Trump’s deal will take the world backwards in three key areas ...Middle East

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There may be an art to a deal, but Donald Trump’s proposed agreement to end the conflict with Iran is looking more like a muddle than a masterpiece.

Trust between the two sides is at rock bottom following the conflict that started at the end of February and which has cost the US Treasury billions of dollars, threatened global supply chains and economic security and damaged relationships with allies.

Despite the President declaring on Sunday that he “doesn’t make bad deals”, the proposals could end up being a strategic own-goal for US power and influence – taking the world backwards in three key areas and paving the way for a more combative Iranian regime.

1. Iran ‘hasn’t pledged not to build a nuclear bomb’

The draft “memorandum of understanding” (MOU) includes commitments from Iran to never pursue nuclear weapons and to negotiate over a suspension of its uranium enrichment programme and the removal of its stockpile of highly enriched uranium. But the initial 60-day period would only be the start of discussions on the key issue of Iranian nuclear stockpiles.

Despite the US and Israel targeting the regime’s nuclear facilities in last year’s operation Midnight Hammer and during the most recent conflict, a US Congress report in early April warned that Iran was still likely to control about 440kg (970lbs) of uranium enriched up to 60 per cent purity – a stepping stone to the weapons-grade level of 90 per cent.

However, it is not clear how accessible that material is after the intense attacks on Iranian nuclear facilities, or what state the regime’s other nuclear infrastructure and workforce is in following the US and Israeli strikes.

The big risk for the US is that the takeaway for the Iranian regime from the conflict is that it needs to accelerate its efforts to build or obtain nuclear weapons to prevent future attacks.

Iranian news agency Fars News, which is closely linked to the Iranian government, said on Sunday that “Iran has made no commitments in this agreement regarding handing over nuclear stockpiles, removing equipment, closing facilities, or even pledging not to build a nuclear bomb”.

Donald Trump has insisted he ‘doesn’t make bad deals’, but his proposal looks flawed (Photo: Brendan Smialowski/AFP via Getty)

2. Long-term effects on the global economy

Proposals under discussion involve Iran opening the Strait of Hormuz, dropping tolls for shipping and clearing any mines in the waterway. In exchange, the US would lift its blockade on Iranian ports and allow for waivers on sanctions to enable Iran to sell its oil freely.

US officials outlined that the President’s key principle in the agreement is “relief for performance” and the faster the Iranians clear the mines and let shipping resume, the faster the blockade will be lifted.

The shipping route remains a key economic and strategic factor. “One thing that Iran has never had is leverage over the US, a way to hold the United States accountable or compliant to any frameworks that it’s negotiating,” said Middle East expert Omar Rahman, fellow at the Middle East Council on Global Affairs. “The US has pulled out of and violated past agreements, but control of the strait is something that Iran holds which is a key piece of leverage.”

About 20 per cent of the world’s oil and liquefied natural gas passed through the Strait of Hormuz before the conflict started in February. Its closure has also affected the flow of other critical commodities, including those needed for fertilisers and for the electronics and aerospace industries.

Even if the strait were to reopen soon, the underlying issues for crucial supply chains are likely to persist for months, according to a report from the Washington-based, non-partisan think-tank the Atlantic Council.

Energy sector analysis firm Wood Mackenzie released a report earlier this month outlining possible scenarios, but even its most optimistic prediction doesn’t forecast oil prices returning to pre-war levels until well into 2027.

Supply issues are likely to continue to affect the UK and Europe, pushing prices of goods and services higher, but will be particularly painful for Asian countries who rely heavily on oil, gas and other materials from the Gulf.

If a deal is broken and Iran continues to impose restrictions on shipping flows, the impact on the world economy could be even more dramatic with political repercussions globally, including for Trump’s popularity at home.

A banner showing the face of Alireza Tangsiri, commander of the Iranian Revolutionary Guards’ navy alongside others killed in US-Israeli strikes on Iran, is displayed. Control of the Strait of Hormuz is the key factor in Iran/US negotiations. (Photo: AFP via Getty)

3. Instability in the Gulf

Gulf countries including the UAE, Kuwait and Saudi Arabia have been shaken by the fighting this year with infrastructure damaged and key sectors such as tourism heavily impacted. The war has highlighted strategic weaknesses for Gulf countries, with some regional commentators viewing US bases as risks to their security more than a supposed shield from attack.

The question for Gulf states is whether they believe that a deep connection through military bases and agreements along with trade and cultural links is the best option for their long-term security and prosperity, according to a recent report from The Middle East Institute, a Washington-based think-tank

This is a key part of the shifting diplomatic puzzle in the region and could lead to new partnerships forming, according to Vikas Aggarwal, managing director of consultancy firm International Affairs and a former UK diplomat who served in Iran.

