Keep­ing the Iran nu­clear agree­ment on course

China Daily European Weekly - - Comment - Har­vey Mor­ris The author is a se­nior me­dia con­sul­tant for China Daily. Con­tact the writer at ed­i­tor@mail.chi­nadai­

Now that the US has pulled out, sur­vival of hard-won deal de­pends on Bei­jing, Moscow and their European part­ners

China was the first stop on a diplo­matic shut­tle this week by Ira­nian For­eign Min­is­ter Javad Zarif, as his govern­ment faces up to the chal­lenge of US Pres­i­dent Don­ald Trump’s de­ci­sion to pull the US out of the in­ter­na­tional agree­ment to limit Te­heran’s nu­clear pro­gram.

In an al­most un­prece­dented cho­rus of agree­ment among the other ma­jor pow­ers, Bri­tain, France, Ger­many and Russia joined China in re­gret­ting the US de­ci­sion to ditch the 2015 Joint Com­pre­hen­sive Plan of Ac­tion (known as JCPOA).

Trump’s move in­volves the reim­po­si­tion of sanc­tions that could not only un­der­mine Iran’s own eco­nomic de­vel­op­ment but also in­ter­fere with its trade re­la­tion­ships with the other JCPOA part­ners.

The US as­sault on the deal is par­tic­u­larly prob­lem­atic for the European govern­ments, which, while com­mit­ted to pre­serv­ing it, are now also be­ing threat­ened with sanc­tions by Washington un­less they fall into line with Trump.

In the glob­al­ized econ­omy, European busi­nesses that have re­newed ties with Iran in re­cent years are vul­ner­a­ble to US mea­sures. They may opt to aban­don projects with the Ira­ni­ans rather than risk tougher US trade rules.

China, which has built solid diplo­matic and trade ties with Te­heran, is less ex­posed to such US sanc­tions. Bi­lat­eral trade is es­ti­mated to have more than dou­bled in the past decade.

Two days af­ter Trump’s an­nounce­ment on the Iran deal, China an­nounced the launch of a freight train ser­vice be­tween its In­ner Mon­go­lia au­ton­o­mous re­gion and Te­heran, a sym­bolic re­minder that these grow­ing ties are not likely to be dis­rupted by uni­lat­eral US ac­tion.

Chi­nese For­eign Min­is­ter Wang Yi told Iran’s Zarif that Bei­jing at­taches im­por­tance to the tra­di­tional friend­ship with Iran and to the com­pre­hen­sive strate­gic part­ner­ship be­tween the two coun­tries. China also re­gards Iran as an im­por­tant part­ner in the Belt and Road Ini­tia­tive, he said.

In light of this part­ner­ship, China is al­ready in a strong position to fill any gap cre­ated by European com­pa­nies fright­ened out of the Ira­nian mar­ket by US threats.

Chi­nese com­pa­nies can offer greater flex­i­bil­ity in ar­rang­ing fi­nanc­ing for projects in Iran com­pared with European com­pa­nies that might have list­ings on the US mar­kets or are oth­er­wise de­pen­dent on the dol­lar econ­omy.

Aside from the eco­nomic con­se­quences of Trump’s uni­lat­eral ac­tion, there is the ques­tion of whether the Iran deal can sur­vive the US de­par­ture.

China’s par­tic­i­pa­tion in the process that led to the deal was seen at the time as vi­tal to its suc­cess. If China had raised ob­jec­tions to the in­ter­na­tional efforts to pres­sure Iran to alter the course of its nu­clear pro­gram, it is un­likely the JCPOA would ever have got off the ground.

Now that the US has pulled out, it is up to Bei­jing, Moscow and their European part­ners to keep the strat­egy on course.

So far, all the re­main­ing par­ties to the agree­ment ap­pear de­ter­mined to keep it on course. How­ever, threats by US of­fi­cials, in­clud­ing White House Na­tional Se­cu­rity Ad­vi­sor John Bolton, that European com­pa­nies could be sanc­tioned if they con­tinue deal­ing with Iran could even­tu­ally weaken that re­solve.

Bri­tain, France and Ger­many have pledged to use their in­flu­ence with the US to get Trump to change his mind or, if not, to con­tinue to abide by the terms of the nu­clear deal. European com­pa­nies may reach their own con­clu­sions, how­ever, if they face los­ing out in the US mar­ket.

If the Euro­peans were to bow to US threats, it would spell the end of one of the most hard­won in­ter­na­tional agree­ments.

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