On Iran, Europe Plays A Weak Hand to Advantage

February 20, 2020

No one is optimistic about Europe’s latest initiative to save the Iran nuclear deal. Iran is violating the agreement incrementally in reaction to U.S. sanctions. Continuing this high-stakes strip tease could provoke a nuclear crisis in the middle of an already tense standoff with the United States. Europe hopes to convince Iran to stop. Here’s the problem: The Europeans can’t offer Iran any meaningful economic incentives because European companies won’t risk U.S. secondary sanctions to do business with Iran, which would be disastrous for their global competitiveness. Worse yet, the ever-growing U.S. “maximum pressure” campaign gives Iran every incentive to continue down the path of nuclear escalation. Lacking tangible leverage to moderate Iranian or American behavior, most analysts deem the initiative desperate, a gamble, and possibly counterproductive. In other words, it’s a long shot.

Or is it?

France, Germany, and the United Kingdom are relying on the nuclear deal’s dispute resolution process, and the political calculations the U.S. presidential election in November will prompt in Tehran and Washington, to motivate Iranian cooperation and American restraint. The electoral and dispute resolution processes provide important inducements: a face-saving line of retreat for Iran without “caving” to U.S. pressure; the threat of punitive action if Iran fails to change course; the risk to both sides of losing international support; the restraint inspired by the U.S. electoral calendar; and the potential for U.S. and Iranian policy options to change, if dispute resolution can be extended through the U.S. election. Admittedly, this is not much to work with but, skillfully played, it may be enough to keep Iran’s nuclear violations from becoming an international crisis and a casus belli through November.



What Is Europe’s Strategy?

The Iran nuclear deal, called the Joint Comprehensive Plan of Action, or JCPOA, established a Joint Commission to handle dispute resolution, among other matters. It comprises the signatories to the accord: the U.K., France, Germany, Russia, China, Iran, and the European Union. Any Joint Commission member can invoke dispute resolution to address concerns over any other member’s compliance with the agreement. It is a flexible process that can move back and forth between the Joint Commission and its members’ foreign ministers, as well as to an advisory board. Time limits for talks in each of these venues can be extended, almost indefinitely, with consensus. The last stop is the U.N. Security Council.

This is the process France, Germany, and the United Kingdom triggered last month. It starts a clock on negotiations to address Iran’s breaches of the nuclear deal and carries a severe penalty for failure. Within 65 days, unless all members of the Joint Commission agree to a postponement, Iran’s nuclear violations are referred to the U.N. Security Council, where U.N. sanctions would probably be re-imposed (a process also called “snapback”).

Referral to the Security Council and re-imposition of U.N. sanctions would renew Iran’s international isolation and indicate that Tehran had lost valuable European diplomatic support. It would also be game-over for the European initiative. Iran has threatened to withdraw from the Nuclear Nonproliferation Treaty if the dispute lands in the Security Council. Even without that dangerous provocation, it is easy to imagine some combination of Iranian overreaction and American overreach provoking a nuclear crisis and even direct military conflict. Avoiding these outcomes incentivizes Iranian cooperation. That is why keeping the dispute out of the Security Council is central to Europe’s strategy.

Why Is the U.S. Presidential Race the Key?

Equally important to the European strategy is extending the process through the U.S. presidential election in November, which incentivizes Iranian cooperation and American restraint.

U.S. policy towards Iran is incoherent. President Donald Trump says he wants to re-negotiate the nuclear deal, but his expanding maximum pressure campaign whispers regime change. Trump has had it both ways without any apparent political costs. That will change in an election year. In 2016, Trump won three battleground states because he rejected American military adventurism. Some of the president’s most influential media surrogates are warning him that his Iran policy could lead the United States into war, and some 2020 voters are also worried. So were eight Republican senators who, in a rare break with Trump, joined Democrats recently in a vote to limit the president’s ability to attack Iran. As he seeks re-election in November, Trump would risk the support of his base if he stumbled into another military conflict in the Middle East, which would be seen as an unnecessary and costly distraction from urgent problems at home. That will incline him toward restraint.

