Sputnik talked about the European Union's decision to continue trade with Iran with Andreas Bieler, Professor of Political Economy in the School of Politics and International Relations at the University of Nottingham.
Sputnik: The UK has joined the signatories of the JCPOA and other nations in plans to set up a payment mechanism for Iran, why do you think that London chose to go against US sanctions on Iran?
Andreas Bieler: I think first, of course, there are economic interests at stake, so Iran is potentially a large market and after the 2015 agreement, many companies moved towards trading with Iran, but I think there are also clear security implications and considerations, and the main focus of that agreement back in 2015 had always beento prevent Iran from acquiring nuclear weapons. I think the UK, as the other signatories, is very worried that the US will damage this agreement through its unilateral actions.
Sputnik: It's actually very interesting to note that at the UN General Assembly, many European countries together with Russia and China went against the US and, of course, the United States was very upset about this. Trump was sort of alienated in some ways by his views on Iran and views of the rest of the world. What can you say about the situation with UK's relationship with Washington and actually all of the signatories, the participants of the Joint Comprehensive Plan of Action? How will this affect leadership and diplomacy in the world?
Andreas Bieler: I think it is interesting to observe how the United States to some extent is being isolated, especially on this particular issue, but I think it's also a reflection of the increasingly unilateral stance President Trump and his administration have adopted over recent months and the recent year. It's interesting to see how this alliance of other countries, basically, defies the United States' wishes.
In practice it will be possible to convince companies to continue trading with Iran through the special purpose vehicle; it's another issue that actually has to be seen, and has to be tested.
Sputnik: How do you think this mechanism is going to work? And what are your ideas of how this will actually look? How long it will take to implement such a platform for payment?
Andreas Bieler: The idea is that it will basically be a kind of a sophisticated barter system, so Iran, for example, could ship crude oil to a French firm, accumulating credit in that process and that in turn could then be used to pay an Italian manufacturer or other manufacturers from those countries for goods shipped to Iran. In that process when you set up this kind of special purpose vehicle, no money would actually flow across borders and could avoid detection by the US Treasury.
Now there are different assessments of this kind of special purpose vehicle and there are also statements and assessments that actually argue that even going through this route, those companies may still incur sanctions from the United States, and again the question is: will those companies actually dare to do it.
Sputnik: Actually there have been a lot of different suggestions to counter US sanctions, from cryptocurrency, some of which is very untraceable, although it's very volatile and unstable, and perhaps even creating some kind of a system other than the SWIFT system for transfers. What are your thoughts on other options that might be on the table? Because as you mentioned, there's a primary flaw and that's this barter, other than being fairly primitive, it is also quite traceable.
Andreas Bieler: Exactly, and I think that ultimately whatever technical solution is proposed I would argue that it comes up against the reality that a global level trade is a highly integrated and in this highly integrated trade regime, the United States and the market of the United States plays a crucial role, and every company trading in the global market is very dependent also on being able to have access to the US market.
As a result of that, whatever technical solution is going to be found, there are other questions of power in the global system which will ultimately decide whether companies actually go ahead using that kind of alternative system to continue trading with Iran.
Sputnik: How do you think that other countries (could benefit?) If such a mechanism is somehow created and made more or less usable, workable, could it also benefit China and India?
Andreas Bieler: Yes, I think that would be an interesting area and it would be especially interesting to see whether India and China will continue to import oil from Iran. Whether they defy US leadership and to some extent one could argue that those two countries are in a better position to continue trading with Iran, especially as China has its own trade conflict with the United States, so it may use and continue Iran trade as a counter measure to US sanctions. So there's quite a lot of tension and conflict in the global trading system at the moment and as a result of that, including first of all Russia, there are a number of countries we could see and envisage carry-on trading with Iran, and that, of course, then would lead to further tensions.
The views and opinions expressed by the contributors do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.