Agreement first proposed in 2016 . . .
Iran and China reportedly are strengthening economic and security ties, according to a leaked agreement approved last month by Iranian President Hassan Rouhani’s cabinet. The agreement, first proposed by Chinese President Xi Jinping in 2016, will help bring much-needed investment to Iran, further solidifying Iran in China’s Belt and Road Initiative, while strengthening China’s presence in the region. The agreement includes C$380 billion to develop Iran’s oil, gas, and petrochemicals, and C$163 billion for transportation and manufacturing. In return, China will receive heavily discounted Iranian oil for the next 25 years, as well as likely access to Iran’s strongly positioned trade ports in the Persian Gulf.
Further trouble for tensions with Washington . . .
Iran-U.S. tensions have been high since 2018 when U.S. President Donald Trump withdrew the United States from the Obama-era Iran Nuclear Deal. In January, tensions reached their highest point since the 1979 Iranian Hostage Crisis when a U.S. drone strike killed Iranian General Qassem Soleimani. U.S.-China relations have also soured, with President Trump threatening to rip up their freshly signed trade agreement. Strengthened Beijing-Tehran ties do not bode well for the U.S.; however, some critics doubt that Tehran will allow Beijing to get too close. Iran has had disputes with China’s businesses operating in Iran. Many Iranians are skeptical of the agreement, some even comparing it to the humiliating 1828 Treaty of Turkmenchay, when Iran ceded large areas of territory to Russia.
Canada’s diplomatic dilemmas . . .
Canada’s relations with both China and Iran have been strained in recent years. Canada-China relations have deteriorated since the arrest of Huawei CFO Meng Wanzhou in late 2018. In 2012, then Prime Minister Stephen Harper expelled Iranian diplomats and suspended relations with Tehran over the latter’s threats to Israel and backing of the Assad regime in Syria. When Iran shot down a civilian Ukrainian jet in January, killing 176, including 63 Canadians, the lack of diplomatic relations and the Iranian regime’s stonewalling put those tensions centre stage. A closer China-Iran alliance could thus complicate Canada’s diplomatic strategy.