Following recent effort of US Congress to pass ISA, it is distressing that the Obama White House, after years of talks and intense promotion of the deal, has not raised serious objections against the effort to undermine and mitigate the pact, says Research Director of International Business at the India, China & America Institute Dr. Dan Steinbock.
He described President-elect Trump’s push for a new Iran policy is likely to result in one of three possible scenarios: a US withdrawal from the JCPOA, an attempt to renegotiate the deal, or an enhanced enforcement of the deal.
Steinbock elaborated more in his comments addressed to Mehr News correspondent:
Tacit goals of the Iran Sanctions Act
The US Senate on Thursday unanimously voted to extend the Iran Sanctions Act for one decade after it was easily cleared in the House of Representatives last month. What goals lay behind the extension of Iran Sanctions Act (ISA) and why US is now violating its obligations after months of negotiations?
The comprehensive nuclear accord (JCPOA, July 2015) offered relief from US, UN and multilateral sanctions on Iran’s energy, financial, shipping, automotive and other sectors. These (primary) sanctions were lifted after the International Atomic Energy Agency’s (IAEA) certification in January 2016 that Iran had complied with the agreement. Yet, secondary sanctions (on firms) remained in place, along with sanctions applying to US companies, including US banks.
During the past month, there has been hectic activity in Washington to reverse the White House’s Iran policy during the two Obama terms. In its November report on Iran sanctions, the Congressional Research Service typically argued that the Iran Sanctions Act (ISA) “might not be inconsistent with the JCPOA” and that it is “unclear” whether the position of the incoming Trump administration on the JCPOA and on legislation “might conflict with US commitments in the JCPOA.”
As political exigencies have been seized to justify the extension of sanctions, their legal status is questionable even in the US. Reportedly, the new efforts seek to harm Iran, for another 10 years. Between 2010 and 2013, the sanctions significantly hurt Iran’s economy contributing to the fall of crude oil exports from 2.5 million barrels per day (mbd) to 1.1 mbd by mid-2013. That, in turn, was compounded by the plunge in oil prices since early 2014. Furthermore, the sanctions made Iran’s $120 billion in reserves held in banks abroad inaccessible. Before stabilization in 2015, Iran’s economy reportedly shrank by 9% in the two sanctions years. Current growth projections are predicated on sanctions relief.
The new strategic objective seems to be thus to harm Iran’s economy through a new 10-year long fall in crude oil exports, relatively low prices, and continued obstacles against access to remaining Iranian reserves abroad. Such strategic primacies – whatever their nominal rationale – represent a unilateral move that seeks to undermine a multilateral agreement.
Iran policy amid power transition in the US
JCPOA is not a bilateral deal between Iran and the US, but in fact a multilateral accord between seven countries and confirmed by the UE and UNSC, which a single party could not block it. Do you think the US can undermine the multilateral agreement, and if so, how do you expect international response?
In the evolving status quo, Iran should be prepared for all contingencies, including a potential US effort to undermine the multilateral agreement and an accompanying effort to do so with (or possibly without) a tacit support of all or some of its partners.
In the US, the effort to extend sanctions is taking place during the transition of power as alignments are shifting in the White House, among the two major parties, and even the incoming administration. In these circumstances, it is distressing that the Obama White House, after years of talks and intense promotion of the deal, has not raised serious objections against the effort to undermine and mitigate the pact.
During his campaign, President-elect Donald Trump railed against the nuclear pact, while members of the Republican Party have called him to tear up the agreement. Among the critics, neoconservatives play a critical role as they did in 2003 when the Iraq war was legitimized with arguments that were known to be flawed.
Within the Republican Party, Iran efforts reflect both tactical goals, which involve timing, and strategic objectives, which reflect the incoming administration’s tenets. These efforts began in the House in mid-November – right after the election in the US – and in the Congress in early December – only a week or so before the Electoral College is due to vote for President and Vice President. From the standpoint of Trump and Republican neoconservatives, the “Iran card” has allowed the new administration to strengthen its position as some anti-Trump Republicans continue to lobby against him before the Electoral College vote. Indeed, Senate Foreign Relations Committee Chairman Bob Corker, also a possible candidate for Trump secretary of state, has said that the renewal ensures Trump can re-impose sanctions Obama lifted under the deal.
