The problem of sanctions ‘snapback’ on Iran

Conflicts Forum’s Weekly Comment, 1-8 May 2015

The Council on Foreign Relations (CFR) has just released a remarkably frank policy document which, given the Council’s links to what may be termed the American ‘deep state’, gives us a window into the thinking of a preeminent US constituency: that of Wall Street.  It makes no bones about its aims, but rather it says it flatly:  China must be defeated, since it threatens US global hegemony:

“Since its founding, the United States has consistently pursued a grand strategy focused on acquiring and maintaining preeminent power over various rivals, first on the North American continent, then in the Western hemisphere, and finally globally.” It goes on to praise the George H.W. Bush administration for presciently contended that its ‘strategy must now refocus on precluding the emergence of any potential future global competitor’.

“China’s sustained economic success over the past thirty-odd years has enabled it to aggregate formidable power, making it the nation most capable of dominating the Asian continent and thus undermining the traditional U.S. geopolitical objective of ensuring that this arena remains free of hegemonic control.”  [It is clear that the authors here do not see ‘precluding the emergence of any potential competitor’, itself to amount to amount to a demand for ‘hegemonic control’.]

The report, Revising U.S. Grand Strategy Toward China, is introduced by Richard Haass, CFR’s President, who writes in his introduction that the authors “also argue that China has not evolved into the ‘responsible stakeholder’ that many in the United States hoped it would … what flows from this assessment is nothing less than a call on their part for a new grand strategy toward China that centers on balancing the rise of Chinese power rather than continuing to assist its ascendancy … Stated somewhat differently, the authors recommend a new U.S. policy of balancing China that would in effect change the balance of current U.S. policy, in the process placing less emphasis on support and cooperation and more on pressure and competition. There would be less hedging and more active countering.” Or, as the report’s authors put it, by “intense U.S.-China strategic competition.”

The need for a shift in America’s foreign policy adduced in a parallel book penned by Haass, Foreign Policy Begins at Home - perhaps unintentionally – says more about the state of affairs in America than one might usually expect.  Haas starts by arguing that America’s earlier unjustified wars of choice made “no strategic sense at the best of times; [and would be] even less defensible now, when the United States faces difficult challenges to its solvency”.

Hass continues that the US is “in a position of high vulnerability to forces or actions beyond its control. Right now the US government requires an inflow of more than $1billion a day to support a gross federal debt that stands at about $16 trillion and increases by more than $1 trillion a year. We can look to our own history to see what can happen when foreign governments obtain this kind of leverage. In 1956, the US government, furious over Great Britain’s participation in the invasion of Egypt after Nasser’s nationalization of the Suez Canal, blocked international loans the British needed to avert a collapse of their currency. The British government of the day was forced to back down. Now imagine what might happen were China to threaten a similar action against the United States amid a crisis over Taiwan or the South China Sea”.

Another scenario is simply one in which money markets lose confidence in America’s ability to manage its own finances and start to exact a higher price for their continued willingness to lend money. This would force the Federal Reserve to raise interest rates, not for the traditional purpose of cooling inflationary pressures, but rather to attract needed dollars that demand a higher return given concerns over American credit-worthiness. This would spell disaster for an economy barely out of recession. This scenario might have come to pass already had it not been for the Eurozone crisis, which removed a viable alternative to the dollar. But Americans cannot count on Europeans to forever do the wrong thing, or on China’s remaining unwilling to allow its currency to take on an international role.

So what has this to do with America’s wish to create a ‘snapback’ mechanism for the re-imposition of sanctions on Iran – were Iran to fail to comply with its commitments reached with the P5+1?  Perhaps the first thing to note is that China already is moving very rapidly towards international status for its currency.  And the second point is that, if China (and Russia), in an Eurasian economic and security alliance, are perceived to be directly inimical to US control of the global order – then it will be of prime importance to the US to stop Iran from being swept up into any emerging Eurasian power block. 

Russia and China are, as it were, Iran’s natural allies, and it would be logical, on the basis of the CFR argument – for the US to do everything to try to separate Iran from Russia and China, by bringing Iran within the scope of the global economy (and thereby US control of the geo-financial system).  Indeed, much of the American narrative in connection with the nuclear talks is about bringing Iran into the ‘world community’ – i.e. into the system of global economic governance.  Equally, from the alternative perspective, it would be in Russia and China’s interest to have sanctions lifted on Iran, and for Iran to  assimilate into Eurasia.

And this leads us to ‘snapback’: whilst it would be theoretically possible (legal, and in conformity with the UN Charter) for the P5+1 to agree a UNSC resolution that would suspend sanctions – with the proviso that sanctions would ‘snapback’automatically, if triggered by a predetermined event (such as a formal report by the IAEA to the Security Council that Iran had in some respect breached its undertakings) – is it likely that Russia and China would agree to such automaticity in the workings of the Security Council?   Would either accept an automaticity that precluded, for example, any prior Security Council discussion or examination of the triggering mechanism (such as an IAEA report)?

This, it seems, is what the US seeks: “U.S. Ambassador to the United Nations Samantha Power made it clear that Washington did not want Russia’s and China’s recent slew of vetoes on resolutions related to Syria to be repeated with an Iran nuclear agreement. “We’re going to do so in a manner that doesn’t require Russian and Chinese support or a vote for snapback … because we are in a different world in 2015 than we were when the sanctions architecture was put in place,” Power said in an interview with Charlie Rose on Bloomberg television”. 

It is of course possible that Iran might, (just might) agree to such a provision, but this does not mean that Russia or China would be bound to agree a precedent where a UN agency (such as the IAEA, in which the US wields major diplomatic clout) can preempt and bypass China or Russia’s UNSC prerogatives – especially where Chapter Seven (i.e. binding and executable) measures are at stake.

And this is where Richard Haass and the CFR enter the picture: Russia is already under US and EU sanctions (like Iran). And the CFR report extolls the TPP (Trans-Pacific Partnership) as an essential economic counter to China’s growing influence in Asia – i.e. the CFR argues the TPP as form of economic sanctions on China (China  is excluded from the TPP).

It is pretty clear: if America may be moving to intense geo-strategic cold war with China, why would China allow any of its prerogatives at the Security Council to be diluted? Ditto for Russia. For them to agree would be to acquiesce in a revision of the operating methodology of the Security Council – and truly to grant America its exceptional status.  The interests of Russia and China must be to have sanctions lifted in a resolution embodying any P5+1 agreement, and then to rely on the existing mechanisms to deal with any Iranian non-compliance.