US-Europe Relations - Iran Nuclear Deal

What is the issue?

• The United States has pulled out of the Iran nuclear deal.
• The decision seems to be complicating the future US relations with EU and Britain.

What is EU's and Britain's stance?

• Britain is of the opinion to not junk the nuclear deal with Iran completely.
• It instead wants the US to work with its European allies.
• It is inclined to find solutions to what US describes as flaws.
• It prefers working around the existing deal rather than rejecting it outright.
• France and Germany also seem to be taking a similar stance.
• In a joint statement, the leaders of Britain, France and Germany emphasised their continuing commitment to the JCPOA.

Why is the deal significant for European countries?

• Europe has had strong ties with Iran for long.
• It had been Iran’s largest trading partner until the sanctions regime (2006 - 2010).
• This role was however overtaken by China and the UAE.
• The EU currently accounts for just around 6% of Iran’s trade.
• But trade and investment had begun to recover swiftly since the 2015.
• The deal with Iran and lifting of sanctions significantly contributed to this.
• European firms have entered into investments in Iran.
• European countries are thus particular in saving the deal in some form with Iran.

Why is the US crucial for Europe?

• Britain has made plain its eagerness to maintain strong ties with the US.
• It is particular of a comprehensive trade deal with the US.
• This is seen as one of the great deals for a post-Brexit Britain.
• European countries have adopted an accommodating stance towards the US in the past.
• It has received some special treatments from the US, in return, in the past.
• E.g. exemptions (temporarily) accorded to Europe from the US global tariffs on aluminium and steel products.

What lies ahead?

• So far Europe has presented a united front.
• It remains to be seen if this would continue with developments in the Iran issue.
• Iran had indicated that Europe had “limited opportunity” to preserve the deal.
• It has emphasized that the countries clarify their position and intentions.
• This will inevitably force European countries to reassess their approach to the US administration.

Source: Business Line