Analysis | Europe to the Rescue: Saving the Iran Deal
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Can the Europeans Save the Iran Deal?
Macron Leads The Charge
Iran is back in the news this week following French President Emmanuel Macron’s state visit to the United States and much-publicized Congressional address. His visit comes as growing transatlantic concerns over the Trump administration’s pillory against the Iran Deal loom large over deliberations between the European Union, European Three, and Iran over the future of the deal. U.S. President Donald Trump has on numerous occasions called the deal “insane,” arguing that the P5+1 “gave Iran far too much in exchange for far too little.”
In his speech, President Macron identified four key pillars on which to form a new “comprehensive deal,” taking the form of an add-on deal or revised JCPOA which addresses ancillary concerns in Washington. “[W]e have to work on this more comprehensive deal based, as discussed with President Trump yesterday, on four pillars: The substance of the existing agreement—especially if you decide to leave it—, the post-2025 period—in order to be sure that we will never have any nuclear activity for Iran—, the containment of the military influence of the Iranian regime in the region, and the monitoring of ballistic activity.”
Indeed, containing Iran’s proxy activity and ballistic program have been a point of great tension both in Washington and in Paris, London, Berlin, and Brussels for many years. Neither of these issues is present in the current JCPOA. Nonetheless, they play an outsized part in maintaining the diplomatic tripping wire over which European and American foreign relations frequently stumble when dealing with Tehran. Proxy warfare in Syria, Iraq, Afghanistan, and Yemen, among other countries, gives reason for pragmatic concerns over the Middle East peace process as a fragile Iraq recovers from a decade-and-a-half of continuous warfare and ISIS recedes from Syria. A lasting peace across the region is only possible if economic prosperity is permitted to develop.
Nonetheless, the negotiation of an entirely new comprehensive deal is likely to generate little appeal in Iran as long as it has seen few real economic gains arrive in the wake of the 2015 agreement. Reformist President Hassan Rouhani has staked his reputation and his mandate on the premise of economic revival from the Iran Deal, leaving him in a less-than-maneuverable position to stall for renegotiations.
While Iran has met the terms of the agreement for almost three years now, the European Union and United States remain sluggish in opening lines of credit and rescinding sanctions on the Islamic Republic, slowing economic development. Further stunting growth is the threat of renewed U.S. primary sanctions on Iran and secondary sanctions on foreign companies and institutions that do business in Iran, causing many to delay their investments until the United States’ position is made clear.
However time is running out for the US and the EU/E3 to deliver on their end of the agreement. Seemingly now-forgotten is the 2004 Paris Agreement between the EU/E3 and Iran—a “proto-JCPOA”—in which Iran voluntarily ceased its nuclear enrichment activities and submitted to IAEA inspections and additional protocols. Much like the JCPOA, in the 2004 agreement Europe promised to lobby for Iranian membership to the WTO and to financially and technologically invest in Iranian nuclear energy capacities, rescind sanctions, and put pressure on Washington to do the same. However, as time passed, European politicians took turns criticizing Iran’s proxy activity, human rights record, and calling for more concessions on the part of Tehran as a precursor to delivering on the agreed framework.
These shifting goalposts, ad-hoc linkage diplomacy, and continued delay in deliverance of promised political and economic aid led Iran to view the entire deal as a tactic to indefinitely delay Iran’s nuclear program while Europe deferred complying with the terms of the deal, and eventually led Iran to reinitiate its enrichment program seven months later. While Tehran saw its enrichment cessation as a first goodwill measure to be followed in kind by Europe, Europe viewed cessation as a necessary condition to the continuation of talks and further engagement. This misrecognition eventually led Europe to join the United States in isolating Iran from the international community, garnering international support to enact stifling UN economic sanctions on Tehran.
If the P5+1 aren’t mindful of these past experiences, they may condemn themselves to relive them with the JCPOA. Rouhani’s second term will only last so long, and Iranians won’t wait forever for economic progress, as proven through the December protests across the country. The same goes for politicians in Europe and the United States; absent demonstrable evidence that the Iran Deal is bringing solid dividends in security and economic terms, the greater the likelihood that politicians will begin to publicly criticize the efficacy of the deal and attack Iran itself for its infractions—real and otherwise. The future of the JCPOA dances on an hourglass that seems ever closer to running out.
SAVING THE IRAN DEAL
However, Europe has a number of policy options at its disposal to deal with the United States’ withdrawal, Iran’s impatience, and other contingencies. In order to restore confidence to European companies looking to invest in Iranian projects and to safeguard its own economic growth, Europe should develop its own trade tools to enact reciprocal sanctions should the United States reengage secondary sanctions on European enterprises. This contingency plan would provide European businesses with enough of a political cover to proceed with research, investment, and development work in Iran even in the event that the United States leaves the deal and renews its campaign of isolation against Tehran.
