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Foreign Policy

The Prospect of the Iran Nuclear Issue and China-Iran Economic Relations

Jan 08 , 2014
  • Jin Liangxiang

    Senior Research Fellow, Shanghai Institute of Int'l Studies

Signing “Joint Plan of Actions” on November 24 certainly marks a major step in resolving the Iran nuclear issue. Interestingly and even ironically, it was generally highly praised in China while complicatedly responded to in the United States. Albeit the optimistic atmosphere, it is still doubtful whether the progress can be sustainable. And China, together with the international community, will have to be prepared for worsened scenarios.

Jin Liangxiang

It is true that the interim deal did achieve something. According to the deal, Iran will have to stop enrichment activities beyond 5% purity, freeze installation of new centrifuges, dilute half of its stockpile of 20% enriched uranium and open sensitive facilities for inspections. Or to put it another way, the other parties had been able to stop the advancement of Iran’s sensitive nuclear capability and to make Iran’s nuclear program more transparent.

In return, the West agreed to remove some modest sanctions, including the release of some of Iran’s overseas assets and the removal of sanctions on Iran’s trade of aircraft parts and metals.

A breakthrough refers to substantial progress in the sticking points, which also implicates that the follow-up process will be much easier than the previous one. Judging by these standards, the deal is far from being a breakthrough since it neither addressed the question what kind of uranium enrichment capability Iran can have nor touched the core of the sanctions against Iran. The latter in particular will decide the prospect of Iran nuclear issue to a great extent.

Among all the sanctions passed by the US against Iran, the ones on Iran’s oil and financial sectors are most biting. The oil sanctions reduced Iran’s oil export from 2.5 million barrels a day to 1 million barrels a day in 2012. The sanctions on Iran’s financial sector even caused the collapse of Iran’s international trade by separating Iran from the international market.

Judging by the throat-cutting nature of sanctions in the two areas, any agreement without removal of these sanctions does not actually make sense for Iran, and any progress without sufficiently addressing Iran’s major concerns cannot be sustainable. Iran’s hardliners can easily sabotage such positive trends.

But can the US remove these sanctions? The possibility, though cannot be excluded, yet truly should not be overestimated. It is actually not a problem between the US and Iran but a domestic one of the US. Barack Obama and John Kerry might be able to get concessions from Iran on the negotiating table but not necessarily able to get what they want at home.

US domestic politics about this issue is too complicated. The time of 34 years has proved to be too short to heal Americans’ psychological trauma of the hostage crisis though the US side also hurt the feelings of Iranians in many events. Evidences are numeral indicating that the US congress has had distorted logic while dealing with any Iran issues as a result of the psyche. Nevertheless, the hostility of the US Congress is also enhanced by anti-Iran Jewish lobbyists.

Shortly after Hassan Rouhani, the famous moderate Iranian politician, was elected as Iran’s new president, the US congress passed an act with new additional sanctions against Iran in late July 2013 while the world was expecting a US-Iran rapprochement; and shortly after the interim agreement was signed on November 24, the US congressmen began their new efforts to push for new sanctions instead of keeping the agreement commitments to hold off new sanctions. They illogically asked why they should not continue since the sanctions worked to push Iran to the table.

The White House expressed explicitly that it would veto such sanctions bill, if passed, in order to keep its commitment. It is easy to veto a new sanction, but can the lamb-ducked While House ask the congress to remove the sanctions on Iran’s oil and financial sectors? Judging by the current distorted logic of the mindset of the congress, the possibility is low.

US sanctions against Cuba might be cited in this regard. Cuba is another country, the US policy toward which is emotional. It seems that the US will not remove the sanctions against Cuba until the Castro brothers leave though the UN general assembly passed resolutions in 22 consecutive years demanding the US to remove the sanctions against Cuba, which have lasted more than half a century.

Iran might be a little bit different from Cuba. Despite animosity, quite a number of decision makers believe that the US should positively approach Iran so as to get Iran’s assistance in dealing various Middle East problems. But it is still doubtful whether the strategic value of Iran can override the widely held anti-Iran psyche.

As a closely relevant party, China will have to be prepared for bad weather while continuously working to promote confidence between the two. Progress of the nuclear issue cannot be described as breakthrough, and US-Iran relations cannot be regarded as stable so long as the US is not able to remove the core sanctions against Iran.

It is in China’s interests to keep the nuclear dispute under control and to promote reconciliation between the US and Iran. As a meaningful partner to both, China has been carefully managing the relations with the two for long due to their hostility. Therefore, China is a victim rather a beneficiary.

That’s not the full story. As a result of the hostility, the danger of another war has been looming in the region. If that happens, China’s interests of maintaining stable supply of energy and stable market of products will be seriously undermined.

Beijing also has reasons to be well aware that its companies should be prudent in increasing business efforts in Iran though such efforts do benefit not only China but also Iran’s quagmire economy and the livelihood of Iranian people. And worsening of US-Iran relations as a result of Iran’s dissatisfaction of the unbalanced concessions will likely put Chinese companies in a more difficult situation.

Dr. Jin Liangxiang is a Research Fellow at the Shanghai Institute for International Studies.

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