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Trump's anti-Iran move on
Tuesday was deeply worrying for allies of the US. It is a blow for those
countries, especially in Europe, that were hoping to build on the big expansion
of trade with and investment in Iran after the July 2015 nuclear deal was signed.
But it is more than just an economic opportunity under threat. As Germany’s Zeit
Online commented ‘with nationalism and protectionism, Donald Trump is
gradually eliminating the world order shaped by the USA’. Here I look at some
implications of the latest US policy and the reasons for its timing.
Holy orders
The extent of the new US
sanctions is at present unclear, although there will be some delay before full
implementation. What worries the Europeans is that they are unlikely to apply
only to US companies, like Boeing.
On past form, any company
not doing as the US wishes could be liable to suffer financial penalties. They
could also face problems of access to the US market and its banking system –
the latter being necessary for all international companies that use the US
dollar. This extra-territoriality of US sanctions, in the words of France’s
Finance Minister, Bruno Le Maire, makes the US ‘the economic policeman of the
planet’, and that is ‘not acceptable’.
Last October, the now
ex-Secretary of State Rex Tillerson claimed that the US will not interfere in
Europe’s business dealings with Iran. But the newly appointed US ambassador to
Germany, Richard Grenell, has taken a very different tack. He followed up
Trump’s statement with a threatening tweet: ‘German companies doing business in
Iran should wind down operations immediately’.
It would be hard to top that as
a sign of imperial arrogance, something that has become ever more embarrassing
for US allies under the Trump regime. To have a smoothy like Obama advance US
interests after a chat among ‘friends’ was acceptable. Now the veneer is off
and the modus operandi of the nincompoop POTUS is to fart, blame someone else
and carry on regardless.[1]
The little, big problem
Following the long years of
sanctions, Iran is far from being a big economic partner for the major western
powers. Last year it was only number 33 in the ranking of external trading
partners of the European Union. Trade between the EU and Iran was close to
€21bn, with a little over €10bn of both exports and imports, but this made up
less than 1% of the EU’s total external trade. EU trade with India is four
times bigger, and it is more than seven times bigger with Turkey. US trade with
Iran is much smaller still, roughly $200m last year, which is barely a rounding
error in the statistics.
Nevertheless, there had been
rapid growth in trade for the EU in recent years, mostly imports of fuel from
Iran and exports to Iran of manufactured goods, especially machinery and
transport equipment. From 2014 to 2017, EU exports grew by nearly 70% and EU
imports by nearly nine times.
Much more trade growth has been
in prospect, together with attractive investment opportunities, for EU
companies such as Renault, PSA Group, Airbus, Siemens, Total, Alstom and others.
Iran’s half-wrecked economy offered a cornucopia of deals in the tens of
billions to refurbish, resupply and rebuild.
All that is at risk with the new
US policy. More important, however, is that the Iran deal was the result of a
longwinded negotiation involving all the major powers, and now the US has
walked away from it. This calls into doubt the status of more or less anything
else the US has signed up for in the past, and also the status of the US as the
unquestioned leader of the western powers.
Why now?
Why did former president Obama’s
signing of the joint agreement with Iran look like the ‘worst deal ever’ for
Trump? First, note that the US has sustained hostility to a country that dared
to step out of line in 1979, when the Shah was overthrown, and has since not
been cooperative enough. While the US has come around to accepting other
miscreants – notably Vietnam, which beat it in a war – this is very rare and
is, in any case, a very slow process. Similarly for Cuba. The irony in Iran’s
case is that, aside from sections of the elite who make gains from managing the
sanctions regime to their advantage, the country was overwhelmingly in favour
of doing a deal with the west as a means of gaining access to technology and
development. Nevertheless, despite signing the 2015 deal, Obama was not exactly
friendly to Iran. Even afterwards, US political prejudice hindered American
business prospects in Iran, with the Europeans much quicker to take advantage.
What seems to have scuppered the
Iran deal now is the problem that US policy faces in the Middle East region.
This is behind Trump’s long signalled change of course.
Apart from its own direct
military intervention, the US has had two elements of control in the Middle
East: Israel and Saudi Arabia. Each of these has become more unstable and
problematic in recent years, causing trouble for western policy and some
embarrassment when it comes to ‘human rights’ in family plutocracy Saudi Arabia
and Palestinian rights in the racist gangster state of Israel. Yet the US has not been
able to find alternative local tools. After the disaster of US policy in Iraq,
another adventure, to replace Assad in Syria, and so to undermine Russia, has
failed. This now leaves the US with two dysfunctional supports in a region
scarred by imperialism, a mess that it cannot sort out.
The US inability to get rid of
Assad has raised Saudi Arabian and Israeli paranoia about Iran. Worried about
the stability of their own regimes, they see a long shadow from the bogeyman
who does not necessarily do what the US wants and use this to disturb the US’s
own discontent. This is neatly summed up in the invention of the so-called
‘Shia crescent’ of Iranian power and influence from Iran through Iraq, Syria
and into Lebanon and the Gaza Strip. Saudi Arabia even sees Iran in Yemen,
while Netanyahu starred in his own special anti-Iran video for Trump. In an
inversion of reality that only someone of his powers can provide, Trump even
outdid them with his latest comment that Iran backs al-Qaeda and ISIS.
Trump will tweet and things may
change again. But it looks like the foundations of the world order are
crumbling further.
Tony Norfield, 9 May 2018
[1] Apologies
for lowering the tone, but the word ‘trump’ in colloquial English also means to
break wind.
