tv U.S. Withdrawal From Iran Nuclear Deal CSPAN May 14, 2018 10:31pm-12:01am EDT
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the judiciary hears from smokey robinson and other musicians, songwriters, and music industry executives. that starts at 10:00 a.m. eastern. at noon, oral argument for the case concerning president trump's decision to and the deferred action childhood arrivals program known as daca. and regents of the university of california versus the department of homeland security starts at 4:00 p.m. on c-span3. speaking about the u.s. decision from withdrawal of the nuclear deal at the atlantic council. following an ambassador's remarks, a panel looks at the sanction and debates what will happen next with the agreement.
>> thank you. i'm delighted we are bringing together all of our iran work now. atuggest all of you look &iransource. events this new week. certainly, president trump has given us a lot to chew over. we will look at sanctions aspects. in particular, what the announcement regarding the u.s. withdrawal regarding the jcpoa will mean for the u.s., for our asian partners. we are lucky we have a last-minute addition to our
experts. that is the ambassador and head of the european delegation to the united states, david o'sullivan will make some keynote remarks. then we will turn to our panel of true leopards -- our true experts. let me briefly introduce them. ms. rosenberg is director of the energy and economics security program at the center for new american security. she is a veteran of the treasury departments. she is an expert on sanctions policy. we also have a new member who is a policy fellow at the european leadership network and he will address european concerns and concerns about the trump decision for the u.s. alliance in europe. we have an old friend of the program, the iranian budget the i ranho --
project director -- deer ran project director. in his senior fellow at our global energy center and veteran of the state department. i believe also the nsc, where he worked on developing the sanctions that are now going to be returning. so, it promises to be a very, very interesting our and a half. i would like to ask you to silence your cell phones and invite ambassador sullivan to come make some preliminary remarks. thank you. youssador sullivan: thank very much, barbara. good morning. good afternoon, ladies and gentlemen. it is seven minutes past 12:00 so it is no longer the morning.
i will not hide from you that it is with a slightly heavy heart that i take the stage this morning. this is never where we had hoped we would be. maybe we should not be entirely surprised, but that does not stop me from feeling the need to express my extreme disappointment at where we now are. we deeply regret the decision that president has taken. maybe we should not be entirely surprised. usis something we feel puts in a very difficult situation. around nucleare deal as -- or the iran nuclear deal as many of you know is perceived by the europeans and the broader community is a strategic multilateral agreement. by the national security council and most importantly, and this is usually
hugely important to say over and over. it is serving the purpose for which it was designed, which was three event around from every developing a nuclear weapon. iranich was to prevent from developing a nuclear weapon. certainly we as the european union and you is the united states continue to have problems, but the decision was taken that the most important issue in our relations with a was thatd -- with iran they could develop a nuclear weapon and that was important to be stopped. that is what this agreement set out to do, does, and in our view, will continue to do. program hasnuclear been significantly rolled back
and more importantly, and perhaps the single most important aspect of this agreement, it has been brought within a comprehensive and unprecedented late intrusive system.ng the international atomic energy authority has placed a robust verification system and takes on average to nuclear inspections per month. since the start, the international atomic agency has issued 10 reports that certify iran is complying with its agreements under the deal. in multiple appearances before the senate and under committees, members have confirmed that is the view of the intelligence community. the outcomes of inspections and iranian compliance has been widely reported in europe and the
united states. we continue to believe in europe vitalhis jcpoa is a element of our national security. regionlso vital for the and more globally. it represents a key element of global nuclear nonproliferation architecture. it is probably the single most impressive piece of nuclear nonproliferation that has been committed to paper. it is the single most important working model of nuclear nonproliferation at a time when we are also discussing the future possibilities for ending nuclear proliferation. for example, in the korean peninsula. misse deal with to sometimes propagated about this deal. me deal with two myths sometimes propagated with this deal. after the deal, iran is free to
do what it wants. this is not true. it is true there are elements and restrictions on peaceful nuclear activity which are subject to certain caps and ceilings over time. the fact remains, this is a deal in perpetuity where a ran commits itself -- where iran commits itself never to acquire or develop nuclear weapons, ever. the international community is equipped with the right to monitor and verify that commitment in perpetuity. in particular, through the adoptingns and protocol. this is a treaty which is forever the definitive annunciation by iran of the right to acquire or by nuclear weapons.
can a ran change its mind? yes. but then they would be in breach of the agreement. conduct activities deemed not compatible, we retain the full right to reimpose all of the measures we think are necessary in order to enforce the purposes of this agreement. the second myth i want to , puncture, is that this is all about money and trade with iran. we took some of the toughest economic hits. we generally do so with these sanctions issues. times more with russia then does the united states. we also traded a great deal more with iran then did the united states. so when we introduce the sanctions, we took the economic kit with the full recognition that it was important to prevent
the acquisition of nuclear weapons by iran. and we are going to give up those sanctions until we were absolutely convinced we had a deal with iran that was enforceable and effective. it was at that moment we agreed that indeed the quid pro quo of this negotiation -- and let us be clear, ladies and gentlemen -- any international negotiation an element of quid pro quo. it was to make sure ran! felt they were getting some benefit for accepting this draconian and unprecedentedly intrusive inspection system of their nuclear activities. it is true it is natural that perhaps the europeans, who had previously had more economic ties with iran would go back to more dealings. and frankly, we have no monopoly on that and there has been no rush by european government. because of the chilling effect of the debate about whether the
agreement would continue and sanctions would come back. so there has been a limited amount of economic benefit for iran. -- benefit for we are bound to deliver on our commitment if we want iran to stay in the deal. we wanted to be felt by the people of a ran -- of a ran! and i believe that will be one of -- in this spirit, and in our maintaining that commitment because we think it is vital not to permit the development of nuclear weapons by around -- iran. we will work on options to prevent extraterritorial effects u.s. sanctions.
