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Trump Can’t Deal With Iran If He Doesn’t Understand It
Trump Can’t Deal With Iran If He Doesn’t Understand It
The Iran deal is on life support. Can Europe revive it?
The Iran deal is on life support. Can Europe revive it?

Trump Can’t Deal With Iran If He Doesn’t Understand It

Originally published in Foreign Policy

Tweets about putting Iran "ON NOTICE" are no replacement for appreciating the sources of Iranian conduct in the Middle East.

It took only 12 days in office for U.S. President Donald Trump’s administration to put Iran “on notice” that the era of compromise had been replaced by an era of confrontation. In a stern message on Feb. 1, then-National Security Advisor Michael Flynn accused Iran of a “provocative ballistic missile launch and an attack against a Saudi naval vessel conducted by Iran-supported Houthi militants.” Two days later, Washington slapped sanctions on 25 individuals and entities involved with Iran’s ballistic missile tests, even though U.N. Security Council Resolution 2231 had only called on, not enjoined, Iran to refrain from such tests.

In response, Iran threatened its own sanctions and held a military drill, including rocket launches. Gen. Amir Ali Hazjizadeh, an Iranian air force commander with the Islamic Revolutionary Guard Corps (IRGC), threatened: “Should the enemy make a mistake, our roaring missiles will rain down on them.”

Despite the bombast, both sides have so far been careful not to escalate too far, too fast. The sanctions designations were carefully selected so as not to violate the terms of the nuclear deal. Likewise, the missiles tested during Iran’s military drill were not ballistic, and these launches therefore did not contravene the U.N. Security Council resolution.

It is not helpful to exaggerate Iran’s sway and power.

But such tit-for-tat measures, if they continue, could easily spiral out of control and provoke a military confrontation. This is especially true since the bilateral communication channels born of the nuclear talks, which helped to contain tense episodes under the Barack Obama administration, are no more. Unlike the previous administration, Trump’s National Security Council and State Department appear uninterested in engaging their Iranian counterparts.

If Washington hopes to develop an effective strategy for dealing with Tehran, it must first understand the sources of Iranian conduct in the region. It is not helpful to exaggerate Iran’s sway and power: While Tehran has more influence in Baghdad, Damascus, Beirut, and Sanaa than it used to, its role in all four is more bitterly contested by state and nonstate actors than in the past.As a Persian nation among Arabs and Turks, a Shiite state among Sunnis, there are natural barriers to Iran’s reach — hence its failure to export its nearly four-decade-old revolution to any neighboring country. In the words of former U.S. Ambassador to Iraq Ryan Crocker, “Iranian influence is self-limiting. The harder they push, the more resistance they get.”

The policies of all contemporary Iranian leaders, regardless of where they fall on the political spectrum, have been shaped by two impulses: regime preservation and restoration — critics would say expansion — of Iran’s role as a regional leader.

The pursuit of self-preservation, the principal objective of any political system, borders on paranoia in an Iranian political culture steeped in a deep sense of insecurity and solitude.

Consider the words of this aggrieved Iranian leader: “Why is it normal for France and Britain to even have nuclear and hydrogen weapons, but for Iran, which is not a member of NATO and its security is not guaranteed by any country in the world, the simple principle of self-defense becomes so problematic?” This complaint was not lodged by a turbaned anti-American official in the Islamic Republic but by the Shah of Iran, the steadfast American ally and a prime recipient of U.S. weaponry who launched the country’s nuclear program.

The security perspective of Iran’s current leaders is shaped by the traumatic 1980-1988 conflict with Iraq

The security perspective of Iran’s current leaders is shaped by the traumatic 1980-1988 conflict with Iraq, in which almost the entire region and the West supported Saddam Hussein’s war effort. Subsequently, they witnessed the United States invade Afghanistan and Iraq, their neighbors to the east and the west.

To compensate for its sense of encirclement by U.S. forces and pro-U.S. states, and its inferior conventional military capacity compared with that of its neighbors, Iran developed a network of partners and proxies to push threats away from its borders. Tehran dubs this its “forward-defense policy,” a euphemism for many in the region for Iran’s exploitation of other states as buffers at the expense of their sovereignty.

The Lebanese Hezbollah is the cornerstone of Iran’s forward-leaning strategy. As a senior Israeli official once put it: “For us, Iran is a 1,000 kilometers away, whereas for Iran, Israel is 10 meters away from across the Lebanese border.” Many in Tehran are convinced the primary reason Israel did not strike Iran’s uranium enrichment facilities and heavy-water reactor during the nuclear crisis was its fear of hundreds of Hezbollah’s Iran-supplied missiles pointing at Israeli cities.

