Fighting Sanctions
How can Iran deal with mounting U.S. pressure?
AThe author is a research fellow with the Charhar Institute and the Syria Research Center at Northwest University, China
s Washington’s deadline for the withdrawal of foreign investment from Iran approaches, U.S. President Donald Trump looks set to reimpose punitive sanctions on both Iran and foreign companies which continue to do business in the Iranian market. A series of challenges, both internal and external, may destabilize Iran.
Trump’s plan
The Iran nuclear deal was an important foundation in the settlement of the Iran nuclear issue. On July 14, 2015, the P5+1, made up of China, France, the United States, Russia, the UK and Germany, along with the European Union (EU), reached the Joint Comprehensive Plan of Action (JCPOA) with Iran to ensure that its nuclear program would be strictly non-military in nature. But less than two years later, in May 2018, Trump declared Washington’s intent to withdraw from the deal, with hostility between Iran and the United States escalating ever since.
According to Trump, the JCPOA is flawed in several ways and needs reworking. Firstly, the deal is largely temporary, and most of the restrictions it imposes on Iran’s nuclear research and development activities will expire in 2030. Trump therefore thinks it is necessary to establish a new set of rules to permanently remove the possibility of Iran’s future development of nuclear weapons. Secondly, the deal does not, according to Trump, do enough to restrict Iran’s ambition of developing its own missile program and expanding its influence within the Middle East. Since the deal was signed in 2015, Iran has tested various missiles while its Islamic Revolutionary Guards have been involved in conflicts in Yemen and Syria.
Trump’s decision to withdraw from the JCPOA is a serious blow to the values of the international community and the political reputation of Iranian President Hassan Rouhani. For the Rouhani administration, which assumed power in 2014, the nuclear deal was an important opportunity to integrate Iran into the international community following decades of isolation under U.S. sanctions and gain wider public support at home. Many Iranians also believed that the deal might help improve Iran’s economy, which deteriorated during the tenure of Rouhani’s predecessor, Mahmoud Ahmadinejad.
Limited options
For Iran, Washington’s withdrawal deals a significant setback to the country’s economic prospects and has come as a disappointment to many Iranians. At home, the Iranian Government has faced a series of protests and demonstrations since the end of last year. These protests came primarily as a result of economic hardship, with some protestors calling for an end to theocratic rule, withdrawal from Syria and suspension of investment and economic assistance to Iran’s allies in the Middle East, such as Syria, Hezbollah in Lebanon and Hamas in Gaza.
These ongoing challenges have also prompted a shift in Iran’s domestic political landscape. Many conservatives and hardliners in Iran are blaming the Rouhani administration for the U.S. treachery and are threatening to quit the JCPOA as a counterattack to Washington’s upcoming sanctions. For the Iranian opposition, Trump’s withdrawal from the JCPOA means an important opportunity to regain domestic support, challenge the current government and potentially demand its resignation.
There are two measures Iran could take to counter U.S. sanctions. It could threaten to restart its nuclear research and development program so as to force Washington and its allies in the Middle East to accept its demands to lift sanctions. Iran could also affect international oil prices by increasing its oil exports so as to disrupt Saudi Arabia’s plan to alleviate its own financial burdens by increasing international oil prices.
Yet even these moves could ultimately prove futile. An attempt by Iran to restart its nuclear facilities may provoke the ire of countries in the EU, especially France, Germany and the UK. Although these nations do not agree with Trump’s withdrawal and proposed sanctions, this does not necessarily mean that they would merely stand aside while Iran restarts its nuclear facilities. Any move by Iran to reinitiate its nuclear development program would distance it from the EU and seriously affect their already strained diplomatic relations.
An attempt to increase the production and export of oil could be blocked by Washington’s punitive measures. Iran has been looking for ways to continue exporting oil ever since the Trump administration At a press conference in July, Foreign Ministry spokeswoman Hua Chunying outlined China’s stance on the Iran nuclear deal. An excerpt of her comments follows:
Currently, the JCPOA is at a critical juncture about its direction. We emphasized in particular that international rules should be followed and major countries should have credibility and assume their due responsibilities. The unilateral sanctions should be abandoned because they are counterproductive. All relevant parties should stay committed to dialogue and negotiation and adopt a constructive attitude to discuss the issues of common concern.
Upholding and implementing the JCPOA remain an arduous task. The Chinese side will continue with its efforts to uphold the outcome of multilateralism. China will by no means accept the unilateral sanctions which are groundless under international law and we will resolutely safeguard our own legitimate rights and interests. (Source: Ministry of Foreign Affairs)