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Support for US Iran policy out of left field: China dramatically reduces trade with Tehran

Dr. James M. Dorsey

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China has dramatically reduced its trade with Iran in line with US sanctions, raising questions whether Iran will remain committed to an international agreement that puts severe limits on its nuclear endeavours.

Reduced Chinese trade also suggests that Iran is likely to face increased obstacles as it seeks to blunt the impact of the harsh US sanctions imposed last year in a bid to force the Islamic republic to change its regional and defense policy.

China’s apparent willingness to accommodate the sanctions is remarkable given Beijing’s declared efforts to salvage the 2015 international agreement that curbed Iran’s nuclear program as well as its escalating trade and technology dispute with the United States.

Bourse & Bazaar, a self-described media and business diplomacy company operated by Esfandyar Batmanghelidj, the founder of the Europe-Iran Forum, disclosed China’s reduced trade on almost the same day that the US Justice Department filed criminal charges against Chinese telecommunications giant Huawei and its chief financial officer Meng Wanzhou.

The Justice Department asserts that the company and Ms. Meng violated Iran sanctions in addition to stealing US robotic technology.

Based on a review of trade data from China’s General Customs Administration, Bourse & Bazaar concluded that Chinese trade with Iran had dropped by 70 percent in the first two months after the re-imposition of US sanctions.

In addition, China’s Bank of Kunlun, the vehicle China used in the past for business with Iran because it had no exposure to the United States and as a result was not vulnerable to US sanctions, said in December that it would restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.

China replaced Europe as Iran’s main trading partner in 2012 at a time that Iran was under United Nations sanctions. Those sanctions were lifted with the conclusion of the nuclear agreement in 2015.

Bourse & Bazaar said Chinese exports to Iran had dropped to US$400 million in the period from October to December of last year compared to US$1.2 billion in the same period in 2017.

“China may be abandoning the policy of sustaining trade with Iran in direct contravention of US sanctions, introducing both economic risks in regards to Iran’s continued industrialization and political risks in regards to Iran’s continued compliance with the JCPOA,” the report said, referring to the nuclear accord by the initials of its official designation, the Joint Comprehensive Plan of Action.

The report said that Iran relies on China for the import of badly needed industrial machinery and technology funded by its oil exports.

Iranian oil exports to China rebounded after the US gave China and seven other countries a six-month waiver but that did not revive Chinese exports, the report said.

Chinese compliance with US sanctions, at least in terms of trade could put to the test Iran’s declared commitment to the nuclear agreement in the wake of US President Donald J. Trump’s withdrawal from the accord last May.

Iran has said its continued commitment would be determined by whether the accord remained in its interest, determined primarily by the ability and willingness of the other signatories to the agreement –China, the European Union, Britain, France, Germany and Russia – to help it blunt the impact of the US sanctions.

The signatories have so far maintained that Iran has complied with the agreement even if the European Union recently sanctioned Iran’s intelligence ministry for allegedly targeting Iranian dissidents in the Netherlands, Denmark and France.

Germany subsequently banned Mahan Air, an Iranian airline sanctioned by the United States, from landing at its airports, asserting that Mahan Air had ferried fighters and weapons to Iranian-backed forces in Syria. Mahan Air operated four flights a week to Duesseldorf and Munich.

The signatories’ position appeared to be supported by a Worldwide Threat Assessment by the US intelligence community that in effect concluded that the Trump administration’s Iran policy had so far failed.

“We continue to assess that Iran is not currently undertaking the key nuclear weapons-development activities we judge necessary to produce a nuclear device,” Director of National Intelligence Daniel Coats told the Senate Intelligence committee in a hearing on the 42-page report.

The report warned that US policy could empower Iranian hard-liners; had sparked at best only sporadic uncoordinated anti-government protests in the Islamic republic; had failed to persuade Iran to change its regional and defense policy; and could prompt it to pursue more aggressive policies to counter perceived US, Saudi and Israeli attempts to destabilize the regime in Tehran.

