News : Economy
- Published: Monday, 01 April 2019
By Edward Carney
The US government kept up its progress this week toward exerting “maximum pressure” on the Islamic Republic over its nuclear ambitions, regional imperialism, and other “malign activities.” The broader focus of US policy toward Iran was underscored by Monday’s announcement of new sanctions on more than two dozen individuals and groups with ties to the Iranian Revolutionary Guard Corps.
The new sanctions were highlighted as an example of the sorts of actions that were promised last May in the wake of President Donald Trump’s withdrawal from the 2015 Iran nuclear deal, or Joint Comprehensive Plan of Action.
But that withdrawal itself was justified by reference to the “spirit” of the deal, which Iran was accused of violating not only through ongoing, albeit supposedly limited work on nuclear technology and potential nuclear delivery devices, but also through such things as the proliferation of Iran-backed militias across the Middle East, particularly in Syria and Iraq.
This development of militant proxies is uniquely the purview of the IRGC, and the new sanctions primarily serve to address American concerns over the spread of Tehran’s regional influence. The IRGC has also been seen to play a leading role in the crackdown on dissent inside Iran, particularly in the wake of the nationwide anti-government uprising at the end of 2017 and the beginning of 2018. With this in mind, opponents of the clerical regime are hopeful that sanctions on IRGC financiers will help to alleviate some pain for Iran’s activist population.
But even amidst regional conflicts and Iran’s domestic unrest, much of the international community’s attention has remained focused on questions about the future of the JCPOA and the status of Iran’s nuclear program and overall nuclear ambitions. The concerns have certainly not been forgotten by the US as it continues to push in the direction of maximum pressure. This was made apparent earlier in March when Jackie Wolcott, the US ambassador to the International Atomic Energy Agency, addressed the nuclear monitoring organization to reiterate some of the concerns that had led to the president’s withdrawal nearly 10 months earlier.
In its reporting on the IAEA’s work this week, The National Interest quoted Wolcott as saying that the US still expected Iran to come back to the negotiating table in the interest of achieving “a comprehensive agreement with Iran that addresses the totality of our concerns.” However, that article went on to underscore the fact that even among supporters of the Trump administration’s Iran strategy, there are many who feel the progress toward maximum pressure is not coming fast enough and that serious risks remain of the Islamic Republic securing additional nuclear know-how before being caught out by the international community.
The National Interest took issue with Wolcott’s expression of “highest confidence” in the IAEA’s monitoring activities, which were previously criticized by President Trump and other opponents of the JCPOA because they are limited to sites and activities that have already been disclosed. Many of those same opponents are firmly convinced that Iran has only publicly disclosed a small portion of its work related to nuclear weapons, and only after the relevant aspects of the program were uncovered by foreign intelligence agencies or the domestic intelligence network of the People’s Mojahedin Organization of Iran.
The National Interest article further explained: “The IAEA is trying to avoid provoking Iran by not making requests regarding facilities and activities that became known to the IAEA through information received from outside sources—certainly not from the treasure trove of information about Iran’s military nuclear plans that is contained in the Iran nuclear archives, which Israel took from the heart of Iran and made available to the IAEA in early 2018.”
Such observations arguably justify calls for more pressure by the US government on the IAEA and the international community as a whole, with the ultimate goal being a collectively-enforced project of maximum pressure on the Islamic Republic itself. This in turn may help to explain the persistent discord just within the Republican Party and the White House over the precise trajectory of an increasingly assertive Iran policy. This was the focus of an NBC News article earlier in the week which highlighted efforts by “hardline” congressional lawmakers to convince the Trump administration to withhold all sanctions waivers for international businesses that transact with the Islamic Republic.
The article explains that so far, the White House has been resistant to these calls, out of concern for the possibility of “triggering a spike in oil and gasoline prices, upsetting delicate trade talks with China or further alienating allies.” But even though some of the harshest critics of the Islamic Republic have proven unwilling to wait for maximum pressure to take hold, certain recent developments indicate that they may not have to wait particularly long. And these developments are largely the result of pressure that the US is applying indirectly, via its allies and trading partners.
