Joe Biden May Provide Windfall for Iran and China’s Newest Port Project

Michael Rubin Politics, Americas Traditionally, when the United States seeks to engage with Iran, diplomats propose cooperating on areas of mutual interest. Former Vice President Joe Biden has committed to rejoin the 2015 Joint Comprehensive Plan of Action should he win the presidency. In a September 2020 CNN article, he explained, “If Iran returns to strict compliance with the nuclear deal, the United States would rejoin the agreement as a starting point for follow-on negotiations.” The problem is that the Iranian nuclear deal had built-in sunset clauses so the agreement Biden proposes to rejoin would be significantly weaker than that which President Donald Trump left. Renegotiation would require new concessions. The question as a Biden administration moves from theory into reality would therefore become whether common ground exists to expand negotiations and potential concessions. Traditionally, when the United States seeks to engage with Iran, diplomats propose cooperating on areas of mutual interest. In the past, this meant repeated proposals to assist Iran with its war on drugs. “Thousands of Iranians have been killed in the fight against drug traffickers. Moreover, Iran is now a world leader in the quantity of illegal drugs annually seized. This is one area where increased U.S.-Iranian cooperation clearly makes sense for both countries,” Secretary of State Madeleine Albright said in a March 2000 address to the Iranian American Council, for example. Proponents of engagement with Iran also urge cooperating on common ground in Afghanistan. This has always been easier said than done. While in theory both Tehran and Washington share antipathy toward the Taliban, Iran’s Islamic Revolution Guard Corps cynically armed the group in order to encourage attacks on Americans. Brian Hook, the U.S. special representative for Iran, reported that Iran had been providing weaponry to the Taliban since 2007. Likewise, the Afghan news outlet Hasht-e Sobh [8 a.m.] reported in January 2011 that when Afghan forces captured a Taliban commander in Kunduz, they found a checkbook from an Iranian bank on his person. Still, the notion that the United States can work with Iran in Afghanistan has resonance. Biden has affirmed a desire to maintain a small number of U.S. forces in Afghanistan in order to conduct counterterrorism operations. While he reportedly once quipped to Afghan president Hamid Karzai, a leader with whom he had a notoriously prickly relationship, that Pakistan was fifty times more important than Afghanistan to the United States, Biden’s broader team understands the problems inherent in relying upon a double-dealing Pakistan for American logistics. Many European states as well as long-time partners of Afghanistan such as India have long urged the United States to allow trans-shipment of goods and supplies to Afghanistan through Iran’s Chahbahar Port. Indeed, given Pakistan’s animosity toward India and its paranoia about any Indian investment in Afghanistan, Chahbahar has become India’s only real option to trade with the landlocked state. Rakesh Sood, India’s former ambassador to Afghanistan, was explicit: “The main idea of Chabahar was to get around Pakistan, which was a stumbling block to our way to Afghanistan . . . Pakistan prevented everything from wheat to service vehicles from being sent to our ally.” India has accordingly already committed $500 million to Chahbahar Port. More Indian investment would be forthcoming, Indian diplomats say privately, if Tehran could resolve its own dysfunctional bureaucracy. Still, the port is growing. Arun Kumar Gupta, managing director of India Ports Global Ltd., reported that the 2016 expansion of the 1992 Chahbahar Free Trade Zone to include the port has boosted cargo significantly, with the trickle of cargo growing steadily over the past two years. Behrouz Aghaei, director-general of the Sistan and Balochistan Ports and Maritime Department, reported a 63 percent increase in the loading of oil and non-oil goods between March and November 2019 over the same period in 2018. While the United States already provides some sanctions exceptions for the use of the ports, the Iranian government complains that expected investment in Chahbahar Port has slowed in the wake of the Trump administration’s departure from the Joint Comprehensive Plan of Action. Such Iranian complaints from Iranian foreign minister Mohammad Javad Zarif are exaggerations. Secretary of State Mike Pompeo has exempted Indian development projects in Chahbahar Port from U.S. sanctions and has also waived Afghanistan commitments to enforce the Iran Freedom and Counter-Proliferation Act of 2012 as it relates to activities in Chahbahar Port. Exaggeration or not, however, Biden’s team may see diplomatic opportunity in Iranian attempts to utilize Chahbahar Port as a means to further unravel sanctions. Enthusiasm for re-engaging with the Islamic Republic, however, should not blind a Biden White House or a Tony Blinken o

Joe Biden May Provide Windfall for Iran and China’s Newest Port Project

Michael Rubin

Politics, Americas

Traditionally, when the United States seeks to engage with Iran, diplomats propose cooperating on areas of mutual interest.

Former Vice President Joe Biden has committed to rejoin the 2015 Joint Comprehensive Plan of Action should he win the presidency. In a September 2020 CNN article, he explained, “If Iran returns to strict compliance with the nuclear deal, the United States would rejoin the agreement as a starting point for follow-on negotiations.” The problem is that the Iranian nuclear deal had built-in sunset clauses so the agreement Biden proposes to rejoin would be significantly weaker than that which President Donald Trump left. Renegotiation would require new concessions. The question as a Biden administration moves from theory into reality would therefore become whether common ground exists to expand negotiations and potential concessions.

