What it will take to keep the deal alive

The U.S. withdrawal from the nuclear agreement between Iran and the EU/E3+3 constitutes a strong rejection of multilateralism by the Trump administration and leaves the remaining parties of the agreement with the challenge to safeguard its survival. Europe has been ascribed a leading role in this quest, as it has arguably a much greater stake in keeping the deal alive compared to Russia and China.

In its efforts to champion this quest, Europe must reject two narratives that are being pushed forward by Washington: first, that being in favour of the Joint Comprehensive Plan of Action (JCPOA), as the Iran nuclear deal is officially known, means being pro-Iran. The JCPOA was finalized for the very reason that Europe, too, did not trust Iran. Keeping the deal alive means keeping the most comprehensive non-proliferation mechanism intact, rather than courting Iran.

Secondly, Europe must not accept the notion that pro-JCPOA diplomacy means acting contrary to the transatlantic bond. In fact, it was the Trump administration that seriously harmed transatlantic relations with its unilateral decision to leave the nuclear agreement. European leaders must push back against this binary, expressing commitment to preserving the transatlantic bond and to safeguarding the JCPOA.

To determine the future fate of the JCPOA, decision-makers in Iran will have to address a simple question: Are we better off with the deal?

How to keep Iran in the deal

As per the JCPOA, Tehran has agreed to scale down the scope and increase the transparency of its nuclear programme in exchange for the lifting of nuclear-related sanctions.

The International Atomic Energy Agency (IAEA) has confirmed in ten reports that Iran fully abides by its obligations. However, Tehran has repeatedly complained it is not receiving its deserved end of the bargain, and it has a legitimate case to make about US non-compliance with the terms of the agreement by openly discouraging European businesses from doing business with Iran.

To determine the future fate of the JCPOA, decision-makers in Iran will have to address a simple question: Are we better off with the deal?

For “yes“ to be the answer to this question, the economic, political and security dividends must outweigh the costs. While the economic dividend is outlined in the terms of the JCPOA, the others will be of significance too. In its effort to safeguard the agreement, Europe has therefore to take all three dividends into consideration.

Economic dividend

Albeit drastically reduced, economic benefits can be generated at least to a level that would allow Iran to conclude that it is worth staying in the deal. Tehran should assist the Europeans in laying out the threshold of what it will take to stay in. In 2017, an estimated €20bn in trade between Iran and Europe was reached. This can serve as a point of orientation as to what the minimal level must look like.

European governments as well as European Union institutions will have to work on measures that immunize European companies against US penalties – or at least, minimize their effects. In their May 15th meeting, hosted by EU High Representative Federica Mogherini, the E3 foreign ministers and Iran‘s foreign minister Javad Zarif laid out nine concrete areas of economic relations with Iran, for which expert groups will start right away to develop practical solutions. The announcement to reactivate ‘blocking statutes‘ certainly is a promising sign that the EU means business, even though it has to be seen how this resonates among European businesses.

All of this requires strong and steadfast political will. It will also have to send concrete and reassuring signals to European businesses for it to be translated into economic incentives.

Beyond economics, the JCPOA was seen in Iran as an initial step to normalize relations with Europe.

Political dividend

Beyond economics, the JCPOA was seen in Iran as an initial step to normalize relations with Europe. Under European coordination and guidance, a decade-old dispute was processed and resolved through multilateral institutions such as the EU, the UN, the UN Security Council and the IAEA. Furthermore, a specific dialogue format, the EU/E3+3 or P5+1, was established, as well as the ‘joint commission‘ as a permanent entity to oversee the agreement.

Institutionalizing political dialogue is a necessary step to desecuritize dialogue. Verification and control measures are put in place so that mistrust can be overcome. Ultimately, this desecuritization of talks can lead to normalization. The frequency and depth of constructive dialogue bears the potential to normalize what used to be seen as unthinkable, just as it became normal that Iran‘s foreign minister Javad Zarif had regular one-on-one meetings with his American counterpart John Kerry.

Iran‘s aim was to be politically elevated on the global stage by going through this 3-step-process: from institutionalization to desecuritization and normalization. This, however, can be argued to be exactly what opponents of the JCPOA do not want to see happening. Enmity towards Iran from Washington to Riyadh, to Tel Aviv and Abu Dhabi has led to coordinated efforts to block ‘desecuritizing‘ and ‘normalizing‘ Iran.

Political leaders in Tehran will now expect European officials to express interest in continuing to engage Iran. During every encounter, EU High Representative Federica Mogherini discussed far more than just JCPOA-related affairs with Iranian foreign minister Javad Zarif, including regional issues, or even Iran‘s human rights situation. Keeping this spirit alive while strongly rejecting the rhetoric from Washington will certainly be appreciated in Tehran and will be seen as generating political gains.

Security dividend

For Iran, the JCPOA resembled an arrangement with world powers. At least tacitly, this gave Tehran some assurance that regime change policies and military action are off the table. This, however, has drastically changed with the Trump administration building an anti-Iran coalition, according to Secretary of State Mike Pompeo.

In order to address Iran‘s regional posture in the Middle East, it will be indispensable to acknowledge Iran‘s security interests – just as the security interests of any nation should be taken seriously. Europe can broaden talks on shared concerns such as migration, drug trafficking, counter-terrorism and regional stability. Serious progress on these domains has always mattered to both sides. The talks on Yemen between Iran and the E4 (Germany, France, United Kingdom, and Italy) have been a promising first step.

In the previous months, Iranian-Russian exchanges have expanded and deepened, with meetings not only among presidents and foreign ministers,

Serious security concessions are needed to convince Iran to scale down its means of deterrence, which are a point of concern for Iran‘s neighbours. But these concessions are unthinkable without the US. After all, Iranian deterrence is directed at US presence and allies in the region, and could only be alleviated through talks with the US.

This brings Russia in a formidable position. In the previous months, Iranian-Russian exchanges have expanded and deepened, with meetings not only among presidents and foreign ministers, but between ministers of defence, ministers of education, as well as between influential clerics. Iran may try to secure Russian (and Chinese) veto protection in the UN Security Council, as it was seen by the Russian veto on an alleged UNSCR 2216 violation by Iran.

Iran may very well conclude that its security is less challenged if it stays committed to the JCPOA. The above aspects are on the table.

In April 2015, when the finalization of the nuclear agreement was on the horizon, Iran‘s Supreme Leader Ayatollah Ali Khamenei made clear that he views the ongoing negotiations as a “test“. If the other side proves to be trustworthy and a positive experience is made, talks on other issues could follow.

Particularly for Europe, this would have been important. It has no ocean between its mainland and the Middle East. The security of the region is closely tied to the security of Europe. It is therefore of utmost importance for Europe to invest into keeping its leverage on multiple regional actors intact. Iran should be one of them. Ensuring that the JCPOA survives will manifest the European role against all odds in not only initiating and coordinating but also safeguarding the most robust nuclear non-proliferation treaty in history. And it would enable Europe to engage Iran beyond the nuclear file.