Nearly a month after the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA), leaders from the Shanghai Cooperation Organization (SCO) met in Qingdao, China, to set the roadmap for the future.
In his speech, Chinese President Xi Jinping, the summit host, announced that the SCO members will uphold the authority and efficacy of WTO rules, strengthen an open, inclusive, transparent, non-discriminatory and rules-based multilateral trading regime, and oppose trade protectionism of any form. “We point out that economic globalization and regional integration are the compelling trend of our times,” Xi said.
“All parties will continue to work in line with the principle of mutual benefit to improve regional economic cooperation arrangements, enhance the Belt and Road cooperation and complementarity of our respective development strategies, deepen cooperation in business, investment, finance, connectivity and agriculture, advance trade and investment facilitation, and foster new prospects for integrated development of the region to deliver benefits to our people and add fresh impetus to global growth,” the Global Times quoted the Chinese president as saying.
Iran, JCPOA and SCO summit
One of the major issues on the summit’s agenda was the consensus that Russia, China, and India (which comprise three of the five BRICS countries) do not back sanctions against Iran announced by Trump and his secretary of state. The summitters also rejected U.S. unilateralism in global affairs in favor of a multilateral world order.
Iran, a current observer member of the SCO which has officially applied full membership, participated at the event on June 8-9 at the presidential level. Iran sought to achieve several goals in the summit. The country initially seeks saving the 2015 international nuclear deal by getting assurances from the remaining parties to the nuclear agreement. It wants its interests, which is removal of economic and financial sanctions under the agreement, are guaranteed otherwise it would resume nuclear activities at a higher speed. Developing regional and international economic cooperation as an independent and reliable partner and also expanding a comprehensive strategic partnership with China in the fields of energy and infrastructure, stand among the other major priorities of Iran for attending the summit.
President Hassan Rouhani, addressing the summit, stressed the significance of a non-political approach to energy security and legitimate international trade in both regional and global development, calling on the international community to stand up to abuse of energy.
“Without a doubt, economic, political and legal unilateralism undermine regional convergence. In this regard, the United States’ attempts to impose its own policies on others is a growing danger. A recent example of the United States’ unilateralism and indifference towards the opinions of the international community is its decisions to withdraw from the JCPOA. The Islamic Republic of Iran has so far lived up to all his commitments under the JCPOA and the International Atomic Energy Agency (IAEA) has so far confirmed my country’s commitment to its obligations for 11 times,” he said. He added, “All signatories to the JCPOA have a responsibility regarding the commitments of removing sanctions under the JCPOA, and also based on Resolution 2231 of the UN Security Council and Article 25 of the Charter of the United Nations are responsible to help full implementation of the JCOPA and prevent any move that poses an obstacle on implementation of the JCPOA.”
Welcoming efforts by Russia and China in maintaining the JCPOA, Rouhani announced that “Iran has given a limited opportunity to remaining signatories to the JCPOA so that they can give the necessary guarantee in action to help implement all the agreed conditions in the JCPOA and continue being a party to this agreement.”
“Definitely, the U.S. has monitored the reactions to its withdrawal from the JCPOA and considers the lack of response to its unilateral withdrawal as not being costly, which will have very bad consequences for the international community,” he underlined.
Rouhani’s participation at the event bore some economic fruit, ended with the signing of a cooperation document within the framework of the Belt and Road Initiative with China. Included in the document was the agreement to use national currencies in bilateral investments and trade exchanges as well as developing technical and scientific cooperation between the two countries and cooperation between stock exchanges of the two countries.
In addition, concluding the summit, the SCO unanimously issued a statement urging a “full and efficient” implementation of the nuclear deal.
“The member SCO states deem it important to consistently implement the JCPOA on the Iranian nuclear program, and call for participants to strictly observe their obligations with a view to ensuring its full and efficient implementation and promoting peace and stability in the region and globally,” read a paragraph of the statement issued at the end of the summit.
