Many Australians will remember the late NZ Prime Minister Robert Muldoon’s witticism that Kiwis crossing the Tasman raised the average IQ of both countries. Another time, after tight wage, price and currency controls, he was queried about the value at which the NZ dollar had been pegged. Our value is exactly right, he said; every other currency is out of line.

President Donald Trump’s decision on 8 May to exit the Iran nuclear deal is reminiscent of that. The Joint Comprehensive Plan of Action (JCPOA) was painstakingly negotiated by six countries (China, France, Germany, Russia, the UK and the US). The Europeans concluded that the most critical item on the Iran file was its suspected pursuit of nuclear weapons.

They persuaded the Obama administration to isolate the nuclear program from other concerns like Iran’s ballistic missile capability and regional misbehaviour, increase the breakout time to the bomb by shrink-wrapping all dimensions of the program, and impose a stringent inspections regime to verify compliance.

Quarantining the nuclear program from other problematic items also enabled them to end Sino-Russian backing for Tehran. The JCPOA was unanimously endorsed in Security Council Resolution 2231 (20 July 2015) and widely welcomed around the world as the only bit of good news on nuclear issues in several years.

Now we’re told that everyone else got it wrong. Only Israeli PM Benjamin Netanyahu (who relies on US power to shun compromising with the Palestinians), Trump and his secretary of state and national security adviser understand the fraud perpetrated by the JCPOA. In reinstating sanctions, Washington has made itself an international outlaw for material breach of the JCPOA.

Trump has shown an uncanny knack for uniting US adversaries and antagonising and alienating US allies (except joined-at-the-hip Australia). He acts on a vision of US exceptionalism that confers global rights without the corresponding obligations. The driving force behind his exit from the JCPOA is not to keep Iran from getting the bomb but regime change in Tehran.

The Europeans had invested the most in securing the deal by effectively mediating between Iran, the US, China and Russia and have reacted with unconcealed fury. Some American commentators gallantly insist that Trump can ignore Europe because its condemnations are never matched by action.

But in the mainstream media, Carl Bildt, Edward Luce and James Traub argue that Trump’s exit from the JCPOA was ‘a massive attack on Europe’. The US ‘abandoned its belief in allies’ and may ‘the trans-Atlantic alliance, 1945–2018’ rest in peace. A Der Spiegel editorial concluded: ‘The West as we once knew it no longer exists’. An adviser to EU external affairs chief Federica Mogherini called Trump’s decision ‘an utter and unjustified betrayal of Europe’.

The three big Ms of Europe—French President Emmanuel Macron, UK PM Theresa May, and German Chancellor Angela Merkel—have publicly criticised Trump’s decision, closed ranks and resolved to assert a united European position. In this ‘new age of American imperialism’, French Finance Minister Bruno Le Maire called for collective action ‘to defend our European economic sovereignty’, adding: ‘Do we want to be a vassal that obeys and jumps to attention?’

Donald Tusk and Jean-Claude Juncker, president of the European Council and Commission respectively, said the threat to Europe from US ‘capricious assertiveness’ was serious. Europe must act to protect the JCPOA with EU-wide ‘blocking statutes’ to nullify US sanctions on European firms, a search for additional financial tools to permit the EU to be independent of the US, and the creation of a European agency to monitor the activities of foreign companies.

Europeans are infuriated at Trump’s one-finger send-off to the deal they negotiated with considerable pride. They fear the consequences for the US’s reputation and credibility and the harmful impact on a negotiated resolution to North Korea’s nuclear challenge. Former President Barack Obama warned that Trump ‘risks losing a deal that accomplishes—with Iran—the very outcome that we are pursuing with the North Koreans’.

The unilateral US decision forces the Europeans into a stark choice that can’t be fudged and finessed. They can accept a subservient status vis-à-vis Washington; defer to Trump’s superior wisdom, insight and judgement on Iran; and comply with the tough new US sanctions. In that case, the JCPOA is dead and Iran is liberated from all its constraints and could sprint to the bomb and seek a presidential summit with the US leader on the North Korean model.

Trump has discredited the moderate pragmatists and empowered the hardliners in Tehran who had never reconciled themselves to the JCPOA. With decades of justification for its antipathy to the US, why would Iran ever trust America again? In turn, this could create a ‘polynuclear’ Middle East as Saudi Arabia, Egypt and Turkey enter the nuclear arms race. The prospects of an Iran–Israel war have also heightened.

The alternative, less unpalatable but challenging option for the Europeans is to salvage the deal by continuing to honour their commitments on sanctions relief and assistance to Iran. European companies engaged in commercial transactions in and with Iran will need ironclad guarantees to protect them from punitive US measures for violating their extraterritorial secondary sanctions.

This is the path the Europeans seem inclined to take. We could face fresh turbulence with the onset of a trans-Atlantic trade war alongside already picked fights with China, South Korea, Japan and Russia.

