With the May 12 deadline on the Iran sanctions approaching, U.S. President Donald Trump will decide whether to reimpose sanctions on Tehran and essentially scrap the deal, whether to extend the sanctions waiver and save the deal, or whether to take a third route of compromise. The implications of this decision reach far beyond Iran, and the wrong choice will impact the prospect of peace in Korea, Washington’s relations with Europe, and America’s future reputation as a reliable deal-making partner.


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Domestic pressure is increasing on President Trump as the Mueller inquiry continues, and the President has long shown a keen ability to distract domestic audiences from the investigation through the timely application of controversial foreign policy choices. The next opportunity to intercept the domestic media narrative comes on May 12, when the review period on extending sanctions waivers attached to the Joint Comprehensive Plan of Action (JCPOA) with Iran expires. If Trump – who has long criticised the Obama-era Iran deal – terminates the waivers, as many European leaders believe he will, the JCPOA will be threatened and an additional vector for Middle Eastern (and global) instability will be reopened.

Such a move by President Trump would carry significant consequences locally, particularly given Israeli President Benjamin Netanyahu’s recent bout of combative accusations regarding a secret Iranian nuclear weapons program. Iran has denied the accusations, calling it “propaganda” and has blamed Israel for generating suspicion against them. Following this, Netanyahu announced that he does not seek to start a war with Iran, but added that President Trump “appreciated the evidence” provided by Israel.

The accusations put forward by Netanyahu have likely added to existing domestic pressure on the Trump administration to withdraw from the deal. The U.S. Secretary of State – a position recently taken over in the turbulent Trump cabinet by long-term Iran hawk Mike Pompeo – has already stated that Washington was “deeply concerned” by Tehran’s destabilising activities in the Middle East and has called for new sanctions.

European signatories of the P5+1 deal, notably France and Germany, have been increasingly concerned about the future of the Joint Comprehensive Plan of Action (JCPOA) and the impact of its collapse on the wider region.

European signatories of the P5+1 deal, notably France and Germany, have been increasingly concerned about the future of the Joint Comprehensive Plan of Action (JCPOA) and the impact of its collapse on the wider region. On May 2nd, French Prime Minister Emmanuel Macron stated that he was unsure whether Trump would break the nuclear deal or not, while German Chancellor Angela Merkel added that the deal should be supported. While France and Germany are insisting that the deal should be maintained, the uncertainty surrounding its future is already affecting Iran’s economy, which has enjoyed very little real recovery following the easing of sanctions and has long been a main campaign focus of the nation’s embattled liberal-reformist President Hassan Rouhani.

Pyongyang, Brussels and Riyadh

Despite the serious potential risks mounting in the Middle East region, President Trump’s decision on Iran will have far more impactful consequences globally. As recently examined by Encyclopedia Geopolitica‘s John Rugarber, North Korea’s government is currently exploring major de-escalation with the United States and South Korea, presenting an opportunity to reduce a key factor of major geopolitical risk on a scale as equally important as the 2015 JCPOA deal. Pyongyang will be closely watching the May 12th deadline and the White House’s decision, and will factor Washington’s adherence to legacy deals into its planning. A perceivably unreliable United States will have a significantly harder time convincing Pyongyang that entering into an Asia-Pacific version of the JCPOA is in its interests.

Equally at risk is the United States’ relationship with Europe. Earlier this year, reports circulated that France – which maintains major economic assets in Iran – would start offering euro-denominated credit to Iranian buyers of its goods in a move designed to bolster trade while keeping it outside the reach of potential U.S. sanctions. Reports from French sources also indicated that Italy, Germany, Austria and Belgium were also working on mechanisms that would shield European companies from renewed U.S. sanctions. The European powers have been looking to increase trade with Iran since the 2015 JCPOA resulted in controls on Iran’s nuclear program that the EU largely believes Tehran has largely adhered to. While structuring financing through vehicles without any U.S. dollar link is designed to avoid the extraterritorial reach of U.S. legislation, it also represents a significant blow to Brussels-Washington trust and would represent a fresh low in bilateral relations. In late 2017, Trump had accused the European signatories of the nuclear deal of “profiteering”, although he later backtracked, stating that he had told French President Emmanuel Macron and German Chancellor Angela Merkel they could “keep making money” in Iran. The European powers, along with the United Kingdom, have all insisted that the JCPOA deal remains the best option for curbing Iranian nuclear ambitions.

