Trump won’t rip up Iran deal

Trump won’t rip up Iran deal

By Mahmood Khaghani for Trend

The nuclear deal between Iran and P5+1 Group (the United States, Britain, Germany, France, Russia and China), enabling Iran to continue a peaceful nuclear program, has been threatened by the US president-elect Donald Trump in his campaigns. This is while the EU governments continue to take the lead in accessing what many observers regard as one of the most significant and expanding new markets based upon Iran’s unique combination of massive natural and human resources.

In a recent Berlin workshop, organized on the sidelines of the EU-Iran Oil, Gas & Energy Summit, participants were amused by Trump’s statement that the deal “gave back to Iran $150 billion and gave us absolutely nothing -- it will go down in history as one of the worst deals ever negotiated.”

The consensus of the workshop was that the effect of any further US sanction would be minimal and counter-productive for the US.

Indeed, as I write this article, I observe that US legislators are already trying to sabotage the recent agreement by the US to re-equip Iran's fleet of Boeing aircraft. This is ironic when it is considered that earlier this year Trump was heavily critical of Secretary of State Clinton and President Obama for allowing Airbus to enter what he regarded as a US market.

Trump and the oil market

The immediate oil market reaction to the election was a price fall which soon recovered. But there is a broad market consensus that the market is heavily over-supplied and that in the absence of a meaningful production cut by OPEC/non-OPEC the price will fall, probably substantially.

I exchanged views with market observer and commentator Chris Cook, who is a senior research fellow at University College London. He expects that the oil market strategy of the Trump administration – which is focused upon the US domestic physical market – will be very different to that of the Obama administration which was concerned with the financial market in oil.

Mr Cook believes that financial demand for oil was maintained by skilful and opaque manipulation of the global oil market by Obama's Wall Street advisers, and that the Trump administration will have neither the will nor the skill and experience to continue this strategy.

Trump’s foreign policy

The Persian Gulf states are all suffering from low oil prices in a way that Iran is not and see that their massive investments in Hillary Clinton’s campaign have been wasted. They are fearful both of Trump policies for further US energy independence and of any changes to Trump's Iran policy.

Trump has already made clear that the US military umbrella will no longer come cheaply and can be expected to renegotiate historic NATO or US agreements – written and unwritten – with Persian Gulf states generally and Saudi Arabia specifically.

Trump and Iran’s nuclear deal

We are learning more by the day of Trump's policies, and indeed it's fair to say that these are a work in progress at this point two months before he takes office. Walid Phares, one of Trump’s top foreign policy advisers, highlighted that the Trump administration’s foreign policy on Iran is in a state of flux. Speaking to BBC Radio on Thursday, Nov. 10, Phares said the nuclear deal, which Trump has vowed to dismantle, would instead be renegotiated.

As CNN reported:

“Ripping up is maybe a too strong of word, he’s going to take that agreement, it’s been done before in international context, and then review it,” he added. “He will take the agreement, review it, send it to Congress, demand from the Iranians to restore a few issues or change a few issues, and there will be a discussion. It could be a tense discussion...”

What will President Trump mean for Iran?

I asked Chris Cook for his view as to the best way for Iran to deal with the new US president. He told me that his intuition was for over a year that Donald Trump was likely to become US president and that his view was confirmed by the UK referendum Brexit decision in May this year to leave the European Union.

Cook observed that both these major political surprises had the same root cause, which is the concentration of wealth in few hands due to increasing automation and globalization.

A mere 60 individuals now possess as much wealth as over 50 percent of the global population, and the impoverished majority is increasingly unhappy with those they hold responsible.

Firstly, any US president is restricted in what he can achieve: firstly by the US legislature, secondly by a powerful executive branch and thirdly by a central bank (the Federal Reserve Bank) which is ruled not by the interests of the US but by the interests of global finance capital.

Secondly, many commentators are worried about Trump's rationality and his finger on the nuclear button. Chris Cook is further of the opinion that he is not in the least worried because Trump's theatrical performance in the campaign will bear no relationship to his actions in office. Trump is – like President Putin – a pragmatic businessman who is aware that global nuclear war is bad for business, and also understands that no-one undertakes suicide bombing for profit.

