What Will Happen to the JCPOA?

On Friday, the foreign ministers of France, Germany, Russia, China, Iran, the UK Foreign Secretary's representative, and the head of the EU's foreign policy participated in a meeting of the Joint Commission of the JCPOA in Vienna to find a way to save the JCPOA or the Joint Comprehensive Plan of Action after the US withdrawal from this international agreement. In a statement read by Federica Mogherini, the head of the EU's foreign policy, it was announced that the parties are seeking to maintain economic relations and financial exchange routes with Iran, especially in the oil and gas sector. This week, we have discussed the fate of the JCPOA and how issues such as Iran's ballistic missiles, allegations of Iranian interference in the Middle East, and human rights conditions will impact future negotiations. With the presence of Nader Eskoui, a senior analyst at the Atlantic Council, and Ali Vaez, a senior analyst at the International Crisis Group on Iran, both residing in the US: Mr. Vaez, the meeting of the Joint Commission of the remaining countries in the JCPOA was held. Ms. Mogherini read a statement at the end of this meeting and said the parties are seeking to maintain economic relations and financial exchange routes with Iran, especially in the oil and gas sector. How do you assess this statement? Can we say that negotiations have not reached a conclusion or have not been satisfactory for Iran? Ali Vaez: I think this statement is more of a way to buy time. It cannot be said that negotiations have not reached a conclusion, nor can it be said that they have reached a sufficient conclusion. As you know, in a conversation that Mr. Rouhani had with the President of France and the Chancellor of Germany, he expressed dissatisfaction with the package of proposals that the Europeans have been able to offer Iran so far. The guarantees that the Europeans have put on the table may not be detailed enough to meet Iran's desires and may not have much practical impact for Iran. Therefore, in the negotiations that took place, despite both sides insisting on their political commitment to the JCPOA, it seems that the details of some of these commitments need more time to be finalized, and the foreign ministers of France and Germany emphasized that they doubt such mechanisms can be established by August, next month, when the first series of US sanctions will be implemented. Perhaps by November, when oil sanctions are enforced, something can be done. As far as I know, a series of ideas have been proposed regarding mechanisms for the continuation of banking exchanges and methods for continuing Iran's oil exports to Europe, but as I said, experts need to work on the details, and it is not clear whether a definitive result will be reached or not. Mr. Eskoui, how do you evaluate the results of Friday's meeting? Nader Eskoui: I think they could not even reach an agreement in general. In fact, the Iranians did not see that the Europeans provided a practical solution and a specific method to solve the problems for Iran. Ultimately, the bottom line is that if these negotiations proceed successfully, European, Chinese, and Russian companies must be able to maintain relations with Iran, but when these companies face the option of either maintaining their relationship with Iran or exiting the US financial market, this option is naturally not in favor of Iran, and neither the European governments nor even perhaps China and Russia can force these companies to work with Iran. I am not very optimistic about this issue. What I hope is that the three European countries can reach an agreement with Iran that leads to a JCPOA 2, which addresses missile issues, nuclear issues, and Iran's military interventions in the region. It is not strange to have such contracts like the JCPOA. In the past, we have revised nuclear disarmament treaties or limitations on nuclear weapons several times. For example, the treaty between the Soviet Union and the US on limiting nuclear weapons has changed five or six times. Such a change could then solve these problems. Before the meeting of the Joint Commission of the remaining countries in the JCPOA, I spoke with Carl Bildt, the former Prime Minister of Sweden and co-chair of the foreign relations section of the European Council, and asked him how he sees the fate of the JCPOA with the US withdrawal and the promise of new sanctions against Iran. Let's hear Mr. Bildt's response and then return to the discussion: Mr. Bildt, my first question is about the Iran nuclear agreement. What do you think about the US withdrawal from the JCPOA? Abbas Araghchi, Iran's Deputy Foreign Minister, previously stated that the JCPOA is in the ICU, and if Tehran cannot obtain the necessary guarantees from Europe, it will likely exit the JCPOA. With these new US sanctions, how do you see the fate of the JCPOA? We do not know, but there is a strong interest from the European Union to preserve the JCPOA because it is a good agreement, a kind of compromise, and is important for the stability of the Middle East. It is also a guarantee for the denuclearization of Iran and is important for future discussions with Iran regarding other concerns about its behavior. Therefore, leaving the JCPOA and obstructing it is very dangerous from the perspective of the European Union. I read a note from you in the Washington Post stating that Donald Trump's withdrawal from the nuclear agreement is an attack on the European Union. Why do you think so? Well, because if you look at the US sanctions, you see that they really do not target Iran or American companies. Of course, there are exceptions. For example, Boeing is one of these exceptions. Otherwise, Iran's economic relations with the US are severely limited. This means that the sanctions are actually against Europe, which has trade with Iran, and against the foreign policy of the European Union, which its member states are united. This is my opinion. Mr. Bildt, do you think European companies will stay in Iran, or will the sanctions force them to stop trading with Iran? Well, some of them have problems because the US has threatened them. The question is what we can do to ensure that some of these companies, for example, oil companies, continue their work. This, as far as I know, is an ongoing dialogue. What about Swedish companies? According to a report from the Economic Tribune website, trade relations between Iran and Sweden in the first eleven months of 2017 