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Europeans Race to Establish Trade With Iran

BRUSSELS — European signatories to the Iran nuclear deal are scrambling to get a barter-trade arrangement with Tehran up and running this week, in an effort to persuade Tehran not to breach limits on enrichment set out in the agreement.

Iran has threatened to break the limit on its stockpile of low-enrichment uranium as early as Thursday. But it is considered likely to hold off until after a meeting in Vienna on Friday with the remaining signatories: Britain, China, France, Germany, Russia and the European Union.

Iran has said it will breach the deal unless it gets at least some of the economic benefits it was promised in return for accepting tough limits on its nuclear program. The Europeans are hoping to announce by Friday a multimillion-euro line of credit to get the barter-trade system functioning.

On Wednesday, Iran’s ambassador to the United Nations, Majid Takht Ravanchi, repeated the warning, saying, “a multilateral agreement cannot be implemented unilaterally,” and arguing that the Europeans must step up. The Europeans said in a statement that the barter system, known as Instex, was being finalized and that Iran should stick to the deal.

[Iran says it is verging on passing a uranium cap. What happens next?]

Instex is designed to get around any use of the American dollar, which could trigger new American sanctions. As a sort of test run it deals initially only in “humanitarian” products like food and medicine, which are not subject to Washington’s sanctions.

American officials have derided the European effort, calling it impractical, overly complex and unlikely to produce much trade. Most analysts agree that it will not bring Iran the benefits it seeks, but the Europeans regard it as an important gesture of good faith in the agreement and as a riposte to a Trump administration that they say is using American financial power to harm European interests and trade.

Though established in January, Instex has been complicated to deploy because it required establishing a parallel structure on the Iranian end and some credits to start the bartering process. On Tuesday, the European Union foreign policy chief, Federica Mogherini, said that Instex was ready, in both Europe and Iran, and that the Europeans were working to provide the credit line to complete the first deals.

An Iranian withdrawal from the nuclear deal would deepen the current tensions and prompt American demands for European signatories to restore their own sanctions on Iran.

More important than the size of the stockpile, which can be easily maneuvered, is Iran’s threat to increase uranium enrichment purity levels above the 3.67 percent limit set in the deal — possibly as soon as July 8. Higher levels of enrichment shorten the time Iran would need to enrich enough uranium to bomb-quality; the deal is meant to keep at least a year between a decision by Tehran to “break out” and have a nuclear weapon.

President Trump pulled the United States from the 2015 deal last year, restoring punishing economic sanctions on Iran and enhancing them since with measures to snuff out its oil sales.

Mr. Trump called the deal the “worst” ever made, and he has said that the stifling pressure campaign is intended to force Tehran to negotiate away its entire nuclear program and agree to new limits on its missile development and support for various militias in the region.

Tehran has always insisted that it has no intention of building a nuclear weapon, but that assurance is widely discounted. Even many Europeans, especially the French, regard the deal as flawed, but Europe has remained united in arguing that it is worth preserving while additions were made in further negotiations, a position Mr. Trump has rejected.

“While the Europeans wanted to build on it, it became clear that for the United States the only way to include more elements was to negate the deal itself,” said Guillaume Xavier-Bender, an Iran expert with the German Marshall Fund in Brussels.

The Americans wanted “to start again with pressure on Iran, while the Europeans thought you could build on the trust with the Iranians” represented by the deal, Mr. Xavier-Bender said. But that was President Barack Obama’s theory, and Mr. Trump did not buy it.

Having spent 12 years or more negotiating with Iran, the Europeans did not believe that the American pressure campaign would achieve Washington’s goal of forcing Iran to the negotiating table. The Europeans also argued, as Mr. Obama believed, that all the dangers of Iran’s behavior in the region — the missile development and support for actors like Hamas, Hezbollah and Syria — were made more dangerous if it was also pursuing a nuclear weapon. So it was better to keep a flawed nuclear deal, they argued, because it kept Iran’s nuclear program at bay.

“I don’t think there was much the Europeans could have said or done that would have shifted Trump’s view,” said Ian Lesser, a former American official who directs the Brussels office of the German Marshall Fund. It was a major part of his presidential campaign and “such a major issue for American hawks that it would have been hard to shift them,” he said.

President Emmanuel Macron of France spoke for the other European leaders when he said late last week that “I believe the deal that was signed in 2015 is not enough, but it’s a good deal.” He said he regretted Iran’s threat to breach the limits and added: “France will do everything for Iran to remain in the deal.”

Like the other Europeans, Mr. Macron called for de-escalation in the Gulf and a return to diplomacy.

But others fear events might spiral out of control. “He’s acting in a way that makes war possible,” a senior French official said of President Trump. “The Americans are demonstrating a very great unpredictability.”

Both Iran and the Europeans are confused about American aims and strategy, Mr. Xavier-Bender said — and the Europeans are caught in the middle.

“Do the Americans want regime change, or a photo op, or negotiations,” and if so, on what terms, he asked. “It’s very difficult to understand what the end goal is. And Europeans are trying to preserve the situation without knowing what the end game is.”

Source: NYT > World News

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