“International norms and expectations on security partners have been shaken, but I don’t know whether it’s beyond repair,” he said. “Gulf states may say, ‘Maybe we need to have our own security umbrella, in addition to whatever agreements we have with the US, UK and so on’. And I suspect they will be looking at making sure they have a very good balance with both China and Russia in terms of their engagement, their diplomatic relations and their defence relations.”

Further risking the delicate diplomatic balance in the region, Trump has posted on social media that it should be “mandatory” for regional powers – including Saudi Arabia, Qatar and Pakistan – to sign up to the Abraham Accords, a series of diplomatic protocols brokered during Trump’s first term where several Arab nations agreed to recognise Israel, as part of wider US efforts to deal with Iran.

How likely is the deal to hold and what could happen next?

If a deal is reached between the US and Iran, any short-term relief may not last with trust between the two parties so low.

Criticism has already come from within the President’s own party with influential Republican Senators Ted Cruz and Lindsey Graham arguing that the proposed deal is a mistake.

The draft MOU includes a plan for the war between Israel and Hezbollah in Lebanon to end but Israeli prime minister Benjamin Netanyahu has expressed concern about that condition during a phone call with Trump on Saturday, according to US media reports.

“Israel doesn’t stick by its agreements. We’ve seen that practice over and over again. And they’re not happy about this potential agreement,” says Rahman. “They’ve kind of expressed that very openly. And if Lebanon remains a linchpin of this agreement, they have the ability to thwart the whole thing unless the US takes a harder position towards Israel.”

Aggarwal sees risks on all sides. “I think there will certainly be interest in both Iran and Israel to make sure that it doesn’t succeed. It comes down to the saving face in terms of the deal on the Iranian side, and the perceived quality of the deal from the Israeli side and their feeling of security. I’m just not convinced it will hold.”

Rahman felt that despite the destruction of their infrastructure and the costs of the war to the regime, Iran was in a stronger position.

“Strategically, Iran are coming out in an improved position because of their control over the Strait of Hormuz and because the one thing that was used to compel them for years and years was the threat of military force by the United States and by Israel.

“Now, Iran has withstood that to the point that the US is no longer interested in fighting against Iran militarily. I think that’s a major win for Iran, and it’s exposed the limits of American military power.”

Rahman noted that Trump and his team are not the master negotiators they think they are. “The Obama deal took years of work. Trump has hollowed out the institutions that support that type of process internally in the US. He doesn’t have the career diplomats that he needs, instead he relies solely on a couple of real estate developers who have no experience with this.”

The Iranian foreign ministry spokesperson Esmail Baghaei told a news briefing on Monday that negotiations are still ongoing. “It is correct to say that we have reached a conclusion on a large portion of the issues under discussion,” he said. “But to say that this means the signing of an agreement is imminent – no one can make such a claim.”

The American draft also sets out plans for US forces mobilised for the conflict to stay in the region during a 60-day period and only withdraw if a final deal is reached.

There are also questions about the decision-making process in Iran, with the Supreme Leader Mojtaba Khamenei – whose father, the previous supreme leader, and other relatives were killed by an air strike at the start of the conflict – needing to agree to any deal.

Aggarwal said: “The new ayatollah is still very much in hiding and my suspicion would be that he certainly won’t want to accept a deal that doesn’t boost Iran and wants to show that they are still very much in charge.”

He said that the Iranian diaspora was likely to be critical of the US involvement, asking: “What happened? You promised to support us but if anything you have made it worse, you bombed us and we don’t have control of our own country.”

Aggarwal said the chances of a popular uprising now looked slim. “I think that idea is now dead in the water.”

Iranian negotiators are demanding the immediate release of $12bn in frozen assets held in Qatar as a precondition for advancing talks with the US, according to regional media. Trump, however, declared in a recent social media post: “If I make a deal with Iran, it will be a good and proper one, not like the one made by Obama, which gave Iran massive amounts of CASH.”

Rahman added: “The most important thing Iran needs is to revive its economy, because the Iranian people are suffering, and that’s always going to be a source of instability for the regime. If it’s able to get sanctions relief, then I think it’s on its way to doing that.”

US officials appear to acknowledge that allowing Iran to sell oil on the open market would be a boost to Iran’s economy, but have argued it would also bring relief to the global oil market.

Both Aggarwal and Rahman think that – at least financially – this undermines Trump’s claims his deal is better than previous ones.

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