Finally, Mr Cook suggested that unlike previous presidents in recent times, president-elect Trump is not motivated by religion, by ideology or even by money. He is a business man and real estate developer motivated by ego and by the need to be seen to win. His approach was outlined in 1987 in his book The Art of the Deal, which is a combination of a business book and his early memoirs.

The Art of the Deal

Cook observed that Trump's approach to business – and hence to negotiation – is the precise opposite of that in Iran. Whereas Iranians are among the toughest negotiators in the world, his experience is that once an agreement is reached it tends to be honoured.

For Trump this is not the case – his companies have defaulted on their obligations (gone bankrupt) no less than five times, and he is notorious for the ruthless way in which he deals with suppliers and other counterparties. Trump trusts no-one and it is unwise for Iran, EU and others to trust him.

Cook pointed out that the 5+1 agreement cannot be negotiated without the agreement of the other parties, which he believes is completely out of the question. This means that any US-Iran deal must be an additional bilateral agreement which is complementary to the JCPOA.

I asked Mr Cook what kind of policies and structure Iran could consider in dealing with president-elect Trump which would firstly meet Trump's business criteria and secondly survive Trump's practice of tearing up agreements in response to future events and adverse market circumstances.

The Art of Winning

Chris Cook's view is that the best way to deal with the US led by Trump is to create economic relations which represent a 'win' for both the US and Iran. This can never be the case for any purchase of equipment or technology from the US which is financed by dollar debt or (as with recent proposed aircraft deals) by leases payable in dollars, since the dollars printed by the US do not represent value, but merely a claim over value manufactured by the US banking system.

Indeed, today's news in relation to US legislator's actions in respect of the proposed Boeing deal confirm Mr Cook's pessimistic view and I asked him what Iran can possibly do to create a win/win outcome.

Mr Cook suggested that the solution lies with a simple swap transaction: Boeing or Airbus would supply aircraft not for dollars or euros but in exchange for a flow of the value of energy. This would be yet another innovative energy swap - essentially Air Transport as a Service – to add to the new wave of swap transactions led by Iran. Here I should point out the recent announcement by the NIGC Managing Director that Turkmen gas supplied (through a private sector initiative) to Iran is being exchanged for a supply of Iranian gas to the Republic of Azerbaijan.

So, if Iran were to propose to the US a swap of the use of US technology and hardware against Iranian energy flow this creates a win/win solution. The key is the issuance by Iran of promises (credits) returnable in payment for Iranian oil, gas or electricity.

Any US company, such as Boeing supplying Iran with technology would know that even if it is illegal to receive Iranian physical energy, or impossible to be paid through the US dollar clearing system, they would nevertheless be able to exchange Iran's energy credits for goods and services from international companies who could themselves use these energy credits to pay for Iranian energy supply.

Energy Diplomacy equals Energy Cooperation

Chris Cook believes that the UK’s Brexit vote and Trump’s accession destroy the old ideological certainties of Left (Public) and Right (Private). He says that while constructive engagement with the US and the EU is possible, it cannot take place within the failed commodity and financial market paradigm which have led to this global economic and political turning point – indeed have led to Brexit and Trump – but requires simple new additional agreements.

At the recent Oil, Gas & Energy Berlin Summit in my presentation in association with Chris Cook, we offered a window of opportunity that has opened for a new services market paradigm based upon energy cooperation and the principle of resource resilience – that is to say that for any given use of energy as a service – transport, heat/cooling, or power the use of finite resources such as oil, gas and water will be minimized.

This approach of course is not an alternative to the existing dollar economy, but it is complementary to it and enables the kind of mutually beneficial (win/win) relations, which are necessary for Iran in its new policy to engage safely with Trump.

In my experience of international negotiations, the true Art of the Deal is that no agreement is sustainable which has been imposed by one side on the other. Moreover, I confidently expect that in the same way that only the Republican President Richard Nixon could travel to China to transform the US relationship with China, so it is that a historic invitation to President Trump from Iran to negotiate a new US-Iran deal would be irresistible to his ambitions for a historic Trump presidency.

