By Ravi Joshi
‘If it ain’t broke, don’t fix it.’ This is common sense in America, but President Donald Trump governs the country not so much by common sense but by gut instinct and prejudices. And so when he declared that he will trash the nuclear deal with Iran (the JCPOA – Joint Comprehensive Plan of Action) signed by the P5+1 (US, UK, France, Russia, China and Germany), it is not Iran that got so much into a tizzy but all the European partners of the US. For the last few weeks, German Chancellor Angela Merkel, French President Emmanuel Macron and British Foreign Secretary Boris Johnson have all visited the White House, pleading with Trump not to wreck the deal.
Obviously, the Europeans have good reasons to do so. First, Iran has not violated any of the provisions of the deal. Second, the only agency mandated by the UNSC to endorse the deal, the IAEA, has consistently given a clean chit to Iran, till as recently as March 2018. While IAEA Director General Yukiya Amano certified that Iran is fully implementing all its obligations under the JCPOA of 2015, he called upon North Korea to abide by the UN Security Council Resolutions and open up its facilities for verification. While President Trump is eagerly seeking out a meeting with a ‘rogue nuclear weapon state’ such as North Korea, his stubborn refusal to abide by an agreement signed by his predecessor with a ‘non-nuclear weapon state’ that has agreed to withhold its nuclear programme, smacks of utterly arbitrary and petulant behavior. As Nicholas Kristof says “this is not an act of foreign policy. This is an act of vandalism”.
Third, this is the best deal that the P5+1 could get out of Iran to keep it reined in from its suspected nuclear ambitions. Fourth, tearing up the deal now would untether Iran to pursue its nuclear weapon’s programme and finally, this would tie down Iran to American sanctions forever, which were not lifted even after it signed the deal and enrage it to unpredictable acts of recklessness in an already turbulent region. To put it simply, this is an act of ‘bad faith’ and no other country would trust American word on any deal, any more. Would North Korean President Kim Jong-un accept President Trump’s word for any deal?
Is there a problem with Trump or is it that he wants to undo all the work done by his predecessor – Barack Obama? His decision to break away from the TPP, NAFTA, the Paris Climate accord and now the Iran deal shows that he has a pathological problem with his predecessor. But then, what about all the countries involved? What about global trade, and the common concerns on climate warming? Does he care? Probably not.
Trump’s motives behind the move
Is there something more than irrationality here, a plausible motivation to achieve an unstated goal. Is that related to the destruction or degradation of Iranian power – an objective that is sought by both Israel and Saudi Arabia, great allies of President Trump. Does it have something to do with Jared Kushner’s business interests? Do they coincide with the ambitions of Mohamed bin Salman (MBS) – the young and reckless Crown Prince of Saudi Arabia? The recent visits of both MBS and Benjamin Netanyahu to Washington have obviously worked on Trump in convincing him of the need to dump the deal and isolate Iran.
Having suffered low oil price in the range of $43 to $54 per barrel from 2015 to 2017, specifically during the 3-year-long period of a disastrous and unwinnable war against the Houthi rebels in Yemen, for which he had to buy hundreds of billions of dollars worth of arms from the US, Saudi Arabia now wants the oil prices to go back up to a reasonable $85 per barrel at least, to fill up the budgetary gap and a further rise of up to $100 per barrel to put the country well on the road to prosperity. Ratcheting up tension in the Persian Gulf is a sure of way of doing that. The oil prices had already climbed up to $70 per barrel merely on the expectation that Trump would break off from the deal. And the day after Trump’s announcement, it rose up to $77 per barrel.
A sustained upswing in oil prices will crucially depend on whether Trump takes action to prevent Iran from shipping out its oil. This calls for re-imposing all the old sanctions prior to the deal and adding a few more. And that’s exactly what Trump’s announcement indicated.
Successive American presidents have removed Saudi rivals in the region — from Saddam Hussain in Iraq to Mummar al-Gaddafi in Libya. The one remaining ‘snake whose head they need to cut off’ is Iran as the then Saudi King Abdullah had told the US Defence Secretary Robert Gates in April 2008. He had specifically asked the US to bomb Iranian nuclear installations. What better way for Trump than to start by unraveling the nuclear deal with Iran, as a first step.
Implications for Iran and the region
The initial reaction from Tehran is on expected lines, with President Rouhani stating that Iran would abide by the agreement and wait for the response of the other five signatories – UK, France, Germany, Russia and China and then decide on its future course of action. He is also reported to have told his nuclear scientists to ‘commence enrichment of uranium without limit.’ Recent reports indicate that the leaders of EU-3 have decided to meet with Iranian leaders on coming Monday, 14 May.
Domestically within Iran, President Rouhani faced stiff resistance from the hardliners in the Parliament as well as the Iranian Revolutionary Guards Corps (IRGC) that benefitted immensely from a flourishing black market economy during the sanctions period. Both had a vested interest in breaking the accord. For them, Trump has done a favour.
If the other five signatories hold on to the accord and work out modes of payments in currencies other than US Dollar, such as Euros and the Chinese Yuan, the situation within Iran may still be salvaged without much disruption.
The West Asian region would return to greater instability, with Saudi Arabia and Israel becoming openly hostile to Iran. With the US now positioning itself decisively in the Saudi camp against Iran, the region could soon witness much saber rattling that could easily slide into war.
Implications for India
New Delhi, true to its style, has refused to comment on the situation, though Iran is the third largest supplier of oil to India. Since we continued to import Iranian oil even during the height of sanctions by making payments in non-dollar currencies and with a barter system of 20% in Indian rupees and 30% for third country trade of Iran through an Indian bank, India should not have difficulty in adjusting to the new reality.
However, Prime Minister Narendra Modi’s relations with both Trump and Netanyahu may complicate his stance. Both of them would certainly expect him to fall in line with their reasoning. How we are going to position ourselves will reveal a lot about our foreign policy.
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