Why Nobody Invests in Japan
Tokyo’s Failure to Welcome Foreign Capital Is Hobbling Its Economy
After a year of complaining about the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), U.S. President Donald Trump finally resorted to threats. In January, he gave Congress and Europe an ultimatum: if they did not fix what he considered the agreement’s shortcomings by May, he would kill the deal.
Trump’s chief objection is that certain restrictions on Iran’s nuclear program expire, or “sunset,” after 10–15 years. He has also raised concerns about Iran’s support for Hezbollah in Lebanon and various Shiite militia groups in Iraq, Syria, and Yemen, and has decried the absence of measures to address Iran’s ballistic missile program. These latter concerns are broadly shared, but Trump seems to harbor unrealistic expectations that the nuclear agreement address all of Iran’s problematic activities. In the rough and tumble world of international diplomacy, it is impossible to get a perfect deal. And the JCPOA stands as a meaningful framework for nuclear arms control, offering a robust inspections regime that ensures compliance. More important, the JCPOA is far superior to the alternatives: allowing Iran, which had already reached the nuclear threshold when the deal was signed, to continue moving forward or else pursuing U.S. military action to set Iran back.
Many who originally opposed the JCPOA—including National Security Adviser H. R. McMaster, Secretary of Defense James Mattis, and Secretary of State Rex Tillerson—now support maintaining it. They fear that if the United States walks away from the agreement, it will be blamed for the JCPOA’s collapse. Iran could then restart its nuclear program while the international community, split over whether to continue honoring the deal, would be unable to collectively isolate Iran. But given Trump’s threats and the looming May deadline, the question is now whether Europe and members of Congress can address Trump’s concerns with the JCPOA while setting implementation on a more stable long-term path to ensure that it survives.
The Trump administration’s concerns about inspections and missiles can be relatively easily addressed without crossing European or congressional redlines or violating the terms of the agreement. European and congressional negotiators have already come to an agreement with the administration on language that focuses on Iran’s intercontinental ballistic missile capability and emphasizes that international inspectors must have access to any facility in Iran that they believe is necessary to inspect. (Concerns with Iran’s regional behavior require a much more comprehensive long-term strategy, but the administration has wisely chosen to keep those discussions outside of its nuclear deal talks for the moment.)
The more difficult question is how to extend the sunset provisions. The administration wants to permanently prevent Iran from spinning more than 5,060 centrifuges or stockpiling more than 300 kilograms of low enriched uranium, activities that are prohibited under the deal until 2026 and 2031, respectively. But this puts the Europeans in a tough position, since they are deeply invested in preserving the nuclear agreement and in not changing terms that would violate the deal.
An obvious long-term solution is to draft a new agreement that extends some of the sunset provisions in the JCPOA, while providing Iran with new incentives, such as further sanctions relief or cooperation on a civil nuclear energy program. This is standard practice in the world of arms control. Ideally, such an agreement should be pursued a few years from now, following a longer stretch of compliance with the JCPOA. The Trump administration’s decision to set a May deadline only generates an artificial crisis over an issue with years left to solve.
In any case, this theoretical future agreement will not address Trump’s concerns today. There is simply no appetite for a new deal after only two years of implementation. The most practical option at the moment, which is currently being discussed between France, Germany, the United Kingdom, and the United States, is issuing a joint public statement, indicating a desire to address the sunset clauses and an intention to roll out a strategy for a follow-on arrangement in a few years’ time.
Of course, China and Russia, which are also signatories to the JCPOA, are not pleased that they have been excluded from the negotiations, and they will therefore regard any agreement that emerges with reserve. It may be possible to convince Beijing and Moscow, however, to support an extended agreement, given their own interests. They too consider a nuclear-armed Iran as destabilizing. And economically, they would prefer to prevent Iran from expanding its civilian nuclear energy technology so that they can become its key suppliers.
Although the Iranians will certainly reject a joint statement by the United States and its European allies, they will continue honoring the deal as long as there are no clear violations of it. Tehran does not wish to be blamed for having caused the deal’s collapse, which would condemn it to international isolation and harsh sanctions once more. In the long term, Tehran may be open to a follow-on arrangement, especially if the other parties to the agreement are united and it is offered new incentives.
