President Trump announced Tuesday (8 May 2018) that he was pulling out of the Iran Nuclear Deal. This would potentially bring several consequences to the doors of Central Asia, some positive, some negative.
There are four elements to this mix: 1. Rationale of Trump for ditching the Iran deal; 2. Response of US allies and deal partners; 3. Iran’s reaction; and 4. Outcome projections for Central Asia.
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Trump has made a logical and convincing case when announcing his withdrawal from the Iran deal.
Here are the main points of his statement justifying the withdrawal:
- The USA is withdrawing from the Iran deal (Joint Comprehensive Plan of Action, or J.C.P.O.A.) and preparing to reinstate all sanctions.
- Iran is a leading state sponsor of terror, exporting dangerous missiles, fueling conflicts across the Middle East, supporting terror proxies and militias such as Hezbollah, Hamas, the Taliban and Al Qaeda.
- The deal has allowed Iran to continue enriching uranium and – over time – reach the brink of the nuclear breakout.
- The crippling economic sanctions were lifted but very weak restrictions were imposed on the nuclear activity. And, no limits were imposed on the malign behavior including Iranian involvement in Syria, Yemen and other places around the world.
- This disastrous deal undid the US leverage over the regime and gave it billions of dollars.
- It was a fiction that the Iran regime desired only a peaceful nuclear energy programme. Today we have proof, as published by Israel, that Iran was pursuing nuclear weapons.
- Since the deal, the Iranian military budget has grown by 40%. The funds are used for building nuclear-capable missiles, support of terrorism and disruption of peace and stability in the Middle East.
- Even if the deal were to remain in force, Iran could reach the verge of the nuclear breakout in a short period of time. This would trigger the nuclear arms race in the Middle East.
- USA, its allies, and friends, are convinced that Iran must never acquire nuclear weapons.
At the end of his statement, Trump said:
“Today’s action sends a critical message. The United States no longer makes empty threats. When I make promises, I keep them. In fact, at this very moment, Secretary Pompeo is on his way to North Korea in preparation for my upcoming meeting with Kim Jong-un. Plans are being made, relationships are building. Hopefully, a deal will happen, and with the help of China, South Korea, and Japan, a future of great prosperity and security can be achieved for everyone.
“As we exit the Iran deal, we will be working with our allies to find a real, comprehensive, and lasting solution to the Iranian nuclear threat. This will include efforts to eliminate the threat of Iran’s ballistic missile program, to stop its terrorist activities worldwide, and to block its menacing activity across the Middle East.
“In the meantime, powerful sanction also go into full effect. If the regime continues its nuclear aspirations, it will have bigger problems than it has ever had before.”
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France, Germany, and the UK regretted the U.S. decision to leave the JCPOA. Theresa May, Angela Merkel and Emmanuel Macron issued a joint statement:
“Our governments remain committed to ensuring the agreement is upheld, and will work with all the remaining parties to the deal to ensure this remains the case including through ensuring the continuing economic benefits to the Iranian people that are linked to the agreement.
“We urge the US to ensure that the structures of the JCPoA can remain intact, and to avoid taking action which obstructs its full implementation by all other parties to the deal.
“After engaging with the US Administration in a thorough manner over the past months, we call on the US to do everything possible to preserve the gains for nuclear non-proliferation brought about by the JCPoA, by allowing for a continued enforcement of its main elements.
“We encourage Iran to show restraint in response to the decision by the US; Iran must continue to meet its own obligations under the deal, cooperating fully and in a timely manner with IAEA inspection requirements.
“The IAEA must be able to continue to carry out its long-term verification and monitoring programme without restriction or hindrance.
“In turn, Iran should continue to receive the sanctions relief it is entitled to whilst it remains in compliance with the terms of the deal.”
Federica Mogherini of EU called on the international community to preserve the Iran nuclear deal. “The EU will remain committed to the continued full and effective implementation of the nuclear deal,” Mogherini said from Brussels.
“The lifting of nuclear related sanctions is an essential part of the agreement. The EU has repeatedly stressed that the lifting of nuclear related sanctions has a positive impact not only on trade and economic relations with Iran, but also mainly, [it has] crucial benefits for the Iranian people.”
Israeli Prime Minister Netanyahu applauded the Trump’s decision. “Israel fully supports President Trump’s bold decision today to reject the disastrous nuclear deal with the terrorist regime in Iran. Israel has opposed the nuclear deal from the start because we said that rather than blocking Iran’s path to a bomb, the deal actually paves Iran’s path to an actual arsenal of nuclear bombs and this within a few years time. The removal of sanctions under the deal has already produced disastrous results. The deal didn’t push war further away, it actually brought it closer.”
In a written statement, Barack Obama, the former US president, whose administration negotiated and signed the deal, issued a list of points as to why Trump’s decision is “so misguided”. “The reality is clear. The JCPOA is working – that is a view shared by our European allies, independent experts, and the current US Secretary of Defense,” Barack Obama wrote.
“The JCPOA is in America’s interest – it has significantly rolled back Iran’s nuclear programme. And the JCPOA is a model for what diplomacy can accomplish – its inspections and verification regime is precisely what the United States should be working to put in place with North Korea.
“Indeed, at a time when we are all rooting for diplomacy with North Korea to succeed, walking away from the JCPOA risks losing a deal that accomplishes – with Iran – the very outcome that we are pursuing with the North Koreans.”
Saudi Arabia, a regional rival of Iran and longtime US ally, said that it supports Trump’s decision.
“The kingdom supports and welcomes the steps announced by the US president toward withdrawing from the nuclear deal … and reinstating economic sanctions against Iran,” the Saudi foreign ministry said.
