The election of Donald Trump to the highest public office in the United States sent shockwaves through liberal America and much of the world last month. Iran is one of the countries that could be most immediately affected by that appointment.
Ali Khamenei, the supreme leader of Iran, promptly stated that the election result mattered not one bit for his country, which sets its own course regardless of US policy. “We neither mourn nor celebrate, because it makes no difference to us,” he said.
But, whether Iran likes it or not, its economic prospects are tied, for the foreseeable future, to those of the Iran nuclear deal (or JCPOA) – an international agreement that lifted most sanctions on the country and that Trump vowed to bring down during his presidential campaign.
Those looking to increase the nuclear deal’s chances of survival under a Trump administration may wish to act now. Ahead of his inauguration, they may still be able to fortify the deal against possible attack from Trump and a US Congress dominated by the Republican Party, also a staunch opponent of the deal.
The most effective way of cementing the agreement may be to go all-in on setting up banking and business ties between Iran and the US soon.
Risky gamble
In a risky gamble, the Obama administration is reportedly considering buttressing the pact by providing licenses for more American businesses to enter the Iranian market. That way, more jobs on US soil would be tied to the endurance of the nuclear deal – making dismantling it a more fraught political exercise for Trump and Republicans.
Since the implementation of the nuclear deal in January, banks and businesses in Iran have been busy forming ties with peers around the world – setting up correspondent banking relations and signing trade contracts. But the United States has hardly benefited from these changes because it has retained a number of sanctions, making it difficult for US firms to re-engage with the Islamic Republic. These sanctions relate in part to Iran’s human rights abuses.
Valiollah Seif, the governor of the Central Bank of Iran, tells Euromoney that US reticence toward the nuclear deal may owe something to the fact that it is not feeling the deal’s economic benefits in the way that, say, Iran and the European Union are.
“It seems that the American side is not motivated enough, do not have enough incentives,” he says. “Maybe it is because, economically, they are not benefiting from the JCPOA as much as the Europeans are.”
If that sounds cynical, it’s because it is. After years spent as a pariah state, during which money – or its absence – was used as a weapon against Iran, the country knows that banking and trading are at the heart of geopolitical interactions. To put it bluntly, does Trump care more about Iran’s human rights record, or its commercial potential?