The unique economic clout of the US rests in its central role in the global financial system, which even China’s growing trade profile—it’s the world’s biggest bilateral trade partner—can’t erode.

Trump’s decision to abrogate the multilaterally negotiated and UN-endorsed JCPOA, followed by threats of secondary sanctions on non-US enterprises doing business with Iran, shows that US dominance of the world financial system has become a national security threat to other countries, including longstanding US allies. While the policy implications are obvious, the will and ability to address the threat are less so.

Every good reason

The decision to withdraw from the Iran nuclear deal has been met with widespread criticism given that it was Barack Obama’s flagship foreign affairs agreement and represented a rare consensus among the world’s great powers.

From a nuclear non-proliferation perspective, the Joint Comprehensive Plan of Action (JCPOA) certainly has its merits. It achieved a partial ‘roll back’ of Iran’s nuclear program, increasing its ‘break-out time’ from an estimated three months to one year. It did so by placing limits on Tehran’s ability to enrich uranium and build up stockpiles of fissile material for at least 10, and up to 15, years. This included the dismantling of centrifuges, putting limits on the numbers of operating centrifuges, and imposing caps on the allowed level of uranium enrichment.

As a result of the deal, the international community and International Atomic Energy Agency (IAEA) inspectors have become far more knowledgeable about Iran’s nuclear program, and are now better placed to detect any illegitimate activity than was the case before. Iran has to give IAEA inspectors access to any site within 24 days of a request, which is more than enough time to detect illicit activity.

Further, Iran’s good faith isn’t assumed. Should Tehran be found in breach of the agreement, the suite of UN sanctions that had crippled Iran’s economy in the preceding years will automatically ‘snap back’ into place, and countries such as China and Russia would have no veto to prevent that occurring.

Even so, Trump’s decision to withdraw from the deal is not entirely irrational on either non-proliferation or broader geostrategic grounds.

The high-water mark for any deal with Iran would have been complete denuclearisation. What was achieved instead was a postponement of the problem for 10–15 years, in return for the lifting of most UN, EU and US sanctions. In the meantime, Iran’s nuclear scientists are still allowed to conduct advanced centrifuge research and development, the UN‑endorsed heavy arms embargo will be lifted in five years, and the ‘snapback’ mechanism will expire in 10 years.

A further key omission in the JCPOA is the failure to link Iran’s nuclear and ballistic missile capabilities, even though the means of delivery is as important as the weapon itself. The deal itself doesn’t directly set limits on Iran’s ballistic missile program. UN Security Council Resolution 2231 that endorsed the deal merely ‘calls upon’ rather than requires that Iran refrain from testing nuclear-capable ballistic missiles for eight years. Iran has, however, shown little restraint, testing as many as 23 short- and medium-range missiles since the deal was struck, many of which the US, France, Germany and Britain argue are ‘inherently capable of delivering nuclear weapons’.

In short, the nuclear deal only partially rolls back and freezes Iran’s nuclear program. When it expires, the US and its allies will likely face an Iran with the ability to deliver a nuclear weapon via a medium-range missile within one year. Given the prospect of further Iranian satellite launch vehicle testing, there’s a possibility that within this time frame Tehran may even have an intercontinental delivery system.

Meanwhile, Iran’s behaviour has done little to allay concerns that it will indeed restart its nuclear weapons program once the constraints of the deal end. The immediate lifting of sanctions was meant to usher in a new period of more cooperative relations between the US and Iran. The lure of access to export markets and foreign direct investment was predicted to dampen Iran’s pursuit of regional hegemony, and greater economic prosperity would support moderate forces within the country.

However, this hoped-for transformation in Iranian foreign policy hasn’t eventuated. Tehran has taken advantage of political turmoil and power vacuums in neighbouring countries, acting against US interests not only by providing military support to Bashar al-Assad in Syria, but also by extending its influence in Bahrain, Lebanon, Iraq and Yemen. Such behaviour has vindicated Republican Party critics of the deal in the US, who argued that Tehran would use its newfound access to hard currency to pursue its long-standing expansionist aims in the Middle East.

Sticking with the nuclear deal is based on the flawed assumption that Iranian foreign policy is amenable to change. It allows Iran to maintain a latent nuclear weapons capability, regain its economic and military strength, and use that to undermine US foreign policy objectives in the region.

While many hoped that Donald Trump would stick with the nuclear deal, and lead negotiations on a separate agreement to restrain Iran’s ballistic missile program, the very existence of the JCPOA constrains Trump’s ability to do so. Iran argues that its ballistic missile programs are purely defensive, and that any sanctions applied to it would be in breach of the nuclear deal and constitute grounds for its withdrawal.

Thus, the US had two choices: stick with the nuclear deal or start again, this time using a ‘maximum pressure’ campaign to drive Iran to the bargaining table under the threat of a return to oil and secondary sanctions.

