US Sanctions Against Iran. On Whose Side Will Ukraine Be: Washington or Brussels?
On August, 7, US President Donald Trump posted on his Twitter: “Anyone doing business with Iran will not be doing business with the United States.” Trump emphasized that the current sanctions against Iran were “the most biting” ones ever imposed and announced that in November they would ratchet up to yet another level.
The European Union instantly reacted. Brussels introduced measures to protect the European companies, which could be subject to the US sanctions. The respective directive was published in the EU official journal on that very day, August, 7.
It that penalty measures, which the USA reintroduced against Iran after the country withdrew from the Nuclear Agreement, had extraterritorial effect and harmed interests of the EU as well as those of physical and legal persons that exercise their rights under the Treaty on the Functioning of the European Union. According to Brussels, these actions violate the international law.
The directive in particular includes Iran on the list of countries and regions, which can get the financial support from the European Investment Bank, with the EU being a guarantor. Brussels also encourages the European companies to ignore threats of sanctions introduced by the USA and other countries, promising them to provide financial compensation in case of financial losses caused by sanctions.
What Ukraine should expect in relation to this? Indeed, the disruption of the Transatlantic unity from the beginning of the Russian aggression was more than undesirable scenario for Kyiv, since it threatens the only position of the West regarding the Russian acts in Ukraine.
Ukraine found itself in rather precarious situation when any time it should side one of two the most important partners - the USA or the EU. In terms of the Iranian agreement Ukraine could simply refrain from making its position know. However, it is more difficult to act in the same way regarding the issue of custom rates on import of steel and aluminum to the USA (at the level of 25% and 10% respectively), since Ukraine became the victim of them in March.
In the latest issue of TRUMAN Index journal our experts state that new restrictive measures effect 20-25% of general export of Ukrainian products to the USA for the last three years. Within this period Ukraine exported products of steel industry in the following amounts: $119.6 mln in 2015, $89.7 mln in 2016, $175.6 mln in 2017.
At the same time Ukraine is not even among top 20 of exporters of metal industry products to the US. Last year it was only on the 24th place among all exporters with 256 thousand of tons of these products, which doesn’t look that significant, compared with almost 6 million of tons exported by Canada or almost 5 million of tons exported by Brazil.
Since the decision of the US president provides for the possibility of inclusion or revision of additional customs rate for separate countries upon the fulfillment of certain conditions (overall five), Ukrainian side puts effort into this direction.
The initial negotiations on exclusion of Ukraine from the effect of customs rates took place in Washington in the beginning of June. It looks like Ukraine is going to follow the example of Japanese Prime Minister Abe, who, unlike some other world leaders, refrains from criticism of protectionist measures introduced by Trump, in order to maintain the safety dialogue.
TRUMAN Index journal is available upon request by email to Head of Communications & Analytical Projects Coordinator Tetiana Gaiduk tetianagaiduk@truman.ua
