The future of EU-US-Iran relations

The US withdrawal from the nuclear deal with Iran in May 2018 was not the end of the political disagreement between the EU, the US, and Iran. The US administration went further and re-imposed economic sanctions against Iran. In the beginning, the European Union seemed to remain neutral. This was a surprising choice considering the Americans further reduced the efficiency of the nuclear deal, which was considered the greatest political and diplomatic achievement in this continuous and painful dialogue.

But European politicians, mainly through the voice of the EEAS, started to express their concerns and warned their American counterparts to not have the situation escalate. Ever since European politicians issued their concerns, the European institutions as a whole also decided to act. On August 23, the European Commission adopted a first package of €18 million, which aims at supporting sustainable economic and social development in the Islamic Republic of Iran.

The background

The latest developments in the trialogue between the EU, the US and Iran can be summarized in a few key points. The Joint Comprehensive Plan of Action, also known as the Iran nuclear deal, was signed on July 14, 2015 by all three parties. According to this framework, Iran would have to redesign and convert some of its nuclear facilities. In exchange for that, the mostly economic sanctions against the country would be lifted. In addition, the three parties agreed to establish a  dialogue in various fields, such as economy, transport and energy, education and culture, and to cooperate to address some of the most urgent global challenges (e.g. climate change, drug trafficking, migration and refugee flows).

European politicians believed this to be the biggest achievement in the EU-US joint negotiations with Iran. However, earlier this year the United States decided to re-impose sanctions. The EU considered this action to be illegal and reactivated its “blocking statute”, a mechanism that bans European companies and residents from complying with US sanctions. It also allows EU economic operators to demand a refund for damages that might result from these sanctions. Moreover, the EU does not recognize any court ruling enforcing US sanctions.

At the same time, Brussels pointed out that it is beneficial for European businesses to strengthen ties with Iran. The approved aid package seems to be an attempt to support the nuclear deal and its commitments, and thereby benefits European businesses, despite US reactions.

Is the European Union ready to play a “dirty” political game?

The EU is showing growing dissatisfaction with the political discourse of the current American administration. It is also clear that the European Union will no longer support the US government’s actions, especially when it comes to the relations with Iran. The EU’s strong commitment to the Joint Comprehensive Plan of Action serves as the best evidence. EU member states support the current package approved by the European Commission, which is part of a wider €50 million development investment plan that aims at helping Iran in addressing its key economic and social challenges.

Approximately €8 million will be invested in the private sector, supporting and assisting, among other things, high-potential Iranian SMEs, the development of selected value chains, and Iran’s Trade Promotion Organization. This commitment stands in stark contrast to the US’s sanctions approach.

However, one question still remains unresolved: is the European Union ready to play a “dirty” political game, or will it resort to its soft power?

Future perspectives for EU-US-Iran relations

Since Donald Trump took office, he abolished several deals, agreements and policies established and promoted by Obama. These decisions were a result of Trump’s aggressiveness in international politics and his reluctance to build coalitions. At the same time, the EU claims to aim at becoming a friend and ally to those countries that actively attempt to transform into a democracy.

It remains to be seen which of the super powers will change its stance towards Iran. Donald Trump is fairly convinced of the US’s power as hegemon, continuing his much-debated approach. Nevertheless, it seems easier to believe that the US will change its approach rather than the EU, eventually, since the EU is established as a soft power. This makes it hard to believe that the EU will become an aggressive hegemon imposing hard sanctions. Regardless, the EU cannot longer be underestimated in its actions, as it has shown to move from being silent on the matter, to using its soft power.

Author: Irina Kruhmalova