Saturday, May 26, 2018

EU leaders double down to preserve Iran deal

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Federica Mogherini, the European Union's (EU) foreign policy chief, said on Friday that Europe is "determined to keep the Iran deal in place". The clash between the United States and the EU on this important issue is setting off intensified transatlantic tensions that may not be easy to manage in coming months, not least with separate bilateral battles over trade issues in play too.

These geopolitical fault lines will be exposed again tomorrow. Mogherini will be meeting in Brussels the foreign ministers from Iran, France, the United Kingdom and Germany - Mohammad Javad Zarif, Jean-Yves Le Drian, Boris Johnson, and Heiko Maas, respectively, - to discuss ways to best preserve the landmark agreement following US President Donald Trump's announcement last Tuesday that he would not recertify it again.

Strikingly, the US president's decision last week was immediately countermanded by French President Emmanuel Macron, British Prime Minister Theresa May and German Chancellor Angela Merkel. The three European leaders declared not just that their nations will remain signatories to the agreement, but also that they will work "collectively on a broader framework" with Tehran in 2018 and beyond.

Of course, deep US-European discord over Tehran is not unprecedented as in the 1990s significant disagreements surfaced when Washington adopted legislation - including the Iran and Libya Sanctions Act (ILSA) - that punished European firms for doing business in those countries.

In response, Brussels agreed reciprocal steps to protect European businesses and adopt counter-measures against the US where restrictions were imposed by Washington. A similar pattern may now play out again, following Trump's decision. It is clear the US president feels strongly about the Iran issue, claiming that the agreement is "a great embarrassment" and "a giant fiction", given that "we cannot prevent an Iranian nuclear bomb under the decaying, rotten structure of the current agreement".

Given such rhetoric, it is unlikely he will back-track from his decision. However, US Treasury Secretary Steven Mnuchin said last week that Washington "will continue to work with our allies to build an agreement that is truly in the best interest of our long-term national security".

Following Trump's decision, the ball is now in Europe's court and it is clear that many of the continent's leaders are aghast at Trump's dismissal of the deal which took over a decade to negotiate.

Mogherini, for instance, said on Friday that "it seems that screaming, shouting, insulting and bully, systematically destroying and dismantling everything that is already in place, is the mood of our times ...[But we have to] move on from the 'I win, you lose. approach".

Mogherini also said that Iranian President Hassan Rouhani has reconfirmed to her that Tehran will not itself pull out of the agreement if other signatories (not just France, United Kingdom, and Germany but also China, Russia) remain committed to its terms.

Yet, at the same time, Rouhani did warn last week that he had instructed the country's atomic energy agency to prepare to restart enrichment of uranium in a few weeks' time should the deal collapse completely in the coming months.

Not only does Europe want to make the deal work. But France, Germany and the UK indicated last week they "will work collectively on a broader framework, covering nuclear activity, the post-2025 period, ballistic activity, and stability in the Middle-East, notably Syria, Yemen and Iraq".

Yet, there is no doubting that European leaders are disheartened over Trump's decision, which comes after high-level lobbying in Washington from Macron, Merkel and Johnson in recent weeks. While Merkel and Johnson made no apparent headway with the US president, there had been signs when Macron met Trump of potential compromise.

Macron had said on April 25 that "I think we are. work[ing] towards a [new] deal, an overall deal that will enable us to deal with the nuclear issue, but also treat it together with other issues which are not being dealt with so far" that Trump has expressed dismay over. From this European perspective, the 2015 nuclear agreement would be only the "first pillar" of a broader framework that would also restrict Iran's regional influence, its ballistic missiles and its nuclear activities post-2025, when the existing deal expires.

 Trump had indicated last month that such an agreement, may, be acceptable to him, telling Macron that "You know in life, you have to be flexible, and as leaders of countries, you have to show some flexibility ... We could have at least an agreement among ourselves fairly quickly ... I think we're fairly close to understanding each other".

Yet, ultimately, this US-French dialogue came to nothing. And a key question for Europe is therefore how far to push back against Trump. This was indicated by Le Drian who said on Friday that "the extraterritoriality of the [US] sanction measures are unacceptable ... [we will] put in place the necessary measures to protect the interests of our companies and start negotiations with Washington".

Europe took a similar path after Washington passed the ILSA legislation in 1996. Then Brussels approved measures to neutralize the law, asserting that the US should not be able to impose such measures with such an extraterritorial effect.

Despite this precedent, however, the newly re-imposed US sanctions could potentially critically undermine EU attempts to preserve the Iran agreement. For instance, it may only be European firms with little or no economic interests in the US who prove likely to want to trade with Iran given the potential risks, including fines from the US Treasury.

Taken overall, transatlantic tensions are now spiking again and this could make a tricky G7 summit next month. While Europe will now double down to preserve the agreement, its future may be precarious in the coming months.

The writer is an Associate at LSE IDEAS at the London School of Economics
Source: Gulf News

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