amounted to 409 million euros. Do you think Swedish companies will continue trade with Iran, or will they succumb to the sanctions? If you look at our (Sweden's) trade with Iran since the lifting of sanctions, you will see that it has not been very much, but it has quadrupled. Therefore, it has expanded significantly. We are looking for possibilities for a significant expansion of our economic relations with Iran in the future. But whether this is feasible remains to be seen. The Deputy Minister of Foreign Trade of Sweden recently visited Iran to discuss this issue with Iranian officials. Another problem with Iran is that it is accused of interfering in the Middle East and countries like Iraq, Syria, Lebanon, and Yemen. Iran is also accused of using ballistic missiles. The European Union and the US are concerned about Iran's missile program. What is the solution to these concerns? There are several issues in this regard that are problematic. Syria is one of them, where we have disagreements with Tehran, and we are concerned about Iran's role in this country. We need to discuss this with Tehran. There is the situation in Yemen, and Iran's presence there is complicated. Therefore, there are differences that the European Union is interested in discussing more deeply with Iran. We are discussing misinformation and fake news on the sidelines of a meeting. You yourself spoke about preventing the spread of misinformation at this meeting. You have previously traveled to Iran and met with Mohammad Javad Zarif, Iran's Foreign Minister. Mr. Zarif recently stated that minorities in Iran are not imprisoned because of their beliefs. We have Baha'i minorities in Iran who cannot study at university because of their beliefs. Many of them have been imprisoned because of their beliefs, lost their jobs, or even had their shops shut down. How will the European Union and Western countries deal with this misinformation that Mr. Zarif has spread? When I was in Iran, we had a series of discussions about the human rights situation in Iran, regarding several individual cases and also some minorities in Iran. You mentioned the Baha'is. We talked about the Baha'is as well. Cases of human rights violations against Baha'is are the most difficult cases in Iran. But I think these issues need to be addressed in ongoing discussions. You are accused by some groups of being very supportive of Iran. Do you accept this? No. But I am interested in dialogue and relations with Iran because I believe in democracy, and I think the nuclear agreement with Iran is a good example of this. This agreement started from nothing, and over time we reached an agreement that was better than many expected. I would really like to continue this approach towards Iran and see how far we can go. We need to see what the Americans will do. Mr. Vaez, we heard my conversation with Carl Bildt, the former Prime Minister of Sweden and co-chair of the foreign relations section of the European Council. US sanctions have made it difficult for European companies to cooperate economically and financially with Iran. Many of these companies have left Iran in recent weeks due to fears of potential US penalties. Now, given Mr. Bildt's remarks, if the European Union continues trade with Iran, what will be the US reaction? Ali Vaez: Mr. Bildt's position is a nearly public position in the European Union. Except perhaps for a few Eastern European countries that have doubts in this regard, most EU countries want to preserve the JCPOA, but the problem is that they really do not have the necessary infrastructure to resist US secondary sanctions. The reason why negotiations between Iran and the European Union have also taken too long is that creating this infrastructure requires time and ideas that perhaps have not been needed to think about in the European Union until now. The US, in any case, uses its secondary sanctions in such a way that they have a deterrent effect. There is no doubt that they will have a significant impact on multinational companies that operate in the US market. The question here is whether medium and smaller companies can take advantage of such solutions if the European Union creates them and continue a limited level of trade with Iran or not. As we saw in Mr. Bildt's remarks, since this is a new issue, it cannot be definitively judged. What can be said with certainty is that Iran's trade will undoubtedly be affected by US sanctions and will decrease, but whether it will be to the extent that it can guarantee the survival of the JCPOA is really uncertain. One other issue is what the US will do. In the past, the US has sanctioned private companies and banks, but now that there is political will in Europe, and some of these solutions that are being created may be through state banks and state companies, whether the US will accept, for example, to sanction the German central bank or not, in a situation where Mr. Trump's government has entered into a trade war with European governments and China, these are matters that perhaps six months ago could not have been imagined. Nader Eskoui: I do not think that what Iran has done in recent days and the statements made reflect strategic patience. Iran has threatened to close the Strait of Hormuz. Even this threat does not indicate that Iran wants to buy time until 2020. Because I do not think that Iran's current chaotic economy is one that allows it to buy time until 2020. Mr. Eskoui, what do you think? How much do you agree with Mr. Vaez? European Parliament representatives voted on a proposal on Thursday that allows the European Investment Bank to cooperate with Iran. However, this decision is not binding. But what obstacles exist for this cooperation? Nader Eskoui: I think many of the points that my dear colleague Mr. Vaez mentioned are very correct. The issue is not whether the Europeans want to work through non-profit companies like the European Investment Bank or state institutions like the German bank. The issue is whether those institutions want to take the risk of sidelining themselves from the US financial market. Specifically regarding the European Investment Bank, as far as I know, 80% of the loans that this bank secures for its investments worldwide come from US financial markets and are essentially in dollars. I do not think the European Investment Bank, even if the European Union has allowed it to trade with Iran, would want to jeopardize its existence, which is very much tied to transactions with the US.