Potential Consequences of US Withdrawal From the Iran Nuclear Deal
On May 8, 2018, Donald Trump announced the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on resolving the situation over the Iranian nuclear program, which was agreed in Vienna on July 14, 2015 by the six international mediators (Britain, China, France, Germany, Russia, and the United States) and Iran.
At about the same time in 2013, shortly after Xi Jinping got himself appointed to all the top Communist Party and government offices, China launched a massive campaign against corruption in the law-enforcement, security, and secret services, with a special emphasis on the Ministry of Public Security (MoPS) and the Ministry of State Security (MoSS).
Why did President Trump decide to withdraw from the JCPOA, a 156-page document that imposes serious restrictions on the development of Tehran’s nuclear capability and strict controls on its nuclear activities that go well beyond the usual measures used by the IAEA for other NPT members? What is the outlook for the JCPOA now that the US is no longer a member? What are the potential regional repercussions of the US president’s decision in the Middle East? Is there a relationship between the JCPOA, which took 12 years to negotiate, and the efforts to settle the Korean crisis? This paper offers a brief analysis of these and other issues.
Why did Trump decide to withdraw?
To comply with the terms of the JCPOA, Iran has reduced its national stockpiles of low-enriched uranium stored in its own territory by 95%, and the number of uranium enrichment centrifuges by two-thirds. It has undertaken irreversible steps to alter the design of the heavy water research reactor in Arak, which was originally capable of producing weapons-grade plutonium. According to estimates by America’s closest ally Great Britain, the adoption of the JCPOA has increased the time Iran would require to build a nuclear weapon — should a political decision ever be taken to that effect — by a factor of three or four.1 By the time Washington announced its withdrawal, the IAEA had released nine reports that confirmed Tehran’s full compliance with the terms of the JCPOA. Why, despite all this, has President Trump decided to withdraw?
Donald Trump was extremely critical of the JCPOA during his election campaign. In a September 8, 2015 op-ed in USA Today, he argued that the plan was “so poorly constructed and so terribly negotiated that it increases uncertainty and reduces security for America and our allies, including Israel”2. Speaking a few days later at a Republican primaries debate, he said the JCPOA “was terrible. It was incompetent. I’ve never seen anything like it. One of the worst contracts of any kind I’ve ever seen”3. Speaking in January 2016 before members of the American Israel Public Affairs Committee (AIPAC) Policy Conference of the, he said: “My number one priority is to dismantle the disastrous deal with Iran.”
A careful reading of the US president’s statement of May 8 makes it clear that his withdrawal from the JCPOA was driven primarily by his and his close allies’ overall attitude to Iran rather than the specific contents of the agreement itself. He uses the word “regime” 14 times, and refers to the plan by its official name, the JCPOA, only once. Less than two weeks after the US announcement of its withdrawal from the JCPOA, US Secretary of State Mike Pompeo unveiled a new US strategy on Iran that contains 12 demands addressed to Tehran. These include ending uranium enrichment, closing the heavy-water research reactor in Arak, granting IAEA inspectors unqualified access to all sites throughout the entire country, apply restrictions on missile program, and withdrawal all Iranian troops out of Syria. Complying with all these demands would essentially amount to an Iranian capitulation.4
In other words, the Trump administration’s decision is not primarily motivated by any aspiration to negotiate a better deal (an aspiration Trump has repeatedly declared, both before and after winning the election). It is mainly driven by a new US strategy on Iran, which is based on ramping up the pressure on all possible fronts. A US withdrawal from the JCPOA was never the main goal of the new US policy; the deal has merely fallen victim to the Trump administration’s comprehensive review of the US policy on Iran. The JCPOA is Item 1 on the list of collateral damage wrought by that review. That is why the joint attempts undertaken in late 2017 and early 2018 by the US Department of State and the JCPOA’s European participants to negotiate some kind of amendment to the deal that would alleviate the Trump’sconcerns were always doomed to fail.
Is there a future for the JCPOA without the United States?
The US administration has opted for one of the most hardline scenarios of quitting the Iran deal, which includes threatening any non-US companies that continue to work in Iran with secondary sanctions. That is why the JCPOA as it stands now is not the same deal that was reached in Vienna, minus the United States. The situation is far more complex and much less attractive for Iran. It also bears the risk of further erosion of the Iranian deal. For Tehran, the main incentive for adoption the JCPOA was the promise of renewed economic cooperation with the world’s largest economies, new foreign investment in the Iranian oil and gas industry, and the lifting of restrictions on oil exports. The threat of secondary US sanctions is essentially forcing the world’s largest energy companies to choose between working in the vast US market, where their existing business is worth billions, and pursuing new projects in Iran, with its more difficult investment climate, a complicated business culture, and higher risks.
Unless the EU, along with Iran’s other major trade partners and Iranian oil buyers (China, South Korea, and Japan) find a way of shielding their companies from America’s secondary (extraterritorial) sanctions, big businesses will start to flee from Iran. In that case, Tehran will of course lose its main incentive for continued full and comprehensive compliance with the Vienna accords. In Iran itself, there has never been a consensus in favor of the JCPOA, and the US withdrawal has rekindled the domestic Iranian debate on whether the deal serves Iran’s best interests.
The remaining parties to the JCPOA, including Iran, keep reiterating their commitment to the deal. That includes regular meetings of the Joint Commission that monitors the deal’s implementation. Nevertheless, an exodus of foreign businesses from Iran would force Tehran to review its stance on the JCPOA. President Rouhani and his team — especially Foreign Minister Mohammad Javad Zarif and the head of the Atomic Energy Organization of Iran (AEOI), Ali Akbar Salehi — have invested a lot of political capital in negotiating the deal, securing the domestic Iranian backing for it, and implementing its terms. They will have to take the internal political dynamics into account when formulating their response if the practical benefits of the Vienna agreements for Iran continue to dwindle.
