The Navigator from CGP


Nixing Nuclear Deal Unlikely to Change Iran’s Behavior

PUBLISHED May 15, 2018

Last week, U.S. President Donald Trump withdrew the United States from the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), and reinstated “the highest levels of economic sanctions” on Iran. The U.S. withdrawal from the deal is significantly strengthening anti-U.S. hardliners in Tehran, particularly the security establishment dominated by the Islamic Revolutionary Guards Corps (IRGC) and risks complicating Washington’s position in the Middle East.

Iranian President Hassan Rouhani is in an increasingly precarious position. He created irrational exuberance about the deal among Iranians by promising that it would lift all the major sanctions, reintegrate Iran into the global economy, and improve the country’s economic conditions. Most Iranians are deeply disappointed that the JCPOA has not fulfilled those promises. This is mostly the result of pervasive corruption and the mismanagement of Iran’s economy and partly the result of Trump’s deliberate policy of creating uncertainty about the JCPOA in order to prevent any major Western investments in Iran. Now, the politically moderate Rouhani must address popular discontent and prepare Iran for a new wave of U.S. sanctions.

While Rouhani strongly condemned the United States for violating the international accord, he is determined to salvage the nuclear deal – his signature achievement and legacy. “If the remaining five countries continue to abide by the agreement,” he has declared, “Iran will remain in the deal despite the will of America.” However, if the JCPOA collapses, Rouhani has threatened to restart uranium enrichment and expand Iran’s nuclear activities, even though Iran is unlikely to leave the Non-Proliferation Treaty. Clearly, this is not the path he prefers.

Looking to Europe for Hope

Since Iran already has good relations with JCPOA signatories Russia and China, Europe is the key to saving the deal. Rouhani hopes that Europe will provide concrete reassurances that it will not withdraw from the deal or cease commercial relations with Iran.

Trump’s decision to withdraw from the deal has created tensions between Washington and its European allies. The Europeans argue that the JCPOA was a multilateral agreement enshrined in international law; the U.N. Security Council approved it unanimously in 2015. Moreover, some major European companies have or plan to have business dealings with Iran and fear that the possible U.S. sanctions on any entity conducting business with Iran will harm them.

To protect the nuclear deal, the E3 (France, Germany, and Britain) reportedly is preparing a package of economic incentives to ensure that Iran stays in the JCPOA. It is too early to know just how far Europe is willing to go to undermine U.S. sanctions against Iran, given that Trump could punish Europe with tariffs on European steel and aluminum. This is not lost upon the Iranians as is evident from the May 9 statement from Khamenei in which he warned the Rouhani administration from relying on the E3 nations to uphold the JCPOA.

Rouhani knows that the new U.S. sanctions will hurt Iranian people and businesses much more than the government or government-dependent entities controlled by his hardliner rivals. Rouhani’s bet is that as long as the United States lacks European support for new sanctions, Iran can withstand the pain.

Iran’s Hardliners Gain Strength

Even if he manages the deleterious consequences of U.S. sanctions, Rouhani faces domestic opposition from hardliners emboldened by the U.S. withdrawal. Iranian Supreme Leader Ayatollah Ali Khamenei’s reaction to Trump’s withdrawal from the JCPOA has been harsh. Khamenei said the United States cannot do “a damn thing to Iran,” and that Trump “will turn to dust and his body will become food for worms and ants, and the Islamic Republic will still be standing.” His remarks could signal that Iran is considering tilting even more toward Russia and China who are only too happy to use the Iranian card to gain leverage against the United States.  

Following Khamenei’s statements, the hardliners intensified their attacks on the United States and those who had negotiated the JCPOA, with some asking Rouhani to apologize to the nation for supporting the nuclear deal. Iranian reformists have been equally harsh. They argue that the JCPOA could have paved the way for normalized relations with Washington, but that goal is now elusive. A consensus has been gradually developing within Iran’s elite that the country must be prepared for a possible confrontation with the United States, either in Iran or in the broader Middle East.  

Still, the Trump Administration seems determined to put “maximum pressure” on Iran. This approach could include imposing crippling sanctions in order to weaken the economy, supporting the domestic and exiled opposition to the Islamic Republic, and strengthening the alliance with Israel, Saudi Arabia and the United Arab Emirates to contain Iran’s regional ambitions. Iranian policymakers are debating whether the Trump administration merely seeks to apply pressure to force Tehran’s hand or if Washington has a more elaborate objective in mind, i.e. regime-change.

There is a growing fear in Tehran that the United States’ ultimate goal is to destabilize the Islamic Republic. Such a threat perception will tip the domestic balance of power in favor of  the security forces led by the IRGC. The U.S. withdrawal from the nuclear deal has already shifted the balance of power in Tehran in favor of the hardliners who opposed the nuclear deal and rapprochement with Washington from the start. In these circumstances, the state is likely to become more oppressive toward its people and more confrontational toward the United States.

For four decades, Washington has used a variety of tactics to try to contain Iran and force a change in its behavior. Yet Iran is more powerful in the region than at any time since the 1979 Revolution. The new sanctions are unlikely to produce the changes Washington seeks. If anything, they will embolden the hardliners, who are likely to pursue more aggressive regional policies. Therefore, it is in Washington’s interests to work with its European allies to reach a new compromise with Iran, which Trump can sell as an achievement and the Iranians would be willing to accept. This would be difficult, but not impossible, especially since the Trump administration’s current approach entails far more risks than potential dividends and could bring unpredictable and unintended consequences.

Professor Mohsen Milani is the Executive Director of the Center for Strategic & Diplomatic Studies and Professor of Politics in the School of Interdisciplinary Global Studies at the University of South Florida. He tweets at @milanimohsen 

The views expressed herein are the author’s and do not necessarily reflect those of CGP.

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