Repercussions Of US pulling Out Of iran Deal Flashcards
Trump pulls out of the Iran deal, In making his announcement Trump did not hold back, or make any concessions to European sentiment, effectively accusing his European allies of being duped by “a giant fiction perpetrated by a murderous regime”. Still worse, from the EU perspective, he said he was imposing “the highest level of sanctions”, adding explicitly that other nations could be sanctioned if they assisted Iran.
To India:
1. Oil prices:- The impact on world oil prices will be the immediately visible impact of the U.S. decision. Iran is presently India’s third biggest supplier (after Iraq and Saudi Arabia), and any increase in prices will hit both inflation levels as well as the Indian Rupee, which breached ₹67 to the U.S.
- Chabahar: India’s moves over the last few years to develop berths at the Shahid Beheshti port in Chabahar was a key part of its plans to circumvent Pakistan’s blocks on trade with Afghanistan, and the new U.S. sanctions could slow or even bring those plans to a halt depending on how strictly they are implemented. Any further restrictions US places will make India’s Chabahar plans more expensive and even unviable.
- INSTC: Beyond Chabahar, India has been a founder of the International North South Transport Corridor (INSTC), that starts from Iran and aims to cut right across Central Asia to Russia, cutting down transportation and time taken by trade by about 30%. New U.S. sanctions will affect these plans immediately, especially if any of the countries along the route or banking and insurance companies dealing with the INSTC plan also decide to adhere to U.S. restrictions on trade with Iran.
- Shanghai Cooperation Organisation: India joined the SCO along with Pakistan last year. This year, Chinese officials say they will consider inducting Iran into the 8-member Eurasian security organisation. If the proposal is accepted by the SCO which is led by China and Russia, India will become a member of a bloc that will be seen as anti-American, and will run counter to some of the government’s other initiatives, for eg. the Indo-Pacific quadrilateral with the U.S., Australia and Japan. The move may also rile other adversaries of Iran, like Saudi Arabia, UAE and Israel, with whom the Modi government has strengthened ties in an effort to balance its West Asia policy.
Effects on the rest of the world :
1. European businesses would get hurt.
- Donald trump has put the Middle East into the path of disaster. The winners from this move are Netanyahu and Saudi Prince who is chummy with Jared kushner. Trump has no plan B and the world is not clear what will happen now, what is the respite and how sanctions are going to help anyone.
- In making his announcement Trump did not hold back, or make any concessions to European sentiment, effectively accusing his European allies of being duped by “a giant fiction perpetrated by a murderous regime”. Still worse, from the EU perspective, he said he was imposing “the highest level of sanctions”, adding explicitly that other nations could be sanctioned if they assisted Iran.
- In a democracy, there will always be changes in policies and priorities from one Administration to the next. But the consistent flouting of agreements that our country is a party to risks eroding America’s credibility, and puts us at odds with the world’s major powers.
- Iran could become the next Iraq- there is even talk of a military takeover. Trump’s move tipped the scales against the so-called moderates. Hard-liners, who have long lost popular support but control security forces, the judiciary and state television, are set to declare victory, since they have always argued that the United States can never be trusted in any deal.
**Currently The U.S. stands isolated in its decision. But the question is whether Europe and other powers will stick together to respect the mandate of an international agreement, or buckle under American pressure. If they do cave in, West Asia will be a lot more dangerous.