the jcpoa is a long-term international agreement. we count on them to preserve it even without the united states involved. one of the key elements of multilateralism is predictability and maintenance of a agreements over. the european union will maintain its commitment as long as they do with the same. clear, our is commitment to the jcpoa and determination to act in accordance with europe's security interest. we do not see a credible, peaceful alternative to the jcpoa. frankly, the united states has not yet suggested a credible alternative, neither before nor since the president made his statement on may 8. we wait to hear what this administration thinks such a carnival alternative could look
like. we have met with the administration following the announcement. in the coming days, we will have meetings with member states and partners to assess the situation. the high representative has convened a meeting with ministers tomorrow, followed by a meeting with the arabian minister for foreign affairs for -- the iranian minister of foreign affairs. we will have other meetings. if i may conclude by quoting the high representative when she said, in her remarks on the eighth of may, this deal belongs to each and everyone of us. we expect the international community to continue to do its part to guarantee the deal continues to be fully implemented for the sake of our own collective security. that is what i wanted to say by way of keynote remarks. i want to return to my initial statement. it is with a very heavy heart
that i deliver these remarks. this is a difficult moment. i hope we can find a way through but we will face of difficult decisions. thank you. i will take one or two questions. [applause] for the microphone if you want. thank you. >> thank you for your remarks. i'm with the reporters congressional quarterly. my question involves conjecture. what do you think is the likelihood of reissuing of oncking our regulations seven-year sanctions question even if blocking regulations are used, what do you think, given the lack of strong european investment in the economy would they know invest in the iranian economy
given the threat of secondary sanctions? understand the question. i'm not in the position today to give you detailed answers. we are engaged in conversation to see how this will unfold from the u.s. perspective so we understand what we are dealing with. we will discuss in brussels and elsewhere this week our we can possibly respond to that and we may have something more to say later in the week. the other point i want to make is this is not just about the ability of european countries to -- do business. there are other countries, china, india, russia -- you do business with iran. it is not that the usn the u.k. dominate this arena. situation, wes had built an unprecedented international coalition. china, russia, the three european member states. that meant the sanctions truly
had impact. i doubt it will be possible to reinstate anything like that international consensus, given the united states is walking away from it deal that iran is obligated to implement. while we may have some tensions between the u.k. and u.s., other people will be able to do business with iran. so this is not a closed circuit which is only a debate between that you and the u.s. -- between u.s.e.u. and the question: i will take my prerogative as moderator and ask you a question. how much damage has this decision done to u.s. relations with europe in the context of the withdrawal from the paris climate accord's, the complaints
about nato spending, the trade disputes over aluminum and steel? o'sullivan: it is true we are going to return to a turbulent time. i do not want to it into a quantification. we've had disagreements in the past. we will have disagreements in the future. the strength of the transpacific us.ance binds i am sure we will work through. but this is a moment of great disagreement he tween us where we are not on the same page. question: ambassador, a few months ago i ask you the same question. you said europe is ready to enact legislation to protect its interests. as a fewnswer the same months ago? is europe ready to enact legislation to protect its
interests? ambassador o'sullivan: we are studying exactly what will be the issues that arise from the manner in which the u.s. will put back its sanctions and the implications for european companies. i know a chinese company is apparently going to be no longer held to account. that may be opens up the possibility of flexibility in the way this could be approach. when we better understand how this will be managed, we will decide how to respond from the thepean side to defend interests of our country and ampanies and also to protect ran from the prospect of their fundamental bargain with the jcpoa. i wish you an interesting panel discussion. thank you. [applause]
host: ok. as somebody who has followed the negotiations and u.s.-iran relations, i want to ask you two things. this mean for any possibility of reconciliation between the united states and iran? do you think iran will be actually able to stay within this agreement absent u.s. participation? andhose are two very good difficult questions to start with. in terms of long-term implications, it is difficult to predict.
ofyou put it in the context the past year and a half, i would argue it is for the first i am seeing a top-down process turning into a bottom-up phenomenon. i see western educated iranians who don't understand why the u.s. is doing this to them. broader context of the muslim ban, calling the ,ersian gulf the arabian gulf which is the best way if you want to provoke the arabian sense of net -- the iranian sense of nationalism. that, licenses to civilian
airlines is directly related to the quality of life and safety of iranians. has givens together positive the argument that the enmity coming from washington is not just against the system, but is against the iranian people. they even pushed the iranian leadership at the moment. -- trusted the united states, look cap he ended up. ended up.w he --m on he has entered
rhouhani has entered into this agreement and look how he has ended up. we are talking about a population that has almost no experience. for them, this is the most informative experience they are having with the united states. to go back to your first say i wouldwould like to look at this on two different levels. there are to blame games here determining the outcome. one is the international blame game. iran plan b was to make sure they could win the international blame game. this comes out of the sanctions. they realize the only reason the sanctions were so affect during the obama administration was that iran was seen as the inflexible party at fault. sanctions were effective as they
continued with national support. they said, never again. we have to make sure this will not happen again and we are not isolated and we have to act as if we are really delivering our and of the bargain. they delivered 100% of the jcpoa agreement. he has agreed to create a consensus around this idea that they have to stay in the steel and take this as far as possible to demonstrate around has not been the inflexible party at fault again. rouhani came out the other day and supported this come i think iranians will stick to the deal waiting to see what happens in the negotiations.
