Tuesday, 8 May 2018

U.S. withdraws from Iran nuclear deal, a set-up for Trump's ultimate goal

What nixing the Iran deal means

Not re-issuing the waivers required under the nuclear agreement "will have a devastatingly chilling effect on any kind of economic activity" between Europe and Iran," said Tony Blinken, former deputy secretary of State under former president Barack Obama, who helped negotiate the deal.
It will take some time to re-impose the regulatory scheme that would be required to re-impose sanctions, said Robert Einhorn, a former arms control official at State under Obama's first secretary of State, Hillary Clinton.
The practical effect of not issuing the waivers is to put banks, businesses and purchasers of Iranian crude oil on notice "that in the next 180 days, before November, they have to either stop importing Iranian crude oil or make significant reductions, up to 20% of Iranian crude oil," Einhorn said.

Why Trump decided to pull the U.S. out of the deal

Trump campaigned against the Iran nuclear agreement, which he called the worst ever negotiated. He cited weaknesses in the deal that the leaders of France, Germany and Britain have acknowledged and pledged to improve. Those include:
• eliminating expiration dates on the most important restrictions on Iran's nuclear activity, which would allow Iran to resume large-scale processing of nuclear fuel starting in 2025;
•allowing inspections of military sites, which Iran currently disputes;
•limiting Iran's ballistic missile program;
•and addressing its support for terrorist groups across the Middle East.
President Emmanuel Macron met with Trump at the White House last month and urged Congress to keep the deal and seek to improve it. German Chancellor Angela Merkel met with Trump last week and British Foreign Secretary Boris Johnson met with Trump on Monday.
All urged Trump to stay with the deal and vowed to work with him to address his concerns. They agreed with U.S. intelligence agencies and Secretary of State Mike Pompeo who testified that the agreement limited Iran's nuclear activities for now, and that Iran has complied with it.
Johnson went on Fox News to make his point.
"Iran has a tendency to develop intercontinental ballistic missiles. We've got to stop that. We’ve got to push back on what Iran is doing in the region. We’ve got to be tougher on Iran. We have to fix the flaws in the deal." Johnson said Monday.
"We need to find a way of fixing that (deal), but you’ve got to do that without just throwing the baby out with the bathwater," he said.

What's next for Iran, Russia, the EU

While Iran's President Hasan Rouhani said that his country would respond to the U.S. action, he and other signatories to the deal have said they would seek to stay in it.
Russia, an crude oil exporter, doesn't import much if any crude oil from Iran. And China could direct its oil purchases through its Kunlun Bank, which is already under U.S. sanctions, Einhorn said. 
The Europeans Union said Tuesday it plans to protect companies if Trump pulls out of the deal.
“We are working on plans to protect the interests of European companies” Maja Kocijancic, EU spokeswoman for foreign affairs, told reporters in Brussels, according to Bloomberg.
But Einhorn said that may be difficult for them to achieve. 
"Virtually all banks and businesses will make the decision to pull out of Iran," he predicted. "They can’t afford to duck out of the U.S.-led financial system."
Banks and businesses are already wary of doing business in Iran because its economy is so poorly managed and corrupt, he said. "Bit by bit, any economic gains that Iran was getting from the (nuclear deal) will dwindle away."

Trump's ultimate goal: Negotiate

Trump's ideal goal is to negotiate a better deal with Iran, said Stephen Rademaker, a former arms control official at State under then-president George W. Bush.
"Our president believes he is a negotiator," Rademaker told the House Foreign Affairs Committee Monday before Trump issued his statement.
Even after refusing to waive sanctions and those sanctions go back into effect, "the president will still have the waiver authority," Rademaker said.
Trump said he still wants to negotiate.
"Iran’s leaders will probably say they refuse to negotiate a new deal," he said Tuesday at the White House. "That’s fine I probably would say the same thing if I were in their position. The fact is they will want to negotiate a new deal."
"When that happens I am willing and able," Trump said. "Great things can happen for Iran."
President Trump made an announcement from the White House, keeping his campaign promise, that the United States would withdraw from the Joint Comprehensive Plan of Action, also known as the Iran nuclear deal. John Fritze reports. John Fritze, USA TODAY

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