Assessing the Implications of U.S. Withdrawal from Iran Deal

A mere three days after President Trump decided to withdraw from the JCPOA nuclear deal with Iran, GMF’s Paris office  hosted a roundtable discussion with Ms. Danielle Pletka, senior vice president for foreign and defense policy studies at the American Enterprise Institute (AEI). Ms. Pletka oversees the Institute’s work on foreign and defense issues, with special focus on Iran, the Middle East, and South Asia. GMF program and public affairs coordinator Jessica Pennetier took a few minutes after the event to speak to Ms. Pletka about the implications of Trump’s decision for the transatlantic relationship and for future negotiations with North Korea.

The United States has withdrawn from the Iran nuclear deal. How does the Trump administration expect its EU allies to handle this crisis? Is Europe expected to broker a new deal without the United States?

Danielle Pletka: The United States hopes for a partnership with its EU allies in addressing Iran’s increasingly destabilizing behavior in the Middles East; in addressing the Iranian missile program; and in addressing the limitations and problems within the JCPOA. That is what the United States expects. I see every reason for cooperation. And if Europe does help the United States in addressing these concerns, that does not mean that Europe has to abandon the JCPOA.

Are we at risk of a trade war due to the fact that European countries have a lot of business interests in Iran? I am thinking particularly of Peugeot, which does a lot of business with Iran. Perhaps the United States would rather Europeans simply withdrew from Iran, but for now, it seems as if European powers would rather push back against U.S. sanctions. Are Europe’s economic interests going to prevail?

Danielle Pletka: Somebody said to me that something like 0.1 percent of German trade goes to Iran. You do not have a lot of economic interests in Iran; your companies do not have interests in Iran. Iran is, apart from anything else, a terrible economic partner. Hard to do business with, does not pay, does not keep to its deals. So just on a pure trade front, you should be asking yourself, “who would I rather do business with, the United States or Iran?”

It seems quite a clear choice to me. Nobody likes to be told what to do, and I understand that, it is a perspective often held by European countries. On the other hand, we do have shared goals with regards Iran, namely, we do not want this regime to cause more problems than it has already caused. It has caused the death of half a million people. Just look at its activities in Yemen, its activities in Bahrain. I could go on. Iran is a destabilizing force, especially though Hezbollah.

So are we at risk of a trade war? I think the real risk is that there is a mélange of issues here. The United States could be accused of protectionism by slapping tariffs on aluminum and on steel — tariffs which, to my mind, are neither good for U.S. economic interests, nor for our global reputation.

The problem is that we might mix up the marginal question of aluminum and steel with the major question of trade between Iran and our European friends. And the Europeans might put them all together and say that this is unacceptable, that this is an intolerable thing to accept from the United States. And there you need to be sympathetic. In the United States, we need to pick our battles. For me the bigger battle is Iran, for the president, he thinks he can have all his battles. I believe he is wrong.

If any, what will be the impact of this withdrawal on North Korean negotiations? The summit is happening in Singapore in two days. How is the situation with North Korea going to impact the Iran Deal? If indeed there is going to be an impact – perhaps you think these are two totally different situations.

Danielle Pletka: There is nothing unrelated in the world. Everybody reads one event to see how it informs others. On the one hand, the U.S. withdrawal from the JCPOA tells the North Koreans that no deal that we make with them is going to look like the JCPOA, in which they get to keep some part of their program, covertly work on it, keep all their research, hang on to their scientists, close off their program to inspection. We are not going to do a bad deal like the JCPOA with the North Koreans.

Of course, that makes it much harder to do a deal. Weirdly, it is much easier to do a bad deal and then pretend it is a good one, like the Obama administration did. With North Korea, Donald Trump has suggested that he is only interested in achieving full denuclearization. But the real question for North Korea is what they mean and what we think they mean by “denuclearization.” And that will be the key issue for these negotiations.

I suspect that North Korea has very dramatic ambitions, which have very serious implications for not only North Korea but also for the United States defense umbrella, the U.S. relationship with Japan, and the entire U.S. posture in Asia. Our allies will be confused if the United States is prepared to give away the region and our interests in the Pacific. I do not think that is a deal that will be done.

So we will see, it is certainly an opportunity. For now, the only signal that the North Koreans have is that they are not going to be doing a bad deal with Donald Trump.