The future of the JCPOA without the United States will depend primarily on the EU’s willingness to provide a credible shield from secondary US sanctions for the European businesses working in Iran. To do that, the EU will have to accept a further deterioration in its relations with the US because of the Iranian issue. As seen from Moscow, the signals from Brussels and the key European capitals look promising for the time being — but those signals alone are not enough to persuade European companies to keep working in Iran. For that, businesses will need a tangible legal shield — and so far, that shield has not even begun to coalesce.
Broader regional fallout
The Trump administration’s withdrawal from the JCPOA is not just a major step backwards in terms of resolving the Iranian nuclear crisis, but also a potential source of new flareups in the Middle East in view of the new US stance on Iran and the latter’s status as a major regional power.
When the JCPOA talks were still in progress, the situation would often become so volatile that a failure of diplomacy and the conflict’s degeneration into outright war seemed imminent. The Russian delegation at the talks always worked on the assumption that a military scenario was completely unacceptable, and that another military crisis in the Middle East would have unpredictable consequences.5 Donald Trump’s decision has now brought us back to that dangerous point. Further escalation in what is already one of the most volatile and unpredictable parts of the world has now become even more likely. Washington and Tehran are already ramping up mutual recriminations and hostile rhetoric. The new 12-point US strategy on Iran unveiled by Secretary Pompeo does not leave any room for compromise on the region’s numerous crises. It has also defenestrated the basic concept underlying the entire JCPOA architecture: resolving the Iranian nuclear program first, and then, with mutual confidence gradually improving, moving on to new efforts to close the region’s numerous political and diplomatic rifts.
The ultimate goal of the new US policy on Iran is Tehran’s utter capitulation in its confrontation with Washington and America’s Middle Eastern allies. The United States expects that tough new sanctions and renewed political and economic pressure will exacerbate Iran’s social and economic problems, leading to regime change in the best-case scenario — or at the very least, forcing the Iranian authorities to offer major concessions. These hopes are unlikely to come to fruition. In fact, the opposite scenario is far more likely: a more conservative government may come to power at the next presidential election in 2021 (or perhaps even earlier), a government that will respond to any attempts at meddling in Iranian internal affairs asymmetrically and decisively, using all available instruments, including its influence in other Middle Eastern states. In his response to the 12 US demands, Iranian Foreign Minister Mohammad Javad Zarif recalled Washington’s role in the 1953 Iranian coup6 and spoke of ordinary Iranians’ demand for their government never again to allow foreign meddling in Iranian affairs.
In that context, a fresh escalation in the region may be a matter of months.
JCPOA and the Korean peninsula
Washington’s withdrawal from the JCPOA — described as a violation of the terms of the deal by Ernest Moniz, former US energy secretary and one of the authors of the Vienna agreements7 — will have repercussions for the nascent dialogue on the Korean nuclear issue. That withdrawal will have a cost in terms of progress towards denuclearization of the Korean peninsula.
On the one hand, there are fundamental differences between the Iranian nuclear situation and the denuclearization of the Korean peninsula. In all likelihood, Iran has never taken any political decision to build nuclear weapons. Tehran has always declared its commitment to the Nuclear Non-Proliferation Regime (NPT), even though some of the efforts by Iranian nuclear scientists constituted a violation of Iran’s commitments under the IAEA Safeguards Agreement. In contrast, the DPRK has officially announced its withdrawal from the NPT, conducted six nuclear tests, and is estimated by some specialists to possess a small nuclear arsenal that can be delivered using intermediate and shorter-range missiles. That is why finding a solution to the Korean nuclear crisis will inevitably prove far more difficult.
On the other hand, as far as the author of this paper is aware, Pyongyang has long kept a close eye on the JCPOA talks and the implementation of that document. The North Korean leadership has also looked at the relevance of the principles of the negotiating process that led to the signing of the JCPOA, and of some individual technical elements of the plan, for any future negotiations on the Korean situation. Clearly, the US withdrawal from the JCPOA and Washington’s decision to revise its policy on Iran now that the country has already dismantled part of its nuclear infrastructure (some of it irreversibly) will have negative repercussions for any future Korean talks by reinforcing Pyongyang’s distrust of America’s ability to abide by its own commitments in the medium and longer term, regardless of the phase of the US electoral cycle. It would be useful at this point to recall a statement made by Kim Jong-un at a meeting with senior party officials in March 2013: “We should never forget the bitter lessons learnt by some countries in the Balkans and the Middle East. After succumbing to pressure and deceit by the imperialists, they surrendered their military deterrence instruments — only to fall victim to aggression”.
By way of an intellectual exercise, we could also consider the impact of the US withdrawal from the JCPOA on the outlook for crisis settlement in other parts of the world, and on the broader issue of arms control and nuclear proliferation. In all these areas, sharp questions are increasingly being asked about Washington’s ability and willingness to keep its word and abide by its own commitments — but an analysis of the wider repercussions of the US move is beyond the scope of this paper.
As a brief summary, it is safe to say that the US withdrawal from the Vienna agreements has several immediate implications. First, unless the foreign companies working in Iran are provided with a credible shield against secondary US sanctions, the JCPOA may soon collapse, raising the risk of a new cycle of nuclear technology advances in Iran. Second, the US decision increases the potential for conflict in the Middle East and the risk of an escalation of various regional conflicts over the next few months. And third, it is not conducive to confidence-building as part of the nascent negotiating process with the DPRK aimed at a denuclearization of the Korean peninsula.