four plus oneing is a better deal than five plus one. there is also the domestic blame game. the situation is different here. aroundere are debates the jcpoa plus, giving more to that europeans may be on regional issues, human rights, banking reform and in return ask for more from the europeans. should accept it without the u.s. less than what they were before, but maybe enough to carry on in the next few years. if the europeans are
not really able to protect their companies or incentivize their , cannies to stay in iran it survive my simply selling its oil to india, turkey, and basically reorienting almost entirely toward asia. >> they cannot thrive, but they could survive. but i think the situation is not very tenable. is if you look at the milestones in iranian politics, in 2020 there were presidential elections. in 2020 when there are presidential and local elections. there is the prospect of discussions looming large. there is a lot at stake. system will be determined by the next supreme
leader. there is a lot of vested interest in the economy. if the system is closed, there is opportunity for revolutionary guards to monopolize the economy. why i think if rouhani fails as a last-ditch resort to try to save the deal, i doubt he would be able to maintain the deal just as an arrangement. what the: you heard ambassador had to say. he was not very specific about the measures europe might take. is it realistic to expect that european companies, when faced with an $18 trillion u.s. market and a $400 billion a rainy and market -- $400 billion iranian choose iran?
>> they have been relatively quiet on what measures they would take. i think there are very -- the deal. focusing on the compensations they have leading up to the decision. to requirewant diplomacy to make the deal work. i think they were mindful that any open statements or more confrontational measures could derail those negotiations. is, ifer reason for that we look at plan b, it is not too tempting. there are a number of options on the table for protecting european interests in iran.
most people in your seeing they are -- in europe they are either technically or politically complicated. if we look on the block and regulations, simply out the moment, there are too many question marks about how that would play out. it sounds good theoretically that the eu would protect investment in iran. but if you look at how that would play out, it is a technically complicated purpose -- process. for the private sector, i'm not sure it would give them the confidence they need that they will have continued access to the iranian market. beat -- i'm afraid i'm becoming more and more pessimistic that there are concrete measures the eu could take at this point. >> what about the state own, state run entities? in your own paper that you put out for european leadership
networks, the european investment bank, for example, might be able to extend guarantees. there are other banks that have heavy government involvement and credit agencies in such. could they not pick up some of the stock? >> thank you for reading my paper, first of all. i'm glad somebody did. >> that is why you are here. [laughter] >> there are two points to your question. they are going through a long process at the moment, gradually moving iran to the list of countries where the eib could operate. that is a process that is ongoing. it will take another few months. once that is done, it is time for european negotiators to throw up a framework agreement with their counterparts in iran. this is likely to be a drawnout, complicated process. the real significance of that
right now rather than technical is political. it is showing a. in a you to the private sector but also to iran that we are continuing business with iran. that's the first thing. the other thing is setting up protected credit lines. we have seen a few of these initiatives happening in france, in italy, denmark, and so on. essentially, you would have work with credit export agencies, banks, to establish credit lines to iran the nominated in euros rather than u.s. dollars. theoretically, you would circumvent the reach of the u.s. secondary sanctions. it will have some impact, i think, but the problem is, when i talked to businesses about iran, everyone said we are really interested in this
market. we see a huge potential. we want to do is this. the problem is the bank -- to do business. the problem is the bank. the bank says we want to do this but the risk is too high. we cannot take the risk of penalties from the u.s. that is the sticking point. that you have european policymakers saying we encourage this. youif you are a big bank, are relying on access to european capital markets, on the ability to have processing payments in u.s. dollars. the hesitation and the risk aversion among the big banks will simply continue to have an effect on investment in iran. having said that, with these measures could do is substitute encourage companies and banks to keep some economic deals going with iran. europely policymakers in will see this is enough to tell iran, look, you are better stay
with the deal with loss than you were best with us than you were under the sanctions regime -- stay with the deal with us then you were under the sanctions regime. >> china, because of the size of its economy, seems to be well placed to create new entities that could trade and invest with iran, invest in iran, without any reference to the u.s. dollar. do you anticipate that this is what will happen? we have some experiences already during the period of heavier sanctions when we had an international consensus. china was still buying iranian oil. i don't see it reducing its imports of iranian oil very much. >> that is a rich set of questions. thank you very much. i'm glad to be here with you also in this important conversation. glad for the opportunity to
focus on china and east asia because it is certainly appropriate to talk about how european companies and political leadership will respond, not merely because they laid down some markers and public statements. it's not necessarily the inches style to provide eclair tory policy or offers -- declaratory policy or offers protection, but it does not mean we should neglect the fact that they may be doing so and some quite actively in private. it's a good question. what can iran sustain economically if it only trades with china? but if it only trades with china, china is an enormous purchaser of iranian crude. 800,000 tos about
