Friday, May 26, 2006

Carrots, sticks and the isolation of Iran

By Kaveh L Afrasiabi

Germany is playing a leading role in formulating a European response to the ongoing row over Iran's nuclear program, and that is bound to have direct implications for the larger issue of Germany's role and identity in the international system and resolution of the crisis.

For the past three years, the German government has been one of the European troika, along with France and Britain (the EU-3), engaged in nuclear diplomacy with Iran and, despite a change of guards, there is considerable policy continuity on the part of Chancellor Angela Merkel.

Initially Merkel, being a novice and highly critical of her predecessor's policy of distancing German foreign policy from the

US, rattled a few cages with her post-election leaps in bandaging German-US relations, citing Iran as an "example" of how things work between the two countries.

Then came Merkel's blistering criticisms of President Mahmud Ahmadinejad for his remarks on Israel, which she compared in no unmistakable language to fascism. In her trips to both Israel and the United States, Merkel consistently criticized Iran's nuclear and foreign policies, which, in turn, fueled Germany's current role in the Security Council debates on Iran, referred to as "Permanent Five plus one".

While still short of the formal veto power, the historical precedence set by Germany's critical role in the Iran crisis will undoubtedly be an important catalyst in paving the road for Germany's eventual inclusion in the Security Council's exclusive club, which is now limited to the United States, the United Kingdom, France, China and Russia.

This depends to some extent on the global perception of how Germany plays its diplomatic card with regard to Iran. A compliant Germany, subservient to the policy dictates of Washington, is unlikely to receive much backing from the other powers in its current bid to gain a permanent seat at the Security Council. On the other hand, an independent, self-generating diplomacy, based on Germany's, and the European Union's, calculations of risks and benefits, will have the opposite effect. So far, Germany is evincing a middle position, where signs of autonomous diplomacy and old US dependency converge.

On the positive side, Germany's adamant objection to the military option against Iran, which Merkel communicated to President George W Bush in her recent White House visit, is a welcome development that in a certain sense brings Germany closer to Russia and China, both of whom oppose any reference to UN's Article 42, which would set the stage for a future US military action against Iran.

Among the EU-3, Germany is, in fact, the most enthusiastic proponent of the so-called "carrot" approach, including the security approach, favoring direct Iran-US talks.

Yet, contrary to Berlin's wishes, the US has turned down both the Iranian offer of direct talks as well as any "security guarantee" for Iran, the justification being that Iran is a "troublemaker in the world", to paraphrase Secretary of State Condoleezza Rice.

But don't expect the fissures between Berlin and Washington to spill into the open any time soon. Merkel and her ardent pro-American coalition are committed to avoiding any "crisis of confidence" with Washington, which she has blamed on Gerhard Schroeder and his former Green Party foreign minister, Joschka Fischer, who was intensely disliked by the White House.

Fischer's replacement, Frank-Walter Steinmeier, a member of the leftist Social Democrats, has so far proved an invaluable "balancer", bringing a measure of equilibrium to the unbounded tendency of Merkel's Christian Democratic Party to appease the Americans.

Germany's stakes in the Iran crisis
Germany is Iran's No 1 European trade partner and its booming import-export with Iran will be a net casualty of any UN (or other) sanctions on Iran, compared with the United States, which has practically no economic interests at stake in Iran as a result of 27 years of US sanctions.

Iran is a major market for Germany's industrial and technological products, just as Germany is an importer of Iranian oil and such goods as rugs; some 35% of Iranian rugs are exported to Germany. According to a recent article in Der Spiegel, "Between 2000 and 2005, German exports to Iran more than doubled. Last year they reached a new record of 4.4 billion euros [US$5.6 billion], or 0.6% of Germany's total export volume. Manufacturers of machinery and equipment are the main beneficiaries because Iran is using German know-how to develop its economy."

