Insight
The EU can keep the Iran nuclear deal alive by Luigi Scazzieri 16 May 2019
Iran’s announcement that it will no longer comply with parts of the international nuclear agreement has put the EU in a difficult position. But modest moves by Europe could increase the chances that the core of the deal will survive. In May 2018, Donald Trump pulled the US out of the 2015 Joint Comprehensive Plan of Action (JCPOA), an international agreement designed to stop Iran developing a nuclear weapon. Trump argued that the agreement had failed to halt Iran’s nuclear ambitions and its development of ballistic missiles, and that it did nothing to constrain Tehran’s destabilising foreign policy. The US re-imposed sanctions and started a campaign of ‘maximum pressure’ on Iran, designed to fundamentally change its behaviour and force it to negotiate a broader agreement that addressed all its activities. Following Trump’s withdrawal, the deal survived in limbo. Its remaining signatories, the EU, China and Russia judged that Trump’s criticism of the JCPOA was misplaced, and that the deal was highly effective in its key aim of preventing Iran from further developing its nuclear programme. They pledged to maintain it, and to continue to provide Iran with its economic benefits, so long as Iran complied with its side of the bargain. The International Atomic Energy Agency (IAEA) had repeatedly certified that Iran had done so. However, in the year following the US withdrawal, this fragile arrangement eroded. US sanctions forced purchasers of Iranian oil, including China, to turn elsewhere for fear of US retaliation. European leaders often talk of their desire to enhance the EU’s ‘strategic autonomy’. But the EU did not take a robust stand against Trump’s unilateral attack on the JCPOA, and was unable to provide Iran with meaningful benefits to offset US sanctions. As the CER predicted, the EU’s attempts to maintain trade with Iran were largely unsuccessful. In June 2018, the EU revised its Blocking Statute. Introduced in 1996, following the adoption of new US sanctions on Cuba, Iran and Libya, the statute prohibits EU-based companies from complying with US extraterritorial sanctions. But the legislation has not had the desired effect, as firms are more fearful of the impact of US sanctions than of the statute. European businesses, from aircraft manufacturer Airbus to oil giant Total, have pulled out of Iran en masse. CER INSIGHT: The EU can keep the Iran nuclear deal alive 16 May 2019
info@cer.EU | WWW.CER.EU
1