08/05/18

Point of View: What Germany, France and Britain should do after Trump nixes the Iran deal

Oliver Meier

The Iran nuclear deal has become a litmus test for Europe's willingness to protect its interests, against both Iran and the US, argues Oliver Meier.

Germans and all Europeans need to brace themselves for a unilateral US withdrawal from the Iran nuclear deal on May 12, the deadline for Donald Trump’s decision. Everything suggests that he will re-impose sanctions on Iran related to its nuclear program. Germany, France and Britain – the so-called European “E3” who helped broker the original deal – have worked hard to rescue the deal. But Trump appears unmoved by their arguments. So the Europeans need to do all they can to avoid a crash landing and keep the door open for dialogues across the Atlantic and with Iran. There are three reasons why there are no good alternatives to keeping the Iran deal alive.

First, standing by the nuclear accord reduces the risk of war in the Middle East. Re-imposing sanctions would play into the hands of Iranian hardliners, which have rejected President Rouhani’s support for the nuclear deal all along. Should Iran feel cheated because it curtailed its nuclear program but is denied the economic advantages promised under the accord, it might reverse course, revive its nuclear program and curtail IAEA activities to the bare minimum. A nuclear arms race in the Middle East would loom or even a second war à la Iraq 2003. Both would directly affect European security.

Germany shouldn’t need a Trump ultimatum to come up with its own strategy in the Middle East

Second, Europe’s credibility as supporter of the international order is on the line. A unilateral US withdrawal would thus amount to non-compliance with a legally-binding UN Security Council decision because the Iran deal, formally known as the JCPOA, was endorsed in Resolution 2231 and unanimously adopted on July 20, 2015. Europeans need to speak up against such a breach, if the West wants to be able to preserve the integrity and legitimacy of the United Nations and the Security Council as the final arbiter of international security.

Third, the EU needs to protect the legitimate trade of European companies. As was expected and hoped for, European trade with Iran has increased substantially since implementation of the JCPOA has begun. This provides a key incentive for Iran to accept the Iran deal’s obligations.

Washington, however, threatens to invoke secondary sanctions to enforce its trade restrictions against Iran. As a consequence, the United States could bar all European firms, banks and insurance companies from the US market involved in legitimate trade with Iran. Europe has consistently rejected such extraterritorial sanctions which it deems illegal. In 1996, it already created a “blocking statute” which it could invoke to counteract U.S. sanctions.

Thus, the Iran deal has become a litmus test for European willingness and ability to protect its interests and to uphold a critical element of the international order. To prepare a safe landing for the nuclear accord, the EU and its members should establish credit lines, and the European Commission should update the blocking statute to protect those European firms that want to continue their legitimate business with Iran.

In parallel, the EU should engage Iran in a dialogue on the prerequisites for continued implementation of the JCPOA. Europeans need to address Iranian actions of concern, such as its program to build more powerful ballistic missiles and its support for Syria’s Assad regime. Germany and its European partners shouldn’t need a Trump ultimatum to come up with their own strategic approach to the Middle East.

This Point of View was first published on Handelsblatt Global on May, 4th, 2018.

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