Alongside its discussions with the Europeans, the Trump administration has pursued a second, parallel track with U.S. congressional leaders. The White House is pushing for new legislation authorizing the automatic reimposition of sanctions on Iran should it engage in nuclear activities that are forbidden under the JCPOA today but permitted in 10–15 years. It has set a low bar for reimposing sanctions, requiring 51 votes in the Senate to actively block a move by the president. Democrats have rightly argued that the legislation would violate the terms of the accord.
A better solution would be to allow the automatic snapback of sanctions if Iran takes actions that clearly violate the deal and that indicate a move toward the building of a nuclear weapon. Such steps include the construction of a secret nuclear facility, restarting production of 20 percent enriched uranium (it takes 90 percent or higher to produce a bomb), or conducting additional research on nuclear weapons building. Such legislation would be productive because it would create an additional deterrent for Iran not to cheat.
In regard to the sunset clauses, Congress could still propose a bill to quickly review and reimpose sanctions if Iran were to ramp up its nuclear program after the restrictions expire, but with a higher bar for passage, such as an affirmative vote by 60 or possibly 51 senators and a simple majority in the House. There are numerous variations of this option that it could experiment with, but whatever formulation legislators agree on, they must ensure that from Europe’s view the bill does not violate the nuclear accord. If done correctly, such legislation could provide additional motivation for all parties to negotiate a follow-on nuclear agreement in a few years’ time.
As Europe and Congress undertake the hard work of saving the JCPOA while also addressing Trump’s concerns, they must make it clear that their concessions will not come free.
As Europe and Congress undertake the hard work of saving the JCPOA while also addressing Trump’s concerns, they must make it clear that their concessions will not come free. They should demand an end to the crisis that Trump generates every three months when a deadline nears for certifying Iran’s compliance with the nuclear deal or for waiving sanctions so that foreign companies can pursue business opportunities in Iran. Thus far, Trump has used these moments to call into question whether he will honor the JCPOA, creating confusion and uncertainty in the business community, distracting the deal’s signatories from advancing other priorities, and undercutting confidence in multilateral agreements.
One way forward on this front is for Congress and the Trump administration to reduce the number of waiver and certification requirements associated with the nuclear agreement. They could issue them once every two years or even scrap them altogether. To be sure, this would not be an easy change, as many opponents of the JCPOA prefer to keep the waivers in place as a way to destabilize the agreement. Moreover, Congress has traditionally used waiver requirements to hold the executive branch accountable. Removing these requirements may elicit bipartisan concern about weakening legislative oversight. Trump, on the other hand, might be open to an adaptation of waiver requirements, given how much he dislikes the constant need to renew President Barack Obama’s nuclear commitments.
As for the Europeans, in addition to demanding that the president provide direct assurances of not unilaterally walking away from the agreement, they should press Trump to explicitly push Republicans in Congress to agree to amending the waivers. (Only Congress can adjust the waivers, and Republicans in Congress will only make this change if pressed by the president.) This will reduce the political drama around the deal, as well as its vulnerability to U.S. violations. Europeans should also urge Trump to allow the civilian airline deals signed by Boeing and Airbus with Iran Air to stand, unless Iran Air is involved in significant, threatening activity subject to U.S. sanctions. These business deals are symbolically significant to the success of the JCPOA. French President Emmanuel Macron is due to visit Washington in late April. It would be an opportune moment for Trump to deliver assurances to the Europeans directly.
That said, the biggest impediment to reaching a new agreement will be Trump himself. He has a tendency to renege on deals and gloss over the details necessary for complex international arrangements to succeed. Thus, deal supporters in Congress and in Europe should remain clear-eyed when negotiating with the Trump administration. They must seek to extract concessions that bring stability to the JCPOA, but if they cannot, they should stand back, leaving Trump with the burden of having to shoulder the blame if he throws away the accord. Given the importance of the Iran nuclear agreement, however, whether it’s strengthening the global nonproliferation regime and bringing stability in the Middle East, Europe and JCPOA supporters in Washington must at least explore whether a deal with Trump is possible.