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‘US is not economic policeman’ or it is?

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US President Donald Trump faced diplomatic isolation as world powers scrambled to save a landmark deal curbing Iran's nuclear program that he has rejected, reported Channel News Asia (Singapore).

Trump's decision to withdraw from the accord and reimpose sanctions on the Islamic republic overturns years of diplomacy, could worsen instability in the Middle East and threatens business in Iran worth billions of dollars.

While Tehran's regional rivals Saudi Arabia and Israel applauded Trump's decision to pull Washington out of the 2015 accord, Iran reacted furiously to the move, with lawmakers burning a US flag and chanting "Death to America."

French President Emmanuel Macron and Iran's Hassan Rouhani agreed to work toward the continued implementation of the nuclear deal despite the US decision, which Macron called "a mistake".

Earlier German Chancellor Angela Merkel said European signatories would "do everything" to ensure the agreement's parameters remain in place.

The pledges came as Iran's supreme leader Ayatollah Ali Khamenei told the government in Tehran it too should quit the nuclear deal unless Europeans offer solid guarantees that trade relations would continue.

Other signatories, including major trade partner Beijing, also promised to work to uphold the accord.
China insisted it would maintain "normal economic and trade exchanges with Tehran" and "continue to devote itself to safeguard and implement the deal."

IRAN 'UPHOLDING COMMITMENTS'
Slapping aside more than a decade and a half of diplomacy by Britain, China, France, Germany, Iran, Russia and past US administrations, Trump called Tuesday for a "new and lasting deal."

He described the existing accord as an "embarrassment" to the United States that did nothing to contain Iran's nuclear ambitions.

But the UN's nuclear watchdog, which is charged with ensuring Iran abides by the terms of the deal, said Wednesday Tehran was upholding its "nuclear-related commitments."

"Iran is subject to the world's most robust nuclear verification regime," said International Atomic Energy Agency (IAEA) director-general Yukiya Amano.

Trump said a deal with Iran would have to include not just deeper restrictions on its nuclear program, but on its ballistic missiles and support for militant groups across the Middle East.

In response, Rouhani warned Iran could resume uranium enrichment "without limit".
But he also said Iran would discuss its response with other parties to the deal before announcing a decision.

Stoking fears of a Middle East arms race, Saudi Foreign minister Adel al-Jubeir told CNN the kingdom would pursue its own nuclear weapons if Iran resumed its alleged quest for the bomb.

Iran has always denied seeking a nuclear weapon, insisting its atomic program was for civilian purposes.

Doubling down, Trump told reporters at the White House there would be "very severe consequences" if Iran were to resume its nuclear enrichment program, which the 2015 deal curbed in exchange for sanctions relief.

OIL RALLIES
Trump's decision marked a stark diplomatic defeat for Europe, whose leaders urged the US president to think again.

US Defense Secretary Jim Mattis insisted that the US would keep working with its allies to prevent Iran from getting nuclear weapons - despite Trump's withdrawal from a deal designed to do just that.

"We will continue to work alongside our allies and partners to ensure that Iran can never acquire a nuclear weapon, and will work with others to address the range of Iran's malign influence," Mattis told a Senate panel.

Macron, who in recent weeks made a deliberately public effort to talk Trump around, said in an interview with German media that it was vital for the deal's other parties to reaffirm their commitment.

"The Europeans' decision allows us to prevent Iran from immediately restarting their (nuclear) activities and to avoid escalating tensions," Macron said.

Rouhani for his part said Iran's economic interests would however need to be "guaranteed" in light of Trump's decision, the Iranian presidency's website said.

Trump's advisor John Bolton said earlier that European firms doing business in Iran have a six-month deadline to wind up investments or risk US sanctions.

The move offers Trump a domestic victory, fulfilling a longstanding campaign promise, and sent oil prices surging to levels not seen in three years - but the long-term impact for US foreign policy and for the Middle East was less clear.

Turkish President Recep Tayyip Erdogan said the United States will "lose in the end" from its decision, while Russia's Vladimir Putin expressed his country's "deep concern" over the US withdrawal.

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The European Union has moved to protect the interests of its companies that do business in Iran, following the United States decision to withdraw from the 2015 nuclear deal, reported Russia Today.

President Donald Trump’s announcement that the US was withdrawing from the landmark pact unleashed a wave of criticism from the international community. Now the EU has threatened to take the US to the World Trade Organization (WTO) if it takes any steps that will negatively impact European business in the Middle Eastern country.

A spokesman for the French government said EU partners will confer to discuss the economic fallout from the US decision.

“The European Union is ready to challenge at the WTO any unilateral measure that would hurt the interests of European companies and respond in a proportionate manner, in accordance of course with the rules of that international organisation,” Benjamin Griveaux said.

The deal lifted sanctions on Iran in exchange for Tehran limiting its nuclear program. Trump’s withdrawal from the deal means that the US will reimpose the economic sanctions suspended in 2016 and likely impose new ones. The newly appointed US ambassador to Berlin warned that German businesses should immediately halt their activities in Iran.

European powers scrambled to save the deal on Wednesday, insisting that it is not dead despite America’s withdrawal. Griveaux’s comments were echoed by French Finance Minister Bruno Le Maire.

“The international reach of US sanctions makes the US the economic policeman of the planet, and that is not acceptable,” Le Maire told France Culture radio.

The UK also said it would do its utmost to protect British business interests in Iran, while Germany said it was seeking details on the effect of US sanctions.

Iran has always maintained that it signed the deal in 2015 because it believed that the relaxing of sanctions would lead to increased investment. The value of trade between the EU and Iran has grown rapidly since the deal was signed. The year after the deal was signed, trade grew by more than $7 billion to $16.4 billion, and last year it reached $25 billion.

