09.04.2018 Author: Salman Rafi Sheikh

The Deepening EU-US Schism on Iran Deal


While the US president Donald Trump’s opposition to and his desire to scrap the Iran nuclear deal isn’t any secret, the appointment of a known hawk, John Bolton, as the president’s new national security adviser has manifold increased the prospects of the US’ withdrawal from the deal. But walking out of the deal isn’t going to be just a straightforward decision; it involves, besides other things, the risk of leading the US towards further international isolation; for the US’ European allies, the EU, are in a broader disagreement with the US over the question of Iran-nuke deal’s future. There is a schism which is becoming visible with everyday passing. The complications are arising between the US and the EU because of the fact that the EU was quick enough to lift sanctions on Iran after the deal and many European companies were even quicker in reaching out to Iran and do business with it. Therefore, were the US to walk out of the deal, it will certainly lead to a resumption of tough US sanctions on Iran, which will most certainly make it difficult for the EU to do business with Iran.

With John Bolton, who recently made his views on the Iran deal known through an op-ed for the Wall Street Journal, now in the White House, the fear of resumption of financial sanctions has increased, and so have increased speculations in the EU as to how to deal with the situation. The EU leaders, clearly siding with Iran, have already started to come up with ideas to not only to keep the deal alive between them and Iran but also to keep doing business as usual. Unsurprisingly therefore is to see the EU leaders coming with contingency plans. On last Monday, The EU foreign affairs chief, Federica Mogherini, made a reference to the EU’s plans to shield Europe from the US sanctions, saying that the EU was “starting to prepare in case it will be needed to protect European interests in case other decisions are taken elsewhere”. This plan is then a part of the plan to provide credit to the firms trading with Iran and are faced with sanctions. That is how the EU can potentially circumvent the US plan to scrap the deal and impose sanctions and thus achieve its objective of not only cornering Iran but also forcing it to roll back from Syria.

The United Kingdom has similar views. The UK Foreign Secretary Boris Johnson said on March 24 that the EU might be able to keep the Iran deal alive if the US pulled out, adding further that although the deal “would be much less valuable, and very difficult to work, but it is possible to envisage the JCPOA without the US, but that obviously would be very difficult to achieve.”

There are three key US changes that it wants the EU to make by May 2018 to keep the deal alive. These changes, which were presented to the EU diplomats earlier this year, included: a commitment to renegotiate limits on missile testing by Iran; an assurance that inspectors have unfettered access to Iranian military bases; and an extension of the deal’s expiration dates to prevent Iran from resuming the production of nuclear fuel long after the current restrictions expire in 2030.

The EU diplomats said while there was some scope for an agreement on missiles and inspections, they did not see it possible to bring the question of the length of the deal in equation. The European diplomats are also fundamentally diverging from the US in terms of the way walking out of the deal would damage their bargaining strength vis-à-vis both China and Russia, the two other signatories.

This will happen because, the EU officials have sounded like saying, even if the required changes were made and if the US did stay in the deal, there is no guarantee that the Russia and China will be ready to become party to the deal, let alone the Iranians who have already ruled out any possibility of re-writing and re-negotiating the deal.

The EU is, therefore, facing a real dilemma as it cannot convince the Iranians nor can it hope to bring Trump around, who is already signaling a trade war the EU after he has started one with China. Clouds of this war are already looming large. The US president said last week that he was ready to exempt the 28-country bloc from tariffs on steel and aluminum, but at what cost? What does he want the EU to do in return? Top of the list would be a re-negotiated deal before May when Trump is supposed to either endorse or scrap the deal.

It is for this reason that the exemption is only temporary and is to expire on May 1, only a few days before the deadline of endorsing or scraping the deal to put pressure on the EU for siding with the US on Iran deal. The European Commission has ensured to protect their interests, and among other measures it has suggested to take the US to the WTO as a means to reject what the French president called a ‘gun to the head’ kind of ‘Trumpian diplomacy.’

The EU has its own ways of shielding its companies against the US sanctions. A recent report of International Crisis Group said that it was possible for the EU to stay in the deal and keep doing business with Iran. A survey of 60 multinational companies cited in the report showed that the EU could protect its interests “if Iran remains committed to its JCPOA obligations and European countries pre-emptively revive their ‘Blocking Regulations’, shielding their companies from US extraterritorial sanctions”. This is how the EU could retaliate against the US tariffs. The European Council on Foreign Relations has already suggested identical measures, which include steps to “continue to resist US pressure to once again isolate Iran”.

It is obvious that the EU doesn’t see the US’ Iran policy a matter of national security or interest or the one emerging out of Iran’s violation of the terms of the deal; it essentially sees it a policy of deliberately isolating Iran to appease other allies, the Saudis and the Israelis.

And while the US’ traditional allies, the UK and France, may become somewhat sensitive to the US position, the EU remains adamant and has vowed to “resist” the US pressure. Accordingly, contrary to what the US is asking for, the EU has recommended to “further nurture the channels they have developed with the Iranian leadership to help counterbalance the impact of Donald Trump’s polarising narratives on regional developments”; hence, the increasing schism, moving towards an increasing EU-US polarization under the Trump administration.

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.

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