American Renunciation Of Iran Nuclear Deal; Implications For Europe, South Asia

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President Donald Trump and King Salman bin Abdulaziz Al Saud of Saudi Arabia sign a Joint Strategic Vision Statement for the United States and the Kingdom of Saudi Arabia, during ceremonies, Saturday, May 20, 2017, at the Royal Court Palace in Riyadh, Saudi Arabia. (Official White House Photo Shealah Craighead
President Donald Trump and King Salman bin Abdulaziz Al Saud of Saudi Arabia sign a Joint Strategic Vision Statement for the United States and the Kingdom of Saudi Arabia, during ceremonies, Saturday, May 20, 2017, at the Royal Court Palace in Riyadh, Saudi Arabia. (Official White House Photo Shealah Craighead

By Arif Ansar 

Context

The frame of reference used in an analysis tremendously influences the output, and in fact shapes it. Our vantage point is congruent with the theory that the events of Middle East are now superseding the political, security, and economic dynamics of South Asia, and are likely to become its major determinant. We are reaching a tipping point of this trajectory now. In other words, the opportunity to solve Afghanistan imbroglio and ease Pakistan-India tensions will now directly involve Iran and Saudi Arabia – and the dynamics of Middle East.

A different way to understand this predicament is to consider South Asia as another theater for the wider shift in the global balance of power that is not going in the favor of US – and drifting towards China and Russia, while the fate of Europe hangs in the balance. The European identity stands at the most crucial juncture of its history. Will it be able to carve out an independent posture and identity remains to be seen.

In previous articles we have explored how the US decision to move its embassy to Jerusalem was likely to impact the political and security situation of the Middle East. Now that this decision has been implemented, accompanied by the revoking of the Iran nuclear deal, we have entered a whole new era of international relations.

The American allies and adversaries alike are beginning to see the full manifestation of how the ‘America First’ doctrine looks like in reality. The foremost realization for American allies is that it’s not what America can do for them, but what these allies can deliver for the US to continue to receive the same level of economic and security assistance they had gotten used to.

This has come as a surprise for nations that form the core of the transatlantic alliance like France, Germany and the UK. And the shock and awe extends to the American establishment itself, which now stands at a crossroad.

Analysis

America First and American Establishment

While the American establishment for the most part still operates from the globalist and liberal frame of reference, the Unilateralist premise the Trump Administration has adopted is the antithesis to that. This has already caused a number of inter-institutional frictions, and several of their leaders were removed unceremoniously. Many think this outlook can cause a full fledge trade war with China and the allies.

For example, the American foreign and security policies are still emphasizing building strong international alliances. Withdrawal from trade agreements such as Trans-Pacific Partnership (TPP), Paris climate accord, and now the Iran nuclear deal, is undoing those alliances that US had built over decades with great effort. The re-imposition of trade sanctions on Iran has complicated economic affairs for many of its global allies. With the decision to move its embassy from Jerusalem, US has lost any semblance of neutrality in the Middle East Peace Process.

President Trump had also wanted cordial ties with Russia. However, this was not the assessment of the security institutions, which saw Putin increasingly meddling in the internal affairs of the US and acting against its global interests. Moreover, it has built strong strategic alliance with China and Iran. The investigation looking in to any direct collusion between Russia and Trump’s campaign team is still ongoing and looking ominous by the day.

Two critical dimensions are thus evolving simultaneously. The first one is will President Trump be able to align the establishment and bring consistency between his domestics and global outlook? Alternatively, increasing friction can further stimulate the impeachment process and attempts to revert to a more globalist approach. And even if this eventuality occurs, it’s not clear that if the world can be switched back easily?

Then there is the question of how will the increasingly insecure allies adapt to this flux in the US.

The first thing allies across the spectrum are going through is shock. How can this be happening? And now that ample time has passed to understand that their anxieties were not misplaced, serious thinking will be geared towards formulating a response.

European Allies

When it comes to the European allies, the first phase may be an introspection of how dependent they are on the US. Considering their present economic and security predicament, to what extent can they stand on their own on the world stage?

Once this period is over, it will likely move towards if you can’t beat them then join them mentality.

In parallel, an undercurrent will gain momentum emphasizing a respective Europe First or France First approach. The Nationalist forces have been resurgent across Europe too. This thinking will be accompanied by an evaluation of how Europe stands as individual nations, and collectively as EU, vis-à-vis those actors that US considers adversaries. Not to mention, the building resentment against the America First doctrine will help China and Russia to make inroads and begin to shake the trans-atlantic alliance. To some extent China has been well on its way to enhance its trade relations with Europe, while Russia exerts influence via the gas it supplies. China ranks as EU’s second biggest trading partner after the United States, while the EU is China’s biggest trading partner.

On the other hand, Trump administration would prefer the EU nations realize that they cannot face the global risks alone. Irrespective, in the absence of US support or withdrawal, the struggle would likely shift towards attempts to dominate Europe between France, Germany, UK, and Russia. After all these urges are what led to WWI and WWII – and US could not and will not allow an adversarial power to control Europe.

Equally, the European nations may start to chart an independent course overtime. How these nations deal with the Iranian sanctions will be a case in point. Threatened by American sanctions if their businesses continue with Iran, they might start developing an alternative financial system and in turn pose ominous risks for the US. Russia and China will be more than willing in this endeavor if matters deteriorate further. A major chunk of China’s oil imports come from Iran and trade between the two stands at 28 billion dollars.

Allies in the Middle East and South Asia

As previously discussed in this space, the forgoing of US neutrality in the Israeli-Palestinian conflict, and potentially in Kashmir in the future, will have grave consequences for the region. Some of them have already begun to manifest in the form of more aggressive Israeli behavior towards Syria, Iran, Hamas, and Hezbollah. In this it has the tangent support of Egypt, Saudi Arabia, and UAE. On the other hand, Turkey, Iran and Pakistan have come out strongly against the moving of the US embassy to Jerusalem. This has created an unprecedented fissure in the Islamic world.

Trump has pretty much applied the same formula on the Arab allies as it has now on the Europeans. Principally, if you need American security and economic assistance, then align your policies with that of the US. However, this cannot occur without significant short and long-term costs and consequences like the ones discussed above for Europe.

If the European nations, including Turkey and Pakistan, and other states of the region, start to ignore US sanctions, it could very well trigger the initiation of an alternative financial system spearheaded by Russia and China. The groundwork for such an alternative is already in the works under BRICS and the Chinese One Belt One Road (OBOR) plan.

In this new formulation, US-Indian strategic ties will be acutely tested. India is part of BRICS and the SCO, and also maintains close ties with both the US and Israel. Will India alienate its otherwise cordial economic relations with Iran? And if India does that, it will only move Iran closer to Pakistan, and possibly assist in Afghanistan as well.

The Chabahar port will be the other cost of the American sanctions that will test the Indian will. India has committed $500 million towards the construction of Chahbahar port. According to Indian Foreign Ministry, India-Iran trade for the fiscal year 2016-17 stood at $12.89bn. However, like on Jerusalem, a complete US turnaround on Kashmir could shift the tide in the US favor.

In the emerging formulation, Saudi Arabia and UAE will likely exert their influence to prevent Iran and Pakistan from moving closer, or for Pakistan to move ahead with the Iran-Pakistan Gas Pipeline. These nations could possibly put their support for Kashmir on the table – as the cost for Pakistan to stay away from Iran. In the short-term, after the moving of US embassy to Jerusalem and withdrawal from Iran nuclear deal, the region and Pakistan should expect a more brazen Indian behavior.

 

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