Traditionally, when the United States seeks to engage with Iran, diplomats propose cooperating on areas of mutual interest. In the past, this meant repeated proposals to assist Iran with its war on drugs. “Thousands of Iranians have been killed in the fight against drug traffickers. Moreover, Iran is now a world leader in the quantity of illegal drugs annually seized. This is one area where increased U.S.-Iranian cooperation clearly makes sense for both countries,” Secretary of State Madeleine Albright said in a March 2000 address to the Iranian American Council, for example.

Proponents of engagement with Iran also urge cooperating on common ground in Afghanistan. This has always been easier said than done. While in theory both Tehran and Washington share antipathy toward the Taliban, Iran’s Islamic Revolution Guard Corps cynically armed the group in order to encourage attacks on Americans. Brian Hook, the U.S. special representative for Iran, reported that Iran had been providing weaponry to the Taliban since 2007. Likewise, the Afghan news outlet Hasht-e Sobh [8 a.m.] reported in January 2011 that when Afghan forces captured a Taliban commander in Kunduz, they found a checkbook from an Iranian bank on his person.

Still, the notion that the United States can work with Iran in Afghanistan has resonance. Biden has affirmed a desire to maintain a small number of U.S. forces in Afghanistan in order to conduct counterterrorism operations. While he reportedly once quipped to Afghan president Hamid Karzai, a leader with whom he had a notoriously prickly relationship, that Pakistan was fifty times more important than Afghanistan to the United States, Biden’s broader team understands the problems inherent in relying upon a double-dealing Pakistan for American logistics.

Many European states as well as long-time partners of Afghanistan such as India have long urged the United States to allow trans-shipment of goods and supplies to Afghanistan through Iran’s Chahbahar Port. Indeed, given Pakistan’s animosity toward India and its paranoia about any Indian investment in Afghanistan, Chahbahar has become India’s only real option to trade with the landlocked state. Rakesh Sood, India’s former ambassador to Afghanistan, was explicit: “The main idea of Chabahar was to get around Pakistan, which was a stumbling block to our way to Afghanistan . . . Pakistan prevented everything from wheat to service vehicles from being sent to our ally.”

India has accordingly already committed $500 million to Chahbahar Port. More Indian investment would be forthcoming, Indian diplomats say privately, if Tehran could resolve its own dysfunctional bureaucracy. Still, the port is growing. Arun Kumar Gupta, managing director of India Ports Global Ltd., reported that the 2016 expansion of the 1992 Chahbahar Free Trade Zone to include the port has boosted cargo significantly, with the trickle of cargo growing steadily over the past two years. Behrouz Aghaei, director-general of the Sistan and Balochistan Ports and Maritime Department, reported a 63 percent increase in the loading of oil and non-oil goods between March and November 2019 over the same period in 2018.

While the United States already provides some sanctions exceptions for the use of the ports, the Iranian government complains that expected investment in Chahbahar Port has slowed in the wake of the Trump administration’s departure from the Joint Comprehensive Plan of Action. Such Iranian complaints from Iranian foreign minister Mohammad Javad Zarif are exaggerations. Secretary of State Mike Pompeo has exempted Indian development projects in Chahbahar Port from U.S. sanctions and has also waived Afghanistan commitments to enforce the Iran Freedom and Counter-Proliferation Act of 2012 as it relates to activities in Chahbahar Port. Exaggeration or not, however, Biden’s team may see diplomatic opportunity in Iranian attempts to utilize Chahbahar Port as a means to further unravel sanctions.

Enthusiasm for re-engaging with the Islamic Republic, however, should not blind a Biden White House or a Tony Blinken or Susan Rice-led State Department to the problem of China’s presence in the port. Over the past decade, Chinese investment in Iran and Chahbahar Port, in particular, has increased tremendously. In 2017, China’s state-owned investment corporation, the CITIC Group, provided $10 billion in credits to Iran, while the China Development Bank reportedly provided an additional $15 billion in loans. Beijing looks to Chahbahar Port to further expand its “string of pearls” network of military-capable Indian Ocean ports. In March 2020, Zarif stated that he would welcome both Chinese (and Pakistani investment) in Chahbahar. Zarif’s rhetoric was not empty: China has already financed the first phase of Chahbahar Port’s new airport. Economic investment in ports like Chahbahar Port also plays a role in more recent Sino-Iranian economic and defense agreements.

Additionally, China would not allow U.S. sanctions to constrain its activities. Chahbahar Free Zone infrastructure director Mehdi Kohi told reporters in November 2019 that “China would finance phases two and three, and that this was agreed to during the president’s visit to Beijing.” Morteza Bank, president of the Free Zone Secretariat and deputy chief-of-staff to President Hassan Rouhani, confirmed that Chinese investment continues in Chahbahar despite U.S. sanctions.

Pompeo’s greatest legacy as secretary of State has been to change fundamentally the conversation in Washington with regard to China. Certainly, Biden is aware both that China is more a competitor than a partner and that Beijing, like Moscow, interprets power and influence as a zero-sum game. It would be unfortunate if, in its efforts to restart the Iranian nuclear deal, Biden and team inadvertently bolstered China’s interests and positions in the Indian Ocean basin at a time when, wishful thinking aside, neither Iran’s Supreme Leader Ali Khamenei nor Chinese president Xi Jinping appear sincere in their desire for rapprochement and to respect the post–World War II liberal order. 

Michael Rubin is a resident scholar at the American Enterprise Institute and a frequent author for the National Interest. 

Image: Reuters