900,000 and nearly half in iranian experts. >> -- exports. >> it's possible they could find a way to not diminish that purchased even if there was some on the surface plan to significantly reduce. put a pin in that and we will talk about that. under they that emma prior intensive period of sanctions on iran, there was a requirement for countries to reduce. we will come back to that if you want to talk about the details. but for china in particular, there is an opportunity to continue, including in a manner similar to what happened up until 2012, when it was by thehted by sanctions kremlin who was processing
payments for china in violation of the sanctions. independent traders who purchase iranian oil, they did in various ways through the gulf. there was an intensive effort to get after loopholes and evaders and crude blends. new blends on the market that are not our money crude -- armani crude. china has a huge amount of leverage to comply a little, to comply a lot, to comply not at all. that is the biggest challenge for the united states if this is a power struggle to occur between foreign purchasers of iranian oil, commercial actors
doing business with iran. that would be the site of the real showdown, not with european leaders as you are just mentioning. i want to briefly say something about president trump twitter zte.ations about a pe -- you may think it is unrelated, but it is not. it is a massive chinese telecom sanctionsainst which actions were taken. when president trump indicated he would work with president xi to alleviate some of the economic harm to this major chinese company in the jobs lost because of the sanctions enforcement action, it is undercutting the u.s. when he just told china, if you're president makes -- if you're president makes nice with me, we
will lessen the pain. what does that mean about the plan here for imposing these iran sanctions? what does it signal about how you may be able to get out from under certain things if your political leader, your head of state is savvy enough to do a deal with president trump? manyl that that confuses people trying to do right by this, this set of sanctions -- i should say approach a legal path forward. it opens new opportunities for people who want to strategically contemplate evasion, avoidance, or political negotiation to go around them. were an architect of these sanctions. you know what parts to put in place. how hard will it be to bring them all back?
a particular, coming off of what was just said, there are so many negotiations going on right now on multilateral and a bilateral basis. we have aluminum, steel -- do we thoughy clarity -- even president trump said he would bring back all the sanctions and more in his comments last week, it looks as though he might be willing to perhaps have a carved at here or a car out there -- carve out here or a carve out there. can you envision that there would be these kind of deals done?ould be how much more does that money the whole picture for people trying to figure out whether they shouldn't be winding down their business by next november? >> thanks, barbara. you potential have two big questions int there.
the first being how do you put the sanctions back in place? can they be done easily? i think they can. it is a lot of work for lawyers and the government. we have already seen some pretty extensive guidance about how these sanctions will come into play. it is clear they will simply roll everything back in, what was in place in 2015 going into the jpoa. thatis not included is how plays out. resuscitated the state of u.s. lauren 2015 bring us to the goals of the president laid out last tuesday for a better negotiated deal with iran? because we can see what is happening now is that the statements from europe about remaining in the deal, remaining asmitted to the jcpoa,
everyone knows, it is not the entire story. what will happen is clear consequences, such as reinstating prohibitions on foreign subs of u.s. companies. that is pretty clear how that will play out. the secondary sanctions. is a tougher question. at the end of the day, for most companies, even though the actual position of sanctions is not a common event, is usually preceded by a visit from the u.s. government, the reality is that the reputational and of infringing on u.s. policy interests in iran from those companies will not be worth the price of admission. and i share axel's skepticism that there is any legal step that europe can take to ensure that iran continues to receive the commercial benefits promised to it from european countries --
companies. the blocking statute in the 1990's was largely political .ignal from europe it was never imposed against any company -- signal from europe. it was never imposed against any company. biggest difference in the 1990's was that you had a crisis andransatlantic relations and post on an administration that was concerned about their relationships with your, and as a result came to a diplomatic solution. obviously, that is less of the case today. the reality is we will see from downnies a rapid winding and respect for what those sections are. there are two open questions for
others on the panel. number one, how does that get us from a to b, especially if we start issuing carveouts add exceptions? two, but i have not addressed is, at the end of the six-month wind activity, there will be a collision not just commercial,and private sector interests, but between the united states and foreign governments over their purchases of oil. so i will leave is open. >> i will give you one follow-up. this is something that is of great concern. that is the whole question of humanitarian trade with iran, food, medicine, medical devices. these items are not supposed to be sanctioned.
the have not been sanctioned -- at the -- i believe it was back in 1999 that the clinton administration lifted all prohibitions on this kind of trick him even with countries like iran, cuba, that were under the sanctions. under the measures that the trump administration is taking, every iranian bank will now be on a designated list, on an ftm list, which means it will be almost impossible for iran to finance purchases of wheat and corn and mri machines and pharmaceuticals from the united states and possibly even from europe. so if you can shed any light on this, is there a need for oh fax -- ofac to come out with guidance on this issue to
prevent ordinary iranians from athenian suffering the impact of once sanctions -- from again suffering the impact of these sanctions? >> the rolling back of the sanctions lifted under the jcpoa will not affect the licenses currently in place for food and medicine and medical devices to iran. there's always an issue pursuant to statute that requires the 2012,ing -- it was in opec converted those specific licenses to a general license and any person can use that general license for medicine and food to iran, subject to the conditions therein. there's no expectation that that license will be withdrawn or altered in any way as a result of the jcpoa flip.
