November 14, 2016
Under Trump, the Iran Nuclear Deal Becomes a Sword of Damocles
By Hamid Zangeneh
For now, Iran is in the driver’s seat and can choose to keep its destiny in its own hands or give into forces antagonistic to Iranian interests in a Trumpean environment. Now that the U.S. election is over and we have a new unknown as the president-elect, Iran can decide whether to reach out to Donald Trump, perhaps through private channels, or take a wait and see attitude and hope for the best.
I believe the United States is now in a situation in some ways similar to Iran after the 1979 revolution: a country with competing factions struggling for power after the overthrow of the Shah. Although Republicans dominate the branches of government, they lack a uniform ideology in both domestic and foreign affairs. It will probably take them one or two years to find their way and coalesce around a coherent set of policies understandable to the rest of the world.
U.S.-Iran relations, as they stand today are tenuous, unsustainable and outright dangerous. Trump may well make an example of somebody to show his strength somewhere in the world, as Ronald Reagan did when he invaded Grenada in 1983 to distract attention from the death of U.S. Marines in a bombing in Beirut. Now is the time for Iran not to provoke the United States but to use private channels to approach the new administration and seek to make a grand bargain. Marginal deals are not going to work as is the case right now. Here is why:
During the campaign, Trump repeatedly criticized the nuclear agreement or Joint Comprehensive Plan of Action (JCPOA) Iran reached with world powers last year. Unlike other candidates who vowed to rip up the agreement on their first day in office, Trump suggested he would renegotiate it to get something more favorable to American interests.
However, Iranian President Hassan Rouhani, facing a hostile right wing and his own re-election in 2017, cannot engage now in such a negotiation. That would be the end of Rouhani’s political career. Knowing that, Trump should not scrap the JCPOA and wait until the Iranian election to see if Rouhani survives.
If Rouhani is not re-elected, all bets are off because, more likely than not, his replacement would be a more hardline figure who will not give in to Trump’s demands and possibly could renounce the JCPOA - without any prodding from Trump. One must consider the fact that hardliners in Iran were openly rooting for a Trump presidency. In that case, we could see open and perilous confrontations.
A wild card for the JCPOA is Russia. Even though this is a multinational agreement that involves all the U.N. Security Council members plus Germany, the most influential may be Russia. Iran would like to see a good relationship between Trump and Russian President Vladimir Putin, but Iran also needs to predict what Russia is going to do.
Is Putin going to make a deal with the United States and sell out Iran for the Ukraine, Syria or another interest? It is very possible that Putin will cut a deal with Washington, just as Russia did to get the JCPOA, and that that deal will not be fair to Iran.
Another possibility is that the United States will seek to deny Iran the economic fruits of the JCPOA without pulling out of the accord. In this scenario, the new administration will neither erect new sanctions nor allay fears that it might do so. This would inhibit big businesses from moving forward with large and meaningful deals with Iran and enable them to charge exorbitant fees for any small and temporary transactions they make. This way, they would profit without incurring the risk of a long-term involvement with Iran.
This policy of discouraging major foreign economic interaction with Iran without scrapping the JCPOA could continue as long as Trump is in office. Of course, this would keep U.S. businesses out of Iran as well, which has been a sore point for American companies. It would also contradict Trump’s agenda of creating jobs in the United States. However, it would be in keeping with past U.S. administrations. U.S. sanctions imposed on Iran for the past two decades have been a major cause of slow growth, low foreign investment, high unemployment, high inflation and exclusion from the World Trade Organization.
President-elect Trump has many other options that do not bode well for Iran-U.S. relations. One needs to remember that JCPOA is not a treaty and therefore, U.S. governments are not obliged to adhere to it. Also, the president and U.S. Treasury are required to periodically and continuously (every 120 or 180 days) issue waivers of various sanctions laws to keep the JCPOA afloat. The president could simply discontinue issuing these waivers and the agreement would dissolve – unless Iran and the other parties chose to continue without American support.
This policy option, however, is not a fruitful one since it would remove a good “stick” to prevent Iran from resuming efforts to develop a nuclear weapon. Given the uncertainty facing the new administration and the volatile situation in the Middle East, it would be better to keep the JCPOA as a sword of Damocles over Iran.
Hamid Zangeneh, PhD, is a former Professor of Economics at Widener University, Chester, Pa.