WASHINGTON/PARIS (Reuters) – Dismayed European allies sought to salvage the international nuclear pact and preserve their business with Iran on Wednesday after President Donald Trump pulled the United States out of the landmark accord.
“The deal is not dead. There’s an American withdrawal from the deal but the deal is still there,” French Foreign Minister Jean-Yves Le Drian said.
Iranian Supreme Leader Ayatollah Ali Khamenei said: “Mr Trump, I tell you on behalf of the Iranian people: You’ve made a mistake … I said many times from the first day: don’t trust America.” A government spokesman said Iran had drawn up a response proportional to Washington’s withdrawal.
French President Emmanuel Macron, who like other European leaders had lobbied Trump to keep the agreement, urged his Iranian counterpart Hassan Rouhani in a phone call to keep respecting the deal, and consider broader negotiations.
Trump announced on Tuesday he would reimpose U.S. economic sanctions on Iran to undermine what he called “a horrible, one-sided deal that should have never, ever been made”.
The fruit of more than a decade of diplomacy, the agreement was concluded in 2015 by the United States, France, Britain, Germany, Russia, China and Iran.
It was designed to prevent Iran obtaining a nuclear bomb in return for the removal of sanctions that had crippled its economy, not least by Washington threatening to penalize businesses anywhere in the world that traded with Iran.
Trump complained that the deal, the signature foreign policy achievement of his Democratic predecessor, Barack Obama, did not address Iran’s ballistic missile program, its nuclear activities beyond 2025 or its role in conflicts in Yemen and Syria.
His decision raises the risk of deepening conflicts in the Middle East, puts the United States at odds with European diplomatic and business interests, and casts uncertainty over global oil supplies. Oil prices rose more than 2 percent, with Brent hitting a 3-1/2-year high. [O/R]
The deal could also strengthen the hand of hardliners in Iran’s political scene, at the expense of moderates like Rouhani who had pinned their hopes on the deal to boost living standards in Iran, with limited success so far.
“REGION DESERVES BETTER”
France’s Le Drian, German Chancellor Angela Merkel and the International Atomic Energy Agency (IAEA) all said Iran was honoring its commitments under the accord.
“The region deserves better than further destabilization provoked by American withdrawal,” Le Drian said.
The European Union said it would ensure sanctions on Iran remain lifted, as long as Tehran meets its commitments.
The Kremlin said Russian President Vladimir Putin was “deeply concerned” by the withdrawal, the RIA news agency said.
Merkel said that, while the existing deal should not be called into question, there should be discussion of “a broader deal that goes beyond it”.
British Foreign Secretary Boris Johnson spoke of a “follow-on agreement” but said it was now up to Washington to come up with concrete proposals. Macron said he wanted a broader discussion with all relevant parties on the development of Iran’s nuclear program after 2025, when key elements of the current deal expire, as well as Iran’s ballistic missile program and wider Middle East issues.
Iranian officials will next week meet counterparts from France, Britain and Germany.
But Iran’s Khamenei appeared skeptical whether they could deliver, saying: “I don’t trust these three countries.”
The chances of saving the deal without Washington depend largely on whether international firms are willing and able to keep trading with Iran despite the threat of U.S. sanctions.
In a sign of what may be in store, Trump’s ambassador to Berlin tweeted, within hours of taking up his post, that German businesses should halt activities in Iran at once.
French Finance Minister Bruno Le Maire said the United States should not consider itself the world’s “economic policeman”.
Britain, France and Germany said they would do all they could to protect their business interests in Iran, yet it was unclear how far they would be able to shield firms from U.S. sanctions.
Brussels has a “blocking statute” at its disposal that bans any EU company from complying with U.S. sanctions and does not recognize any court rulings that enforce American penalties.
But it has never been used and is seen by European governments more as a political weapon than a regulation, because its rules are vague and difficult to enforce.
British Prime Minister Theresa May’s spokesman made the limits of potential action clear, saying: “UK businesses may wish to consider the implications for their business activities in Iran and, where necessary, seek appropriate legal advice.”