However, the JCPOA is a multilateral accord. Earlier in the week, China’s Foreign Minister Wang Yi stressed that, while the implementation of the JCPOA is a long process and may face occasional obstacles, the deal is “a multilateral agreement endorsed by the UN Security Council, and its implementation must not be affected by any country’s domestic affairs.”
Any multilateral deal is a compromise. Nevertheless, a deal is a deal.
Democrats’ odd Iran reversal
Given that, the Democrats who supported JCPOA in Congress like Elizabeth Warren, Benjamin Cardin and Harry Reid unanimously voted for ISA claiming that the measure will not lead to the violation of JCPOA, do you think the US is sending a strong signal that any US president would have the ability to snap back sanctions on Iran? Is the extension a shortcut to tear JCPOA up, as President-elect Donald Trump has promised?
Not all Democrats agreed with the reversal in the Iran policy. When the Senate voted to extend the sanctions against Iran, Senator Bernie Sanders was absent. During his campaign, Sanders portrayed Iran as a major player in the Middle East arguing that diplomatic relations between Iran and the West would be critical for both regional stability and long-term security of the US and its allies. Yet, most Democrats have been surprisingly quick to reverse their longstanding position regarding the Iran pact in a matter of weeks, for purely political calculations.
Yesterday, Democrats still accused the Trump campaign for unilateral moves that sought to undermine the multilateral JCPOA and for dragging Washington again into the kind of international quicksand that severely impaired America’s credibility in the Bush era. Yet today, Democrats claim the ISA extension does not violate the pact because it continues a sanctions regime that is already in place. Obama is expected to sign the extension and, after failed personal lobbying against the extension, his Secretary of State John Kerry has been marginalized.
The new rationale seems to be that “it is OK to return to primary sanctions, which we agreed to lift, because we never agreed to nullify the secondary sanctions, which remain in place.” That’s a bad excuse for a flawed argument and a pretext for a new decade for political bullying.
Time for European leaders to walk the talk
Do you think that European sides of the deal have showed proper reaction to this ISA approval in the Congress? What about other parties involved in the deal, especially Iran's ally Russia? Would they hold any position on the issue to react against the measure?
As they decided to support the Republican position regarding Iran, Congressional Democrats said they were acting in agreement with US partners. "I have not heard strident objections from our key allies in the JCPOA," Democratic Senator Chris Coons told reporters.
If the Democrats’ stated view of US allies’ Iran policy truly would be valid, it would imply that all key European partners of the JCPOA would also have reversed their position in a matter of weeks and that they would have accepted at face-value the incoming Trump administration’s arguments – after months of serious, public and purposeful criticism of the Trump platform and everything it stands for.
Since the agreement was signed by the US, the UK, Russia, France, China, Germany and Iran, those statements suggest that neither London nor Paris or Berlin had objected to US reversal of the West’s long-standing position. In light of past statements, that would be very odd.
After all, since spring 2015, German Chancellor Angela Merkel has urged “unified approach to removal of sanctions against Iran.” UK’s Prime Minister Theresa May just stated that the Iran nuclear agreement “must stand.” After the US election, French President Francois Hollande noted that the nuclear “accord gives us all security….Could the US with Donald Trump put into question this accord? I don’t think so”. In reality, Trump has made up his mind. Now it is up to the key European partners of the JCPOA to walk the talk.
In the past few years, Iran-Russia relations have broadened economically, politically and strategically. While Americans see Iran primarily as a threat, an overwhelming majority of Russians view Iran’s influence positively. During the JCPOA talks, Russia played a vital and constructive role, which is likely to continue. While the world has much to gain from the hoped-for détente between President Putin and President-elect Trump, the former does not share the latter’s inclination to ‘bilateralize’ multilateral international issues. Moreover, Trump has made it clear that US-Russia cooperation could have neutralized much of the jihadist threat, Syrian civil war and migration crises in the Middle East. To gain President Putin’s support, however, Trump, too, should compromise – particularly in the case of Iran.
