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LUCID MAINS CURRENT AFFAIRS 2018

  1. U.S.A ENDS IRAN DEAL

BACKGROUND:  

Iran received technical assistance for nuclear technology under the USA’s Atoms for Peace Programme before Iranian revolution (1979) and assistance ended after that. Soon US Central Intelligence Agency warned that Iran could develop a nuclear weapon and hence Economic sanctions were imposed on Iran till 2015. With lot of diplomacy and dialogues Iran Nuclear deal signed by P5 + 1(Germany), the European Union and Iran.

After Trump coming to presidency the deal was called off and

  1. US imposed sanctions on individuals and companies linked to Iran’s Ballistic Missile Programme.
  2. US decertifies Iran’s compliance to the deal (According to Iran Nuclear Agreement Review Act (INARA), 2015, the US President must certify Iran’s compliance with the deal in every 90days)
  • JOINT COMPREHENSIVE PLAN OF ACTION: It is multilateral nuclear between Iran and P5+1 (Germany and European Union (EU)) signed at Vienna in July 2015

KEY PROVISIONS

  1. Limits on uranium enrichment
  2. Limits on number of nuclear centrifuges
  3. Restrictions on plutonium enrichment
  4. The deal increased the breakout time to 1 year
  5. Allowing IAEAfor inspections.
  6. In return Sanctions relief: i.e. lift all US and EU economic and energy sanctions.

**Breakout time: is the time it would take Iran to produce enough bomb-grade material for a single nuclear weapon

  • WHY U.S WITHDRAWN FROM JCPOA: Trump has criticized the deal based mainly on 3 points
  • Threat of Iran’s ballistic missile programme.
  • Sunset clauses ability to enrich uranium would expire within 10 to 15 years.  
  • Does not include strong mechanisms for inspections and verification.

Trump however does not want to scrap the deal but renegotiate it to get a more favorable outcome for the U.S.A

  • UNDERLYING CAUSES

Even though Trump states many reasons experts believe the below said reasons might be the key factors that lead to this decision

  • There are speculations Tehran has been trying for years to move away from the dollar, although much of the country’s international trade is still conducted in dollars.
  • Allies of US (Israel and Saudi Arabia) in the region feel their interests are threatened by the rise of Iran.
  • Military emergence of Iran as regional power in the strategic area (Strait of Hormuz) despite various sanctions.

This resulted in the need for US and its allies to contain Iran in a systematic   manner.

  • REACTIONS:
  • Iran: Mixed responses- Hardened its position; and warned of consequences; demanded that other signatories to uphold their promises; called for revival of nuclear weapons programme.
  • France, Germany and UK: stated that they regret the US decision to leave JCPOA and will work with the other parties to the deal to maintain it.
  • European Union: commented that “EU will remain committed to the continued full and effective implementation of the nuclear deal.”
  • China and Russia: criticized US decision and ensured that they are committed to maintain the deal. They also stated that this may de-stabilize the Middle East and also cause hindrance to the peace talks with North Korea.
  • Saudi Arabia, UAE, Bahrain and Israel: (allies of US) welcomed the step and called for more stringent economic sanctions.
  • United Nations: stated that they are deeply concerned and urged other signatories to abide by their commitments.
  • India: reacted cautiously and asked all the signatories to resolve the issue peacefully through dialogue and diplomacy.

IMPLICATIONS

  • INTERNATIONAL IMPLICATIONS:
    • Rise in oil price leading to volatility in financial markets.
    • Rise of other payment methods that are immune to US banks and currencies.
    • Positive or negative turn on talks with North Korea
    • Trump’s announcement to impose CAATSA (Countering America's Adversaries through Sanctions) Act would hinder international companies to continue working in Iran due to potential consequences for their US business.
  • IMPACT ON WEST ASIA:
    • Sanction will adversely affect Iran’s economy.
    • The collapse of the deal would aggravate the instability in West Asia.
    • If Iran resumes it nuclear programme, both Saudi Arabia and Israel are expected to increase their efforts to combat Iranian interference in the region.
  • IMPACT ON IRAN:
  • Significant loss of oil revenues will result in further depreciation of Iran’s currency.
  • Weakening of the private sector due to sanctions and people become more reliant on government and public sector.
  • Rise of conservatives who were opposed to this deal and loss of face for the moderates like the president Rouhani.
  • Iran may resume uranium enrichment.
  • IMPACT ON US
    • Increased tensions with Russia and China.
    • Strained relation with close allies like France, UK and Germany.
  • IMPACT ON INDIA
  • Energy Crisis: Iran is the second largest oil importer to India and US threat to invoke CAATSA on countries that trade with Iran puts India on a dilemma
  • Connectivity Issue
  • Chabahar Port: both connectivity and a strategic issue, major step of India in this region to bypass Pakistan and connect to West and Central Asia.
  • International North South Corridor(INSTC): India-Iran-Russia growth corridor to have better connectivity and improve trade & relation among the countries in this region
  • Instability in West Asia region: 85% of energy export of India, 8 million workers and large investment of gulf countries may be threatened if instability in region prevails.
  • Iran moving closer to China: This may provide an opportunity for China to interact with Iran and have a better hold on them which may not be good for India.
  • Chance of better bargaining power: Indian companies may have better leverage while negotiating for oil imports.
  • WHAT CAN BE DONE
  • With this decision President Trump is risking U.S. national security, recklessly upending foundational partnerships with key U.S. allies in Europe and gambling with Israel’s security.
  • Today’s withdrawal from the JCPOA makes it more likely Iran will restartits nuclear weapons program in the future
  • The U.S. stands isolated in its decision. Europe and other powers (UN permanent members) should stick together to respect the mandate of an international agreement. Any sanctions imposed by U.S. will hurt the global economyand may force Iran to stock nuclear weapons, further complicating the situation.
  • If USA is serious about non-proliferation, it should come back to the deal and sign similar deals to solve other complex international conflicts.
  • For India, it is better for the deal to continue rather than US exiting from it.
  • India must make common cause with all those who would be affected by America’s unilateral move.

Thus, the need of the hour is to standby with the agreement even after the U.S. has withdrawn.