A senior French diplomat said businesses would ultimately be forced to choose between their Iranian economic interests and their potential U.S. interests, adding: “Generally, that decision is quickly made in favor of the U.S.”
“DEATH TO AMERICA!”
Lawmakers in Iran’s parliament burned a U.S. flag and a symbolic copy of the deal, known officially as the Joint Comprehensive Plan of Action (JCPOA), chanting “Death to America!”.
Rouhani, whose position could be weakened by a blow to Iran’s economy, struck a more pragmatic tone in a televised speech, saying Iran would negotiate with European Union countries, China and Russia.
“If at the end of this short period we conclude that we can fully benefit from the JCPOA with the cooperation of all countries, the deal will remain,” he said.
Trump’s decision adds to the strain on the transatlantic alliance since he took office 16 months ago. One by one, European leaders came to Washington and tried to meet his demands, while pleading with him to preserve the deal.
The Trump administration kept the door open to negotiating another deal, but it is far from clear whether the Europeans would pursue that option or be able to win Iran over.
A Western diplomat who declined to be named said the decision “announces sanctions for which the first victims will be Trump’s European allies”.
Abandoning the pact was one of the most consequential decisions of Trump’s “America First” policy, which has led him to quit the global Paris climate accord, come close to a trade war with China and pull out of an Asian-Pacific trade deal.
It also appeared to reflect the growing influence within the administration of Iran hawks such as new National Security Adviser John Bolton and Secretary of State Mike Pompeo, who arrived in Pyongyang on Wednesday to prepare for a summit that Trump hopes will secure North Korea’s denuclearisation.
COMPLYING WITH DEAL
Iran denies long-held Western suspicions that it tried in the past to develop atomic weapons and says its nuclear program is for peaceful purposes.
Senior U.S. officials themselves have said several times that Iran is in technical compliance with the pact.
Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.
Iran is the third-largest member of the Organization of the Petroleum Exporting Countries and pumps about 3.8 million barrels per day of crude, or just under 4 percent of global supply. China, India, Japan and South Korea buy most of its 2.5 million bpd of exports.
Its rial currency plunged to a record low against the U.S. dollar in the free market, after sliding for months because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who feared that renewed U.S. sanctions would hit Iranian exports hard.
“I am scared,” 47-year-old Isfahan school teacher Morad Sabzevari said by telephone. “I listened to Trump’s speech on English news channels last night … It was a declaration of war against Iran … It means dark days and months are ahead of us.”
The U.S. Treasury says sanctions related to Iran’s energy, auto and financial sectors will be reimposed in three and six months.
U.S. Treasury Secretary Steve Mnuchin said a license for Boeing Co (BA.N) to sell passenger jets to Iran will be revoked, scuttling a $38 billion deal. The ban will also hit Europe’s Airbus (AIR.PA), whose planes contain U.S.-made parts.
Trump said the nuclear agreement did not prevent Iran from cheating and continuing to pursue nuclear weapons.
“It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” he said.
He said he was willing to negotiate a new deal with Iran, but Iran has already ruled that out.
Iran’s growing military and political power in Yemen, Syria, Lebanon and Iraq worries the United States, Israel and Washington’s Gulf Arab allies such as Saudi Arabia.
Among the few nations to welcome Trump’s decision were Israel and Saudi Arabia, Iran’s arch-foes in the Middle East.
Less than 24 hours after Trump’s announcement, Saudi Arabia said it had intercepted missiles fired at Riyadh by the Iran-aligned Houthi forces it is fighting in Yemen.
(Graphic showing Iran’s nuclear facilities tmsnrt.rs/2K9tVRX)
Reporting by Steve Holland; Additional reporting by Tim Ahmann, Makini Brice, Warren Strobel, Jonathan Landay and Arshad Mohammed, Patricia Zengerle, David Lawder, Mohammad Zargham in Washington, Ayenat Mersie in New York, Sybille de La Hamaide, John Irish and Tim Hepher in Paris, Parisa Hafezi in Ankara, David Milliken and Bozorgmehr Sharafedin in London and Andrew Torchia in Dubai; Writing by Angus MacSwan and Kevin Liffey; Editing by Richard Balmforth