Mahmood Khaghani, now retired, has over 33 years of work experience at senior international positions of Iran's petroleum industry, including as the head of the Oil Ministry's Caspian Sea and Central Asia Department, as well as business development and joint ventures advisor of Iran's North Drilling Company. He was also the director for energy, minerals and environment at the ECO Secretariat in 1996-2000.

Subscribe to Trend in Google News! Subscribe
Israel's active COVID-19 cases below 20,000
Israel's active COVID-19 cases below 20,000
Israel's annual inflation up 2.5 pct, highest in nearly decade
Israel's annual inflation up 2.5 pct, highest in nearly decade
Russia, Israel to coordinate efforts at UN to counter history revision
Russia, Israel to coordinate efforts at UN to counter history revision
Loading Bars
UK to fund new nuclear power station as part of net zero drive
Former U.S. president Clinton released from hospital
U.S. administers 408.3 mln doses of COVID-19 vaccines - CDC
French ambassador leaves Belarus - embassy
Google dedicates doodle to Azerbaijan's Restoration of Independence Day
Chronicles of Victory: President Aliyev announces that Azerbaijan's armed forces raise Azerbaijan's flag over ancient Khudaferin Bridge (VIDEO)
Chronicles of Victory: October 18, 2020
Georgian CEC calls on public to participate in October 30 municipal run-offs
Turkey expresses interest in expanding activities of Turkish companies in Kyrgyzstan
Helicopter crash kills three in Germany
As soon as possible, we will return to their native lands IDPs who lived in suffering for 30 years - Azerbaijani president
Heydar Aliyev did not allow holding of referendum on preservation of Soviet Union in Nakhchivan - President Aliyev
Celebrating October 18 solemnly or thanking someone for it is absolutely inappropriate, says Azerbaijani president
UK records more than 40,000 COVID cases for fifth day in a row
Cargo movements in Iran’s Qeshm port up
Amendments related to national holidays completely correspond to historical realities - Azerbaijani president
First VP of Azerbaijan makes Instagram post after meeting with heroes of Second Karabakh war (PHOTO)
Georgia faces fifth Covid-19 wave, observing recommendations much needed, NCDC Head says
UNHCR opens alternative route of aid to Afghanistan via Uzbekistan
Azerbaijan allocates funds for construction of Fuzuli Memorial Complex
Master plans of Zangilan, Gubadly, Kalbajar and Lachin being developed - Azerbaijani president
Azerbaijani economy grows by about 5%, non-oil economy by 20% over 9 months - President Aliyev
Large settlement will be created based on "smart village" concept in village of Dovletyarly - Azerbaijani president
We significantly brought closer day of IDPs return to their homelands - President Aliyev
Projects under implementation in Fuzuli show our determination and potential - Azerbaijani president
We will restore Fuzuli city, settlements of Fuzuli district - President Aliyev
Every person who visits Fuzuli becomes witness of Armenian vandalism and no one can deny this, says Azerbaijani president
This glorious victory will forever remain in history of Azerbaijan - President Ilham Aliyev
After liberation of Fuzuli, cases of desertion in Armenian army became even more widespread - President Aliyev
After Fuzuli was liberated it created more opportunities to move towards Shusha - President Aliyev
President Ilham Aliyev and First Lady Mehriban Aliyeva view conditions created at Fuzuli International Airport
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,896 more COVID-19 cases, 764 recoveries
Azerbaijani president, first lady meet with members of Fuzuli district's general public (PHOTO)
Azerbaijani president, first lady view conditions created in Fuzuli Central City Park, plant trees there
President Aliyev lays foundation for Digital Substation Management Center in Fuzuli
President Ilham Aliyev lays foundation stone for Fuzuli Memorial Complex, city of Fuzuli
Liberation of Fuzuli during war was very important - President Ilham Aliyev
October 17 will forever have special place in history - President Ilham Aliyev
President Aliyev lays foundation stones for Fuzuli-Aghdam highway and new “smart village” in Fuzuli (PHOTO)