What Iran calls the “axis of resistance” to Israel and the United States — known to Iran’s Sunni neighbors as the “Shiite crescent” — is a more aggressive extension of its forward-defense policy. It not only gives Iran strategic depth but allows it to project power in the Levant. Iran long rejected the notion that sectarianism lay at the root of its alliances, but as Syria’s zero-sum proxy war deepened, it has shed even the pretense of staying above the sectarian fray. Tehran now mobilizes Shiite militias from across the region to fight in Iraq and Syria while it fails to condemn — and even facilitates — the atrocities they commit in these countries’ Sunni heartlands, stoking resentment and providing Sunni extremists a potent recruitment tool.

Tehran’s conventional deterrence appears no less threatening to the region. Its centerpiece is a ballistic missile program — a legacy of having been a victim of these during the Iran-Iraq War. As the only Iranian weapon that could reach its adversaries on their soil, the missiles are deemed an existential asset by Tehran, which will pursue their development regardless of whatever sanctions are imposed. The Iranians refused to put their missiles on the bargaining table during the nuclear negotiations and are unlikely to compromise on them, absent fundamental changes to the region’s security structure of which Iran would be an integral part.

It’s hardly surprising that what looks defensive from Tehran would be perceived elsewhere as aggressive. But what makes Iran’s regional policy seem especially menacing is the second impetus behind it — its desire for regional power status, which to neighboring capitals looks like a bid for hegemony. To them, that scenario is as unbearable as Iran’s isolation from the region is unacceptable to Tehran.

Any U.S. policy toward Iran’s regional ambitions must take these dynamics into account. This will allow Washington to develop a realistic assessment of Tehran’s likely reactions, of which the following are the most obvious:

First, the United States could continue its decades-old pursuit of containing Iran. This entails sanctioning Tehran and ensuring that it is unable to modernize or significantly expand its military capabilities and reach while supplying its regional rivals with the latest cutting-edge weaponry. The problem with this policy is that it has plainly failed, as new wars and instability have opened opportunities for Iran to increase its influence in the region. It is also clear that the more Washington sides with and arms Iran’s Sunni neighbors, the more it pushes Tehran to double down on means of asymmetric deterrence and forward defense.

The idea of designating the IRGC as a foreign terrorist organization is one initiative sure to backfire. Ironically, the IRGC is likely to welcome this step. Given its extensive role in Iran’s opaque economy, the designation will further chill foreign investment in Iran, thereby helping it preserve its vested economic interests and boosting its domestic standing as a champion of resistance to the United States.

But the most damaging impact, as some in the U.S. military and security establishment have warned, would be on U.S. troops who operate in proximity to Iranian advisors and Iran-backed Shiite militias in Iraq. Defeating the Islamic State and stabilizing Iraq will become much more difficult if these militias turn their guns on U.S. military advisors — as they did when the United States still had 130,000 troops in Iraq — instead of their shared foe. For now, the help of these militias may prove indispensable in liberating Mosul.

Second, Washington could up the ante and resort to military confrontation. During the campaign, President Trump vowed to put that option on the table — promising to shoot Iranian boats that harass U.S. Navy ships “out of the water.” But direct military confrontation in the Persian Gulf could have perilous consequences, pushing the Iranians toward familiar asymmetric responses: to either use their speed boats, mini-submarines, or mines to directly target U.S. ships or employ partners (like the Houthis in Yemen) to fire missiles at U.S. Navy vessels or those of its allies in the Red Sea.

Those risks could make an indirect and limited conflict more attractive. The Trump administration could consider targeting the Houthis, which it sees as an Iranian proxy, in order to send a strong signal to its Gulf allies and Tehran alike. So long as the conflict is containable, going after Iranian and Houthi equities in Yemen might seem less risky than in Iraq and Syria, where Iran could retaliate directly against U.S. forces.

[E]ven limited use of military force could have disastrous ramifications

But even limited use of military force could have disastrous ramifications. So far, Iran has provided just enough assistance to the Houthis to provoke Saudi Arabia into launching a military campaign that has cost it billions of dollars, with no end in sight. But a U.S.-led escalation of the conflict could further radicalize the Houthis, who have a history of ignoring Tehran’s advice, and push them to invade Saudi Arabia’s southern provinces if negotiations fail to yield a settlement. This would further intensify a ruinous war, weakening Yemen internally, to Iran’s advantage, and pushing the Houthis further into Tehran’s arms.

