The Instrument in Support of Trade Exchanges (INSTEX) has been established by various European countries to bypass US sanctions, and channel payments between Europe and Iran.
German Foreign Minister, Heiko Mass, told the press that the deal had to be made in the interests of Europe. The Iran nuclear deal between the US and Iran seems to be falling apart at the seams, a deal where Iran’s nuclear program is limited in exchange for limited sanctions.
US quits the nuclear deal
President Trump has said that the US would quit the nuclear deal. This has dismayed Europe, which feels that this will affect them and their safety. The nuclear agreement was signed by Obama and Iran. When Trump announced USA’s withdrawal, most European countries and officials were dismayed.
Trump went further, and warned other countries not to do business with Iran. US sanctions against Iran have hit the country hard, leading to shortage of medical supplies and medical equipment.
INSTEX allows Europe to sell medicine, medical equipment, and food to Iran, something that will be welcomed by the Iranian people.
While INSTEX will help the somewhat tense relationship between European countries and Iran, otherwise strained because of the Middle Eastern nation’s nuclear program, it is not going to help Europe and the US. Trump is increasingly isolating himself. European allies were not happy with Trump abandoning the nuclear deal, especially the way he did it in hurry, and many feels, without any consideration for the future.
There are still tough conditions for Iran if they want INSTEX to work and grow. The new deal will allow for smaller trade that consists of mostly humanitarian aid, but should Iran stick to the nuclear deal, it can increase to other larger exports.
Europe is also sending a strong message to President Trump by creating INSTEX, and bonding with Iran. They will not be bullied, and they will do what they can to save the nuclear deal, ensuring they defend their own interests.
It has taken a few months for the European countries and Iran to work out the INSTEX deal, which basically allows for limited trade and opens payment channels between Europe and Iran. It may still take a while before the deal becomes fully operational.
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