In one of the latest examples of this trend, Radio Free Europe reported on Friday that Sigal Mandelker, the US undersecretary for terrorism and financial intelligence, was visiting Southeast Asia to urge region-wide economic and political isolation for the Islamic Republic. This follows upon a trip by Secretary of State Mike Pompeo to three Middle Eastern countries earlier in the month, where he promoted the development of a Middle East Strategic Alliance, informally known as an “Arab NATO,” that would specifically coordinate to counter Iranian influence in the region.
These sorts of state visits, and the accompanying public commentary, underscore the truly global reach of the administration’s effort to prevent foreign countries from defying US sanctions or otherwise enabling the Iranian regime. For the White House and for any policymakers who are not certain about the issue of sanctions waivers which will come up for renewal in May, the hope is that this international pressure will convince much of the world to voluntarily abandon Iranian commerce. And by most accounts, that effort has been proving successful, even as far away as East Asia.
On one hand, the IRGC-linked Tasnim News Agency issued a report on Friday claiming that Japan was preparing to continue loading Iranian oil after the expiration of the US waivers, which were granted to the Asian nation alongside seven other major importers of Iranian oil. The evidence for this claim consisted of the Japanese parliament’s extension of insurance coverage for Iranian tankers through May of next year.
But as Reuters indicated on the same day, this appears to only be a hedge against the potential interruption of transactions that are already in progress before the current American waivers expire.
In fact, Reuters directly quotes a spokesperson for Japanese refiner Fuji Oil as saying, “We think it would be difficult to keep on lifting Iranian oil after March.” Another representative of the Japanese petroleum industry expressed tentative expectations that the US might decide to issue waivers for yet another 180 days, but also that these would likely be narrower in scope and would remain contingent upon the recipients drawing down their loadings of Iranian products during the time those waivers are in effect.
As a condition of the previous round of waivers, recipients were expected to reduce the relevant imports by 20 percent and many of them, including Japan, exceeded this benchmark. The average Japanese loadings of Iranian oil during the first three months of 2019 were lower than the average for the previous year, by one-third. Additionally, there are no orders for April, suggesting that some if not all waiver recipients are remaining as conservative as possible with regard to their expectations of future American permissiveness.
Some of Tehran’s critics may remain unsatisfied with this situation, in which foreign partners of the United States are being relied upon to comply in advance with a campaign of maximum pressure that is still forthcoming. But some critics have also expressed optimism about the prospective impact of existing pressure not only on US partners but also on adversaries. This was the tone, for instance, of a report published by the National Council of Resistance of Iran on Friday.
The article raised the question of whether China is “pulling away from Iran,” and it cited recent trade figures to undermine the mutually supportive public statements that had been made by the Chinese president and the Iranian Minister of the Economy around the time of the latter’s visit to Beijing last week. According to the NCRI, China may be exploiting access to cheap Iranian oil over the short term, while providing little in return and “hinting that it is more likely to work with the US than the mullahs.”
The article acknowledges that China’s long-term strategy may still shift in either direction, but it argues that the US and its European allies can exert pressure on the Asian giant to remove what would otherwise be a very significant lifeline for the Iranian regime. This would be especially positive for Western ideals in light of the fact that China and Iran have both been cited together in warnings by experts on geopolitics, regarding the possible development of an eastern bloc of nations that would represent a meaningful challenge to NATO.
Any such challenge would naturally be amplified by the nuclear weapons capability of individual members of the theoretical bloc. Thus, many politicians in the US, Europe, and elsewhere remain seriously concerned about the perceived limits of current restraints on Iran. However, additional limits may prove easier to apply if current patterns persist and the predominant White House strategy proves effective in quickly and thoroughly isolating Tehran.