It is worth noting that almost concurrent with the SCO summit in Qingdao, the leaders of the Group of Seven (G7) met in Quebec, Canada. The G7 meeting ended in failure as leaders of Canada, France, Germany, and Britain clashed with President Trump over imposition of tariffs on import of steel and aluminum from Europe and Canada. Also one of the main contentions of the other six nations in the G7 group with Trump was their support for the JCPOA.
Cooperation with SCO members is Iran’s lever of power
To have a better view about the achievements of the SCO summit, the Tehran Times conducted a phone interview with Davood Abbasi, an economic expert.
Abbasi said, “Besides China and Russia who are the major powers at United Nations Security Council, the SCO members include Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and India and Pakistan, among which India can be considered as a rising economic power in the world. Iran, Afghanistan, Belarus, and Mongolia are the observer states. Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey are the dialogue partners.”
“One of the main goals of SCO 2018 was supporting China’s One Belt, One Road (OBOR) project, as a giant economic project which can engage all the named SCO members,” he said.
He added, “The interesting point about this project is that China discusses a type of trade cooperation pattern totally different from the one used by the capitalist Westerners.”
In fact, the SCO seeks creation of a free trade zone, transition to a preferential trade regime, and facilitating trade between countries along the OBOR route in Central Asia and the Persian Gulf region.
Abbasi said, “All the countries in the region can benefit from the establish the OBOR project, accordingly.” In better words, he said, the project can spur all the member states to take part for joint economic benefits.
Answering a question on Iran’s participation and role in development of OBOR and the advantages of cooperating with SCO to persevere its national interests, Abbasi said, “I believe some factors, such as the simultaneity of the SCO 2018 with G7 summit and Russia’s tendency in trying other formats than G8, can highlight the positive and pivotal role of Iran in OBOR project for China, while such factors could increase Iran’s bargaining power in the Shanghai Cooperation Organization as well as the country’s capability in convincing EU members to preserve their economic relations with the country after withdrawal of U.S. from the JCPOA.”
“Iran can benefit from its participation in the regional agreement of the SCO as an alternative for replacing European countries in its economic relations with those from the region,” the economic expert highlighted.
“Under the present conditions, I guess that senior European officials are focusing more than before on continuing their oil purchases from Iran, of course, without encountering any difficulties in their relation with the U.S., specifically Trump. While, China preserved its purchase of 630,000 bpd of Iranian oil in 2017 and has announced its readiness to boost oil purchases from Iran. Besides, the value of Iran-China trade surpassed $37 billion in 2017, showing a 20-percent increase from the preceding year. Therefore, in case Europeans decide to decrease the purchasing volume, Iran has an alternative to replace them with eastern customers,” he said, “This improves Iran’s bargaining power.”
“More effectively than any political measure, Iran’s reinforcement of economic ties with regional countries and China can persuade Europeans to tighten their economic ties with Iran, while Europeans cannot ignore the economic benefits they can gain from developing ties with Iran,” he concluded.
Considering Iran’s relations with Russia and China, Abbasi said the three countries’ cooperation on reconstruction of the war-hit Syria and Iraq can additionally improve their trilateral cooperation.
“In better words, the three countries’ political cooperation is incrementally being converted into economic collaboration in the region to guarantee their economic benefits.”
However, the road to reach such warm ties through OBOR is not smooth. India disagrees with the OBOR project, which cuts through the Pakistan-controlled Kashmir since it lays claim to that area.
“Here, China has the possibility to resolve the old row between India and China by defining economic benefits for both sides via implementation of the OBOR project. Regarding its firm economic ties with India and Pakistan, Iran can also have a positive impact on India-Pakistan relations as well as that between Armenia and Azerbaijan,” Abbasi remarked.
“In fact, when some countries in the region such as Saudi Arabia sow unrest via spreading ideological and political disputes…, Iran is transmitting a direct message to regional countries, inviting them to peace and boosting economic cooperation to guarantee multilateral benefits of all parties,” Abbasi stated.
Asked about Iran’s membership in the SCO, he expressed content that “some negotiations have been held at the SCO summit to improve Iran’s situation in the SCO via accepting it as a permanent member,” predicting that Iran’s full membership in the regional bloc would be facilitated regarding the current circumstances.
First published at our partner Tehran Times