There’s
something very uncomfortable about a world in which future peace depends on the
Iranian Ayatollahs being more reasonable than the President of the USA. We can but hope. Whether one regards the deal from which Trump
has walked away as good, bad or indifferent (and Trump’s principal reason for declaring
it bad seems to be more to do with the fact that Obama negotiated it than with
any of the detail), the underlying principle was that Iran was offered the
economic carrot of a reduction in sanctions in return for agreeing to halt some
aspects of its nuclear programme and permit international inspections. The fact that Iran may have done some things
which it never promised not to do isn’t really a very good reason for other
signatories to stop doing the things to which they did agree.
But Trump has
done more than simply removing the American carrot; he has made it clear that,
whilst he and the US are reneging on their part of the deal, he still expects
Iran not only to honour its part, but to do other things (or cease doing some
things) as well, with an implied threat to back that up. He has attempted to replace the carrot with a
very big stick, and behave in the style of a schoolyard bully. The European response has, thus far, been
robust. The determination of Macron, May
and Merkel to seek to uphold the deal is to be welcomed. There’s a ‘but’ to that, however: how far are
they prepared to go?
In purely
economic terms, the US has been doing little trade with Iran anyway since the
sanctions were lifted, although there was at least one big deal in the
pipeline. An $18 billion deal to sell
Boeing aircraft will now, inevitably, be cancelled and there will be an impact
on jobs in the US. Some might see that
as an opportunity for Boeing’s main competitor, the European company Airbus, to
fill the gap and sell extra planes on top of its existing $20 billion order
from Iran. Things are not quite that
simple, though. As Craig Murray has pointed
out, there are US-made components in aircraft made by Airbus, which make
the Airbus order itself fall foul of Trump’s decision. The default position is the US expectation
that the Airbus order will also be cancelled, or else the European companies
involved will also be subject to US sanctions.
Trump’s re-imposition of sanctions on Iran doesn’t only affect US
companies; it also applies to any non-US company which does business with both Iran and the US.
And that issue goes
wider than just aircraft. It also
affects the banking system, for instance.
As this article
in the New Yorker highlights, any European bank facilitating trade with Iran
will leave it open to fines and sanctions in US courts. The bully isn’t just aiming to stop US-Iran
trade; he’s aiming to force his so-called allies and friends into line as
well. In that context, for the joint
UK-France-Germany declaration to have any meaning at all, it requires using the
strength of the massive trading bloc which the EU constitutes to resist
American economic power – the EU is the only trading unit in the world in a
position to do that – and take whatever steps are necessary to ensure that
Europe can uphold the deal despite Trump.
It’s just as
well, then, that none of those three European leaders making their bold
statements is seeking to leave the EU, weaken the bloc’s economic power, and
align itself ever more closely with the US economy. That would be hypocritical, as well as silly,
wouldn’t it?
Posts
1 comment:
I think you have to read Little Johnny Bolton`s book (I did) that was roundly ridiculed when it was published some years ago, as it suggested crazy things were happening, like North Korea was developing a nuclear bomb, China was a market manipulator that broke WTO copy rights and steal data to make a profit – which they do on a daily basis, but he omitted South Korea and Japan that have been doing it for decades. The best bit that I liked was he stated you could get rid of the top eight floors of the UN building and you would not notice the difference, but again the same could be said for many corporate HQ`s. That book is the blue print of what we now see being enacted.
Most of the “economic carrot “was giving Iran back their own money that had been suspended in western backs, but this did not work as they spent it on foreign wars and rocket development and the talented and down trodden Iranians saw nothing of it.
The airline business will be affected, but I expect a fat tax break for US aircraft manufacturing to cover the cost of these new sanctions, but Airbus will not be able to trade as Iran is demanding that the EU and others underpin any financial loss and only Germany has the cash in the EU, to do that. Little is being said about the sanctions by the Gulf states/Saudi on Qatar, but it’s important as when sanctions were in force before it was Qatar that kept their financial transactions alive and this is an important piece on the chess board.
Mutti Merkle has the problem as she is the last man standing in the EU from the original deal and if it collapses her credibility could go south and another election called and that is why the Boy Johnson and the French were on the Washington Express.
Post a Comment