France prioritizing business over peace with Iran deals
The international community is watching closely as the deadline approaches for US President Donald Trump to announce his decision on the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal. Some members of the P5+1 are pressuring the Trump administration not to scrap the nuclear agreement. Prominently, President Emmanuel Macron of France has been investing his political capital to lobby for Iran by convincing Trump that he ought to stick with the deal. Macron even made a trip to the White House to accomplish his mission.
Without a doubt, the Iranian leaders have been happy with, and welcome, any lobbying activities on behalf of Tehran. For example, Foreign Minister Mohammed Javad Zarif seized the moment and immediately supported Macron’s position on the agreement. He tweeted: “President Macron is correct in saying there’s no ‘Plan B’ on JCPOA. It’s either all or nothing.”
The key question is: Why is France so forcefully lobbying to maintain the Iranian regime’s nuclear deal? When the nuances of the economic landscape are examined closely, it becomes evident and understandable. The nuclear deal continues to bring the Iranian regime out of economic isolation and open up its huge untapped market due to the lifting of major sanctions that were previously imposed by the UN Security Council.
This has been a vital development for France. Iran’s trade with France has increased significantly since the nuclear accord, which was struck in 2015. Tehran’s trade with Paris was approximately $3.18 billion during the period from January to October 2017 — a remarkable rise of nearly 112 percent compared to the same period the previous year. In 2016, trade between the two countries was nearly $2 billion, revealing a staggering increase of roughly 300 percent in comparison to 2015. And trade between them is expected to reach $4.8 billion in 2018, according to the head of Iran’s Chamber of Commerce.
There are three major industries that France and Iran have been profiting from. The first area is the energy sector. One of the most lucrative contracts agreed after the nuclear deal was signed involved the French oil corporation Total and was worth close to $4.8 billion. Total is investing in the development of an offshore gas field in the Gulf. The deal is critical for France because Total is reaping a 50 percent profit from this investment.
The second field is linked to the aircraft sector. The Iranian regime has signed an agreement with French airline manufacturer Airbus to take delivery of more than 100 aircraft. Iran Air has already received several Airbus jets and some turboprops. The deal will bring France significant revenue, as Iranian leaders have shown a willingness to pay about $25 billion for the order. Another French company is also in talks to sell 40 medium-haul aircraft to Iran.
Not every country is benefiting from Iran’s nuclear deal like France is. But Paris must be cautious that such a short-term policy may bring about significant repercussions and unintended negative consequences in the long term.
Dr. Majid Rafizadeh
The third field is related to the transportation industry. Thanks to the nuclear deal, the French carmaker PSA Peugeot Citroen is on the path to again be the top auto-seller in Iran, as it was prior to the sanctions era. It has signed a contract with Tehran regime’s biggest carmakers — Iran Khodro and SAIPA — to open a plant that will produce nearly 200,000 vehicles a year.
Other French carmakers have also been rushing to reap profits. For instance, Renault has reached a deal with the Iranian regime’s Industrial Development and Renovation Organization to manufacture at least 150,000 vehicles a year.
The transportation sector is not limited to automakers, since France is expanding in other fields as well. It is facilitating trade between Tehran and other Asian countries through its shipping companies. France’s CMA CGM, one of the world’s largest container shipping groups, signed an agreement with the Iranian regime during President Hassan Rouhani’s visit to Paris in January. The firm is providing services from China to Iran.
In fact, based on the changes witnessed in the volume of trade before and after the nuclear deal, France has likely been the most proactive and engaged European nation when it comes to increasing its business with the Iranian regime.
In addition, France has been taking steps to protect itself by charting a new path, which will assist Paris in bypassing the US dollar and insulating France from US Congressional laws regarding dealings with Iran. The plan is to conduct transactions through a euro system of finance and credits with no links to or involvement of US entities. This will also shield France from potential US sanctions against the Tehran regime.
Such an advantageous business relationship between France and Iran may also explain the reasons behind the improving diplomatic ties between the two countries. French ministers have visited Tehran three times since the nuclear agreement was signed, while the Iranian president’s first trip abroad after sanctions were lifted saw him visit Paris.
Not every country is benefiting from Iran’s nuclear deal like France is. By lobbying for the agreement, France is more likely prioritizing its business deals with the Iranian regime over regional stability, security and peace. It must be cautious that such a short-term policy may bring about significant repercussions and unintended negative consequences in the long term.
• Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. He is a leading expert on Iran and US foreign policy, a businessman and president of the International American Council. He serves on the boards of the Harvard International Review, the Harvard International Relations Council and the US-Middle East Chamber for Commerce and Business.
Twitter: @Dr_Rafizadeh
