New Trade Mechanism Unlikely To Bring EU Firms Back To Iran

A new EU mechanism for non-dollar trade with Iran embodies Europe's adherence to the nuclear deal with Tehran, but the measure is unlikely to ensure the return of major EU companies to the Iranian market as it does not protect them from possible US restrictions.

Nuclear deal with Tehran, but the measure is unlikely to ensure the return of major EU companies to the Iranian market as it does not protect them from possible US restrictions, experts told Sputnik.

US President Donald Trump announced in May that the United States would withdraw from the 2015 Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal, and re-impose its sanctions against Tehran that had been lifted under the agreement.

The first package of the US restrictions came into force in August.

On Thursday, Germany, France and the United Kingdom  the signatories to the Iran nuclear deal  announced that the mechanism, dubbed INSTEX (Instrument for Supporting Trade Exchanges), has been established to ensure legitimate trade with Tehran despite US efforts to derail the implementation of the nuclear agreement with Iran.

The INSTEX announcement is politically significant as it signals Europe's determination to keep the nuclear deal with Iran despite the pressure from the United States, Ahmad Khalid Majidyar, a fellow and the director of IranObserved Project at the Washington-based middle East Institute, told Sputnik.

"By creating the new mechanism, European powers are signaling to Tehran that they still support the nuclear agreement and will encourage European companies to continue doing business with Iran," Majidyar said.

Such assessment was echoed by Steffen Kotre, a member of the Bundestag Committee on Economic Affairs and Energy from the Alternative for Germany (AfD) party, who also noted the political importance of the long-awaited trading mechanism for regional security.

"Continuing trade and treating Iran with respect and not as an enemy is the best way how to secure peace and to keep control over Iran's nuclear program," Kotre told Sputnik.

At the same time, this move could also be perceived as a signal to Trump personally from other JCPOA signatories who strongly disagreed with his decision to pull out from the nuclear deal as well as re-imposition of sanctions on Iran, Abdulaziz Alghashian, a Middle East expert and PhD researcher of international relations and the politics of the Middle East at Essex University, pointed out in his comments to Sputnik.

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