What will U.S. restraint mean for the maximum pressure campaign? Trump’s hardline Iran policy fires up parts of his base, so it will likely continue, but with less risk of provocation. It could also be re-packaged in a style that gives the appearance of reacting to Iranian moves, rather than remaining offensive in nature. This is where the nuclear deal’s dispute resolution mechanism could help. Washington has never offered Iran an off-ramp. While dispute resolution cannot offer quid pro quo de-escalation, it does offer Iran a line of retreat from nuclear escalation without appearing to bow to U.S. pressure. This allows Iran, which strives to convey the impression that it is capable of withstanding the full weight of American pressures, to maintain that posture, and also to demonstrate that it is not isolated and retains the diplomatic support of Europe, Russia, and China. That would make it harder politically for America to marshal international censure of Iran, let alone launch a military strike. These factors, and the possibility of a new face in the White House, will incline Iran toward restraint, reinforced by the threat of punitive action under the dispute resolution process.

After November, any number of developments could alter the strategic and tactical choices of Iran and the United States, potentially improving the political climate for a new deal. Similarly, as America’s European allies lead the effort to keep the nuclear deal operational, their persistent attempts to deny Washington the ability to dictate European foreign policy through threats and U.S. secondary sanctions could erode international acquiescence to American unilateralism. If this European trend becomes irreversible, it would have consequences for America’s image, credibility, and posture in the world.

Will Iran See Cooperation as in its Interest?

Without Iranian cooperation, the European initiative cannot succeed in postponing a final reckoning on the nuclear deal. Iran has violated the accord in four areas: breaching limits on the amount of low-enriched uranium and heavy water it is allowed to stockpile, surpassing the limit on uranium enrichment, abandoning limits on advanced centrifuges, and resuming enrichment at its underground facility at Fordow. Iran exceeded the limit on low-enriched uranium, its first violation, after the United States imposed sanctions in May 2019 preventing the sale or exchange of its surplus stock, as required under the nuclear deal. Last month, Iran announced a fifth breach, abandonment of enrichment restrictions, but there has been no follow-up, according to the International Atomic Energy Agency.

These violations are concerning and must be addressed, but they are not more important than continued nuclear transparency and monitoring. Iran’s full compliance with its commitments regarding the presence and access of inspectors employed by the International Atomic Energy Agency in the country, and the nuclear deal’s enhanced inspection regime, gives the international community eyes and ears on the ground in Iran every single day. The International Atomic Energy Agency could detect and report to the world if Iran began producing weapons-grade uranium, for instance. Of the four violations to date, only one is irreversible: the potential improvement in Iran’s knowledge of centrifuge enrichment, which it cannot unlearn. The Europeans cited this breach with particular concern and they are right to prioritize it. Uranium enrichment is the other major concern. Iran is leaving the door open to abiding by all enrichment restrictions again if economic benefits resume. However, if Tehran takes any further provocative steps, such as enrichment to 20 percent, referral to the U.N. Security Council would be guaranteed. The regime must also consider that the longer Iran’s nuclear violations continue, the more likely the U.S. position on domestic uranium enrichment will revert to its pre-2015 status quo: that zero enrichment is the best guarantee that Iran will not acquire a nuclear weapon.

Extending Dispute Resolution Through November Will Be Challenging, But Possible

None of this will be easy, and the Europeans may overestimate their ability to park the nuclear issue safely in the dispute resolution process. First, extending the process will almost certainly require restoring some compliance Iran has withdrawn, without compensating sanctions relief. Iran complied with the nuclear deal for a year after the U.S. withdrawal in May 2018, without economic benefits, while waiting for the Europeans to find a way around U.S. sanctions. Tehran has good reasons to play ball again. Iran’s cooperation would deepen the divide in the transatlantic alliance over Iran policy and could sharpen international criticism of the U.S. maximum pressure campaign, strengthening Iran’s position vis-à-vis the United States. Iran also has an obvious stake in avoiding referral to the Security Council. How the regime would weigh these advantages against other considerations is hard to predict. Intensifying U.S. sanctions could raise the regime’s tolerance for risk and reduce its willingness to cooperate. Second, the Trump administration will not sit quietly on the sidelines. Nothing says “maximum pressure,” after all, like the referral of a nuclear breach to the U.N. Security Council. Washington will try to force that outcome, drawing on the impartial and authoritative documentation of the International Atomic Energy Agency.

