The intense factional competition is ramping up in anticipation of the 21 February 2020 election to the Majles. These rivalries will heighten domestic tensions and paralyse political decision making in the coming months. Hardliners will use the current anti-corruption campaign to attempt to marginalise the reformists and moderates.

Regional politics — particularly with regard to Iraq and Syria — will compel Tehran and Washington to look for ways to communicate with each other in 2020 in order to make sure that the so-called Islamic State and other jihadist groups do not regain ground. Confidence-building measures such as the mutual release of prisoners could pave the way for renewed dialogue.

A proposed loan agreement between Iran on the one side, and Japan and France on the other, has the potential to halt Tehran’s withdrawal from its nuclear commitments. In the absence of this, or other key economic steps by the European powers, it will move to the next stage of escalation which could include 20% enrichment of uranium.

President Hassan Rohani And President Donald Trump

The non-operation of Instrument in Support of Trade Exchanges (INSTEX) will continue to be a key issue in Iran–EU relations. The main problem is the disconnect between EU political leaders — who want to see the relationship and the Joint Comprehensive Plan of Action (JCPOA) survive — and technocrats who are puzzled how to make mechanisms such as INSTEX work if Washington does not cooperate.

While Tehran will reduce its interaction with the European Union, there is no appetite in President Hassan Rohani government for allowing the JCPOA to collapse completely. Tehran does not want to permit Washington to translate its unilateral approach into a multilateral legal framework through UN Security Council (UNSC) resolutions, and understands that a complete collapse of the JCPOA could herald such a process.

Iran’s trade agreements with the Eurasian Economic Union (EEU) will bring greater trade and investment interaction with Russia and the other EEU member states, i.e., Armenia, Belarus, Kazakhstan, and Kyrgyzstan. This will be a welcome development for Iran as it will open up banking channels, export markets, and routes to manage Iranian imports that have been choked by US sanctions.

Note: Menas Associates is organising an evening seminar on Iranian-US Relations in 2020 on the evening of 27 November.  Our speaker will be the well-known Iran expert, Dr Bijan Khajehpour, who has edited our Iran Strategic Focus monthly reports for over 20 years. Our co-hosts in London are Eversheds Sutherland who have particular expertise on Iran related legal arbitration cases. Space at the event is much more limited than normal so we would first like to gauge what interest there is. Please click here to pre-register if you would like to come.

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