There are a number of legal grounds on which the European Union could take this action, and on which it could also easily argue its case before the World Trade Organization. United States sanctions following an exit from the JCPOA would violate Article I of the General Agreement on Tariffs and Trade (GATT) which serves to “ensure the equality of opportunity to import from, or to export to, all WTO members” and Article II, which “prohibits discrimination between like services and service suppliers from different countries,” as well as several other clauses of WTO treaties to which the United States is party. Since the United States respects WTO rulings more than those of any other international body, this makes a good credible threat against United States secondary sanctions as well.
In order to preserve propitious relations between Europe and Iran the EU/E3 should immediately follow-through with the easiest and most impactful conditions set forth in the deal. Namely, the EU, France, Britain, and Germany should lead the charge in bringing Iran into the WTO, IMF, and other key international institutions to which would help improve both Iran’s public image and Rouhani’s domestic approval ratings. The stronger and more capable partner Brussels has in Tehran, the greater chances the both of them have at advancing in other areas of cooperation.
Leveraging another of Europe’s strengths in cultural interconnectivity by establishing an extension program to the Erasmus Student Exchange program would also do much to improve people-to-people connectivity and allow both Europeans and Iranians to develop mutual respect and interest in one another’s cultures. A close contemporary and kindred spirit of Erasmus in his universalistic views exists in Iran’s history: Bahāʾ al‐Dīn Muḥammad ibn Ḥusayn al‐ʿĀmilī (شیخ بهایی), pen name “Sheikh Baha’i.” Naming an “Erasmus-Baha’i Exchange Program” would do much to honor Iranian heritage and cultivate respect for Europeans in the eyes of Iranians. Supplementing this program, the EU and Iran could offer scholarships and funding for joint European-Iranian research and development projects, and hold cultural summits which help dignify and celebrate the deep and longstanding cultural connection that Iran has with Europe.
Economy and Defense: Forging Ahead
In order to shore up support in the United States and among the more skeptical members of the polity in Europe, Europe should spearhead efforts to establish a regional dialogue (including the P5+1) in the Middle East. This will compliment France’s forward momentum in this space, and allow for proper signaling and communication between the various actors in the region, and at a minimum provide a diplomatic track to deescalate conflict and develop cooperative working relationships. This is critical if Europe wants to see Iranian proxy activity to decline, as Tehran’s forward deployment of paramilitary forces is largely an effort to destabilize its traditional geopolitical rivals and shore up its own security situation. Clearer lines of dialogue will help to ameliorate Iranian concerns over its neighbors.
In the same vein, a regional dialogue including the P5+1 to facilitate economic cooperation and investment would allow for greater cooperation and economic interdependence between the fragile and generally bellicose Middle Eastern nations, and provide a forum for dialogue on trade and the security of trade routes. Talks should focus on establishing common regulatory and border procedures to facilitate trade across the region, and limit the interference of middlemen and extortion in cross-border trade.
Cooperative action to advance Belt and Road Initiative projects in this context could also take place at these summits, possibly leading to further extension of the Belt and Road Initiative (BRI) to other states in the region, which would serve the dual purpose of developing cooperative working relationships between states and producing a condition of limited Mutually Assured Restraint (MAR), dis-incentivizing the use of proxies. Additionally, Economic dialogue might also take focus on the development of cooperative energy and sustainability projects within the context of the Paris Climate Accords, allowing actors to contribute to projects that will provide member states an opportunity to collaborate in non-military spheres and laud their collective accomplishments in the international sphere.
Augmenting this economic dialogue, Chinese and European cooperation and investment in Belt and Road Initiative (and perhaps “Euro-Asian Connectivity”) projects in the region could provide much-needed multilateral action that neither is neither credibly threatened by United States sanctions nor requires U.S. participation for political or financial capital. As the Belt and Road Initiative is a Chinese endeavor and plans for Chinese investment across the region are already in place, this is one sphere where little European political capital is required or at risk. European institutions have great experience and capacity in this field, making future investment projects both more feasible and more effective. Drawing China—a JCPOA signatory—into the equation in the context of expansion of the BRI will also shore up international support for continued rapprochement with Iran and its integration into the international community. It is also likely that the United States would face pressure from Beijing if it applied secondary sanctions to Iranian investment from foreign powers, further limiting Washington’s policy options should it take an aggressive stance towards Tehran in the future.
Playing to the European Union’s foreign, economic, and cultural diplomacy strengths and institutional capacity will allow Europe to take a stronger position in safeguarding the JCPOA. Building international coalitions will further strengthen international support for Iran’s “return” to the International Community, limiting the damage that the United States can credibly inflict to the JCPOA. By capitalizing on Europe’s strengths in political, diplomatic, economic, and cultural dialogue and cooperation, the Europeans can both save the JCPOA and help Iran transition from a Rogue State to an Upstanding Nation of the International Community.
All views expressed in this article are solely those of the author, and do not represent the views of The International Scholar or any other organization.
Banner Photo: By United States Department of State - https://www.flickr.com/photos/statephotos/16389774054, Public Domain, https://commons.wikimedia.org/w/index.php?curid=39359554
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