On May 8th, President Trump pulled the plug on the Joint Comprehensive Plan of Action (JCPOA) and claimed that Iran failed to comply with the obligations despite very little tangible evidence. Regardless of which side is correct, a U.S withdrawal from the deal raises some serious implications about what will come next.
The Joint Comprehensive Plan of Action was a diplomatic initiative that involved the United States, Iran, the United Kingdom, France, China, Russia, plus Germany. In July 2015, the group of countries known as the P5+1 reached an agreement in Vienna that specifically restricted Tehran’s nuclear program. In return, the global community would lift some of the sanctions that were placed on Iran. Since the ratification of the agreement, the International Atomic Energy Agency (IAEA), which is the leading authority on the issue has repeatedly verified Iran’s compliance within the terms of the deal. Yet, regardless of its functionality, Trump has expressed his grief with the agreement.
The Trump Administration has identified four aspects it would like to see included in the nuclear deal. These include 1) Iran’s ballistic missile program, 2) Tehran’s role in the region, 3) the inspections regime, and 4) the sunset provisions, which allow certain legal items to expire over time. However, the JCPOA was specifically designed to curb Iran’s nuclear program and in this context, it functioned adequately.
But the deal was never meant to address non-nuclear proliferation issues. Thus, including non-nuclear provisions within the current framework is not a feasible endeavor nor is it something the global community looks forward too. Nonetheless, the Trump Administration considered the non-nuclear shortcomings as a deal-breaker and announced the exit from the JCPOA.
In his announcement, Trump stated plans to reimpose all suspended sanctions on Iran. These include penalties to curb Iranian energy exports by targeting the Central Bank in Tehran as well as the hundreds of banks that deal in finances and insurances. The most likely way for Trump to reimpose sanctions on Iran is to go through channels that administer and enforce economic sanctions. This task falls under the authority of the Office of Foreign Assets Control in the U.S Department of Treasury. However, their protocols explicitly note that imposing sanctions can only take force after a period of 90-180 days. Much of the process depends on the unprecedented interpretations and the country in question. Within this timeframe, Washington can reimpose the sanctions on Iran.
Thus far, the global community has responded to Trump’s decision with mixed feelings. British, French, and German leaders made a final push to change Trump’s mind, but ultimately failed to do so. As such, immediately following Trump’s announcement, top officials from the European Union responded by saying that the U.S President does not have the power to unilaterally scrap the multilateral deal. Officials from China and Russia reacted similarly and noted that they remain committed to the nuclear pact, including the provision for sanctions relief for the Islamic Republic.
The other members of the agreement reject Trump’s decision, but once the U.S sanctions are in place, any firm that wants to conduct business with Iran will immediately be subject to U.S secondary sanctions, which will cut them off from the U.S banking system. If Washington reinstates sanctions while the Europeans, Chinese, and Russians want to remain committed to the deal, they will have to resort to non-dollar measures and pass legislation to protect their companies. This could reduce the extent of U.S sanctions that can affect Iranian energy exports.
So far, Iranian President Hassan Rouhani has called for restraint and said that Iran remains committed to the JCPOA. If the Europeans remain committed to the agreement as well, it would be in Iran’s interest to abide by the nuclear terms. Doing otherwise would damage Tehran’s relationship with the European Union. However, the European commitment to the JCPOA remains dubious at best. The Europeans are simply unlikely to risk upsetting Washington. As such, despite the current defiance, the Europeans are most likely to comply with certain U.S sanctions.
On the other hand, Russia and China have been proven to be willing to take greater risks. Moscow has close security ties to Tehran especially in the Syrian battle space, while Beijing is the largest importer of Iranian crude oil followed by New Delhi. Russia, China, and India also cooperate with Tehran in their respective grand economic policies. Some examples include the Indian-Russian Transport Corridor and the Chinese Belt and Road Initiative, both of which involve Iran.
New Delhi and Beijing also rely on their access to Iranian energy for the development of their respective industries. In short, while Europe is likely to comply with U.S sanctions, Moscow, Beijing, and New Delhi will be important for Tehran to navigate the sanctions environment. In the coming months, Rouhani is likely to seek for greater international support to push against Trump before the U.S reinstates economic sanctions.
For Rouhani, the well-being of his moderate faction depends on the ongoing economic reforms which are tied to the survival of the JCPOA. At the end of 2017, protests erupted across Iran with many Iranians complaining that the nuclear agreement had failed to provide the country with tangible economic benefits.
In addition, Iranian conservatives are likely to exploit the weakened position of the moderates. The conservatives believe that Rouhani’s failure to reform the economy will allow them to dominate Iran’s political landscape once again. Trump’s exit from the JCPOA will further complicate the internal political balance in Iran.
Another faction that welcomed Trump’s decision was the government of Israeli Prime Minister Benjamin Netanyahu. The Israelis are in a proxy conflict with their Iranian counterparts. The current Iranian-Israeli proxy conflict is taking place inside Syria with the former trying to carve a direct land corridor through its proxy Hezbollah in Lebanon.
Israeli intelligence estimates that Hezbollah has around 150,000 rockets and missiles in its possession of which thousands can reach major Israeli cities like Tel Aviv. As such, Hezbollah is Israel’s most imminent threat. If Iran succeeds by creating a direct corridor to Hezbollah, Tehran would be able to swiftly reinforce and strengthen the position of its proxy in Lebanon as well as create a second front by the Golan Heights.
However, as Israel and Iran act to preserve their credibility, their responses and counter-responses are likely to get stronger over time. This cycle of violence only requires one miscalculation for a dramatic escalation. In fact, this is not a position the Israeli leadership wants to be in, especially not on its own. Israel needs the United States in the proxy conflict against Iran and the collapse of the JCPOA helps to bring Washington into the fight.
In the long-term, Trump’s withdrawal from the JCPOA raises questions that affect the geopolitical standing of the United States in the Middle East. How can other nations trust Washington to abide by its commitments when political winds change? This is particularly important considering the nuclear negotiations with North Korea.
Moreover, if the deal collapses all together, the government in Tehran will be free to expand its nuclear program as it was doing so until 2013. Designing a fresh nuclear accord with a resurgent Iran will be even more complicated than it was in the past. Before long, the U.S could face a new geopolitical dilemma with only two options. Washington could either allow Tehran to continue its nuclear program in the absence of international monitoring or use forceful means to stop it. Neither options have particularly favorable outcomes.