Disclosure of Chinese willingness to comply to some degree with US sanctions as well as the European sanctions come in advance of a conference in Warsaw next month convened by the United States to discuss peace and security in the Middle East.

The conference, to which Iran has not been invited, is widely seen as a US effort to bolster support for its Iran policy. Russia and EU foreign policy chief Federica Mogherini have said that they would not be participating in the meeting.

An article in China’s state-owned Global Times discussing the Warsaw meeting under the headline, Poland is getting closer to US, but should China be worried? noted that Poland had arrested on espionage charges a former Chinese employee of Huawei and was considering banning the company.

The European Union, in a bid to blunt the impact of the US sanctions, is believed to be on the verge of launching a financial clearing house known as the Special Purpose Vehicle (SPV) that would allow European companies to continue to trade with Iran in accordance with EU law and could be open to other partners such as China.

The vehicle is being conceived as an alternative to the Brussels-based Society for the Worldwide Interbank Financial Telecommunication (SWIFT) international financial messaging system used by more than 10,000 banks worldwide.

The US has blacklisted tens of Iranian banks and pressured SWIFT into agreeing to steer clear of handling transactions of those banks.

The Bourse & Bazaar report warned that continued Chinese refusal to buck US sanctions and ensure Iran has the necessary industrial machinery and technology to keep its economy running would fuel unemployment in the country that could be “devastating and destabilizing.”

The report said Iran was more likely to withdraw from the nuclear agreement in a move that could significantly raise tensions in the Middle East as a result of Chinese rather than European compliance with US sanctions.

“If the nuclear deal collapses due to extraordinary economic pressures in Iran, China may be to blame,” the report said.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Middle East

Turkey and the time bomb in Syria

Mohammad Ghaderi

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The Turkish attack on northern Syria has provided conditions for ISIS militants held in camps in the region to escape and revitalize themselves.

Turkey launched “Operation Peace Spring” on Wednesday October 9, claiming to end the presence of terrorists near its borders in northern Syria. Some countries condemned this illegal action of violation of the Syrian sovereignty.

The military attack has exacerbated the Syrian people’s living condition who live in these areas. On the other hand, it has also allowed ISIS forces to escape and prepare themselves to resume their actions in Syria. Before Turkish incursion into northern Syria, There were many warnings that the incursion would prepare the ground for ISIS resurgence. But ignoring the warning, Turkey launched its military attacks.

Currently, about 11,000 ISIS prisoners are held in Syria. ISIS has claimed the responsibility for two attacks on Qamishli and Hasakah since the beginning of Turkish attacks.

Meanwhile, Donald Trump said that Turkey and the Kurds must stop ISIS prisoners from fleeing. He urged European countries to take back their citizens who have joined ISIS.

It should be noted that the U.S. is trying to prove that ISIS has become stronger since the U.S. troops pulled out before the Turkish invasion, and to show that Syria is not able to manage the situation. But this fact cannot be ignored that ISIS militants’ escape and revival were an important consequence of the Turkish attack.

Turkish troops has approached an important city in the northeast and clashed with Syrian forces. These events provided the chance for hundreds of ISIS members to escape from a camp in Ayn Issa near a U.S.-led coalition base.

 The camp is located 35 kilometers on the south of Syria-Turkey border, and about 12,000 ISIS members, including children and women, are settled there. The Kurdish forces are said to be in charge of controlling these prisoners.

Media reports about the ISIS resurgence in Raqqa, the former ISIS stronghold, cannot be ignored, as dozens of terrorists have shot Kurdish police forces in this city. The terrorists aimed to occupy the headquarters of the Kurdish-Syrian security forces in the center of Raqqa.  One of the eyewitnesses said the attack was coordinated, organized and carried out by several suicide bombers, but failed.

In response to Turkey’s invasion of Syria, the Kurds have repeatedly warned that the attack will lead to release of ISIS elements in the region. Turkey’s President Recep Tayyib Erdogan denied the reports about the escape of ISIS prisoners and called them “lies”.

European officials fear that ISIS prisoners with European nationality, who have fled camps, will come back to their countries.