the general license was issued at a time when we were ofsidering a dual track building of sanctions, but also trying to indicate to the iranian people that we were not against them and we were not -- and we returned to get them humanitarian items. that's a good news. the bad news is that, what is very likely to happen is that we have a situation following the general license. it will still being currently challenging to find banks that are willing to do business with iran. to reply to your question on designated banks, every major iranian bank -- >> private and state -- >> right, will be placed back on a ftn list. we made that change in 2015. so that will be the case again. >> just to remind everyone that
fdn refers to -- >> especially designated nationals and blocked persons. maybe i could finish with somewhat of a speculative silver lining, which is, over the past two years, a number of financial institutions around the world have found axis to the iranian markets. it is true that most of the major banks have not gone into iran because of the cost. but there have been avenues opened up in the last two years with some banks that have used legal but creative mechanisms. perhaps, there is a chance, despite the negative direction of u.s. sanctions, perhaps that
creativity can now hold with those exports that remain legal. >> i see you want to add something to this. -- well, do also to you have anything to add on this point on humanitarian trade? >> i think you have covered it. the implication of all this things going on, the espn list, that they can be part of facilitating the trade and iran just to be explicit about the point. that is why the necessary for this creativity. what state we would be living in and russian iranians would be living in if the only way to get insulin drugs is to creatively engineer it with small, regional, southeast asian banks. >> i did want to ask both of you, what happens to swiss, the procedure for electronically doing these transactions with iran?
does that now become inapplicable to iran >> or is this not clear yet >> i can -- yet? i can't tell you how many conversations i have had, people digesting the first set of applications of these measures and then realize, oh, my god, what does this mean for us as a more technical way to think about iran's financial connectivity to the global financial system. swift as the financial messaging system, it virtually has the corner on the market now because it is very good at what efficient, has had the benefit of everyone in the world understanding how it works, which is a terminus leave
out of all commodity in this world, so what those of you -- i -- say who the european sanctions were so forceful initially. what one of the things people mean by that when they make this claim is that, it's true that the mechanism that is implemented was european, not american. but in all fairness, it was urged along in europe by pressure specifically from the u.s. congress, a coordinated discussion from the u.s. administration and congress. europe got ahead of that. that is unfortunately for everyone by taking its own action. the united states can try and cut off these iranian banks on those sanctions list in various waves to try to possibly
structure their activities. but it would have to do it differently than it currently for -- then it did before. financiale use of its payment systems, the u.s. will have to look for other ideas. and the leading idea that urged backe europeans themselves in 2011, going into 2012, was should name every head of the global financial restitution. outrageousthe potential applications of that other avenues were sought. >> you may designate them? >> correct. >> sanction them? >> yes. one thing that the experience of
russia sanctions may have taught everyone on this stage is that they may be on their way to name these people but insulate the sanctions affect adjusted them and not everything they own and oftrol, like melee the head desperate not have it attached to the entire company. there's no shortage to creativity. the sick going here is that the u.s. administration will have to do it on its own presumably. that could have significant applications. >> i'm going to ask you this, do you think europe will protect this? do you think they will do that? >> yeah. >> ok. >> can i just add -- i sense and i share about what you're being do.- about what you're can
skepticism is wanted, but fatalism is not. i can afford to say this as a non-european. europe does not take the right action until push comes to shove, until they get into critical territory. if you can afford to muddle through, that is the best option that they will pursue. but now we are in cripple territory and i think the european realize this -- this.ans realize i draw your attention to the remarks of the french finance minister last week, which were really unprecedented. -- this is double in -ian.de gaulle >they will not fall in line only because they u.s. president has decided to take certain actions or that europe should put together a note back because why
thepec making decisions or channels that are immune to u.s. sanctions? two weeks ago, this was impossible to imagine. by now it is. because of the way -- but now, it is. theuse of the way administration pushes them to make concessions and that drop them and decided to withdraw from the deal. and also, pushback from europe has worked. look at the russia sanctions. look at the question of tariffs on steel and aluminum. -- iere's political will spent the last two months in the last four months in europe. i could not see it two weeks ago, but it is now their. there are ways they can do it -- but it is now there. it.e are ways they can do
i agree with axel there is no silver bullet solution to shield your company's who are interested in doing business with iran. maybe not multinationals. but it is the europeans -- but if the europeans offer and is package to iran, maybe the total political data would be packaged in their individual elements. and that would be enough for iran to survive in the next two months to two years. i've heard this from iranian officials as well. it took 13 years to negotiate this deal. if we are talking about another two years, and in case the trump administration either changes its mind or its history, then it is worth saving the steel for the next two years. recommendationmy
to the iranians to hold on. >> can i respond to that? theight want to talk about titanic partnership. there is really growing pressure in europe now from society, from media on policymakers to take firm action. i think that might actually change the way that european policymakers approached it in two major german newspapers us money, it said the transpacific partnership was then. best was dead. itthat's the first thing -- said the transpacific partnership was dead. the other thing i would add, talking about potential move,es, beyond the big
you know, going to the wto and working with credit lines, i know that the eas has agreed into looking at new creative ways. >> european action service. >> yes. they are looking at what they can do to encourage, perhaps mainly smaller companies, to do business in iran. is there anything european policymakers can do with due diligence? there's a lot of european do due diligence costs in terms of manpowers that is discouraging. so there's ways to work with the private sector. i have been in several meetings with european companies recently . where we have these discussions is anything the eu could do to work with due diligence. list of people
