The unilateral act of withdrawing performed by the Trump administration from the Iran sanctions is sure to have wide ranging impacts.
Bharat Dogra is a senior journalist who has been involved with several social movements and initiative.
When President Trump unilaterally withdrew from the nuclear deal with Iran and imposed wide-ranging sanctions on Iran, the initial discussion centered around the impact of these rather severe sanctions on Iran. But soon it become increasingly clear that the impact of these sanctions will extend much beyond Iran to influence the world economy and policy in significant ways.
The most significant aspect of these sanctions is that these are opposed by some of the closest western allies of the USA including France, Germany and Britain. The European Union is opposed firmly to these sanctions, as also is another NATO member Turkey. Russia and China are of course clearly opposed to these sanctions, but in addition US ally South Korea is keen not to lose its market in Iran.
With so many important economic power opposed to sanctions, it is likely that while Iran will certain suffer seriously in the short-run, as is already happening, but these sanctions will not be able to destroy the economy of Iran. On the other hand, some indirect impacts may backfire and harm the USA economically and politically.
Already, with the advent of Trump, the gulf between the USA and some of its close European allies like Germany and France has been growing, as also with the European Union as a whole. In October 2018, Trump said, “Nobody treats us much worse than the European Union.” He has even described the European Union as a ‘foe’. Now the serious differences over sanctions on Iran are likely to widen the gulf between Trump-led USA and traditional European allies further.
In this context the efforts which the European Union makes to get over the sanctions will be watched very carefully for all their possible implications. In this context what Federica Mogherini, high representative of the European Union for foreign affairs and security policy and vice-president of the European Commission said in a recent interview with Mark Leonard of the European Council on Foreign Relations is significant. She said, “We are working as a union of 28 member states and with the rest of the international community, to preserve a nuclear agreement that has so far been implemented in full, as certified by the International Atomic Energy Agency in 13 consecutive reports. We do this because of our collective security, we do not want to see Iran developing nuclear weapons, and the Joint Comprehensive Plan of Action with Iran (JCPOA) is delivering precisely on that purpose.”
What is clear from this stand of the EU is that it completely rejects the grounds on the basis of which Trump has withdrawn from the nuclear deal, and also firmly affirms that the EU remains committed to the JCPOA of the nuclear deal.
What precisely will be the response of the EU? Mogherini says further in the same interview, “Part of this work requires us to guarantee that firms wanting to do legitimate business with Iran are allowed to do so. This is what we are working on right now : tools that will assist, protect and reassure economic actors pursuing legitimate business with Iran.”
It will be important to see how precisely this works out in the near future, and what will be the response of the USA to this. On an earlier occasion, Trump had accused Mogherini of hating America. It appears likely that the USA will react with a lot of hostility to such efforts, and so the gulf with western allies will be further widened.
However in Europe any steps to stand up to Trump to protect legitimate rights and sovereignty is likely to get wide support. Mogherini voiced feelings of many European leaders when she stated, “We Europeans cannot accept that a foreign power-even our closest friend and ally-makes decisions over our legitimate trade with another country. This is a basic element of sovereignty…”
As sanctions also involve preventing ‘guilty’ companies and businesses from using USA banks and their paying systems, finding alternative ways of doing business with Iran will inevitably involve finding new payment and exchange avenues as well. This will further adversely affects the already declining ability of the US dollar to maintain its dominance as universally accepted international currency.
In August 2018 the French Finance Minister Bruno Le Maire said he wants financing instruments that are ‘totally independent’ of the US. He added, “I want Europe to be a sovereign continent, not a vassal.” In September 2018 Jean-Claude Juncker, President of the European Commission, said it is absurd that European companies buy European planes in American currency instead of their own.
Such statements reveal a growing assertiveness on the part of prominent European leaders in the wake of the unjust and abrupt sanctions on Iran, after so much effort has been spent by several European nations as well as Obama-led USA earlier to clinch the nuclear deal with Iran. In addition, of course, other important countries like China, Russia and Turkey are also very opposed to the sanctions and the significance of a situation in which on a very sensitive issue the major West European countries are on the some side as Russia and China while the USA is on the other side is clear to everyone. This amazing situation will be watched with growing anxiety by all those who are committed to world peace and justice.
The easiest way of diffusing tensions is for the USA to at least ease up the sanctions significantly on a pathway to withdrawing these entirely. This is unlikely, but US policy makes will do well to remember what Jacob Lew, former US Secretary of Treasury, had stated some time earlier, “Over-use of sanctions can undermine our leadership position within the global economy and the effectiveness of our sanctions themselves.”