Another report by the Iran-German Chamber of Commerce indicates that as much as 75% of Iran's small and medium industries rely on imported goods and technology from Germany. German companies and banks are also involved in projects in Iran's industrial free zones.

Indeed, in light of their physical proximity, a large Iranian community in Germany, and so on, there is every expectation of growing economic exchanges and interdependencies between Germany and Iran, absent the nuclear crisis. Because of the crisis, however, these relations have suffered, not the least because of growing US pressure, reflected in the recent news that the US is utilizing anti-terrorist laws to curb European banks' involvement with Iran - with a measure of success.

As a result, as the nuclear row has been upgraded to "pre-sanction sanctions", many German companies have stayed away from Iran and numerous deals in the pipeline, such as on airplanes and parts, power generators, machinery, have been put in limbo. Undoubtedly, such setbacks will be minuscule compared with a few months or a year or so from now when and if the UN or a "coalition of the willing" imposes sanctions on Iran, which will only benefit German black-marketeers.

Indeed, as Mohammed Nahavandian, an economist with Iran's Supreme National Security Council, recently stated, the implementation of sanctions on Iran would be "impractical" because of the size and nature of Iran's many frontiers, but Iran would "incur extra expenses".

Therefore, to safeguard its vested economic interests with Iran, the German government must show a greater independence from the hitherto coercive US approach, thinly disguised as "diplomacy". The US pseudo-diplomacy, if sheepishly followed by Germany and other European countries, will harm their economic interests, this when, to quote former Italian prime minister Silvio Berlusconi, "Europe has to compete with the US in the area of economics and trade, rather than in politics."

What Berlusconi misses is that by following the US diplomatic prescriptions over Iran, Europe's economic and trade interests will suffer, whereas what is needed is an alternative European Iran policy that fully recognizes "Iran's legitimate rights to nuclear technology", to quote Javier Solana, the EU's foreign-policy chief.

However, the problem with the EU's present approach is that, first of all, Iran's right under the Non-Proliferation Treaty (NPT) to nuclear technology does not really require any "recognition" by the EU and others, and to the extent that under the present circumstances such a statement is laden with special meanings, then it must be taken to its logical conclusion and extend to recognizing Iran's right to produce nuclear fuel, per Article IV of the NPT, under the necessary safeguards and surveillance measures of the International Atomic Energy Agency (IAEA). Otherwise, the statement by Solana and other European officials remains vague and indeterminate, denuded of substantive legal connotations.

The question of security guarantee
Security is a two-way process, and if Germany and other Western powers seek Iran's cooperation against global terrorism and the threats of nuclear terrorism, then they must show a better understanding and appreciation of Iran's post-September 11, 2001, security anxieties. The unprecedented influx of US military might in Iran's vicinity has "securitized" Iran's foreign-policy debates for the foreseeable future. Yet the nub of dilemma on the question of security has largely bypassed policy-makers throughout Europe.

That dilemma is as follows: the European suggestion of Iran's inclusion in any regional security infrastructure is naive and simplistic, given the structural conflict between the US and Iran and their ongoing games of strategy. The main reason the US is incapable of formulating an Iran-inclusive security framework in the Persian Gulf is precisely because the operation of Iranian power in the oil region works against the United States' interventionist policies aimed at controlling the access and flow of the strategic commodity relied on by the industrial world, that is, oil and gas.

That is precisely why the US quest for regime change in Iran will never completely disappear, no matter what deals are brokered on the nuclear front. A more prudent political realism on Germany's, and Europe's, part would step down from the wishful hope of full normalization of relations between Iran and the US. Instead, it would work toward bringing a semblance of order and predictability to the antagonistic relations between Tehran and Washington.

Thus calls for more European pressure on the US to make explicit pledges not to interfere in Iran's internal affairs and to put the regime change recipe (for disaster) on the back burner are insufficiently mustered at the present moment. After all, Europe is much more cognizant of the perils of Iran's potential "breakup", and the threats of irredentism with regard to its own security, should the US make good on its own policy of fomenting ethnic divisions inside Iran.