who cannot do business with. we have a good tracking record. the question is whether that will be i think all of these measures combined might be able to send a message to the private sector and iran -- >> very quickly and then i will turn to you. >> not disagreeing with you at all, but where we end up if you are right, there is a chance europe encourages to stay in. we see the same from china. now,onths, 180 days from the sanctions come back into european,d in fact, asian countries do not reduce their pressure on oil by
november. that is enough to keep iran in the deal. what it means to the united ed of the fac prospect of sanctioning our closest allies or do we do nothing? either scenario -- both are bad. you end up with the ugly you end up with the ugly truth that the u.s.-based in the 1990's, but even more extreme, if we do nothing our sanctions become reckless. the next time we try to use secondary sanctions, whether it is on russia or north korea or hezbollah or whatever the next crisis is, the rest of the world goes -- we know they are not serious. we know that threat is not real. yes, we may end up with iran still in the deal but u.s. using the sanctions as a tool --
>> i wrote something about that. >> great timing with north korea. >> great timing. quickly now. my european on view, i look at this from the u.s. point of view. an emerging concern among u.s. policymakers -- if the united states is seen as overly using their financial leverage on the international scale to push your political agenda, what can the long-term implications of that be? sanctions overuse and the potential of looking at other financial sanctions. it was a concern that was taking for here. m here. i think this is really adding to that concern. >> this is a test, indeed. you have been very patient. say your name.
is it on? i don't hear it. the other mic? yeah. no. ok, thank you. >> ok, good morning. one thing we have not talked about, is the cow irretrievably out of the barn? is there still room for negotiation between the united states and europe over the next six months? is it too late? no matter what -- even the sanctions turn out to be feckless or if there is an agreement with europe at this point, will there still be an indefinite chilling affect at least on major investments in iran because of uncertainty as
to what may happen? the other question is is there a way, do you think, for the eu to look at this issue beyond iran. put it also in terms of economic and trade negotiations that are taking place, or hopefully will be taking place, and to basically go beyond blocking legislation as it becomes necessary, but also raise the stakes with respect to tariffs on things that may be very important to u.s. industry. >> excellent. >> on the first question -- i used to think there would be some kind of negotiations between th europe and the united states, and there would be room for diplomacy. not as much anymore. from trump's statements, he was
really quite clear. it is certainly not a detailed strategy. it seems to me there is some kind of strategy. i think president trump believes by reinforcing all sanctions on iran and putting further economic pressure on iran that he can somehow force them back to the negotiation table and make a better deal. if that is his strategy, given anytim type of sanctions by the europeans to even continue minor investments with iran would run completely counter to that approach. i've become more pessimistic there will be any willingness on behalf of the united states to do that. before the actual announcement, i thought that given there is a great deal of concern, particularly in congress, european concerns, that they
would be open to have some kind of negotiated. ions. >> the europeans should come back, i think. >> i think they are mindful that iran is going to give in to these demands. the new better deal as not going to happen. i'm inclined to agree. for the europeans saying the transatlantic relationship is however, so i've been feeling quite pessimistic about this for a while. with trump's tweets about china and zte, i'm now thinking that actually the kind of deal of a fashion that might be between president trump and china. deal,not a jpoa kind of
it is a deal of another sort entirely, but it is the way that sanctions would be imposed and tolerated. maybe in exchanging of measures around the u.s.-china broader trade issues and how much pain should be imposed pursuant to a set of sanction measures without the concern of tariffs. that is not a nuclear arms control deal. it is not a deal among security partners. it is economic. >> are you saying that china would trade away its commerce with iran to get benefits from the united states? >> perhaps. whichs where china, considers itself to be an excellent strategist with the united states when it comes to economic trade and ip and industries and insinuating itself quite well in the united states and has the leverage asnt of industries
this massive lever to pull on how much it will comply with iran sanctions if it gets other concessions from states.ed the only deal i see happening is to do with economic relationships between the united states and china. >> iran has said it is not coming back to negotiate anything after seeing what happened to the jcpoa. under any circumstances do you think under which iran would return to some kind of negotiating? about any of these issues? >> with the trump administration, it is very difficult to imagine because first of all, iran's leverage as this massive first step is likely going to be to trigger get process in the deal to condemn of the fund to the u.s. as the violator of the deal. now, it's in clear noncompliance with the agreement. that is a huge political victory for iran.
people underestimate this. for four decades, the u.s. has put iran on the international stage as violating international norms. for iran to be able to get the other five powers involved in this, to condemn, to say that noncompliant is a huge political victory. once that happens, i think, again, the objective is to see if they can noncompliant is a he political victory. get an arrangement between iran. at the same time, i think the president himself, president trump has indicated he is interested in a better deal. i'm not sure if that is the perspective of the people around get an him who moe seeking regime change. even if you want to negotiate with the president, you have to go through his people that want either a clash with iran or regime change. it is very hard to imagine the
personal channel directly to the president. >> between the supreme leader and the president. >> and that the president is willing to understand iran's position of security concerns and put more concessions on the table than one would imagine. i tried to when explain iran to western officials, i always say it is not a bizarre mentality. it always depends on what you give them in return. i think a deal with president get but harder to likely obama was easier to get, but harder to maintain. i don't close the door on it entirely. i also don't get but likely to be easier to maintain. a deal with president see much t from china to get into the trade liz was explaining.
