With a friend like Trump ...
Last week, New Zealand was given good reason to invoke the old saying that it can take care of its enemies, but only God can protect it from its friends.
In walking away from the West’s nuclear deal with Iran, United States President Donald Trump not only re-imposed stiff new economic sanctions on Tehran, but threatened to impose sanctions on any countries that helped Iran to achieve its nuclear ambitions.
Initially, Trade Minister David Parker and his counterparts in Europe were somewhat in the dark as to how widely the US would define the trade it would regard as being unacceptably supportive of Iran. Answer: all of it.
For New Zealand, the amounts at stake in our trade with Iran are significant, and were set to increase. We have had an Embassy in Tehran since 1975, thus making it New Zealand’s longest-standing diplomatic mission in the Middle East. During the 1980s, Iran was one of New Zealand’s top five export markets. After the Joint Comprehensive Plan of Action nuclear deal was reached in 2015 and economic sanctions were lifted, the trade between Iran and New Zealand resumed again in earnest. We sent an official trade delegation to Iran last year, and sold $120 million of goods to Teheran in 2017, mainly comprised of dairy products.
All of this hard work and potential economic benefit to our exporters has now been scuppered by our good friend in the White House.
Prime Minister Jacinda Ardern has professed herself to be ‘‘disappointed’’ by the ‘‘backward step’’ Trump has taken. With indecent haste, Export NZ chief executive Catherine Beard indicated that our exporters would already be engaged in obediently shifting their business to elsewhere in the Middle East.
‘‘Exporters are pretty fleet of foot when they need to be,’’ Beard said. ‘‘They hopefully will have other choices, and they’ll start to redirect.’’
New Zealand is not the only country rushing for the exit. Since 2015, joint ventures worth US$10 billion have been signed between Iran and major European companies, to build everything from cars to aircraft. These attempts at peacefully integrating Iran back within the global economy now face termination.
The Trump administration is giving foreign firms trading with Iran only six months to wind down those relationships, or face punishing US sanctions. Across Europe, an undignified scramble has begun for exemptions and grandfather clauses. In effect, the Americans are being allowed to wield veto powers over a significant swathe of world trade.
As Parker pointed out, scrapping the Iran deal will also encourage nuclear proliferation. Iran has now been given every incentive to pursue nuclear weapons, and North Korea has been given every incentive to hold onto the ones it has. Already, Saudi Arabia is talking of attaining a nuclear bomb.
Ultimately, it seems as though the current US President has no conception of diplomacy (or trade) as being based on compromise, and the pursuit of the best achievable level of mutual advantage. Instead, Trump is treating global interaction as a zero sum game where one side wins big, and one side loses big. Last week, that approach looked more like a sure-fire way of ensuring that everyone will lose.