The threat of sanctions

US President Donald Trump’s ill-advised and short-sighted decision to withdraw from the nuclear deal with Iran threatens to affect not just the countries involved in the agreement but all members of the international community that have any ties with Iran. The US will likely re-impose the crippling sanctions that had been loosened under the terms of the agreement. Even though the European Union has promised to continue abiding by the agreement, US sanctions blacklist any company which has business in Iran. Should it come down to choosing to operate in the US or Iran, no company is going to opt for Iran. One of the first projects to suffer the ramifications of US sanctions may be the Chabahar port deal signed by India, Iran and Afghanistan. The port was meant as a way for India to bypass Pakistan in its trade with Iran and Central Asia. But the project has been slow to get started. So far the only trade via the port has been one shipment of wheat. Now, the investment needed to kick-start the enterprise may not be forthcoming out of fear of US retaliation. Contracts to develop the port had been handed to companies from China and Finland but those are now on hold as everyone waits for Washington’s next move.

Pakistan may be inclined to celebrate the uncertain future of the Chabahar port project. It was explicitly designed to cut us off from Central Asian trade by creating a land route to Iran through Afghanistan. But we should not be so quick to rejoice. Pakistan has been trying to rebuild its troubled relationship with Iran not just for political reasons but with an eye on increased trade with Iran and the Central Asian republics. That too will be hurt by US sanctions and Pakistan is in an even weaker position than India when it comes to defying US demands. The main reason our agreement with Iran to construct a vital gas pipeline collapsed was because of US sanctions. Even if Pakistan sets aside its self-interest, it should clearly see the danger of a country having as much power as the US does in a global, interconnected economy. The whims of a man as unstable as Donald Trump is threatening trade deals that were years in the making, driving up the international price of oil and, most frighteningly, increasing the likelihood of war. The Chabahar port may have been a threat to our interests but it is dwarfed by the re-imposition of US sanctions on Iran.