The Fate of the Nuclear Deal without Washington

The Fate of the Nuclear Deal without Washington

Wednesday, 9 May, 2018 - 08:45
President Donald Trump shows a signed presidential memorandum reinstating US nuclear sanctions on the Iranian regime on May 8, 2018. (AP)
Tehran - Faraz Safaei
US President Donald Trump signed on Tuesday his decision to withdraw from the Iran nuclear deal amid European and Iranian discussions on a scenario to preserve the agreement without the US.

Iranian President Hassan Rouhani made light on Monday of Trump’s pullout, saying that Tehran could possibly remain in the deal without Washington. This was a stance echoed by the Germany, France and Britain.

Given that Trump’s withdrawal appeared like a foregone conclusion ahead of his official announcement on Tuesday, the flurry of diplomatic activity that preceded the move was likely not aimed at persuading him to remain in the deal, but actually tackle the post-deal period.

This period would see the continuation of the deal without the US and the re-imposition of sanctions. Tehran stipulated however that the Europeans should commit to the pledges they made in the nuclear deal. Rouhani made it clear that this was Tehran’s demand and the foreign ministers of German, France and Britain stressed that they will maintain their stances on the issue.

Iran's Oil Minister Bijan Zangeneh said on Monday that the Iran nuclear deal will go on as long as Tehran could sell oil and attract investments and funds are pumped into the country. When all this fails, then the deal will collapse. The stances of Iranian officials reveal that the economic aspect of the deal was much more important than others. An informed source said that talks between European and American officials focused on economic factors, urging Trump to exempt European and Chinese companies from sanctions.

Russia, meanwhile, shares a different stand on the return of sanctions. It will likely suffice with condemning the US withdrawal from the deal.

The situation in Iran is much more complex.

Each of the Supreme Leader, conservative institutions and government, Revolutionary Guards and the market are committed to their own position.

Supreme Leader Ali Khamenei had clearly declared that if the US tore up the nuclear deal, then he will set it on fire. It however, appears difficult to burn an agreement that has already been torn up by the US president. The Iranian economy is too fragile to tolerate such a fire.

Khamenei is therefore likely to maintain silence over Trump’s decision or at least speak of American lack of integrity. He would most probably speak of Iran committing to the deal for “moral reasons.”

Rouhani’s government meanwhile accused the US of reneging on the agreement a long time ago. The government will remain in the deal in fulfillment of its vows to European powers. On the economic front, it will seek to push for calm through major propaganda and media campaigns that will focus on the European support.

The markets will meanwhile be wary of the US withdrawal. The gold and currency market have in recent days been positively affected with the European stances on the deal. Experts however predict that gold prices will continue to rise, while stocks will flounder.

The Revolutionary Guards appear to be the weak point in the post-nuclear period given Iran’s development of its ballistic missile program and ongoing meddling in the region. These two files are controlled by the Guards, while the nuclear one is controlled by the government.

The Guards are a complicated organization that enjoys great economic clout. According to unofficial figures, it controls a third of the Iranian economy. This third is closed off from western countries and it refuses to open up to them. A new Iran nuclear deal will therefore not favor the Guards.

They are therefore expected to react angrily to Trump’s withdrawal through a ballistic missile test or a limited military attack against Israel. The chances are high that the Guards would “flip the script” over any attempt to negotiate over a new nuclear deal.

The post-nuclear deal phase could pave the way to negotiations in Iran over important files that are in the hands of the Revolutionary Guards. Such negotiations could go beyond the scary prospect of the US withdrawal and open up a Pandora's box of new challenges, crises and catastrophes.

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