if you think strategically, this is the only place in the middle east, and the world that is going to have oil in the next 100 years. iran is the only country in that part of the world in which the u.s. does not have a foothold. helps the u.s. achieve its objective, that is bound to be felt. >> china is counting on iran for a lot more than just oil. right there. say your name. >> hi. i was studying this topic for the last three years and always trying to explain to european policymakers that their companies are not regulated in brussels but in washington. they are now kind of learning in the heart away. what i am kind of fearing for the foreseeable future is not so their coming to this realization with iran, which i think is kind of a lost cause because there are no real
instruments available to actually keep up the deal. i'm kind of worried with respect to russia, if you compare russia to iran. iran is not really that much important economically for the european union. russia is very much a board for the european union -- important for the european union. if you look at the recent re are alreadyy are already sanctions. you can have already the scenario that is playing out right now with respect to russia which is more important to the european union. if you have european companies and washington withdrawing from the russian market, this would be way worse, i think, than the follow-up we are witnessing now. thenot really see given escalation of the european union in the past, but supporting the u.s.t -- the uris
jurisdiction. how this might be solved in a constructive manner. i wanted to find out the spillover effect with respect to russia. >> anyone has any comments on that? >> yeah, it is true. i think the people who are involved in the russian market are learning a lesson that people -- the europeans involved in the russian market are learning, which is that risk is very big and scary. it could be very costly. it may cause you to wind down certain relationships. the u.s. sanctions policy makers are proving themselves more and more intuitive and how they get ain how they get you. the regulators are in washington, new york.
but, european companies are learning themselves too. i think people thought they would be contained to north korea and iran, and in fact, actually the net is widening quite a lot. >> i agree. just to add, the secondary sanctions is barely noticeable. this was deployed in a broad way until the last decade. i think when we were in government and supporting these measures together and building the regime, it was not done this way. it was done over several years. it was done with consensus that we were trying to address. within thousands and
thousands of hours about reach toexplanation and guidance foreign partners and foreign companies. so far, very little of that exist with the sanctions coming back into place six months. we saw similar problems actually. >> the russia sanctions. >> look at the legislation signed into law in august, it was pretty broughad and in some ways quite clumsy. it was refined quite significantly by opec and the state department to make it what secondary sanctions are designed to do which is specific behavior. i completely agree this will be different scenario than it was between 2010 and 2040. >> are you saying the secondary sanctions are meant to deter? have companies actually been prosecuted for violating secondary sentence? sanctions?
>> i think this gets to the heart of the sanctions. s theory. what is prohibited? it could even extensive foreign banking if they use any u.s. banks. to foreign partners and foreign or if you are a foreig, you n, you can be barred. there are penalties and fines. the secondary sanctions are different. the goal is to -- how do we stop a company doing business anin i ran with no connection to the united states? it is by threatening that company by getting into united states. that we used to get a lot of criticism from congress of not sanctioning enough banks. by the time you sanction them, you have lost because they are
doing business in iran you don't want them to do. really, the secondary sanctions are focused on deterrence. the effectiveness of that deterrence is premised on the credibility of the u.s. threats. >> yes, rachel. another one. >> thanks for the panel. my question is what is the role of congress in all of this? specifically, if it looks like this, could there be a potential deal with china that could alleviate the secondary sanctions harm and the iranian regime is not going to collapse because of the sanctions. what does this mean for europe? are they the losers in all of this because they are not big enough to get a special -- from china? if that is the case, should congress contemplate any kind of legislative action? >> anybody want that one?
