EU, Iran try to stand ground against Trump’s sanctions

Al-Monitor – When Atomic Energy Organization of Iran (AEOI) spokesman Behrouz Kamalvandi announced July 7 that Iran would surpass the uranium enrichment limits it had committed to under the 2015 nuclear arms deal, it was nothing like the last time Tehran said it would break an international enrichment deal.

In 2005, then-President Mahmoud Ahmadinejad appeared before cameras wearing a nuclear engineer’s uniform, removing the seals from centrifuges. It was a scene portrayed in Iranian media as a heroic act.

This time, it was a midlevel official who announced Iran would increase its level of uranium enrichment beyond the 3.67% agreed to in the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). He noted the changes had already been presented to the International Atomic Energy Agency (IAEA). He said Iran doesn’t need to add new centrifuges to its enrichment cycle because Iran’s action is based on its need. Currently, that need is apparently 4.5%.

That percentage would be near weapons-grade levels.

Kamalvandi and Iranian Deputy Foreign Minister Seyyed Abbas Araghchi have emphasized several times that the current planned increase can be called off.

Foreign Minister Mohammad Javad Zarif tweeted July 7 that “all such steps are reversible,” though only with the compliance of the E3 — the United Kingdom, France and Germany.

Iran is taking the step because the other participants in the pact failed to meet a deadline to implement tangible ways of helping Tehran cope with sanctions imposed by the United States. President Donald Trump began levying the sanctions when he withdrew the United States from the deal in May 2018, saying Iran was violating the terms and planned to build nuclear weapons.

After Iran’s recent announcement, the EU called for a meeting of the JCPOA commission, noting Iran was “pursuing activities inconsistent with its commitments” under the 2015 agreement. Even so, the statement issued by the foreign ministers of Britain, France and Germany and EU foreign policy chief Federica Mogherini added, “These compliance issues must be addressed within the framework of the JCPOA,’’ indicating they weren’t willing to comply with a US call for an urgent meeting of the IAEA Board of Governors. Mogherini emphasized that Iran’s steps so far can be undone.

It seems neither Iran nor the EU wants to overreact and both sides are trying to revive the deal rather than abandoning it — even though neither currently seems to benefit from it considerably. So why are they making the effort?

From Iran’s perspective, turning its back on the deal won’t solve any of its current difficulties. It won’t help Iran sell its oil and petroleum products, import necessary goods and attract much-needed foreign investment and technology, especially for its energy sector. If anything, leaving the JCPOA would make it harder to return to good terms with the EU and the United States and could inspire an international consensus against Tehran.

Under certain circumstances, one could expect more serious reactions from Iran because of local politics. The difficulties caused by the unilateral US sanctions give Iranian hard-liners the upper hand.

But making tougher decisions regarding the nuclear deal — such as increasing uranium enrichment substantially or reopening the Arak heavy-water reactor, where Kamalvandi held a news conference June 17 — would require considerable investments not readily available these days with Iran’s economy. Even ignoring this problem and assuming Iran could provide enough resources to restart the reactor, its output would cause other problems for the country. Local demand for enriched uranium is very low at the moment (specifically because the Bushehr nuclear power plant is not working at full capacity), and Iran wouldn’t be able to export it due to the US administration’s sanctions. Piling up product would create expenses and increase international friction. Accordingly, an increase in enrichment by Tehran could be interpreted, at best, as a costly signal to Brussels and Washington, and at worst, an escalatory step toward a conflict spiral.

As for the EU, it has incentives to not interpret Iran’s reactions in the most extreme way.

First, there is no better alternative to the JCPOA at the moment. The EU knows it is next to impossible for Iran to give up its enrichment program as the United States desires, and if it is assumed that Iran actually has a dangerous uranium enrichment capacity, there are no higher surveillance standards than what JCPOA already provides — which, by the way, are much more rigorous than IAEA rules.

Second, rising tensions in the Persian Gulf would harm EU countries’ economies more than others. With the United States positioned as the world’s biggest oil producer, Washington would benefit from a hike in oil prices — to the extent that some believe that has been Trump’s main incentive all along. But European countries are mainly oil consumers; their economies are highly vulnerable to oil price hikes.

Third, Iran has the potential to cause problems for the EU in terms of human and drug trafficking. Iran has been acting as a barrier between Europe and trafficking-prone Afghanistan and Pakistan for decades. Either intentionally or as a result of a long crisis in the region, if Iran loosens controls, EU countries could face new drug-trafficking or refugee crises, probably greater than what happened during the Syria crisis. Arguably, around 2.3 million Afghan refugees live in Iran, including 800,000 who are illegal. After the plunge in Iran’s currency value following Trump’s unilateral embargoes, many of these refugees are finding Europe a more interesting destination. According to Afghani government reports, Iran has prevented thousands of Afghan refugees in Iran from entering Turkey with Europe their final destination.

If these reasons aren’t enough, there could be one more explanation behind all the efforts by Iran and the EU to keep the JCPOA alive — one that is more fundamental and concerns the international order. If Washington’s withdrawal from the nuclear deal and its unilateral sanctions have one point to make, it would seem to be that the EU (and any other actor for that matter) has little ability to make independent policies in some cases without the United States. This is not the international order that the EU or Iran desires, each for its own reasons. If we consider the JCPOA as a symbol of multilateralism, then the US withdrawal challenges the whole idea.

Maintaining the deal amid Washington’s pressures has seemed an impossible mission, but under the current circumstances, both Iran and the EU still have incentives to keep the deal alive. The EU is trying to meet Iran’s minimal expectations, especially fully implementing Instex — the Instrument in Support of Trade Exchanges — a payment channel designed to facilitate trade with Iran and avoid US sanctions. If this succeeds, then the big picture could entice both sides to set an example for the next world order.Found in:TRUMP, IRAN-US TENSIONS, IRAN DEAL

Hamed A. Kermani is a PhD candidate in international relations at ATU University in Tehran. He has worked at the Center for Strategic Research in Tehran and was a visiting research fellow at Victoria University of Wellington, New Zealand. His work mainly focuses on relations between Iran and South Asia, with an emphasis on energy and security.