Finally, the best option — albeit one that currently appears inconceivable given the Trump administration’s marrow-deep suspicion of and belligerence toward Iran — would be for the United States to take into account Tehran’s legitimate security concerns and explore whether cooperation on areas of common interest is possible. At the same time, it could clearly communicate red lines that could trigger a strong response, such as reprisals against Mosul’s population by Iran-backed militias, or attacks by Hezbollah against Israel from the Golan Heights, or shipments of sophisticated weapons to the Houthis in Yemen.

Washington does not need to bring its guard down, throw long-standing allies under the bus, or turn a blind eye to Iran’s behavior in the region. But in the same way that the Trump administration is prepared to have a dialogue with Moscow — whose actions in the region are also not aligned with Washington’s — to understand its hopes and fears, cooperate with it when possible, and contain it when necessary, it must engage Tehran.

Washington may eventually be able to help create the conditions or even lead in building a sustainable order that guarantees peace and prosperity for both large and small nations in the region. In the meantime, however, it should operate by the dictum: First, do no harm. That means it should avoid deepening the chaos by picking a heedless fight with one of the region’s few stable countries.

The Iran deal is on life support. Can Europe revive it?

Originally published in euronews

The key question is whether the sum total of what Europe can offer Iran is sufficiently robust – financially and symbolically – to give those in Iran who argue for restraint and continued engagement a chance. 

President Donald Trump’s decision to exit the nuclear agreement with Iran earlier this month has set off a scramble to save the deal. But while European diplomats hope to scrape by through preserving as much of the deal’s dividends for Iran as possible, business leaders are planning for the worst. The fate of the Joint Comprehensive Plan of Action (JCPOA) may lie in the balance between these two outcomes.

The JCPOA is, at its core, a straightforward trade: Iran pledged to cap its nuclear program and allow for international inspections in return for much-needed relief from a web of international sanctions that largely froze Tehran out of the global financial system. The UN’s nuclear watchdog has repeatedly confirmed that Iran has kept its end of this bargain, and over the past two years, major international companies started to dip their toes in the Iranian market.

Trump’s disdain for the agreement resulted in an ultimatum to Europe at the start of this year: rewrite the JCPOA, or we walk away. Negotiations between the US, France, Germany and the UK nearly closed the gaps between the two sides, but for the White House this did not suffice. On 8 May, Trump announced that the U.S. was not only ending its participation in the JCPOA, but snapping back its entire arsenal of sanctions against Iran – and those who do business with it.

For Europe, keeping the deal alive, even without the US, is imperative. This is based neither on the economic dividends it has provided – trade with Iran last year was a meagre 0.6 per cent of the bloc’s total dealings – nor on the notion that somehow Iran’s domestic and regional policy is beyond reproach – it isn’t. Rather, it is predicated on a consensus that the nuclear agreement, secured after years of difficult negotiations, is serving its primary purpose and removed a major source of tension in a turbulent Middle East. “As long as the Iranians respect their commitments”, declared European Commission President Jean-Claude Juncker, “the EU will of course stick to the agreement … which is essential for preserving peace in the region and the world”.

President Hassan Rouhani is under pressure from hardliners to deliver guarantees that Iran’s continued compliance with the JCPOA yields the dividends to which it is entitled. Iranian hardliners have already declared their scepticism about Europe either having the will or the capability to withstand the US strong-arming it. For Europe, resisting Washington’s coercion means keeping the trading channels with Tehran open despite the pressure of US sanctions. This entails a combination of protections for European companies, such as a revised 1996 “Blocking Statute” to be implemented before US penalties become enforceable this summer, and inducements for Tehran, such as financing via the European Investment bank and processing Iran’s oil payments in a way that bypasses US restrictions.

While there is no foolproof way to shield Iran’s economy completely from the repercussions of a US exit or from continued uncertainty, the E3 (France, Germany and the UK) could develop a package whose political and economic value would be greater than the sum of its individual elements. The package could contain two sets of short-term and long-term elements.

The most immediate challenge is to keep Iran’s oil exports flowing into Europe.

