U.S. “Withdrawal” from the Iran Nuclear Agreement
Conclusion:
The Iran nuclear deal (JCPOA) will be terminated by all parties before the end of 2018. European companies will be unable to continue trading with Iran due to U.S. sanctions. Iran will no longer benefit from this trade. Consequently, Iran will have no incentive to continue the agreement. Inspections will end.
Facts:
The Iran nuclear treaty is known as the Joint Comprehensive Plan of Action (JCPOA).
Preamble and General Provisions of the agreement states: “Iran reaffirms that under no circumstances will Iran ever seek, develop or acquire any nuclear weapons.” Iran is able to restart peaceful use of nuclear energy in ten years, not weapons. 98% of Iran’s uranium is gone.
No money was “given” to Iran for signing the nuclear agreement. Iran was given access to Iranian bank accounts that had been frozen plus funds owed by China and India for oil already delivered from Iran.
The International Atomic Energy Agency (IAEA) concluded Iran has not violated the nuclear agreement. Using new technical capabilities, the U.S. Intelligence reached the same conclusion.
There is no provision for withdrawal from the JCPOA. The U.S. is first country to violate this agreement.
Iran hardliners are big winners in the U.S. violation of the JCPOA. They had argued that the U.S. cannot be trusted to keep the deal and they have been proven correct. The Iranian moderates have been humiliated by the U.S.
Israel announced on April 30, 2018 that Iran covered up a nuclear program 15 years ago. The U.S. discovered this program in 2003 and publicly released their findings in 2007. Israel did discover some new documents.
Opinion
The E.U. will attempt to maintain trade relationships with Iran, but that is highly likely to fail. They can continue to purchase oil, which is one-third of Iranian exports, for the six-months grade period provided by the U.S. Beyond that, most European companies will terminate trade with Iran to avoid losing access to the large U.S. market. The French company, Total, which is the largest foreign oil investor in Iran, has announced it withdrawing from Iran. The failure to the E.U. to maintain trade with Iran will leave Iran with very little benefits from the JCPOA.
Re-imposing U.S. sanctions without Russia and China will have less impact on Iran than the old sanctions. These sanctions may advance the time when China will clear global payments in renminbi (yuan). This would render U.S. sanctions less effective everywhere.
The U.S. does not have a realistic alternative strategy for preventing Iran from developing nuclear weapons. Iran will not abandon its partnerships in the Middle East, including Hezbollah in Lebanon. A state sponsor of terrorism with nuclear weapons will be more dangerous than a state sponsor of terrorism without nuclear weapons. Terminating the JCPOA is counter-productive to advancing peace and stability in the Middle East.
Donald Trump has withdrawn the U.S. from the Paris Accord on Climate Change, which had no penalties for non-compliance. He withdrew the U.S. from the Trans-Pacific Partnership, even though the TPP reduced tariffs on 14,000 American products going into 11 countries and increased U.S. employment and economic growth. The withdrawal from (violation of) the Iran nuclear agreement appears to be primarily driven by Trump’s effort to obliterate the Obama legacy. The odds for a better agreement are low and potential costs of a nuclearized Iran are incalculable.