Assuming Iran cooperates, resisting U.S. pressure without risking retaliation will be a high-wire act for Europe. The Trump administration is willing to condition trade agreements on foreign policy demands and can leverage ongoing economic disputes with the U.K., France, and Germany to weaken their resolve. Washington succeeded, initially, with an isolated, Brexited, Britain: Eliminating U.S. auto tariffs is a U.K. priority, and after a U.S. official threatened 25 percent tariffs, Prime Minister Boris Johnson suggested scrapping the Iran nuclear deal and letting Trump negotiate a new agreement. The incident highlights the challenges to European unity, but they are not insurmountable. Johnson also assured Iran that the United Kingdom is committed to the nuclear deal after Trump urged withdrawal. More significantly, he decided that Chinese technology giant Huawei will be able to take part in Britain’s 5G telecommunications network, despite a massive push to the contrary from Washington.

De-Escalation Measures Are Also Urgently Needed

While they manage the dispute resolution process, the Europeans also hope to resume France’s efforts to promote a “comprehensive” settlement between Tehran and Washington. That is unrealistic at the moment. Although Iran showed restraint in responding to the U.S. assassination of Gen. Qassem Soleimani, as did Trump following Iran’s retaliatory strike, the fury driving both sides closer to direct military confrontation has not abated. Over the past eight months, both have demonstrated the potential damage they can do as well as an alarming willingness to run rapidly up the escalatory ladder: Iran with its attacks on oil tankers in the Strait of Hormuz and (alleged) strikes on two key Saudi oil facilities, and the United States with the hit on Soleimani. The danger is that both may be miscalculating, and the tactics designed to deter conflict might in fact bring it on. European efforts to mitigate those risks and de-escalate U.S.-Iran tensions are, therefore, urgently needed.

European Success on Iran Would Advance Europe’s Stature and Global Security

Europe needs this initiative to succeed, not only to avert a nuclear crisis and possibly another war and refugee influx on Europe’s doorstep, but to stem the decline in its global influence. After the United States withdrew from the nuclear deal and reinstated secondary sanctions on those doing business with Iran, Europe lost its only source of leverage over Tehran: the promise of trade and financial relations. When its solutions to this problem failed to convince European firms they would be safe from U.S. sanctions, Europe looked weak, irrelevant, and incapable of defending its interests. While the Europeans support the goals of U.S. policy insofar as they relate to changing the regime’s behavior, they vehemently oppose the destabilizing tactics the Trump administration has adopted to achieve them. The dispute resolution process allows the Europeans to continue their resistance and counter any perception of impotence. If that perception is allowed to take root, other global powers (Russia and China) could move against European interests more easily in the future. There is more at stake than Iran policy.

The European initiative is the only serious diplomatic process seeking to put guard rails on Iran’s nuclear violations and prevent an international nuclear crisis, which could incite a dangerous escalation in the already volatile U.S.-Iran standoff. Without this initiative, the international community would become mere spectators to events that could undermine global peace and security. If the Europeans can keep dispute resolution going through November and mitigate the potential for direct military conflict, the international community should be grateful.



Ferial Ara Saeed is a consultant at Telegraph Strategies LLC, focusing on analysis of political and economic trends for business and government to mitigate risk. A former senior American diplomat with expertise on North Asia and the Middle East, she worked on Iran policy during her career, including on Iran sanctions.

Image: Iranian Foreign Ministry