House of Commons Library

Can Europe save the Iran nuclear deal?

Published Tuesday, May 15, 2018

European leaders say they will try to save the Iran nuclear deal. Is this realistic?

Jump to full report >>

On 8 May 2018 President Donald Trump announced the end of US support for the Joint Comprehensive Plan of Action nuclear deal with Iran, meaning that US sanctions would at various points be re-imposed and US sanctions waivers, protecting third country companies and individuals trading with Iran from being targeted by US sanctions.

Iran as benefited from the deal, with some $100 billion in frozen Iranian assets being released to Iranian control. But the wider economic benefits of access to international markets have been disappointing to Iranians who hoped for a stronger uplift. Iranian foreign policy has not been moderated, dashing the hopes of backers of the deal. Indeed, Iran’s regional policies have become more aggressive, if anything.

European countries led early negotiations and backed the deal strongly from the start. With Donald Trump in the White House they knew that the future of the deal was uncertain and tried to address some of the concerns about the deal. After 8 May’s announcement, they presented a united front in defending the deal and expressing hopes that it could be saved.

There are several possible moves that the EU could take to try to defend the deal.

  • A ‘blocking regulation’, defending European companies from secondary US sanctions, could be passed. This has been tried before, in 1996, in relation to US policy on Cuba.
  • Other measures could be taken, including using the European Investment Bank to back trade with Iran or using overseas aid to back trade.
  • The sanctions could be fought at the World Trade Organisation, although the WTO’s ‘national security’ exemption would make that difficult.Even if the economic benefits to Iran were preserved by measures such as these, it is still possible for any signatory to the deal to initiate a procedure at the UN Security Council that automatically re-imposes international sanctions.See alsoThe Iran nuclear deal and 'decertification', 25 October 2017The Joint Comprehensive Plan of Action nuclear deal with Iran, 16 October 2015
  • Iran and the re-election of Rouhani, 8 June 2017
  • Iran nuclear deal: what next?, 10 May 2018
  • Meanwhile, the background for any negotiations with Iran is becoming more difficult, with tensions in the Middle East rising to dangerous levels. The likelihood of the deal surviving long seems slight.
  • Whether any or all of these would be enough to counteract the chilling effect of the 8 May announcement on trade with Iran is questionable.

Commons Briefing papers CBP-8311

Author: Ben Smith

Topics: Arms control, Iran, Middle East

Share this page

Stay up to date

  • Subscribe to RSS feed Subscribe to Email alerts Commons Briefing papers

House of Commons Library

The House of Commons Library provides research, analysis and information services for MPs and their staff.