Last week I wrote about the future of the nuclear deal in the light of the Trump administration’s position, which calls for fixing the flaws or canceling the deal wholesale—even if the U.S. unilaterally walks away from the nuclear deal. Also, I discussed the European position forecasting how the nuclear deal will be reaching its end.
There are a number of significant questions we try to answer in this article. For example, we analyze how Iran’s economy has performed since the nuclear deal and what impact there has been on the business sector, foreign investments, and exports in Iran, given U.S. uncertainty over the deal. Probably, the best to answer to such questions scientifically and by applying accurate surveys is the International Crisis Group (ICG). In a recent survey, the ICG stated that hesitation has tied down European companies from establishing new investments or commercial projects as the U.S waives sanctions against Iran. The results show that the reason for the delayed plans and projects of multi-national companies in Iran is over fears of the U.S. re-imposing sanctions. In responding to the question, as to what extent President Trump’s decision of decertifying the nuclear deal has affected their plans to engage in the Iranian market; 17% said it would affect “a lot” their plans, 33% said “somewhat”, 39% said “not much”, and 7% said “not at all”. According to the respondents, the anticipated reaction of the European and Asian companies if the U.S unliterary re-imposes sanctions under the nuclear agreement or imposes new ones; 26% of the respondents stated they will “become very averse to trade and invest in Iran”; 57% stated they will “become somewhat averse to trade and invest in Iran”; while 4% will “totally ignore U.S. unilateral sanctions”. The respondents answered the following question; “Assuming Iran remains committed to the nuclear deal, would the regulations introduced by European governments to prevent the U.S. authorities from penalizing your company over the business in Iran, affect your decision to invest in Iran?”; 54% of the respondents answered “yes”, 15% “no”, 24% “do not know”, and 7% did not answer.
The findings clearly manifest how the European business sector is affected by the U.S. If the European countries remain committed to the nuclear deal— without any amendments—and politically confront the U.S. decision, the economic dividends will be limited as European companies will greatly hesitate to engage in the Iranian market or establish long-mid-term projects with Iran. Also, most of the contracts, previously signed between Iran and European companies, will remain dead. For example, the Chief Executive Office of the French oil and gas company “Total” said that its gas deal— which is considered the largest deal ever conducted in the Iranian gas sector signed in mid-2017—might be canceled if their interests are affected by the new U.S. imposed sanctions. Further, there could be a high ‘political cost’ as EU-U.S. relations might change, leading to economic-political implications. Also, the cost will be quite high if the EU insists on remaining committed to the nuclear deal without having a clear position on Iran’s interventions in destabilizing regional security across the Arab world. Saudi Arabia, UAE, and Egypt may reconsider the advantages given and the deals conducted with European companies in local Arab markets and may eventually look for alternatives.
Translated Piece: Watan SA
Opinions in this article reflect the writer’s point of view, not necessarily the view of The Arabain GCIS