President Donald Trump issued an ultimatum on what he called ‘disastrous flaws’ to the Joint Comprehensive Plan of Action (JCPOA). Iran had come out and said that the United States crossed a red line by rejecting any changes to the 2015 nuclear accord. Last week, President Trump waived sanctions against Tehran but said that he would not grant another reprieve unless the U.S Congress and European allies strengthen the international agreement. Iranian President Hassan Rouhani says that the U.S has failed to undermine the deal, and hailed the JCPOA as a victory for Iran.
Trump has extended sanctions relief on Iran, but this could be the last time that he does it as long as the JCPOA is strengthened. The Iran Nuclear Deal was a landmark achievement of international diplomacy endorsed and embedded by the United Nations Security Council and Germany as a result of having a U.N dimension that makes it mandatory for the parties of the agreement to comply with its terms. It is also legally binding from the prism of international law, in light of President Trump’s reckless rhetoric of the Shia powerhouse since calling the JCPOA an embarrassment on the campaign trail. Iran does have a legal card to play in the latest ultimatum by the Trump Administration. Even from American law itself, the Iran Nuclear Review Act which was passed in May 2016, the Congress gave tacit approval to the deal as a signal to the President that he is wrong about nullifying the JCPOA.
President Trump is trying to destroy the JCPOA without having a direct trigger on it. In addition, Trump is creating a lot of uncertainty on whether this deal can survive or not if the U.S commits or walks away from the deal. The JCPOA sanctions relief was one of the main factors to why Iran has not been able to attract international investments coming into the country the way it was expected after the deal was ratified by the P5+1 parties. This is mainly because the banks are not willing to finance deals when they are not certain if the JCPOA will survive or not, and European banks are also cautious about investments being sanctioned as well.
If the White House does not live up to its end of the bargain, there is a possibility that the Iranians could pull out of the deal because they are not getting any benefits from it for being in compliance with the agreement. And essentially, this is the game that is being played in the White House.
Iran has seen some benefits from the JCPOA, but they seem to be very marginal. Oddly enough, many Republicans in Washington and hard-liners in Tehran have similarly overstated the intended economic impact of this deal which has created a lot of consternation within constituencies in both countries. The JCPOA was intended to pull back the sanctions on Iran over the nuclear issue, and not all of the U.S sanctions were repealed. The Europeans are in fact taking a very cautious approach towards Iran because of the fear that European countries like the U.K, France, and Germany could jeopardize their ties with the United States.
The most important factor of all of this is that Iran has not taken the necessary steps to crack down on corruption, or provide jobs for highly educated Iranians (especially the youth) to absorb and make use of the benefits that have come about by this deal. Also, there is no ability for Iran to absorb the investment from the deal to have a trickle-down effect on the Iranian economy, even though inflation has decreased since Rouhani took office.
The Europeans have actively been lobbying Washington to not do what it is clearly doing, and that is finding an indirect way to pull out of the JCPOA despite wavering the agreement for another four months. There is a possibility that this deal could survive without the U.S, but it necessitates not only the fact that the Europeans will continue to stick with the agreement, but it also signals that European companies will also stand by the deal as well because European governments could provide their companies with protection to enter the Iranian market, but are cautious about losing access to the American market. And as a result of this, Iranians will not get the financial benefits of the deal. Even if European banks protect their companies from doing business with Iran, the deal could still collapse, and the Europeans are standing firm on their stance on the JCPOA that is independent from the United States.
President Trump has handed the burden over to Congress, and its European allies to re-fix the JCPOA, but the inertia is not really there to revisit any change to the agreement. A lot of this depends on domestic issues within the United States and Iran with the latest uprisings about what a balance would look like for the United States to view Iran as a major player not only in the Middle East, but within the Eurasian continent. The actions taken by the Iranian Government towards the protests could potentially compel Trump to withdraw from the JCPOA and continue to accuse Iran as a so-called ‘bad actor’ in the Middle East by meriting a re-visit of the nuclear deal. Conflicting the protests with the nuclear deal will continue to be a problem for the Trump Administration moving forward into the next four months.
As a result of President Trump’s waiver extensions on the JCPOA, it looks like the deal will live for at least another four months. As long as Trump continues to extend the waivers of the deal, Iran can bargain for what it got in the deal and that is a full relief of international sanctions. The problem in the White House is the uncertainty of what will happen when the May deadline approaches, and the referee in the agreement, the IAEA, has already confirmed that Iran has been complying with the JCPOA nine times. By creating uncertainty, the Trump Administration has not provided any evidence of Iranian violations of the deal, and even if they did, the evidence would be available to the public for all to see.
In addition, Trump is using this uncertainty to force Iran to walk away from the deal forcing Tehran to be the main problem and not Washington. If the U.S walked away from the deal and the other parties, especially the Europeans stick with the deal, the Europeans, Chinese, and Russians need to coordinate on 1) pushing back U.S violations of the deal which have happened over the last year; and 2) boost economic relations with Iran to make sure that Tehran derives the investments that it was promised in the JCPOA.
There is one thing that is certain about President Trump, and that is his unpredictability. The Administration’s logic of finding a way out of the JCPOA doesn’t really work because even though the spirit of the deal is to prevent Iran from acquiring a nuclear weapon, the Trump Administration continues to undermine the agreement.