Trump and France's Macron disagree on the Iran deal. Here's why Europe wants to keep it.

BERLIN — President Trump is currently hosting sort of a Europe week at the White House, with French President Emmanuel Macron in town for a state visit and German Chancellor Angela Merkel expected to arrive at the Oval Office on Friday.

To both European leaders who often closely coordinate their foreign policy moves, one issue will define their agenda in Washington: the Iran nuclear deal. Or, as Trump likes to call it: the “bad” and “terrible” deal with a country he has blamed for being “behind every problem” in the Middle East. Trump has called the 2015 agreement disastrous and has argued that it isn’t in the United States’ best interests, though he has reluctantly certified Iran’s compliance in the past.

That may change with a new deadline that's coming up May 12.

A U.S. decision to withdraw would not come as a full surprise to its European allies. Trump had already announced a withdrawal of presidential “certification” of the Iran nuclear deal last October, ahead of a prior deadline. His decision did not automatically result in the United States leaving the agreement, however.

This time — as a supposedly final U.S. deadline Trump set himself is quickly approaching — the stakes are much higher, even though all other signatories of the deal said that they want to stick to it. France, Britain and Germany have urged the president to drop his resistance and have threatened to stay committed to the agreement even if the United States decided to leave it. (China and Russia are also parties to the deal and are unsurprisingly also in favor of keeping it.)

So why are European leaders ready to risk a transatlantic rift to uphold the Iran deal?

Europe thinks that a flawed deal is better than no deal

Even though there might be flaws, the current deal is better than no deal, European governments are arguing. “We have no indication of Iran violating its JCPoA commitments,” said an official in the German Federal Foreign Office last year, referring to the Iran deal, the Joint Comprehensive Plan of Action, by its abbreviation. French officials have reached the same conclusion, and even U.S. officials have made the case that Iran is in compliance.

“It is essential to maintain it to avoid proliferation. In this period when we see the risks with North Korea, we must maintain this line,” French Foreign Minister Jean-Yves Le Drian said. The U.N. watchdog tasked with monitoring compliance has reached a similar conclusion.

Intelligence agencies have recorded a decrease in Iranian proliferation efforts in Europe

Germany’s intelligence service said that Iranian “proliferation efforts for its nuclear program” significantly decreased following the deal’s implementation. Officials did not respond to questions about the details of that decrease, but authorities in Germany’s most populous federal state, North-Rhine Westphalia, said that attempts to try to obtain resources that could be used to pursue its nuclear program had dropped from 141 in 2015 to 32 the following year. German officials argue that the slackening Iranian efforts are one indication that the 2015 deal is working.

Europe could still stick to the deal without U.S. support, but at a high political cost

The lifting of sanctions under the deal prompted a rush of European corporations to do business in Iran. These are now lobbying their governments to prevent the dismantlement of the deal and are hoping that Iran may continue to adhere to its conditions if Europe refrained from reimposing sanctions.

Theoretically, the deal’s non-U. S. signatories, which include Britain, France, Germany, China, Russia and Iran, could agree to stick to the deal without U.S. participation. Asked about such a possibility at a European-Iranian investment conference last fall, Philippe Delleur, senior vice president of public affairs for transport company Alstom, said: “I suppose that they will not put again the European sanctions. [In that case], we should be able to continue to work.”

Such a decision could still have severe implications for transatlantic relations at a time when Trump has already faced open disagreement and anger from many of his allies there over defense spending, trade, climate change and other issues.

A U.S. withdrawal would put Europe on the side of Russia, China and Iran

If Europe chose to stick to the deal, it would side against the United States together with three of the countries it is most at odds with: Russia, China and Iran. Merkel acknowledged that possibility in a January conversation with Israeli Prime Minister Benjamin Netanyahu, according to news site Axios, that quoted Merkel as saying: "It will put us, the Brits and the French on the same side with Russia, China and Iran when the U.S. and Israel will be on the other side. Is this what you want?"

All three nations, Russia, China and Iran, have recently warned the United States of repercussions should Trump leave the agreement. Iranian President Hassan Rouhani said on Tuesday that there would be “severe consequences,” including a ramping up of its nuclear program, as Moscow and Beijing vowed to block any such U.S. move. Europe would risk being blamed for inadvertently bolstering the credibility of their threats.

Existing trade connections and investments make the deal’s dismantling increasingly difficult

Iranian exports to the European Union increased by 375 percent from 2015 to 2016, and European companies have already invested a significant amount of money in the country, raising the stakes of any decision that could result in the deal’s collapse.

The surge in trade volume has been facilitated by the reintroduction of banking connections between Iran and the West, although major European banks have so far refrained from directly dealing with Iranian institutions. European credit agencies have stepped in to provide export guarantees to companies willing to trade with Iran.

But would Europe be able to protect its businesses from U.S. sanctions?

Such a model to save the Iran deal could unravel, however, if the United States decided to punish European companies, banks or agencies cooperating with Iran. Officials are examining options to protect European companies and individuals from U.S. sanctions.

Some European business leaders doubt whether such efforts would provide sufficient protection. “Our stance and the stance of international companies is that we need to be compliant with international law, applicable law. And if sanctions come back and that means we cannot do our work inside or outside Iran, then we will stop,” said one senior executive at a major multinational corporation who spoke on the condition of anonymity to discuss the sensitivity of decertification.

“People have discussed the idea of protective legislation [E.U. blocking sanctions]. I think in practice, with real multinational companies, they wouldn’t want to rely on that to do Iran investment,” the executive said.

In any case, European governments would still face an awkward decision: Would they side with a regime they frequently accuse of human rights violations, or with the United States?

A previous version of this post was first published Oct. 2017. It was updated April 24, 2018. 

Read more:

Iran nuclear deal: What you need to know

5 reasons that Trump hates the Iran deal

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