Iran sanctions leave global powers divided
When US President Donald Trump decided to tear up what had become known as the Iran nuclear deal, the EU, among others, was concerned about the trade arrangements it had with Iran. The incentive of international trade was central to persuading Iran to bring its nuclear program into line.
After a year of protests, nationwide labor strikes and bank failures, the prospect of increased global trade is more important than ever to the regime in Tehran. With Russia, China and Turkey also working to retain their economic ties to Iran, in addition to the EU, the renewed US sanctions, which were labeled illegal by many, will be limited in their effectiveness going forward.
President Trump unilaterally withdrew from the nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), in May. In August, the UK, France and Germany, who have led efforts to preserve the deal, stated that the president’s actions were in violation of a UN Security Council resolution, and vowed to intensify efforts to circumvent the US measures.
Last week, on the sidelines of the UN General Assembly, these plans took shape. It is understood that EU diplomats, supported by their Russian and Chinese counterparts, have devised a scheme to barter Iranian oil products for European goods. The proposal will allow Iran to sell its oil to Russia, where it would be refined and then sold to Europe. European companies would then transfer goods and services to Iran, thereby dodging US trade restrictions. The mechanism, at present a work in progress, amounts to an affront to the Trump administration as it ramps up its anti-Iran agenda.
Despite European powers and the Chinese repeatedly affirming that multiple inspections by the International Atomic Energy Agency (IAEA) have shown Iran to be in compliance with the nuclear deal, the White House remains skeptical. Senior officials in the Trump administration insist that the agreement, negotiated by former President Barack Obama, has not effectively curtailed Iran’s nuclear weapons program or, indeed, Tehran’s aggressive actions in the Middle East and beyond, including sponsorship of terrorism.
With some experts estimating that Iran spends between $12 billion and $15 billion a year supporting the Assad regime alone, limiting Tehran’s ability to finance its regional ambitions remains a paramount concern of the US and its Middle Eastern allies.
Zaid M. Belbagi
With Middle Eastern nations, including Israel, wholly unimpressed with the deal and anxious about the specter of Iranian support for movements in Bahrain, Yemen, Iraq and Syria, there is no sign of consensus on how to deal with the regime in Tehran. America’s annual terrorism report, last published in July 2017, describes Iran as “the foremost state sponsor of terrorism.” It adds that “groups supported by Iran maintained their capability to threaten US interests and allies.” With some experts estimating that Iran spends between $12 billion and $15 billion a year supporting the Assad regime alone, limiting Tehran’s ability to finance its regional ambitions remains a paramount concern of the US and its Middle Eastern allies.
This year the Iranian rial fell to a historic low, crashing through 90,000 rials against the dollar. The clerical establishment that controls Iran has taken notice of the severity of such economic woes, offering the idea of possible government referendums or early elections. Supreme Leader Ali Khamenei, keen to bolster the regime ahead of the 40th anniversary of the 1979 revolution, is under pressure to improve the lives of Iranians amid the unemployment affecting about 3.2 million his countrymen.
With between 12 and 30 percent of the economy controlled by the country’s powerful Revolutionary Guard paramilitary force, severely curtailing its role by clipping its wings regionally could have further economic and political consequences. The praetorian force, which answers only to Khamenei and runs Iran’s ballistic missile program, is central to regime stability — a reality of which the White House is only too aware.
Efforts to bypass US sanctions put powerful NATO allies in direct confrontation with a Trump administration that has shown itself to be only too willing to withdraw from long-standing alliances. Disagreements over Iran represent a sharp break between the US and its European partners, at a time when Russia’s divisive actions challenge the post-1945 status quo. With the World Trade Organization (WTO), the International Criminal Court (ICC), NATO and the G-20 all having been targeted by Washington, European allies must be careful to preserve transatlantic ties while simultaneously avoiding antagonizing the regime in Tehran further.
As decades of international diplomatic norms are being damaged, global powers can ill afford major disagreements over issues as important as nuclear proliferation and international trade. The Iran nuclear deal succeeded because of its multilateral approach, and the efforts of years of painstaking diplomacy. With both sides now threatening to pursue independent solutions to deal with Tehran, the hard-won consensus of 2015 might very well be lost altogether, leaving Iran isolated and free to act with impunity.
• Zaid M. Belbagi is a political commentator and adviser to private clients from London to the Gulf Cooperation Council.