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The day after Trump announced his long-dreaded decision to withdraw from the 2015 Iran nuclear deal, EU members were hammering out measures to try to protect European firms doing business in Iran from US sanctions, reported France24.

The JCPOA (Joint Comprehensive Plan of Action) – as the Iran deal is formally known – was signed between Iran, the US, Russia, China, Britain, France, Germany and the EU.

But Trump’s pullout has left international companies doing business in Iran vulnerable to the extraterritoriality of US law, which enables Washington to punish foreign companies operating in Iran if they have business dealings with the US or use dollar transactions.

Europe has long complained about the long arm of US economic jurisdictions, which made it difficult for major European banks and companies to operate in Iran even before the US pullout. Amid uncertainty over Trump’s impending decision, European banks have avoided Iran-related transactions, fearing “the American guillotine” that has severely punished firms evading US sanctions in the past, such as a hefty, almost $9 billion fine slapped on France’s largest bank, BNP Paribas, in 2014 for sanctions evasion.

Those gripes reached a pitch. Slamming the US withdrawal from the Iran deal as “an error”, French Finance Minister Bruno Le Marie complained that it was “not acceptable” for the US to play “economic policeman of the planet”.

Speaking to reporters in Paris a day after the US withdrawal from the JCPOA, an official in the French presidency said European authorities would “do everything” possible “to find a way to protect this multilateral framework”.

Washington has given companies between 90 and 180 days to phase out existing contracts with Iran and banned them from signing any new ones, under threat of sanctions.

‘Limited opportunity’ or ‘big opportunity’
While the multilateral JCPOA seeks to reintroduce Iran into the global economic system in exchange for its nuclear compliance, Trump’s pullout -- and the threat of US sanctions -- has made it difficult for European signatories to provide Iran the carrots envisaged under the deal.

In a phone call with French President Emmanuel Macron, Iranian President Hassan Rouhani told the French leader that he believed Europe had “limited opportunity” to preserve the nuclear deal, according to Iranian media.

But Caroline Galacteros, a geopolitics and strategic intelligence expert, believes the US pullout could present the EU with “a big opportunity” to come up with a unified response to a system that has long rankled European powers.

“It’s up to us to decide in the end if we really want to accept this extraterritoriality of US law. That’s the big issue in my opinion. It can be a real shift in the balance of power,” said Galacteros on the FRANCE 24’s Debate show. “If Europe sticks to the deal, and the Iranians are cautious and won’t hit back – because that’s what Washington is probably expecting from them – then we have Europe and Iran sticking to the deal, as well as Russia and then China… It all transforms the balance of power.”

Dealing in euros, bypassing US links
Some European governments have already begun implementing measures for European and Iranian firms to bypass US law. In January, France’s state-owned investment bank Bpifrance announced a plan to offer dedicated, euro-denominated export guarantees to Iranian buyers of French goods and services, bypassing any US links.

“We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran,” Bpifrance’s Chief Executive Officer Nicolas Dufourcq told French lawmakers in January. The plan had a pipeline of about €1.5 billion in potential contracts from interested French exporters, said Dufourc.

Italian authorities also worked out a similar deal in early January, when Rome and Tehran agreed on a framework credit agreement to fund investments in Iran worth up to €5 billion via the Italian state-owned holding Invitalia.

“European governments aren’t starting from zero, they have been taking individual steps during the period of uncertainty when Trump’s decision was anticipated,” explained Naysan Rafati, Iran analyst at the Brussels-based International Crisis Group. “What is required now is a more systematic effort at the EU level for a coordinated response.”

Diplomatic negotiations for exemptions
But while these measures could work for small scale Iranian and European businesses, they are unlikely to sway European multinational giants with major US interests and transactions.

The biggest losers are likely to be French aviation giant Airbus, which has booked orders from Iranian airlines for 100 aircraft for a total of $20.8 billion. French oil firm Total, which in association with the Chinese group CNPC has signed an agreement for a $5 billion investment to exploit Iran’s South Pars deposit, is also likely to suffer losses in Iran.

In such cases, Ellie Geranmayeh, a specialist in Iran-European relations at the Brussels-based European Council for International Relations, suggests the Europeans "should try to negotiate exemptions with the US so that they can continue to trade with Iran in strategic sectors such as energy [oil, gas] or aeronautics", she explained.

Another measure available to the EU is the replacement of its so-called 1996 Blocking Statute, which prohibited European companies from complying with US extraterritorial laws. The measure initially concerned European firms doing business in sanctions-hit Iran and Cuba. But as Europe began cooperating with the US on Iran, it only applied to Cuba.

Setting up these structures however takes time, likely more than the 90 to 180 days granted by the US.

Iran would also have to be patient, although Iranian President Hassan Rouhani has said Tehran is willing to give European powers “several weeks” to come up with a solution before he ordered Iran’s Atomic Energy Organisation to resume uranium enrichment “without limit”.

European attempts to negotiate exemptions from the US for strategic sectors such as energy and aeronautics could also flounder if Washington adopted a hardline approach. Under such circumstances, experts say the EU could threaten to impose tariffs on US exports.

Geranmayeh believes the EU threatening to imposing tariffs on US exports would be justified since the US secondary sanctions (on foreign entities) interfere with European foreign policy, of which the JCPOA is an important element.

But few experts believe the EU is likely to risk an all-out trade war with the US. And so as the clocks tick toward more deadlines, European powers will be scrambling to save the landmark 2015 deal.

A transatlantic diplomatic shuffle is likely to start, with European officials attempting to persuade the US “economic policeman” to come up with ways to soften the blow. French Finance Minister Le Marie has said he hoped to meet with US Treasury Secretary Steve Mnuchin. It remains to be seen that the French minister can extract from his US counterpart.

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