Future of the JCPOA
Why is the future of the JCPOA in doubt?
Possibly the most dominant talking point surrounding Iran recently has been the future of the Joint Comprehensive Plan of Action; the landmark nuclear deal Iran signed with the USA, China, Russia, UK, France and Germany in 2015. The deal saw an easing of sanctions in exchange for Iran scaling back its nuclear program and allowing it to be subject of routine, invasive checks. Since coming to power Donald Trump has repeatedly talked about scrapping the deal, putting the possibility of this through to congress who, as of yet, have not made a decision. Whilst Trump may not like the deal the fact stands that in the eyes of all other signatories and UN nuclear watchdogs, Iran has fully cooperated. Whilst an easing of sanctions from the Europeans has seen recent investment in Iran, the US has still not released all Iranian assets and Trump’s administration is proving intent on stifling any dealings with Iran, as seen by the stalling of Iran Air’s aircraft purchase from Boeing. So why is the US so opposed to the deal? Whilst Iran is curbing its nuclear program the same cannot be said for its development of ballistic missile systems and the presence of Iranian backed militias throughout the Middle East. These actions have drawn the criticism from the US leadership, and of course Israel, and Trump has repeatedly suggested that the terms of the JCPOA need to be re-written to address the above or the deal be scrapped entirely. Following the removal of Rex Tillerson for Mike Pompeo, a notorious Iran hawk and critic of the 2015 deal, seems to imply that America is preparing to walk away from the JCPOA imminently.
Where do France, Germany and the UK stand?
Of course, the deal was not signed by Iran and the US alone however with the deal appearing to be reaching an end the European signatories have started making moves to ensure the preservation of the deal. Germany and France both seen an increase in relations and investment with Iran since 2015 and the UK has recently announced their new ambassador to Iran who seems to represent a more business orientated approach. Therefore, a collapse of the deal would not seem to be in the best interests of any of these three. As a result, some recent commentary has looked at the possibility of a ‘soft’ US exit from the deal meaning that the JCPOA would remain intact but the US would simply step back and negotiate its own terms with Iran, however whether this would be of interest to Iran is unknown since the US holds the greatest leverage in terms of sanctions relief. France and Germany have taken quite different stances to the preservation of the deal with France being vocal in suggesting that the deal should be re-written to scrutinise Iran’s missile development and regional interference in what appears quite an obvious attempt to interest the US in remaining in the deal. On the other hand, Germany seems to be taking the line that the JCPOA is working well and that any issues relating to missiles etc. need to be handled separately as they are unrelated. It seems this is a more popular approach to Iran with President Rouhani recently offering Angela Merkel a televised statement of congratulations on her re-election and praising German cooperation in making the JCPOA work. Nonetheless the threat of the JCPOA’s collapse is cause for concern in Europe and it seems telling that France’s Total, who signed perhaps the largest post-JCPOA deal with Iran a few months back, have been busily investigating routes through the UN that would ensure their private dealings with Iran remain intact should the JCPOA collapse and international sanctions return.
How about China and Russia?
Aside from the three European nations involved in the JCPOA, European-Iranian trade seems to be increasing almost day on day from reports of new deals and annual increases in trade from Armenia to Ireland. However, it is important to stress that Iran is definitely not pinning all its hopes on Europe and the West. In mid-February the Supreme Leader Ayatollah Khamenei suggested in a public speech the nation should look ‘East not West’ and recent activity, such as the enormous deals recently signed with India, show that this is very much the case and this seems to be coming to the benefit of the remaining two signatories of the JCPOA: China and Russia. Chinese investment in Iran is not new and but was reported at the start of March that current Iran-China trade stands nearly $20bn higher than the previous year. Ongoing efforts can also be seen by the Iranians to become involved in ‘the new Silk Road’ with extensive construction and improvements to railways and highways that would become part of a wider network connecting China via Central Asia to Iran, Turkey and Europe.