Avoid bilateral traps, favor multilateral cooperation
Iranian authorities have slammed the ISA’s extension as a blatant violation of the nuclear agreement, vowing proper counter-measures. How do you evaluate Iran's retaliatory measures? What is the best response?
Iran’s concern and strong criticism of the ISA’s extension is understandable and legitimate. If international multilateral accords are ignored after domestic elections, global governance and the West’s international multilateral organizations would be swept by political quicksand. Amid current volatility in international relations, it is instructive to remember the simple metaphor of China’s paramount leader Deng Xiaoping to describe great environmental uncertainty. It is like “crossing the river by feeling the stones.” While it is important to choose one’s steps cautiously, it is equally important to move ahead.
While President-elect Trump prefers bilateral venues, the JCPOA is a “multilateral agreement”, whose implementation must not be affected by any country’s “domestic affairs,” as China’s Foreign Minister Wang Yi has stressed. It is thus vital to ensure the support of the JCPOA’s other signatories: UK, France, and Germany. Some of them have already done so in public rhetoric, but more will be needed in the coming weeks. If Trump will remain true to his campaign pledges, the JCPOA may be one of the first but certainly not the last international agreement that the new White House would prefer to re-negotiate, re-define or reject. As a result, a calm but decisive multilateral and international approach is preferable in the beginning.
Furthermore, the JCPOA signatories remain equally apprehensive about US policies. While US House and Senate have opted for the extension of the ISA, much apprehension remains about Washington’s tactical and strategic objectives. Only a few weeks ago, there were great concerns that the Republican Party could disintegrate. While the Trump triumph changed the status quo, some of the current positioning may be posturing for the Electoral College and to unite the Republicans’ Trump proponents, neoconservatives, Tea Party leaders, Russia hawks and Russia doves, anti-Trump advocates, and so on. Moreover, while President Obama is fading out, President-elect Donald Trump’s rule will officially start after January 20, 2017. And yet, every second American has a very negative view of Trump whose administration choices are likely to reinforce such views in the near future.
Amid these developments, Iran has reacted appropriately. Recently, Iran’s Parliamentary JCPOA Supervising Committee, chaired by President Rouhani, held a meeting to discuss ways for reciprocal measures against the decisions made by US Congress. Similarly, Major General Yahya Rahim Safavi, a top military aide to Supreme Leader Ayatollah Ali Khamenei, warned that “the annulment of the nuclear deal will be a strategic mistake” urging America and its allies to join Iran in creating “regional peace and stability.” During his visit in Tokyo, Foreign Minister Mohammad Javad Zarif met Japan’s Foreign Minister Fumio Kishida who made clear his country’s continuous support for the JCPOA.
For now, it is important to push for the timely implementation of the JCPOA through multilateral, international pressure. Nevertheless, it is also important to prepare for alternative and adverse short- and medium-term scenarios.
The right to economic development
President-elect Trump is pushing a new Iran policy that is likely to result in one of three possible scenarios: a US withdrawal from the JCPOA, an attempt to renegotiate the deal, or an enhanced enforcement of the deal.
Since the JCPOA was negotiated and adopted under executive authority in the US, congressional review of the arrangement has been limited. Consequently, the deal can conceivably be reversed by the incoming Trump administration in cooperation with the Republican Congress. Nevertheless, the JCPOA is a multilateral accord rather than a bilateral deal between the US and Iran.
What Iran and the Middle East need today is economic development, not new violations of international multilateral accords. When the US House prepared to vote for the extension of ISA, Foreign Minister Zarif gave a very important speech in which he urged the Islamic world to condemn incompetence and failures and to focus on cooperation rather than conflict to avoid “failed states” in the region. Recently, China, having lifted over 700 million people out of poverty, released a white paper about the “right to development.” It is this focus on economic development that today unites all emerging and developing economies and that is vital to global growth prospects.
If – as it now seems quite clear – Washington will opt for a new Iran policy, it risks not only its own international credibility, as it did only a decade ago. It also risks alienating its allies, which are critical to multilateral decision-making, and its adversaries, which US negotiators in the past have criticized for violating multilateral norms and responsibility.
Dan Steinbock is the founder of Difference Group and has served as research director of international business at the India China and America Institute (US) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see http://www.differencegroup.net
Interview by: Lachin Rezaian
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