European businesses nervous over US scrapping Iran deal

The US plan to scrap the Iranian nuclear deal has led to turmoil between the US and its allies in Europe. Donald Trump’s declaration has led to a quick response from the UK requesting reconsideration.

Iran nuclear deal under threat
The UK has stepped up pressure on President Donald Trump in a bid to dissuade him from abandoning the international nuclear deal with Iran.

Trade investment in Iran under threat

Amid fears that the ditching of the deal by the US could threaten billions of dollars of fledgling European trade and investment deals with Tehran, Prime Minister Theresa May spoke to Mr Trump stressing the nuclear agreement was “vitally important for regional security”.Simultaneously, Foreign Secretary Boris Johnson urged US Secretary of State Rex Tillerson in a phone call not to ditch the deal.The agreement, signed by the US, Russia, China, Britain, France and Germany in 2015, lifts most sanctions imposed on Iran in return for Tehran abandoning its military nuclear programme. Mr Trump, who has described the agreement as the “worst deal ever” while accusing Iran of being a sponsor of terrorism, is now believed ready to “de-certify” the deal, although an American withdrawal would be dependent on Congressional approval.As a US trade embargo of Iran remains in place – although a $19 billion sale of Boeing airliners has been allowed – most American companies have seen no benefit from the agreement, but European and Japanese companies have been actively pursuing trade deals with Iran.

Nuclear deal adds security and allows trade deals to continue

Germany, France and the European Union have joined calls for Mr Trump to adhere to the agreement and, on Wednesday, Mr Johnson met Iran’s Vice-President Dr Ali Akhbar Salehi in London. Speaking ahead of the meeting, Mr Johnson said, “The nuclear deal was a crucial agreement that neutralised its nuclear threat. The UK supports the deal and stresses the importance of all parties continuing to uphold their commitments.“We have made no bones about our deep concern at Iran’s destabilising regional activity, including its ballistic missile programme, but I remain steadfast in my view that the nuclear deal was an historic achievement that has undoubtedly made the world a safer place.“It was the culmination of 13 years of painstaking diplomacy and has increased security, both in the region and in the UK. It is these security implications that we continue to encourage the US to consider.”Analysts say that, should the US pull out, it could derail billions of dollars in Western investment in Iran and even spark European economic retaliation against US businesses.
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US and European breakdown of consensus in Middle East

“It signals the breakdown of consensus between the US and its European allies,” Hassan Hakimian, director of the London Middle East Institute, told USA Today. “It could put European businesses on a collision course with the Treasury Department if sanctions are re-imposed.”Mr Hakimian said that, since the deal was signed, European countries have “been lining up like mad” to trade with Iran and that even the threat of sanctions might be enough to make businesses in Europe or Asia hesitant about investing.“De-certification would send a pretty negative signal to those companies and their corporate boards,” said Richard Nephew, an analyst at the Center on Global Energy Policy in Washington and a former State Department official. “Even the conversation (about de-certification) is going to make things really hard if you are a US business operating in Europe.”A White House spokesman said the conversation between Mrs May and Mr Trump had centred on “ways to deny Iran all paths to a nuclear weapon”. He added, “President Trump underscored the need to work together to hold the Iranian regime accountable for its malign and destabilising activities, especially its sponsorship of terrorism and its development of threatening missiles.”For related news and features, visit our Enterprise section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory  

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