Meanwhile cooperation with Russia is also ever improving. At the start of the year a major deal was signed for private Iranian companies to mill Russian wheat for export to Iraq and much more recently, and significantly, Russia’ Zarubezhneft signed a $700m with the National Iranian Oil Company in what is the second largest deal post JCPOA (The largest being Total’s gas contract in the South Pars Gas Field). There are now suggestions from Russia of the creation of a possible Iran/Russia free trade zone. All this very much appears to tell us that Iran will most likely not be held ransom by the US and Trump. Should the JCPOA be scrapped and a tougher line taken by the West, Iran seems now to have Russian and Asian allies with whom to work and would probably not be too sorry to see Western relations once again collapse and the knowledge of this is no doubt concerning to European partners.
What this means within Iran
Should the JCPOA collapse this would be an enormous blow to President Rouhani and his moderate government to whom the 2015 deal was a significant success. The President is coming under increasing pressure anyhow as the benefits of the deal for everyday Iranians are yet to really be felt (this was the original cause of the widespread riots at the start of the year) and recently the President came under heavy attack for this from opposition. Rouhani has reacted strongly pointing out that whilst the effects of the deal are yet to be felt by the wider population, signs of a more economically healthy Iran are present. Since his election as leader the country’s inflation rates have dropped from near 40% towards single figures and non-oil exports seem to be ever increasing, something that is always proudly reported by Iranian outlets. However with regards to the re-writing of a deal, numerous quotes from Rouhani, the Islamic leadership and the military assert that Iran will not make concessions to their missile program, which they maintain is purely defensive. More hardline figures have also suggested that should the deal collapse, Iran would restart their nuclear activities, reaching pre-deal levels of Uranium enrichment within 20 days. Whether or not this is entirely true, it seems almost certain that Iran will not bend to any amendments to the deal that the US might want to make. Therefore, in scrapping the JCPOA the Whitehouse would essentially facilitate their worst nightmare of a nuclear capable and weaponised Iran completely shut off from them and as a result other US figures (Tillerson included and look where that got him) have suggested that the current deal, even if not perfect, is better than the alternative.
Current relations with Saudi Arabia and Israel
Little recently has changed in the hostilities between Iran and both Saudi Arabia and Israel. Iranian media is still pushing out various attacks at both, as Israel and Saudi do in return, most often citing quotes from members of Iran’s Revolutionary Guard Corps or religious leadership, however this is nothing new. The drone incident with Israel was a particularly tense moment earlier in the year which some suggested threatened a direct confrontation as opposed to the proxy war being played out in Syria. Whilst tensions were indeed a lot higher a direct confrontation between Israel and Iran seems very unlikely without significant support from Israel’s allies (notably the USA). IRGC leadership in recent weeks declared Israel to lack the ‘financial ability’ for a large-scale war with Iran and whilst there may be some truth to this, Iran is in no real position for a war itself.
And what of the proxy wars? With regards to Yemen and Syria we are still in pretty much the same place as we have been for a while and I don’t feel any specific comment is necessary other than European powers are beginning to take a tougher line with Iran given the troubling situation in Syria’s Arbil. Perhaps of slight interest are the recent comments made by US Secretary of Defence Jim Mattis who has accused Iran of meddling in recent Iraqi elections. As the first elections of a supposedly ISIS-free Iraq, the incoming government will have a large task on its hands in rebuilding towns, cities and pretty much the entire nation. Mattis has accused Iran of using financial tools to affect the election, labelling it as ‘unhelpful’. There has been little response on the Iranian side, but I would suggest that Iran has recently shown greater interest in her neighbour with the two agreeing to jointly work on various oil and gas fields that straddle the Iran/Iraq border and therefore it is not inconceivable that Iran would look to assert influence in Iraq and install a regime that suits their interests.
Author: Barnaby Bartlett, Member of APQ Global Research Fellowship