Prince Salman’s comments on Saudi nuclearisation are not unrealistic, and a JCPOA failure would represent a very credible risk of launching a new nuclear arms race amidst the already critical instability of the Middle East.

Across the Arabian Gulf, the implications of a JCPOA failure are even more concerning. Speaking to a U.S. television network in March, Saudi Arabian Crown Prince Mohammed bin Salman – now widely accepted as the true power in the House of Saud – stated that Saudi Arabia would acquire nuclear weapons “if Iran did”. Iran has long been Saudi Arabia’s principle rival in the regional battle for hegemony, and in many categories outmatches Riyadh to an uncomfortable degree. While Saudi Arabia’s oil wealth and consequentially vast state budgets have allowed it to acquire cutting edge Western military technology, Iran’s forces are battle hardened from a successful Syrian campaign in comparison to Saudi Arabia’s own languishing expedition into Yemen. Despite this, Riyadh has maintained committed to wrestling with Iranian expansionism on all fronts in order to resist what it perceives as a strategic encirclement and a risk to the key economic choke-points of the Bab al Mandab and Strait of Hormuz.

As analysed in a previous piece, Prince Salman’s comments on Saudi nuclearisation are not unrealistic, and a JCPOA failure would represent a very credible risk of launching a new nuclear arms race amidst the already critical instability of the Middle East.

Conclusion

While accepting a key piece of Obama’s legacy as worth maintaining may be a bitter pill for President Trump to swallow, he must now decide whether dismantling a major American foreign policy success and hurting the potential for future successes – including those credibly available as a piece of his own enduring legacy in Korea – are worth the risk. While a collapse of the deal and renewed sanctions will be extremely damaging to Tehran, the true victim will be reformist President Rouhani, who campaigned on a promise of restoring Iran’s economy through sanctions relief. By damaging the Rouhani administration, Trump will be inviting Iran’s hardline bloc – which sits heavily in tandem with the Revolutionary Guard that Pompeo’s accusations of destabilisation were aimed at – back to power. While there is no denying that Iran’s hardline camp remains a meddlesome problem across the region, without the balance of Rouhani, they will likely find themselves free to run amok across Syria, Lebanon, Yemen, North Africa and the Horn of Africa.

Despite the looming deadline, a third way exists. Trump has long insisted that the Iran deal is “broken”, and the May 12 deadline decision is more nuanced than a simple decision between sanctions or extension. Should Washington decide to reimpose sanctions, it has the option of leaving several months before their actual commencement, creating a period of pressure on Iran and the EU powers to renegotiate to gain concessions that would appease Trump’s desire to get a “better deal”. While such a move would still damage U.S. credibility in future dealmaking, it would at least allow the JCPOA to potentially survive in some form, and would appease Trump’s domestic support base while not entirely destroying Washington’s diplomatic reputation.

President Trump must now decide whether he can accept a piece of Obama legacy in order to enable his own legacy in Korea, or to meddle with the JCPOA and risk all or some.

Suggested books for in-depth reading on this topic:

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Lewis Tallon is a former British Army Intelligence Officer with several years experience working and living in the Middle East and North Africa and Asia Pacific  regions in geopolitical, armed conflict risk and threat intelligence roles. Lewis currently specialises in MENA-region geopolitical intelligence consulting, in particular in support of the oil & gas industry, and the financial sector.

For an in-depth, bespoke briefing on this or any other geopolitical topic, consider Encylopedia Geopolitica’s intelligence consulting services.


Photo credit: U.S. Department of State

 

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