international

Trump Versus Iran – No Deal

The American invasion of Iraq has been considered one of the worst foreign policy moves made by America. With President Donald Trump calling off the Iran Deal, there is a new contender for the top position on the list worst foreign policy moves.

President Trump during his campaign had made statements that the Iranian deal was a bad deal. Even during his press conference announcing the withdrawal from the agreement, President Trump cited issues in the deal such as the sunset clause that allows Iran some leeway in their nuclear program post 2025. The decision to withdraw was taken on evidence provided by the Israel with Prime Minister Benjamin Netanyahu holding a press conference a few weeks ago showcasing some of the evidence. He mentioned that this was shared with the Americans before the press conference. Some have said that there is no evidence that Iran is violating the deal, including people in the Trump administration. Mike Pompeo, secretary of State, during his confirmation hearing for the job had said that he hadn’t seen any evidence that Iran was in violation of the deal.

In 2015, during the Obama administration, leaders from the US, UK, Germany, France, Russia and China reached a historic agreement to lift sanctions placed on Iran with Iran committing to stop its nuclear program. This was considered by many as one of the biggest achievements of the Obama administration as well as for international diplomacy. Now, with the US decision to backout of the deal, there may be widespread implications. US exiting from the deal would mean sanctions would be put on Iran. There is a 180-day wind-down period. This is a window of time for renegotiations, if any.

With such reneging on deals, future deals also come under question. The issue of a commitment being stuck to is under question and may be a main issue with the North Korean deal. How can the leadership be certain of the deal not being reneged upon by the US government?

Apart from the possibility of Iran restarting its weapons program, there is also a threat of all-out war breaking out. Israel and Iran have already made moves in Syria. Israel said more than 20 rockets were launched by Iranian forces in Syria towards Israeli-claimed territory late Wednesday. The Iron Dome, the Israeli aerial defence system intercepted these missiles. Israel is believed to have launched a retaliatory attack. There are also consequences for transatlantic relations, which haven’t been in the best of shape. All other stakeholders in the process aren’t very happy about the move. Only Saudi Arabia and Israel have backed President Trump’s decision.

France, Germany and Britain have stated that they will uphold their end of the Iran deal and stick to it. Iran has also agreed to stick to the deal as long as the Europeans can ensure that benefits promised in the agreement are delivered. In order to ensure that the benefits are accrued, the Europeans may have to stave off American efforts to penalize companies that trade with Iran. The sanctions that may be placed are likely to affect companies in the oil, aviation, telecom, automotive sectors. Deals worth billions of dollars have been signed since the Iran Nuclear agreement was reached. Oil majors such as Shell and Total have major signed deals to develop oil fields. Boeing and Airbus and had deals in place worth $39bn to sell aircraft to Iran. Auto major Renault signed a $778m deal to make 150,000 cars a year in Iran. Others have also signed agreements with local partners to produce hundreds of thousands of vehicles in Iran. Vodafone has partnered with an Iranian firm called HiWEB to modernise the country’s internet infrastructure. The sanctions are also likely to push up oil prices.

With European firms getting affected by the sanctions, there is a possibility of a trade war if not a series of cases being filed in the World Trade Organization, something which has happened in the past. In the run up to the announcement of US withdrawl, there was a sharp slide in the Iranian rial and prices of goods and services have shot up in Iran. There have been reports of panic buying and hoarding in Iran. Inflation will be a major concern for Iran in the coming weeks and months. With uncertainty rising, the next few months during the renegotiation process will be critical and determine whether there will be a peaceful resolution or not.

– Contributed by Bhargav Dhakappa

Picture Credits: dailystar.co.uk



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