In to withdraw from the deal this April

In July 2015, Iran entered into a landmark nuclear
deal “Parameters for a Joint Comprehensive Plan of Action (JCPOA)” with six
world powers the US, UK, Russia, France, China, and Germany to limit its
sensitive nuclear activities for more than a decade in return for the lifting
of crippling sanctions. This agreement has been a signature foreign policy
achievement of Barack Obama’s presidency. Now in Presidency, Donald Trump finds
the deal lenient and is unmilling to recertify it. This deal resulted a global
impact creating opportunities for countries and re-establishing frozen relationships.
If such strategic important international
deals had to be signed and rescinded on the whims and perceptions of individual
leaders of the leading nation and their electorates, the entire system would
collapse; and collapsing it is, with North Korea under no one’s control and
measures underway to ensure that Iran too would head the same way.

The deal involved limited installations
to 5060 Centrifuges involving Uranium enrichment, restrictions on Nuclear research
& development, barred to operate and build heavy water containing Plutonium
suitable for nuclear bomb, extraordinary and robust monitoring, verification and
inspection from global nuclear watchdog IAEA, increase in ‘Break out Time’ from
3 months to one year and most importantly lifting sanctions on selling oil in
international markets and using Global financial system. Had Iran violates any
aspect of the deal, The UN sanctions will automatically ‘snap back’ into place
for 10 years and extensions. However, the senior official electorates and the
leaders of allied governments have influenced rump to withdraw from
the deal this April 2018 as the costs of blowing up the deal outweigh the
benefits.

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The major impact of the broken deal will be on
Iran. Iran is the second largest economy in the Middle East and North Africa region
after Saudi Arabia. The Iranian economy strongly recovered in 2016, on the back
of a significant rise in oil production and exports, following the removal of
nuclear related international sanctions. In 2016, the economy registered a
strong oil-based bounce back, with an annual headline growth rate of 13.4
percent, compared to a contraction of 1.3 percent in 2015. The country resumed
selling oil on international markets with $48 Bn in 2017 and using the global
financial system for trade. Iran is also able to access more than $100bn in
assets frozen overseas. The sanctions have cost Iran more than more than $160bn
(£102bn) in oil revenue since 2012 alone. Re implementation of sanctions will
have a boomerang effect on the economy re building back itself to 2015 as a
slow economy.

United States have overestimated their efforts of
managing the economy on their own. Pulling the U.S. out of the deal would not
only erode the credibility of the U.S, it would also deal a heavy blow to the
international nuclear non-proliferation drive, and set a bad precedent that
would surely hamper the ongoing multinational efforts at finding a peaceful
solution to the Korean Peninsula nuclear deadlock through negotiations.

Worse, the move could undermine the
systems in place that monitor Iran’s nuclear activity, and would certainly make
proliferation more likely and burn all conceivable options short of war with
Iran and Korea.

 

A stable and integrated Iran is in
the national interest of India. With oil price splurging highs with 99.4% from
their 2016 low, imposing sanctions on Iran would affect the oil prices and
trade relations with major countries. India has been one of the few countries
doing billions of dollars of trade with Iran, despite the sanctions having been
before. Current bilateral trade between India and Iran is about $14bn with the
balance of trade heavily. Indian exports to Iran were around $4.2bn last year. Sanctions
will fuel in the current rising prices high and as India spends nearly $1
billion in import costs for every dollar increase in global crude prices
leading to negative balance of trade. Resuming restrictions on selling of oil
in international market will cut back production of oil leading to inflation
turmoil in India. Secondly, the concerns among Indian businessmen that Iran is playing
hard to get, or even turning to more competitive international players due to
opening up of the economy can rest for some while as the negotiation power has
been dragged down. Thirdly, development of Iran’s Chabahar port, which is
strategically significant as an entre-pot being the gateway to Central Asia in
providing access to Afghanistan shall ignite for early development. As Israel
and several West Asian states are at loggerheads with Iran, India must
tactfully use its diplomacy to balance its equations. With a deal of this
nature that has multi-dimensional implications for India ranging from the
economic to the geostrategic, India must capitalise on the opportunities that
the deal offers. So it is this unpredictability which will rear its ugly
head, which is never good for any international business and trade; the last
thing India needs at a time when its economy is in re-stabilisation mode is an
increase in its oil bill.

 

Stringent sanctions reimplementation
destabilise the economic and security situation in Iran, which has close links
with China. The two countries have economic, trade and energy ties, with China
relying on oil imports from Iran while latter looks to China for investment,
particularly stemming from its sprawling belt and road trade and infrastructure
plan. 

 

The Iran nuclear deal has the
potential to affect the UAE due to UAE’s economic ties to Iran and the GCC’s (
Gulf Cooperation Council) geopolitical rivalry with their neighbouring
countries. Firstly, expatriates from Dubai have made huge profits as the
commercial centre for new business ventures in Iran, adding to its role as the
centre of Middle Eastern commerce and host of scores of company headquarters.
Secondly, UAE has stood strongly with oil producing countries for aggressively
high rate and due to nuclear deal had put stress on UAE and budget deficits of
the nation. Implementation of sanctions would relief UAE’s rising pressure on
their price control through cartel.

 

The nuclear agreement had played a
positive role in ensuring nuclear non-proliferation and protecting peace and
stability in the Middle East for the world. President Trump’s obsession with isolating Iran could witness
the return of a far more robust mechanism of monitoring and preventing breaches
through alternatives ignored by previous administrations.

 

 

 

 

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