The United Arab Emirates and Bahrain – also welcomed Trump’s decision.
The United Nations Secretary General Antonio Guterres said in a statement that he was “deeply concerned”, urging the remaining parties of the deal to abide by their commitments.
“It is essential that all concerns regarding the implementation of the plan be addressed through the mechanisms established in the JCPOA. Issues not directly related to the JCPOA should be addressed without prejudice to preserving the agreement and its accomplishments,” Guterres said.
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Iran is understandably and predictably defiant.
President Rouhani said that he had directed his diplomats to negotiate with the European countries, Russia and China about remaining in the nuclear deal despite the withdrawal of the United States. He warned that Iran was ready to start unlimited uranium enrichment if the negotiation did not yield any benefits in a couple of weeks.
“Iran could face some problems,” said Rouhani, “but we will move on.”
Eshaq Jahangiri, the first vice president of Iran, said that the government had “a plan for managing the country under any circumstances.”
Jahangiri, a popular reformist, said that it would be ‘naïve’ to enter into negotiations with the USA again.
The deputy speaker of the Iranian parliament, Ali Motahari, said, “If the Europeans are willing to give us sufficient guarantees, it makes sense for us to stay in the deal.”
He said Iran should wait several months to see whether Europe plans to resist U.S. pressure to disengage from the Iranian economy, where European companies have invested in sectors ranging from auto manufacturing to oil exploration and tourism.
If Europe succeeds, “this is a victory for Iran, because it will have created a gap between the United States and Europe,” said Motahari.
If Trump confronts Iran, “we will not remain passive,” the head of the National Security Council, Ali Shamkhani, said Tuesday in an interview with the Hamshahri newspaper.
He said Europe made a mistake when its leaders appeased Trump by attempting to extract further concessions from Iran, including a potential halt to its ballistic missile program. The nuclear deal was the result of painstaking negotiations over two years between the Rouhani administration and the world powers, including the Obama administration.
“The Islamic Republic will stand firmly against this threat,” Shamkhani said of the Trump administration’s stance.
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If Trump brings back sanctions, they would hit, among other things, two crucial areas: 1. Oil, 2. Banking.
The Iranian currency is already losing its value against the dollar and the sanctions on the export of Iranian oil could speed up this free fall of Riyal. This would add to the inflation and probable shortage of certain items in the market although Iran is self-sufficient in essential products.
This would reawaken the prospects of barter deals between Iran and the neighbouring countries.
Apart from banking, one area where Iran could feel immediate pain is the price and volume of gasoline available in the market. Just before the signing of the nuclear deal, it was a daily occurrence in major cities of Iran for the cars to start queuing up before the pumping stations since early morning to fill their tanks.
If this happens again, it would prepare grounds for the uprising of the people against the government. Nevertheless, in case the uprising fails to gain the traction to the scale that led to the ouster of the Shah, the chances are that any space vacated by the moderates allied to Rouhani would be claimed by the hardliners like Ahmedinezhad.
Meanwhile, any shortage of gasoline in Iran will translate into demand for gasoline produced by the neighbouring countries at better prices.
If the Iranian share in the oil market shrinks because of the sanctions, it would lead to higher prices of crude. This would automatically raise the prices of gasoline, diesel fuel, other petroleum products, and natural gas. The beneficiaries would be the oil producing countries including those in Central Asia.
If Iran doubles down on its defiance, the USA, with or without its allies, could launch some kind of punitive action against Iran. This will bring pressure on Central Asia to cooperate against Iran.
Since the nuclear path was what united the Iranian nation, chances are the hardliners will use it as a rallying call.
Since the inner cabinet of Trump features frontline hawks such as Pompeo and Bolton, there is every possibility that it may not remain merely a war of words. In this context, we need to recall that Bolton played a similar role just before the Iraq war, helping build a case on false accusations. Building a case against Iran is easier that the building of a case against Iraq ever was.
Iran hopes that the withdrawal of Trump from the deal may create between the USA and its allies because everyone else has expressed the desire to preserve the essential structure of the deal. This may not bear much fruit. The allies of the USA cannot afford to go far against the wishes of Trump because in their blind prejudice they have built monumental rifts with Russia that cannot be healed anytime soon. In their minds, Trump is a lesser evil than Putin.
The sanctions, particularly the restrictions on the Iranian oil entering the markets, and the rollback of banking freedom, would make it very hard for the Europe to stay with the deal much longer. Whether they like it or not, their shoulder-to-shoulder stance has led them into a blind alley.
What is important for Central Asia to take note is that given the style of Trump, he would return to the deal at a suitable time. His issues with the current structure of the deal are three: 1. Prevent Iran from ever acquiring the nuclear weapons; 2. Capping its ballistic missile programme; 3. Stopping the Iranian-linked terrorist worldwide.
These are the kind of demands that everyone in Central Asia can understand and agree to.
A nuclear Iran is in nobody’s interest including Iran itself.
The development of ballistic missiles definitely poses different kinds of threats to the countries near and far, but more than that, it generates powerful temptation: If you have something you must use it.
A very important point is that Trump has mentioned the Taliban as one of the groups supported by Iran.
It is a fact no one was willing to give credence to till now despite the evidence to the contrary.
Some Taliban fighters who have laid down arms have said that Iran was supporting their activities in Afghanistan.
If the withdrawal of Trump from the nuclear deal can somehow lead to curtailment of any Iranian involvement in Afghanistan, it would be a blessing for Central Asia.
The situation is very new now and there could be all kinds of twists and turns in the next few weeks. /// nCa, 9 May 2018 [except for our analysis, the other parts of this write-up draw heavily from reporting by The New York Times, Washington Post, The Rolling Stones, Aljazeera, and Evening Standard]