The transatlantic divide on Iran

Essay


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In 2017, differences between European leaders and US President Donald Trump on several global security objectives have strained transatlantic relations. Nowhere are these differences more profound than on the question of Iran. Given the president’s harsh rhetoric on Iran and recent efforts to translate that rhetoric into action on the Joint Comprehensive Plan of Action (JCPOA), a clash between Europe and the United States seems almost inevitable. European countries should now prepare to minimise the damage, thereby preserving their strategic interests in non-proliferation and the pursuit of stability in the Middle East.

Trump has explicitly outlined a shift in US policy on Iran towards aggressive containment and away from the diplomatic openings created by his predecessor. He has also consistently condemned Iran as a “fanatical regime”, attempted to place expansive travel restrictions on Iranian nationals, and urged other nations to isolate the country. His administration has unambiguously sided with Iran’s regional rival, Saudi Arabia, in addressing the conflicts in the Middle East.

European leaders have thrown huge diplomatic weight behind the JCPOA, hoping to convince President Trump that the preservation of the deal is in the interests of US and global security. Nonetheless, in October 2017, Trump withdrew certification to Congress that Iran was complying with the nuclear deal, defying calls from Europe and ignoring assessments by US generals and eight reports by the International Atomic Energy Agency.

There is now little doubt that Trump wants to undermine the nuclear deal, which he called an “embarrassment”. Through the decertification process, Trump has momentarily deferred responsibility for decision-making on the JCPOA to Congress. But he cannot delegate to Congress the authority to renew waivers for sanctions targeting Iran, as is periodically required by US obligations under the nuclear deal. Were he to refuse to issue such waivers, Trump would terminate the JCPOA.

Yet the extent to which the US is prepared to implement a more confrontational strategy towards Iran remains unclear. Despite its tough rhetoric, throughout 2017 the Trump administration’s priority has been the fight against the Islamic State group, and it has not been prepared to retaliate against Iranian-backed forces in Syria or Iraq. However, it is an open secret that Trump’s inner circle of advisers favours more aggressive checks on Iran’s Islamic Revolutionary Guard Corps (IRGC) in the Middle East.

Meanwhile, Iranian Supreme Leader Ayatollah Ali Khamenei and the IRGC have repeatedly stated that the US remains the most significant threat in the Middle East. In the absence of de-escalation channels between Washington and Tehran, the current trajectory of relations between the capitals not only endangers Europe’s non-proliferation goals but also heightens the risk of further military escalation in its neighbourhood. Growing direct or indirect confrontation between American- and Iranian-backed forces across the Middle East would exacerbate conflicts in the region that have already imposed heavy costs on Europe, particularly those in Iraq and Syria.

Europe: stuck in the middle

Europe finds itself in the middle of the brewing confrontation between Tehran and Washington. The Trump administration has pressed Europe to renegotiate the JCPOA and oppose Iran’s use of missiles. Iran has categorically ruled out further negotiations with the US on any issue, and has urged Europeans to focus on delivering the economic deals that Iranian leaders hoped would follow the JCPOA.

Officials from the E3 – France, Germany, and the United Kingdom – and the European Union have rightly reminded Washington that, as parties to the agreement, they believe no renegotiation of the JCPOA is possible and that the deal must remain delinked from other regional issues. European governments have also expressed their readiness to work with the US in addressing other contentious issues that involve Iran, so long as the Trump administration disperses the shadow it has cast on the JCPOA. But the US administration seems unlikely to moderate its position. As a consequence, European officials express their concern by highlighting in private and public that Tehran’s regional positions, escalating rivalry with Riyadh, expanding missile programme, and poor human-rights record have limited the space for normalising Europe–Iran relations. Meanwhile, other Middle Eastern countries are increasingly under pressure from traditional regional partners, such as Saudi Arabia and Israel, to reduce their engagement with Iran.

Even if European leaders share many US concerns about Iran, their approach to these concerns has so far been strikingly different from Trump’s. European countries have voiced unanimous support for the JCPOA and broadly favoured similar forms of multilateral engagement to address their grievances with Tehran. European officials underscore the fact that an important safeguard of the JCPOA’s goals is the delivery of tangible economic benefits to Iran – an effort at odds with the additional sanctions on the country proposed by the Trump administration.

What should Europe do?

In the coming months, European actors should have the following priorities:

  1. Safeguard and deliver on the nuclear deal

The centrepiece of European efforts to safeguard the nuclear deal should remain the political outreach in the US. E3 and EU leaders should warn the US that if Trump unreasonably withholds the renewal of sanctions waivers or Congress derails the JCPOA, Europe will be forced to proactively cooperate with China, Russia and Iran to salvage the deal. To boost their political leverage, European governments should emphasise the fact that if the US introduces secondary sanctions that target European companies dealing with Iran, the EU will likely revive its Blocking Regulation to minimise the impact.

In parallel, European governments and businesses should also step up private consultations with US lawmakers on devising future US sanctions that minimise the impact on European companies and the JCPOA. The model of the 2017 Russia-sanctions package could be adopted to urge US lawmakers to establish warning and waiver systems that exempt European companies.

European governments should also prepare for a continual battle with the Trump administration over the implementation of the JCPOA. In doing so, the E3 will need to proactively fix problems related to the deal, avoiding reliance on US cooperation in the removal of the financial hurdles faced by European companies that undertake legitimate business with Iran.

Proactive measures include those to boost support for European companies that struggle to acquire financial and insurance cover for business dealings with Iran, such as alternative financing structures that minimises exposure to future secondary sanctions. In the short term, countries can follow the examples of Denmark, Austria, France, and Italy in working with local export agencies to extend credit lines and insurance cover for trade with Iran. In the medium term, EU member states should support the initiative to include Iran in the European Investment Bank’s portfolio in 2018. However limited in its immediate consequences, this step would send a clear political signal to both Tehran and Washington that the EU is committed to promoting investment in Iran.

  1. Maintain a pragmatic approach to Iran’s missile programme

With the JCPOA in limbo and regional tension high, additional pressure on Iran and the threat of new sanctions on its missile programme are likely to be counterproductive. European actors should instead privately urge Iran to limit the range and frequency of its missile tests, with the aim of avoiding further crises in the Middle East and providing Europe with more political space to resist calls for sanctions from Washington.

  1. Press for tangible results on regional issues

European governments should increase their coordination on using the current diplomatic track with Iran to press for tangible – even if incremental – progress on a range of issues in the Middle East. They should focus on efforts to encourage negotiations on easing the political deadlock in Lebanon; ensuring freedom of navigation in the Gulf, including through an efficient mechanism for dealing with incidents that involve US and Iranian vessels; de-escalating the war in Yemen; and stabilising Iraq, including through the development of political relations with Iraqi Kurds.

The Trump presidency seems to have placed Iran and the US on an inescapable path of escalation. After a decade of close coordination between Europe and the US on reaching a multilateral solution to address the Iranian nuclear issue, Trump’s preference for bilateralism will limit opportunities for such coordination to continue. The prevailing view in Washington is that the Trump administration can either force or persuade European countries to follow its Iran policy.

However, Europe can instead use its convergence with Russia and China on the issue to preserve influence in Washington. This is particularly important at a time when global powers face a genuine nuclear threat from North Korea. Moreover, without effective implementation of the JCPOA, there is little hope for the kind of diplomatic breakthrough with Iran on other contentious issues needed to help stabilise the Middle East. With greater European leadership, there may be a chance to halt the deterioration of Middle Eastern security.

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