Kurdish forces are making any effort to confront Turkish troops in border areas, so their presence and patrol in Raqqa have been reduced.

Interestingly, the Turkish military bombarded one of temporary prisons and caused ISIS prisoners escaping. It seems that ISIS-affiliated covert groups have started their activities to seize the control of Raqqa. These groups are seeking to rebuild their so-called caliphate, as Kurdish and Syrian forces are fighting to counter the invading Turkish troops. Families affiliated with ISIS are held in Al-Hol camp, under the control of Kurdish forces. At the current situation, the camp has turned into a time bomb that could explode at any moment. Under normal circumstances, there have been several conflicts between ISIS families in the camp, but the current situation is far worse than before.

There are more than 3,000 ISIS families in the camp and their women are calling for establishment of the ISIS caliphate. Some of SDF forces have abandoned their positions, and decreased their watch on the camp.

The danger of the return of ISIS elements is so serious, since they are so pleased with the Turkish attack and consider it as an opportunity to regain their power. There are pictures of ISIS wives in a camp in northern Syria, under watch of Kurdish militias, showing how happy they are about the Turkish invasion.

In any case, the Turkish attack, in addition to all the military, political and human consequences, holds Ankara responsible for the escape of ISIS militants and preparing the ground for their resurgence.

Currently, the camps holding ISIS and their families are like time bombs that will explode if they all escape. Covert groups affiliated with the terrorist organization are seeking to revive the ISIS caliphate and take further actions if the Turkish attacks continue. These attacks have created new conflicts in Syria and undermined Kurdish and Syrian power to fight ISIS.

From our partner Tehran Times

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Middle East

The Turkish Gambit

Dr. Arshad M. Khan

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The only certainty in war is its intrinsic uncertainty, something Turkish President Recep Tayyip Erdogan could soon chance upon.  One only has to look back on America’s topsy-turvy fortunes in Iraq, Afghanistan and even Syria for confirmation.

The Turkish invasion of northeastern Syria has as its defined objective a buffer zone between the Kurds in Turkey and in Syria.  Mr. Erdogan hopes, to populate it with some of the 3 million plus Syrian refugees in Turkey, many of these in limbo in border camps.  The refugees are Arab; the Kurds are not.

Kurds speak a language different from Arabic but akin to Persian.  After the First World War, when the victors parceled up the Arab areas of the Ottoman Empire, Syria came to be controlled by the French, Iraq by the British, and the Kurdish area was divided into parts in Turkey, Syria and Iraq, not forgetting the borderlands in Iran — a brutal division by a colonial scalpel severing communities, friends and families.  About the latter, I have some experience, having lived through the bloody partition of India into two, and now three countries that cost a million lives.   

How Mr. Erdogan will persuade the Arab Syrian refugees to live in an enclave, surrounded by hostile Kurds, some ethnically cleansed from the very same place, remains an open question.  Will the Turkish army occupy this zone permanently?  For, we can imagine what the Kurds will do if the Turkish forces leave.

There is another aspect of modern conflict that has made conquest no longer such a desirable proposition — the guerrilla fighter.  Lightly armed and a master of asymmetric warfare, he destabilizes. 

Modern weapons provide small bands of men the capacity and capability to down helicopters, cripple tanks, lay IEDs, place car bombs in cities and generally disrupt any orderly functioning of a state, tying down large forces at huge expense with little chance of long term stability.  If the US has failed repeatedly in its efforts to bend countries to its will, one has to wonder if Erdogan has thought this one through.

The Israeli invasion of Lebanon in 1982 is another case in point.  Forever synonymous with the infamous butchery at Sabra and Shatila by the Phalange militia facilitated by Israeli forces, it is easy to forget a major and important Israeli goal:  access to the waters of the Litani River which implied a zone of occupation for the area south of it up to the Israeli border.

