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July 20, 2018 11:34 am

Don’t Believe the Hysterics on Canceling the Iran Nuclear Deal

avatar by Mitchell Bard

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A satellite image of Iran’s Fordow nuclear facility. Photo: File.

A great hue and cry went up throughout Europe and from former Obama administration officials and various foreign policy experts when President Donald Trump pulled out of the Iran deal (JCPOA). Critics said, “What’s he going to do now to stop Iran from building nuclear weapons? Where’s his Plan B?”

This was a nonsensical argument to begin with, which is even clearer now that we see how effective “Plan A” is working.

Before Trump’s decision, Iran was already cheating (e.g., by refusing to allow inspections of its military sites — the places most likely to have nuclear research going on) and taking advantage of various loopholes (e.g., work on naval propulsion reactors). German intelligence services also revealed ongoing Iranian efforts to obtain materials for weapons of mass destruction. In addition, Israel disclosed Iran’s secret trove of documents, proving that Iran lied about its past work on developing nuclear weapons and creating the suspicion the that materials were hidden so that the project could resume when the JCPOA expired, if not before.

Trump gave ample warning to his European allies that he planned to abandon the “worst deal ever” if the agreement was not strengthened. As columnist Bret Stephens noted, “the same people who previously claimed the deal was the best we could possibly hope for suddenly became inventive in proposing means to fix it.”

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Ultimately, the Europeans were unwilling to make significant changes in the agreement, and were especially opposed to reimposing sanctions that would threaten their business opportunities in Iran. The Iranians were even more adamant that the deal not be altered.

Critics said that two things would happen if Trump cancelled the deal: First, the Iranians would resume their nuclear program. Second, that the Europeans would neuter US sanctions by continuing to do business with Iran.

The day after withdrawing from the agreement, Trump warned that if Iran resumed its nuclear program, there would be “very severe consequences.” Iran’s leaders blustered, but have not yet abandoned the agreement.

Trade between the European Union and Iran skyrocketed following the signing of the JCPOA, from $9.2 billion in 2015 to $25 billion in 2017. The Europeans hoped to circumvent US sanctions, but quickly learned this would be difficult because of American threats to deny them access to the US market and banking system. Secretary of State Mike Pompeo warned, “we will hold those doing prohibited business in Iran to account.”

In a major setback, the European Investment Bank rejected an EU proposal to do business in Iran. Reuters noted, “The resistance from the European Union’s lending arm underscores the limits of the bloc’s ability to shield trade with Iran from the reimposition of U.S. sanctions.”

Critics of the president insisted that Iran could not be pressured by the United States alone, and that it was only the multilateral sanctions that brought Iran to the negotiating table. US measures, however, are having a major impact as companies around the world cancel deals with Iran despite protests from the European signatories to the JCPOA. For example:

  • One of the largest deals between a European company and Iran involved the French oil and energy company Total, which signed a multi-billion dollar agreement to develop Iran’s South Pars gas field in 2017. The company announced that it was abandoning the project unless it receives an exemption from US authorities.
  • The Dutch airline KLM said that it is ceasing flights to Iran. Other airlines may follow suit.
  • Two top shipping container carriers, 2M partners MSC and Maersk Line, announced they are reviewing their plans in Iran, and French shipping group CMA CGM said that it was pulling out of Iran.
  • Hyundai and Mazda cancelled their contracts with an Iranian automaker.
  • Korean contractor Daelim cancelled a $2 billion contract to modernize an Iranian refinery.
  • Hyundai Heavy Industries, the world’s largest shipyard, was supposed to deliver container ships to an Iranian shipping company starting in April 2018, but has yet to deliver a single vessel.
  • PSA, owner of the French carmaker Peugeot, said that it had begun to suspend its joint ventures in Iran.
  • South Korea, one of Iran’s main customers in Asia, will not load any Iranian crude and condensate in July, halting all shipments for the first time in six years.

Iran threatened to resume its nuclear activities unless the Europeans agreed to “safeguard trade” and protect Iranian oil sales from US sanctions by purchasing Iranian crude. This is unlikely to happen. Replying to a letter from Britain, France, and Germany seeking broad exemptions for European firms doing business in Iran, Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin wrote that the Trump administration would grant only limited exceptions based on national security or humanitarian grounds.

One objective of the sanctions is to bring Iran back to the negotiating table and allow the international community to forge a deal that will prevent Iran from building a nuclear weapon, and stop its other destabilizing activities. Though the administration will not say it publicly, the real hope is that the deterioration of Iran’s economy will worsen and provoke the Iranian people to change their regime. The full impact of US sanctions has not yet kicked in, but protests are already spreading across Iran, creating hope the mullahs can finally be toppled. That would be the ultimate vindication of “Plan A.”

Dr. Mitchell Bard is Executive Director of the American-Israeli Cooperative Enterprise and author/editor of 23 books including “The Arab Lobby” and the novel “After Anatevka: Tevye in Palestine.”

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