That would mean escalating the Middle East boiling pot to new heights of insecurity, in light of Iran's present importance as a strong centralized government contributing to regional integration and cooperation, something the EU countries can ill-afford.

Unfortunately, neither Germany alone nor the EU as a whole can provide any security guarantee to Iran without US backing, but that does not mean that the EU cannot take proactive steps, such as with respect to influencing the North Atlantic Treaty Organization (NATO) against taking stern anti-Iran steps or promoting Iran-OSCE (Organization for Security and Cooperation in Europe) cooperation, both in the Persian Gulf and the Caspian Sea. The OSCE advances the objective of a UN-like cooperative security framework potentially favored by Iran. Already, Iran has participated in a number of OSCE-sponsored events, for example, on environmental security.

Building on the past, but which past?
In crafting its Iran policy, Merkel's government must deepen "constructive engagement" with Iran and disregard any suggestion that the EU's Iran diplomacy has been a failure. Rather, the result so far has been mixed, in light of Iran's marathon negotiations, its willingness to implement the Additional Protocol of the NPT, allowing intrusive inspections of its nuclear facilities, as requested by the EU-3 in 2003, until January 2006, when Tehran dropped it in reaction to the EU's backtracking on its promises in the Paris Agreement.

This included, above all, a pledge to respect Iran's "exercise" of its nuclear rights "without discrimination". But, as stated by Iran's chief nuclear negotiator, Ali Larijani, Iran is willing to re-adopt the Additional Protocol and to pass it through the parliament (majlis).

Also, learning from past errors of "nuclear reductionism", that is, reducing the sum of Iran-German relations to the nuclear issue, as warned by some top German experts on Iran, such as Johannes Reissner of the Berlin think-tank Stiftung fur Wissenschaft und Politik, is mandatory if Merkel wishes to make a tangible difference in the present crisis.

As Russian Foreign Minister Sergei Lavrov recently stated, "isolating Iran" will have the adverse effect of augmenting Iran's non-cooperative behavior. The obverse strategy of integrating Iran, reflected in the new European package approach, should not be tactical, however, but only if it is buffeted with the firm guarantees of faithful implementation, will it have a decent chance of success.
From Iran's vantage point, Germany's role in Iran's nuclear program leaves a lot to be desired. The German government failed to take any action when Siemens reneged on its lucrative contract to build the Bushehr power plant, forcing Iran to turn to Russia in the mid-1990s for a project half-finished. Consequently, the present European offer of light water reactors to Iran cannot possibly be taken seriously, short of serious stipulations by the EU that would preclude the recycling of such bitter experiences in the past.

Fortunately, Germany resisted some calls, by Israel and its Washington lobbyists, for excluding Iran from the upcoming soccer World Cup, and there is a possibility of Ahmadinejad's presence at the games, preemptively denounced by the hawkish editorials of the Washington Times, among others.

Merkel would be wise to send Steinmeier to Iran ahead of those games and or to invite Iran's Foreign Minister Manouchehr Mottaki to Berlin, and to decouple to some extent Iran-German trade and economic cooperation from the nuclear row, as an intermediary measure that could well have salutary effects on the nuclear crisis.

The more Germany shows its ability to engage in creative diplomacy toward Iran, the better the chances of a mutually-satisfactory resolution of this crisis, following the assumption that Iran greatly values its continuous interaction with Germany and other EU countries.

The crucial question at this critical juncture is whether or not trans-Atlantic considerations and US pressure will impede or neutralize the present drift of Germany toward finding its own voice on Iran.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) and co-author of "Negotiating Iran's Nuclear Populism", Brown Journal of World Affairs, Volume XII, Issue 2, Summer 2005, with Mustafa Kibaroglu. He also wrote "Keeping Iran's Nuclear Potential Latent", Harvard International Review. He is author of Iran's Nuclear Program: Debating Facts Versus Fiction .

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