President Ilham Aliyev and First Lady Mehriban Aliyeva visit Fuzuli district (PHOTO)
Ukrainian MPs visit Ganja where cilivians died as result of missile attacks by Armenia (PHOTOS)
Iran reveals COVID-19 data for October 17
BSEC SG to visit Georgia today
Over 600 COVID-19 patients in Kazakhstan in critical condition
Energy Community highlights leading energy projects implemented in Georgia
First concert of Azerbaijan's trio under leadership Isfar Sarabsky takes place as part of European tour (PHOTO/VIDEO)
Buy/sell operations at Iran Mercantile Exchange soar
Graduation ceremony of Azerbaijani servicemen participating in courses held in Turkey
Heavy rains lash India's Kerala, red alert sounded in 5 districts
Share of households with internet access increases in Georgia
Seventeen U.S. missionaries and family kidnapped in Haiti
Iranian private investments in Tajikistan expected to grow
1,900 new COVID-19 cases reported in Kazakhstan
IRICA unveils data on exports of Iran to Belarus
Azerbaijan national team takes second place at Grand Slam judo tournament
8 killed, over 20 injured in traffic accident in Peru
1 deputy killed, 2 injured in "ambush shooting" in U.S. Texas
Israel's active COVID-19 cases below 20,000
At least 6 dead, 1 missing after ship sinks in Brazil
Azerbaijani Foreign Ministry shares publication in connection with anniversary of Armenia's missile attack on Ganja
Information about firing of Azerbaijani army in direction of Arazdeyen does not reflect truth - Ministry of Defense
Sudan protest calls for military coup as political crisis deepens
Chronicles of Victory: President Ilham Aliyev addresses the nation on October 17, 2020 (PHOTO/VIDEO)
Chronicles of Victory: October 17, 2020
District Election Commissions to sum up protocols of municipal polls in Georgia
A working meeting of the delegations of Uzbekistan and Afghanistan takes place
Russian authorities say 18 dead in suspected alcohol poisoning in Yekaterinburg
UN chief welcomes unilateral cease-fire in CAR
Iran’s Bahar Azadi gold coin price continues to rise
Work on increasing wages, pensions and benefits begins - Ministry of Finance of Azerbaijan
Official talks reasons for increase in gas prices in Azerbaijan
Post-conflict reconstruction projects launched by President Ilham Aliyev is unprecedented - Aide to President (VIDEO)
Azerbaijani IDEA signs agreement with All-Russian Society for Nature Conservation (PHOTO)
Saudi Arabia's PIF launches offshore platform tourism project
NATO Special Representative for Caucasus to visit Azerbaijan
Iran's Energy Exchange announces products to be on sale on October 17
Iran reaches grow in exports to Kyrgyzstan
World gas prices grow by 20-30 times compared to last year - SOCAR
Latvia to gift Georgia 83,070 doses of Pfizer jab
Earthquake hits southern Iran
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,681 more COVID-19 cases, 675 recoveries
South Caucasus countries need to coordinate to open communications - Pakistani diplomat
Azerbaijani President Ilham Aliyev signs decree on raising social payments
Iran reveals COVID-19 data for October 16
Uzbekistan to privatize public park in Tashkent
Muslims all together sympathetic with Azerbaijan - Palestinian ambassador
Iran's exports to Kazakhstan up
SOCAR Georgia Gas opens tender on pickup trucks through operating lease
Turkish president and German chancellor holding talks in Istanbul
Novak does not rule out recurrence of energy crisis in Europe, urges its prevention
Azerbaijani official talks victims of Armenian attacks on Tartar during Second Karabakh War
Centuries needed to revive nature of Azerbaijan's Karabakh - minister
Azerbaijan raises electricity and gas prices
Restoration work in Azerbaijan’s liberated territories show positive trend – Kyrgyz ambassador
Over past 25-30 years, no country independently conducted such large-scale reconstruction in post-conflict period - aide to Azerbaijani president
Armenia must take serious and positive steps to open communications - Azerbaijani president's assistant (Exclusive)
Azerbaijan looks to sign document on demining liberated territories with France
Azerbaijan's Air Defense Units carrying out combat firing exercises (VIDEO)
All news