Keeping the Iran nuclear agreement on course
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.