While the success of such a strategy is far from certain, it appears to have worked well so far with North Korea. No doubt Trump predicts that Iran too will have to re-evaluate the benefits versus the costs of its nuclear hedging strategy.

How Europe can save the Iran nuclear deal

This week, a senior German official pointed out to me that, ‘The Iran nuclear deal is the last firewall preventing military tensions in the world’s most combustible region from spilling over into thermonuclear war.’ That language is unusually apocalyptic, but it reflects a genuine fear that US President Donald Trump could soon dismantle a crucial line of defence that Germans and other Europeans are proud to have built.

European leaders have been on the back foot since January, when Trump gave them a deadline of 12 May to ‘fix the terrible flaws of the Iran nuclear deal’, or he would re-impose sanctions on Iran. Trump’s main objections to the deal are that it does not address Iran’s misbehaviour in the region or its ballistic missile program, nor does it prevent Iran from restarting its nuclear program after 2025. And now that Trump has installed a hawkish new foreign-policy team—with John Bolton as national security adviser and Mike Pompeo as secretary of state—European diplomats fear the worst.

Over the past few months, the German, French and British governments have been frantically assembling a package of measures—including potential sanctions on Iranian elites—to address Trump’s concerns. And both French President Emmanuel Macron and German Chancellor Angela Merkel have now visited the White House to persuade Trump that it is better to build on the deal than blow it up.

In the short term, the Europeans are hoping that their proposed measures will allow Trump to declare victory while remaining in the deal. They have reminded Trump that a diplomatic solution to the North Korea nuclear crisis could very well depend on whether he unilaterally abandons America’s commitments to Iran under the Joint Comprehensive Plan of Action (JCPOA).

In the long term, though, European leaders’ ability to save the deal will depend on the extent to which they can act in their own interests, rather than being a hostage to the caprices of the Trump administration.

It is fitting that the Iran issue has come to the fore around the 15th anniversary of the start of the Iraq War. For European diplomats, that disaster and the success of the JCPOA have come to represent two foreign-policy extremes. Iraq was post–Cold War Europe’s darkest hour, with European countries lined up against one another to support or oppose the war, even though none had any real influence over US decisions.

The JCPOA, by contrast, is seen as modern Europe’s shining success. Desperate to avoid another war in the Middle East, Europeans, starting in 2005, began to define their own interests in the region. With the two-pronged goal of preventing Iran from acquiring nuclear weapons and avoiding another war, they devised various carrots and sticks to shape Iranian and US actions.

To Iran, European diplomats offered a choice between two futures: one in which Iran would freeze its nuclear program and end its international isolation; and one in which it would maintain its program and face ever-harsher sanctions, and possibly war. At the same time, the Europeans, having convinced Russia and China to back their strategy, approached the US with another stark choice: either join an international coalition to apply diplomatic pressure on Iran, or pursue dubiously effective military measures on your own.

Today, European leaders’ overarching goals in the Middle East are to de-escalate the hegemonic struggle between Iran and Saudi Arabia, prevent nuclear proliferation, combat terrorism and staunch the flow of refugees into Europe. But many of these goals are now being actively undermined by the Trump administration, which has made a show of siding with Israel and Saudi Arabia against Iran in regional conflicts from Yemen and Iraq to Lebanon and Syria.

Diplomats in some EU member states have started to worry that attempts to placate Trump could force them into self-defeating positions, thus reprising the relationship between British Prime Minister Tony Blair and US President George W. Bush in 2003. As one official confided to me, the introduction of new sanctions will make it even harder to keep Iran committed to the JCPOA, let alone engage with it on other regional issues.

Nevertheless, the European approach so far has been carefully calibrated both to win over Trump and preserve Iran’s commitment to the deal. Needless to say, this requires a delicate balance. If the Europeans give Trump too much, they will be playing into the hands of US hardliners.

At the same time, they will be empowering the hardliners in Iran. In a recent interview, political scientist Nasser Hadian of Tehran University told me that moderate Iranian leaders such as President Hassan Rouhani and Foreign Minister Javad Zarif have already been left in a weak position, with hardliners now saying, ‘We told you so.’ In Hadian’s view, the greatest danger is that Europe will try to appease Trump ‘at any cost’, when it should be working ‘on a plan B to save the deal without the US’.

Among other things, a plan B would offer Iran economic relief if the US were to re-impose sanctions, conditional on Iran’s continued compliance with the JCPOA; and it would provide the basis for a larger strategy of engaging with Iran and other stakeholders to de-escalate regional conflicts. Of course, it would be better for everyone if Trump agrees not to abrogate the nuclear deal. But to persuade him of that, Europe must show that it is willing to go it alone.

To that end, Trump should be confronted with a clear choice: either preserve the JCPOA, in exchange for European support in addressing regional issues and Iran’s missile program; or scrap the deal and risk the loss of European cooperation and the emergence of a nuclear-armed Iran. As my German interlocutor put it, ‘Trump must be told that he cannot have his cake and eat it.’