The most immediate challenge is to keep Iran’s oil exports flowing into Europe. The EU would have to protect energy companies with a small footprint in the US to continue purchasing Iranian oil and gas, and empower pertinent European central banks to process related payments. Movement of funds could occur at the “net level”, that is, Iran’s revenues from exporting oil to Europe could be used to pay for Iran’s imports from Europe. The EU could also publish a general licence and describing an acceptable standard for due diligence and regulatory compliance for its companies to conduct legitimate business with Iran, thus providing them with a legal shield against secondary US sanctions.

The EU could replace its so-called 1996 Blocking Statute that prohibited European companies from complying with secondary US sanctions imposed on Iran with legislation that supports its companies when they press charges against US regulators at the International Court of Justice or International Chamber of Commerce. It could also establish a “clawback” clause for recovery of damages incurred for alleged sanctions violations through imposing tariffs on US exports to the EU.

The E3 – along with other willing EU member states – could announce a joint effort by their state-owned export credit or investment agencies to cover the risks, including those related to sanctions, that their companies might face in trading with Iran. In the past few months, a number of European governments have taken significant steps to facilitate legitimate trade with Iran by sharing the risks through such a mechanism, but the E3 can spearhead a more systematic, multilateral effort. France’s Agence Française de Développement, Germany’s Kreditanstalt für Wiederaufbau and the UK’s Department for International Development could launch a joint effort to support infrastructural development projects in Iran and enter into negotiations with Tehran to select projects and extend loans as soon as possible.

Medium-term measures would require more time to negotiate and implement, but could signal the seriousness of the European commitment to the JCPOA as well as to developing a cooperative and mutually beneficial relationship with Iran. The EU could create a multilateral Euro-denominated trading bank comprising state-owned and medium-size to smaller private banks. Its aim would be to pool these institutions’ resources and share risks, process payments, and provide credit guarantees and insurance services to European private-sector firms seeking to trade with or invest in Iran, and share due diligence and compliance information.

The European Commission could move Iran from the list of potentially eligible to fully eligible countries for receiving loans from the European Investment Bank to finance large public or private sector projects, and negotiate a framework for the bank’s operations in Iran. Also, the EU and Iran could negotiate and sign a long-term energy partnership, which in return for Iranian natural gas supplies to Europe via existing or new pipelines would provide Iran with access to cutting-edge renewable energy technologies.

Finally, the EU and Iran could enhance civil nuclear cooperation, including construction of new civilian nuclear power reactors in return for an agreement to turn Iran’s enrichment plants into joint European-Iranian ventures or staff them with European nationals.

Such measures affirm a commitment that so long as the Iranians stay at the table, Europe will take the lead in salvaging the deal, even in the face of significant pressure from their transatlantic ally. Success could, in turn, eventually serve as a platform for discussing regional flashpoints, or cooperating on issues such as civil nuclear technology, banking reform or the environment.

But diplomatic will must also contend with commercial realities. Even before the US withdrawal, many multinational companies and most international banks were hesitant to conduct business with Iran. As sanctions move from potential to actual, the list of European firms announcing their intention to wind down existing operations grows by the day.

Sales of civilian airplanes to Iran by Airbus and Boeing, for example, which were among the most financially substantial and symbolically significant agreements struck with Tehran after the lifting of sanctions, will no longer receive the necessary licences from US authorities. France’s TOTAL, which struck a multi-billion Euro deal to work on Iran’s South Pars gas field, has announced that unless it is granted an exemption by Washington, it will abandon the project by early November. Polish energy firms, German banks and Danish shipping companies are among those who have made similar declarations. US Secretary of State Mike Pompeo’s speech on 21 May outlining a pressure-centric approach to “crush” Iran’s economy is likely to accelerate this exodus.

European officials acknowledge that their ability to convince the private sector is limited.

European officials acknowledge that their ability to convince the private sector is limited. As the French president, Emmanuel Macron, put it: “the French president is not the CEO of Total”. Companies are responsible to shareholders; regardless of any diplomatic side benefits, they will not do business in Iran may at the cost of losing access to the US market, or being slapped with massive fines by the long arm of US enforcement authorities.

The key question is whether the sum total of what Europe can offer Iran is sufficiently robust – financially and symbolically – to give those in Iran who argue for restraint and continued engagement a chance. Without it, Europe will have lost an opportunity to keep a renewed nuclear crisis from adding to the long list of tensions within the region that would eventually reach European shores in the form of refugees and more radicalism, and Iran will have little incentive to make new compromises with a partner who failed to deliver. Trump did not kill the deal, but how Europe’s leaders navigate between Washington’s reach and Tehran’s expectations over the coming weeks could well determine if it can survive.