Southern Lebanon is predominantly Shia and at the time of the Israeli invasion they were a placid group who were dominated by Christians and Sunni, even Palestinians ejected from Israel but now armed and finding refuge in Lebanon.  It was when the Israelis looked like they were going to stay that the Shia awoke.  It took a while but soon their guerrillas were harassing Israeli troops and drawing blood.  The game was no longer worth the candle and Israel, licking its wounds, began to withdraw ending up eventually behind their own border.

A colossal footnote is the resurgent Shia confidence, the buildup into Hezbollah and new political power.  The Hezbollah prepared well for another Israeli invasion to settle old scores and teach them a lesson.  So they were ready, and shocked the Israelis in 2006.  Now they are feared by Israeli troops.   

To return to the present, it is not entirely clear as to what transpired in the telephone call between Erdogan and Trump.  Various sources confirm Trump has bluffed Erdogan in the past.  It is not unlikely then for Trump to have said this time, “We’re leaving.  If you go in, you will have to police the area.  Don’t ask us to help you.”  Is that subject to misinterpretation?  It certainly is a reminder of the inadvertent green light to Saddam Hussein for the invasion of Kuwait when Bush Senior was in office. 

For the time being Erdogan is holding fast and Trump has signed an executive order imposing sanctions on Turkish officials and institutions.  Three Turkish ministers and the Defense and Energy ministries are included.  Trump has also demanded an immediate ceasefire.  On the economic front, he has raised tariffs on steel back to 50 percent as it used to be before last May.  Trade negotiations on a $100 billion trade deal with Turkey have also been halted forthwith.  The order also includes the holding of property of those sanctioned, as well as barring entry to the U.S.

Meanwhile, the misery begins all over again as thousands flee the invasion area carrying what they can.  Where are they headed?  Anywhere where artillery shells do not rain down and the sound of airplanes does not mean bombs.

Such are the exigencies of war and often its surprising consequences. 

Author’s Note:  This piece appeared originally on Counterpunch.org

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Middle East

Could Turkish aggression boost peace in Syria?

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On October 7, 2019, the U.S. President Donald Trump announced the withdrawal of American troops from northeast Syria, where the contingent alongside Kurdish militias controlled the vast territories. Trump clarified that the decision is connected with the intention of Turkey to attack the Kurdish units, posing a threat to Ankara.

It’s incredible that the Turkish military operation against Kurds – indeed the territorial integrity of Syria has resulted in the escape of the U.S., Great Britain, and France. These states essentially are key destabilizing components of the Syrian crisis.

Could this factor favourably influence the situation in the country? For instance, after the end of the Iraqi war in 2011 when the bulk of the American troops left the country, the positive developments took place in the lives of all Iraqis. According to World Economics organization, after the end of the conflict, Iraq’s GDP grew by 14% in 2012, while during the U.S. hostilities the average GDP growth was about 5,8%.

Syria’s GDP growth should also be predicted. Not right away the withdrawal of U.S., French, British, and other forces, but a little bit later after the end of the Turkish operation that is not a phenomenon. The Turkish-Kurdish conflict has been going on since the collapse of the Ottoman Empire when Kurds started to promote the ideas of self-identity and independence. Apart from numerous human losses, the Turks accomplished nothing. It is unlikely that Ankara would achieve much in Peace Spring operation. The Kurds realize the gravity of the situation and choose to form an alliance with the Syrian government that has undermined the ongoing Turkish offensive.

Under these circumstances, Erdogan could only hope for the creation of a narrow buffer zone on the Syrian-Turkish border. The withdrawal of the Turkish forces from the region is just a matter of time. However, we can safely say that the Turkish expansion unwittingly accelerated the peace settlement of the Syrian crisis, as the vital destabilizing forces left the country. Besides, the transfer of the oil-rich north-eastern regions under the control of Bashar Assad will also contribute to the early resolution of the conflict.

It remains a matter of conjecture what the leaders of Saudi Arabia, the United Arab Emirates, and Russia agreed on during the high-level talks. Let’s hope that not only the Syrians, but also key Gulf states are tired of instability and tension in the region, and it’s a high time to strive for a political solution to the Syrian problem.

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