News | July 25, 2018

U.S.-China and the Future of the Iran Nuclear Deal

On July 2, 2018, the Asia-Pacific program of the EastWest Institute (EWI) assembled Chinese and U.S. experts to discuss the impacts and aftermath of the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and Chinese engagement in the Middle East. The panel, moderated by Dr. Lora Saalman of EWI, was comprised of Dr. Yu Jianhua, Dr. Fu Yong, Dr. Luo Ailing, Dr. Wang Shuming, and Dr. Dai Yichen of the Shanghai Academy of Social Sciences, as well as Ms. Suzanne DiMaggio of New America and Dr. William Parker of EWI. The following are a few of the key non-attribution takeaways of this session: 

Challenges and Opportunities

  • The majority of U.S. and Chinese experts agreed that the Iran Deal, although not perfect, represents a diplomatic breakthrough. Yet, a U.S. and a Chinese expert both noted that the Iran Deal still had systemic problems, including the following: 1) “sunset provisions” that would trigger the agreement to expire in 15 years; 2) a lack of restrictions on Iran’s ballistic and cruise missile development; 3) incomplete inspection and verification mechanisms; and 4) the inability to constrain Iran in its destabilizing regional activities, including support for Hezbollah. A U.S. participant emphasized that the aim of the Iran Deal had always been to stop Iran from developing nuclear weapons and not to address these other concerns.
  • A U.S. expert stated negative consequences of the U.S. withdrawal from the Iran Deal are its own isolation and undermined credibility, a rift in the transatlantic alliance and the emboldening of other aspiring nuclear states. Another U.S. participant stated U.S. actions may further stoke tensions among regional rivals—namely Iran, Saudi Arabia and Israel—and impede progress on negotiating a deal with North Korea. A Chinese expert agreed that U.S. unilateralism has greatly decreased the credibility of U.S. power and represents a breakdown in cooperative relations among the great powers involved in the agreement.
  • U.S. experts disagreed on the driving influence behind President Trump’s decision to withdraw from the Iran deal. One U.S. expert stated that Trump’s largest motivator was in appealing to his domestic base on a long-standing campaign promise, while another U.S. expert stated that Trump simply did not believe the Iran Deal appropriately satisfied U.S. interests. U.S. and Chinese participants agreed that should Iran achieve nuclear weapons, the eminent collapse of the Nuclear Non-Proliferation Treaty regime is likely, as well as a “domino effect” of nuclear proliferation across the Middle East and potentially other regions.
  • U.S. experts disagreed on the opportunities for President Trump to break the ice with Iran on negotiating a replacement deal. One U.S. expert stated that Trump will very likely meet with Iranian President Hassan Rouhani, given Trump’s active diplomatic outreach to heads of state in “rival” countries—including North Korea, China and Russia. Another U.S. expert stated that Trump has done nothing to get a better deal, and that Rouhani is unlikely to meet with Trump as he suddenly broke budding strategic trust with Iran that had been years in the making.

China’s Role on the Iran Nuclear Issue

  • Outlining the official Chinese position on the Iran and North Korean nuclear issues, a Chinese participant stated that 1) neither country should develop nuclear weapons, 2) the issues should be dealt with only through peaceful means, 3) China is opposed to conflict generated by nuclear weapons development in the region, 4) China’s interests are the most important factors behind its stance in the issues, 5) regional stability is critical, and 6) communication among key stakeholders is critical.
  • Several U.S. participants asked what future role China would be willing to play in the Iranian nuclear issue. A Chinese expert responded that China is best positioned to facilitate and to participate in multilateral dialogues and negotiations on ways forward with the Iran Deal. Nonetheless, a U.S. expert posited that China is likely to be the biggest benefactor of U.S. withdrawal. The expert offered evidence of Chinese companies swiftly filling the void left by retreating western companies in light of resumed U.S. sanctions against foreign companies engaged in continued business in Iran. Yet, a Chinese and U.S. expert also noted the risks, citing the costs of U.S. sanctions on Chinese companies, such as the tech enterprise ZTE, for its dealings with Iran and North Korea.
  • A Chinese participant stated China’s level of interest and influence varies between the North Korean and Iranian nuclear issues, due to the security implications of geographic proximity and the asymmetry in their level of economic engagement. The expert estimated the amount of Chinese oil imports from Iran to stand at only 7.5 percent, trailing its imports from Russia, Saudi Arabia, Angola, Iraq and Oman. As a result, Iran does not have the same level of investment as it does with North Korea. Still, the Chinese expert stated that stability in the Middle East will only become an increasingly important strategic interest for China, as its direct political and economic interests have grown as more Chinese enterprises enter the region under the auspices of the Belt and Road Initiative.

The Future of the Iran Deal and Next Steps

  • A U.S. expert cited three potential avenues for Iran: 1) development of nuclear weapons, 2) playing for time while other signatories to the Iran Deal find ways to maintain it, and 3) engagement with the Trump administration. The expert noted that it was likely that several of these options would be undertaken in tandem. Nonetheless, several other participants expressed their concern that despite any efforts to save the Iran Deal, U.S. actions had left it moribund.
  • U.S. and Chinese experts agreed that the JCPOA, in its current form, is likely dead because of U.S. withdrawal, as the U.S. has so far offered only threats and no incentives to get Iran back to the table. However, experts from both sides stated that even in the absence of U.S. support, the European Union, Russia, China, the International Atomic Energy Agency and even Iran itself are likely to continue certain commitments to JCPOA requirements.
  • Experts disagreed on the next steps for U.S.-Iran relations. One participant remarked that the U.S. and Iran should further engage with one another outside the context of the nuclear issue, a policy that the current U.S. administration is pursuing. Another expert disagreed, stating that the nuclear issue must be resolved prior to the normalization of diplomatic relations and that the U.S. should reapply maximum pressure to get Iran back to the negotiating table.
  • A U.S. expert remarked that conflict resolution is the foremost aim and the most viable method of achieving this would be to seek a third party to arbitrate negotiations, a role potentially best filled by China. A Chinese expert recommended a strategy plan for both the U.S. and Iran to engage one another through multilateral institutions to build trust, while China and Russia assume mediating roles, and to divide the nuclear issue into different increments of negotiations, with each side providing an equal amount of concessions.