>> i'll take three. thank you. that was a rich set of questions there. let me just praise the question because it is appropriate for us to be thinking about all the doubt of this scenario which has this broad array of politic and economic situations that people are only starting to grasp. with respect to the role of congress and the various scenarios that could play out, congress has increasingly, over the last 20 years, taking a theer and bigger role in creation of new sanctions authorities and in the oversight of their implementation and enforcement with respec. it took act to iran, big stand in our administration
and shifted into higher gear with the legislation signed in august. in both of those, there was a policy principle of how the administration -- that tied the administration's hands or force them into a certain direction in the conduct of foreign policy. it is the product of particular political moment. if the political moment changes, which is why it has been known as anticipated in this administration. i can't see why they wouldn't have their own say aboutadministration -- that tiee the iran sanctions. it could be kind of a course correction, if you will, from what the administration does. it may be a double down which will have the effect of being
politically neutral for them because they are not taking any political stance different from the president. safe place for many republicans in this congress. or they may decide to try and force the president's hand in a particular direction. if he decides chinese companies doing business with iran may continue to docongress. or they may decide to try and force the president so independf the rest of his administration, maybe congress will have something to say about that. i can't see how they would sit on their hands in this circumstance when they have not done so for the last so many years, particularly the last 528. five to eight. the same interest groups that supplied much intellectual capital for the various sanctions, bills through 2012 in particular and have supplied much of the intellectual capital to the current administration, they are not going to rest on their laurels. the same motivation is still at
play. of course, they are giving their thoughts and ideas to the hill and hoping they will run with them. the mic. >> i'd like to expand the boundaries of this discussion because it is not just iran and the jcpoa, but we have two other fairly significant events taking place. talks in korea on june 12 about denuclearization. they have an interesting trajectory. north korea is not going to denuclearize, but they could fail. either way, you will have profound implications. we have a tariff tiff with the eu and china that has not really work its way through. i'd like you want to speculate. on the one hand, you could come up with a grand strategy that somehow trump is tying all these things together. i think that would make a better work of fiction or a program on
hbo. more importantly, you have these other events of what could happen in korea which is unpredictable and what could happen with the tariffs. could you explore the various options you might consider to see how that could affect the jcpoa? >> i've already said we would be ao lucky to have a gjcpo like agreement with north korea. it would be fantastic. i don't think we would get that far. that is just my view. ali? iran and north korea are such different countries. kim jong-un can make the decision. iran is not quite like that. that is why it took 13 years to get the jcpoa. any thoughts that all of you have on whether this show of strength by president trump will actually help him with kim jong-un being irrelevant? >> the president certainly believes that, but as you said,
barbara,jong-un being the iranih korean cases are quite different and there are a few differences. one is wemportant already had a deal with iran. so, what's the deal has collapsed -- once the deal has collapsed, the trust in dealing with the united states. the iranians have a long memory. i feel 2018 to diplomacy with the u.s. would be a similar precedent in 1953 with the u.s. engagement with iranian policy. that is one major difference. iran is not a hermit kingdom. it actually has politics. it is very risky for any other iranian politician to engage in direct negotiations with the u.s. anymore.
rouhani would not be able to do it. we are talking post 2021. the doorrouhani would not be abo it. we are talking post 2021. the door as close on that front. -- has closed on that front. at the end of the day, north korea has the ultimate deterrence of attack. iran give away most of its leverage. if there are going to the new tootiations, iranians have reconstitute the leverage they have lost. that is why we are likely to get into isolation of video completely collapses -- the deal completely collapses. that is where there is a rift. if the europeans manage to keep the deal alive with china and russia, and those who were seeking to kill the deal and do not succeed, they may try to raise tensions in the region so there is more friction between iran and the u.s. in yemen and syria and its allies. rouhaniin this way, we will move
towards some kind of a compensation that would then make sustaining the deal between the europeans and the iranians an impossibility. the last point i will make is lessonsalk about what the north koreans would learn from this experience with the iran deal. i'm more worried about the lesson the iranians learned from what the north koreans were able to achieve. the only way you can get a deal with the u.s. and force the u.s. table isnegotiating to develop nuclear weapons. yopu either end up like iran, you give away everything and the goal posts were moved. or you end up like libya. thatore worried about because i am also starting to hear from iran, the national security adviser talking about exiting that the ntc. am
this was an impossible thing to hear six months ago. for a country that always used to say strategically, religiously, we don't want nuclear weapons. now they are talking about maybe that is the way to go. addxel, did you want to something? >> your other part of the question touched on the eu. the other question i did not really respond to. we constantly hear this term being thrown around that this is relations,e to undermining the transit lending transatlantic partnership. we have seen what it will look like in the practice. to me, it comes in two parts. sidee one hand, neither wants this disagreement to affect other areas of their relationship. i think here in the united states, particularly with the u.s. congress, there is a great deal of concern for the transatlantic partnership and
how beneficial that is. on the european side -- my sense on the meetings i have had at the foreign ministry is they will try to compartmentalize. they will try to keep this agreement to the nuclear deal rather than let it still in two other areas of cooperation. i think we have seen -- we have not seen any fireworks from the main european leaders yet. though, this is serious and we are seeking a growing sense of frustration within europe over unilateral u.s. policies. to illustrate this, i think one of the most disheartening things i have heard in my conversations with european diplomats was one european official telling me what is the point? policy withpoint of the united states? in some ways, i think we might see foreign ministry's in europe
start to question the very foundation of the relationship with washington. security has always been a cornerstone of that relationship. from a security point of view, this is sinking in the teeth. long-term, we could seek long-term conflict. the last point of it like to make is we see a lot of references being made to iraq. >> 2003, absolutely. >> i'm not going to go into if it is iraq again. one important thing i would like to make -- 15 years ago with iraq, there was division within europe. the key question for europe was you or do not align with u.s. policy? we are not seeing those dynamics today. this time, this plan goes up the atlantic. the united states on one side and the european leaders all saying we remain committed to the jcpoa. i think that is the last point i wanted to make.
>> we are unfortunately out of time, but that is a perfect segue. tomorrow afternoon, we have two members of parliament from europe, one from france and one from germany, who will be coming. we will talk about the whole question of transatlantic relations and what this dispute is doing in terms of popular sentiments towards the united states. i encourage you to come back for that one. coming.u very much for obviously, we will have to do a lot of follow-up on this in the days and weeks ahead. thank you to my speakers. all very, very good. coming. obviously, we will have to do a lot[captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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