US rift with Europe widens ahead of Orban visit

US rift with Europe widens ahead of Orban visit

12/05/2019 13:04 - Donald Trump resets relations with America’s traditional allies in the EU

in Washington and in Berlin

Mike Pompeo, the US secretary of state, arrived in Baghdad on Tuesday for a previously unscheduled trip that came after he abruptly cancelled a meeting in Berlin with German Chancellor Angela Merkel. Mr Pompeo told reporters as he flew to Baghdad that he was heading to Iraq because of reports that Iran was “escalating their activity” but did not provide any specifics about potential threats from the Islamic Republic.

“I wanted to go to Baghdad to speak with the leadership there, to assure them that we stood ready to continue to ensure that Iraq was a sovereign, independent nation, and that the United States would continue to help build out partners in the region — the Jordanians, the Saudis, the Emiratis, all of the Gulf states — who want to see a free, independent, sovereign Iraq,” Mr Pompeo said.

Pressed on what Iran was doing to warrant his trip to Iraq, Mr Pompeo said: “I just don’t want to go into the details of that any more.”

The secretary of state added that he would also talk to the Iraqi government about pending business deals, including “big energy deals that can disconnect them from Iranian energy”. On Tuesday evening, Mr Pompeo met Iraqi Prime Minister Adel Abdul Mahdi in Baghdad.

Mr Pompeo’s visit came one year after President Donald Trump withdrew from the nuclear agreement that the US, China, Russia, France, Britain and Germany signed with Iran in 2015.

Despite mounting pressure from Washington, Iran and the other non-US signatories have not abandoned the pact, which most experts credit with blocking the country from being able to pursue the development of nuclear weapons.

Iran says it remains committed to the accord. But Iranian media have speculated that President Hassan Rouhani of Iran would announce on Wednesday that his government was going to resort to a dispute resolution mechanism included in the nuclear deal in response to the US exit from the accord and the reintroduction of sanctions.

The White House said on Sunday the US was sending an aircraft carrier strike group, which in addition to fighter jets, includes a number of destroyers and other navy ships, to the Central Command region, which includes Iran and the Middle East, to send a strong signal to Iran.

John Bolton, the national security adviser, announced the move, which was unusual because naval moves are almost never announced by the White House. The Pentagon announced on Tuesday that the USS Abraham Lincoln had been scheduled to deploy to the region as part of a regular rotation, but that the deployment was expedited because of threats from Iran.

Mr Bolton said the US was not “seeking war” with Iran. But he said the US was “fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces”, and that any attack on US interests would be met with “unrelenting force”.

Mr Pompeo and Mr Bolton — who both have reputations as Iran hawks — have referred to “escalatory” behaviour from the Iranian regime in recent days, without providing further detail on the nature of the threat.

James Stavridis, a retired US admiral who served as supreme allied commander of Nato, said that the “aggressive rhetoric” accompanying the deployment of the USS Lincoln signalled a “deliberate and fairly dramatic escalation”.

“The administration has not been forthcoming as to specifics of the new threat from Iran, but I accept it at face value,” said Mr Stavridis. “Look for more posturing on both sides.”

The US has also increased economic pressure on Tehran, ending sanctions waivers for countries importing Iranian crude. Separately, it has designated Iran’s elite Revolutionary Guards as a terrorist organisation.

Washington has pressured Iraq to curb trade with Tehran, out of recognition that the Iraqi market has become increasingly important for Iran’s economy, which has been battered by the impact of US sanctions.

Iraq is the second-biggest export destination for non-oil Iranian products. Of $44bn in Iranian non-oil exports, $8.9bn worth of goods, from bricks to yoghurt, were exported to Iraq in the 12 months to late March. That amounted to a 36 per cent increase from the previous 12 months, according to the Iran-Iraq Chamber of Commerce. Iran also sells electricity and natural gas to Iraq, which struggles with a malfunctioning electricity sector.

Mr Rouhani last week stressed that Tehran was not worried about a decline in petrodollar receipts, as he reminded the US that “we know this region better than you do”. He added that Iran could have the same level of oil exports this year and highlighted the importance of regional countries’ markets, notably Iraq’s.

“We will sell oil. But even if we earn less oil money, we will compensate it somewhere else,” said Mr Rouhani. Iran is increasingly losing hope in the efficiency of a financial channel created by European states, but politicians and business leaders pin hopes on regional and neighbouring countries’ markets for financial transactions and trade.

Ted Cruz, a Republican senator from Texas, has criticised European countries for holding talks with Iran over the Instrument in Support of Trade Exchanges, a financial mechanism that critics say will undermine US sanctions.

“It is unfortunate that our European partners are spending their diplomatic and material capital creating mechanisms that break up American sanctions, rather than siding with us and the Iranian people against the Ayatollahs,” he said.

 

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