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Marcus Montgomery

Iran sanctions are predictable Trump: Shoot first, ask questions later

Mogherini's first visit to Tehran after the nuclear deal was agreed in 2015 [Getty]

Date of publication: 9 May, 2018

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Comment: It is clear that neither Trump nor his administration has a plan B, writes Marcus Montgomery.
Yesterday, President Donald Trump - shunning the pleas of European allies - decided to reimpose nuclear-related sanctions on Iran, effectively pulling the United States out of the Joint Comprehensive Plan of Action (JCPOA).

Then-candidate Trump said he was going to "tear up the deal," so it should not have been all that surprising. But, that doesn't mean it was any less reckless or ill-advised, though.

The technical aspects of the Iran nuclear deal, as the JCPOA is commonly referred to, can be confusing, so it is good to grasp what exactly Trump's Tuesday announcement really means under the terms of the agreement.

What happened?

For years, the international community was worried about the prospects of an Iran capable of developing nuclear weapons.

Some fears grew from general wariness of the proliferation of nuclear weapons, while others assumed that a nuclear Tehran would use those weapons on its enemies.

No matter the reason, the international community rallied behind the United States to impose crippling sanctions on the Iranian economy, stripping it of revenue from its oil exports and blocking a much needed infusion of foreign capital.

Eventually, the regime in Iran decided it could not carry on under such economic conditions and decided to sit down with the US, UK, France, Germany, Russia, China and the European Union to negotiate an end to its troubling nuclear activities.

In fact, the deadline to renew sanctions relief on many of Iran's other major industries was not until July

As incentive to agree to a framework that setback Iran's ability to enrich the chemical necessary to craft a nuclear weapon, the United States, European Union, and the United Nations, agreed to suspend a litany of those crippling sanctions.

The US, for its part, had sanctions in the form of primary sanctions (blocking US entities from participating in trade with Iran), secondary sanctions (which threaten to exclude third party entities like, say, European private companies from the US economy if they traded with Iran), and a host of executive orders and regulations that suffocated any attempt to enter the Iranian market.

After then-President Barack Obama agreed to sign the JCPOA with the UK, France, Germany, Russia, China, and the EU, the Republican-held Congress in Washington was furious and passed a law that required the president to routinely certify that the deal was, in fact, in the United States' best interest and that Iran was abiding by the terms of the agreement.

This law - called the Iran Nuclear Agreement Review Act (INARA) - is what has required President Trump to repeatedly decide whether to certify the deal's utility and waive sanctions.

This - no doubt because it was an all too often reminder of his predecessor's accomplishment in crafting the deal - angered Trump and led to him deciding in early 2018 to issue an ultimatum: Fix the deal to ameliorate his concerns or he would scuttle the deal.

So, before the 12 May deadline, Trump decided that the efforts pursued by the Europeans to address his (reasonable) concerns were not enough and he would reimpose the aforementioned US sanctions.

Trump went above and beyond, however.

The May deadline to waive sanctions applied to only one statutory set of US sanctions that targeted Iran's Central Bank and its crude oil industry.

In fact, the deadline to renew sanctions relief on many of Iran's other major industries was not until July, two months later. Interestingly, Trump's presidential order directed the US government to reimpose all of the sanctions, even the ones not due for review until July, that were originally frozen under the JCPOA, albeit with a 180-day grace period.

Iran stipulated from the beginning of negotiations on the JCPOA that if it did not realise the economic benefits it expected or if Europeans or the Americans reimposed sanctions that it would consider the deal null and void and it would pursue a robust restart of its nuclear programme, including the possibility of seeking nuclear weapons.

So, is the deal really dead?

Here's where things get tricky. Technically, no. But, the United States is certainly no longer party to the agreement, having been the first party to abrogate the deal (no matter what President Trump says).

Iran, the Europeans, Russia, and China could, in theory, agree to maintain the deal and refuse to abide by US sanctions.

But, as a practical matter, foreign corporations, particularly European companies, are wary to risk being blacklisted from the US economy just to pursue business in the smaller and struggling Iranian economy.

European companies are wary to risk being blacklisted from the US economy just to pursue business in the smaller and struggling Iranian economy

Even if the Europeans, as they have suggested, put laws in place to shield those companies from legal exposure, business leaders may decide it is simply not worth the trouble. This does away with one of the major incentives for Iran - integration into the global economy and foreign investment - and could see Tehran argue that the deal is dead.

So, now what?

This is the most jarring aspect of President Trump's decision; there is little-to-no indication that he or his administration have a plan B.

Perhaps before the 180-day grace period expires in November of this year the sides can create the (likely nonexistent) perfect deal that the president is seeking and all will be resolved. I'd be skeptical of that idea. In lieu of such a deal, here are a few contingency plans the administration might be considering.

As mentioned above, the Europeans could fight the US secondary sanctions on their companies (there is precedent for this), but it would largely be symbolic because those companies likely won't risk it regardless.

Read more: Oil prices surge to three-year high as US announces new Iran sanctions

The symbolism is scary nonetheless as the "West" in whatever form it once was would be divided even more. Additionally, the United States could unilaterally reimpose United Nations sanctions (a caveat put forth by the JCPOA and the subsequent UNSC resolution supporting it) which would further isolate the United States from the international community.

Anti-Iran and pro-regime change elements in the intelligentsia are already calling on President Trump to cripple Iran's economy to further pressure the theocratic regime.

It is difficult to see how the United States has not taken a step towards military confrontation

The issue here is that recruiting the rest of the international community to cut off Iran's oil export capabilities - the heavy lifter of Tehran's revenue production - will be nearly impossible, both because of the aforementioned isolation and because demand for oil is booming at the moment. In addition, many large oil-consuming states are wary of taking a big oil producing country out of the market and raising prices even more.

If states like China, India, and the Europeans - who are averse to becoming even more dependent on Moscow for their energy supplies - don't agree to significantly limit their oil imports from Iran, then its economy might weather the hardships that the other sanctions might elicit.

So, with diplomacy off the table and an engrained, almost preternatural disdain for Iran's leaders permeating this administration, it is difficult to see how the United States has not taken a step towards military confrontation.

The anti-Iran hawks are right, to an extent, that yesterday's decision won't result in war anytime soon, as the alarmists have claimed.

But because the march to war is slow, doesn't make it any less troubling. Months may go by before Iran decides it is free to pursue ambitious enrichment and expand its nuclear research and development programmes. But if that time comes, how else will hardliners like John Bolton and Mike Pompeo - prodded by Bibi Netanyahu and Mohammed bin Salman - suggest dealing with the issue?

The president of the United States struck a fatal blow to a deal that, by every observable standard, was a success. The following months will go a long way in defining the nature in which the US is involved in the international community, but the administration has choreographed few plans for how to handle the next few months, let alone the long term prospects of a nuclear Iran.

Like the Paris Climate Accord, Trans-Pacific Partnership, and the attempt to repeal the Affordable Care Act, Donald Trump has shown that he will shoot first and (maybe) ask questions later.

 

Marcus Montgomery is a Junior Analyst for Congressional Affairs at Arab Center Washington DC.

Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, al-Araby al-Jadeed, its editorial board or staff.

 


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