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The Deal Breaker
An interview with expert on U.S. pulling out of the Iran nuclear deal
 NO. 21 MAY 24, 2018

Iran people protest against U.S. withdrawl from the nuclear deal on May 11 in the capital of Teheran (XINHUA)

U.S. President Donald Trump announced his decision to pull out of the Iran nuclear deal and to bring back sanctions against Tehran in early May, inducing a flurry of diplomatic activity and incurring the condemnation of both Iran and the United States' European allies, as well as other related parties. What motivated Trump to take this decision? What repercussions will there be for the Middle East and the wider world? To explore these questions, Beijing Review interviewed Li Guofu, a senior research fellow on Middle East studies with the China Institute of International Studies. An edited excerpt of the interview follows:

What is your evaluation of the Iran nuclear deal? Has Iran honored the agreement?

The Iran nuclear deal is a multinational agreement reached between Iran, the five permanent members of the U.N. Security Council, namely the United States, Russia, France, China and the United Kingdom, as well as Germany, after prolonged negotiations. According to this deal, Iran would limit its production of nuclear weapon materials in exchange for the lifting of economic sanctions against it. The deal is thus seen as a paradigm of the settlement of major, sensitive international issues through peaceful negotiations by the international community.

Based on considerable effort and compromises on various sides, the deal has enabled all parties to reach their basic and paramount objectives. The United States and Europe have managed to limit Iran's ability to develop nuclear weapons, while Iran has alleviated some of the sanctions so that it can again become economically and politically involved with the rest of the world. This deal is thus widely viewed as mutually beneficial for all sides, helping to mitigate the possibility of massive military conflicts in the Middle East and curtailing nuclear proliferation for the good of the world, as well as regional peace and stability.

After the deal took effect in January 2016, the International Atomic Energy Agency conducted 11 inspections at Iran's nuclear facilities, attesting that Iran was honoring the agreement, as did the relevant agencies in Europe and the United States.

Why has Trump decided to withdraw from the Iran nuclear deal?

Superficially, Trump is aspiring to undo the political legacy of former U.S. President Barack Obama, as evidenced by his withdrawal from the Trans Pacific Partnership and the Paris Agreement. Deeper analysis will reveal that his withdrawal from the Iran nuclear deal actually signals a shift in U.S. Iran policy, from the curbing and engagement policy adopted by the Obama administration to a tougher stance on Tehran. The Iran nuclear deal has prevented this new administration from escalating sanctions on Iran, which Trump believes has restricted his new Iran policy. The deal is thus a stumbling block that must be removed.

Meanwhile, Trump believes that the Iran nuclear deal is incomprehensive, flawed and catastrophic. He said that he means to replace the current agreement with a more comprehensive one by demanding that Iran accept all U.S. terms. However, this seems to be an excuse, as Trump clearly knows that Iran will reject such an unattractive offer. This refusal gives Trump the justification to punish Iran for being uncooperative.

Is it likely that Iran will restart its nuclear weapons program following the U.S. withdrawal?

After the U.S. withdrawal, the other five signatories all expressed their willingness to remain in the deal. Whether Iran will remain in the deal depends on whether its interests can remain unaffected. Thus, if the other five countries can guarantee the protection of Iran's rights and interests as defined in the deal, it is possible that Iran will continue to abide by its terms. However, it is also possible that Iran will abandon the deal and resume its uranium enrichment program, potentially even initiating nuclear activities away from the international community's inspections by retreating from the nuclear non-proliferation treaty.

The key to the Iran nuclear deal is relief from U.S. economic sanctions. By pulling out of the deal, the U.S. is now free to impose whatever sanctions it sees fit. U.S. economic sanctions fall into two categories, the first of which punishes U.S. companies that do business with Iran, while the second effectively forces other countries to choose between trading with the U.S. or Iran. Due to U.S. dominance in the financial sector, if France, the UK and Germany do choose to remain in the deal, their companies which continue to trade with Iran may be hit by secondary sanctions.

The three European countries are now taking action, firstly by negotiating with the United States to seek exemptions and waivers for their companies, although it is unlikely that the United States will agree. Secondly, there is talk of the establishment of euro-based investment funds, which could provide a guarantee for companies continuing to do business with Iran. They could also employ blocking regulations approved by the EU in 1996 to protect their companies from U.S. sanctions through legal means.

Whether Iran will continue to comply with the deal after U.S. withdrawal hinges on whether the three European countries are able to allay the impact of U.S. economic sanctions. If they are steadfast, a trade war between the United States and Europe could ensue, although it is unlikely that Europe is bold enough to play hardball with the United States.

How will Trump's withdrawal affect U.S.-European relations?

Europe has close economic and trade ties with the United States, and most European nations are long-term security allies. Compared with the United States, Europe is geographically closer to the Middle East and thus more susceptible to the consequences of what happens there. This was demonstrated in the aftermath of the "Arab Spring," as Europe bore the brunt of mass migration and terrorism. Europe is therefore keen to see stability and peace return to the region. As a major regional player, the fate of Iran is key to this aim.

If Tehran resumes its uranium enrichment program, then hitherto international efforts toward the resolution of the Iran nuclear issue will be undone, which could in turn increase the likelihood of military attacks on Iran by the United States and Israel. Massive military conflict in the Middle East would be terrible for Europe and so for the sake of peace and stability in the region, Europe remains committed to the deal at this stage.

Since taking office, Trump has favored unilateralism in international affairs, putting U.S. interests first, in some cases, sidelining and sacrificing the interests of his European allies. His forsaking of the Iran nuclear deal is another example of this trend.

French President Emmanuel Macron and German Chancellor Angela Merkel visited the United States in quick succession, suppliant in their attempts to persuade Trump not to break with the accord. However, Trump seems to have turned a blind eye to their pleas, and it is unlikely that the European powers have emerged from this episode without feeling insulted by his behavior.

However, the United States' unilateralism is likely a phenomenon distinct to Trump's administration and not a long-term feature of U.S. foreign policy. Therefore, the disintegration of the relationship across the Atlantic will likely just prove a blip in an otherwise steady long-term alliance.

Trump's policies have gradually awakened European countries to the realization that they cannot entrust their fate to the United States. Even if relations are restored in the future, Europe's sense of self-reliance and independence will have been strengthened by this episode. This will have important and long-lasting ramifications for the hue of U.S.-European relations.

How will China cope with the fallout from Trump's decision?

Chinese Foreign Minister Wang Yi met with visiting Iranian Foreign Minister Javad Zarif on May 13, with their talks focusing on how to keep the deal alive.

The Iran nuclear deal, endorsed by the UN Security Council 2231 Resolution, is conducive to peace and stability in the Middle East and the world at large. While Iran has kept its part of the deal, Trump's withdrawal amounts to the unilateral breaching of the agreement and the evading of UN obligations.

China is opposed to the U.S. pulling out of the deal and has expressed its own commitment to it.

So as to ensure that Iran will continue to comply with the deal and that Chinese companies will not be affected by U.S. sanctions for trading with Iran, China is actively engaged in negotiations with the other signatories to the Iran nuclear deal.

Copyedited by Rebeca Toledo

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