As Ed Morrissey noted on Friday, the Trump administration’s response to the Iraqi legislature’s non-binding resolution to have our troops leave their country was, shall we say… less than positive. As it turns out, there was more pressure being applied to the Iraqi Prime Minister than a simple refusal to comply. During a call on Wednesday, the White House suggested to Adil Abdul-Hahdi’s people that possible sanctions in response to kicking us out could include freezing the country’s access to their bank accounts in the Federal Reserve in New York City. And that could send Iraq’s already tenuous financial position into a tailspin. (NY Post)
The US is warning Iraq that it will pay big time if Baghdad boots out American troops.
State Department officials took aim at Iraq’s central bank account at the Federal Reserve Bank in New York City, promising a cash crunch if US forces are sent home, the Wall Street Journal reported. Many nations maintain government accounts at the New York Fed.
Any move by the Trump administration to turn off the money tap could jolt the already shaky Iraqi economy.
Iraq’s response to the elimination of terrorist mastermind Qassem Soleimani has left the Trump administration in yet another situation of considering something we legally can do, but perhaps shouldn’t. As long as the Iraqis don’t do any more than the non-binding resolution, no action is really required. And if they do move to make the demand mandatory, we would be on shaky moral grounds if we retaliated.
As I mentioned, we could legally freeze Iraq’s assets in the Federal Reserve if appropriate sanctions were put in place. In fact, as the Wall Street Journal pointed out this week, we’ve done it before. In 2015 we suspended their access to those accounts for a few weeks over concerns that the money was being filtered through the black market to Iranian interests and possibly being used to support ISIS.
But that was then and this is now. It’s important to remember that this isn’t a threat to cut off foreign aid or loans. This is money that belongs to Iraq, generated and used to conduct oil sales and other government interests. Yes, those funds can be frozen if we suspect the money is being used for illegal purposes, to fund terrorism or any similar channels. But nobody is currently suggesting that anything like that is going on.
If we threaten to freeze Iraq’s legitimate access to their funds in the Federal Reserve simply because we don’t like one of their government policies, we’re basically just openly blackmailing them. We have long since turned over control of the Iraqi government to their own people. They are in control of their own destiny for better or worse. And if they decide that they no longer want foreign troops (even ours) based on their soil, we have a responsibility to comply with the wishes of their elected representatives.
Making this sort of threat sets a terrible precedent and the optics in terms of international affairs are simply awful. We should also ask why President Trump is fighting this idea so hard to begin with. Remember that the President ran on a promise to conclude our “endless wars” and get out troops out of Iraq. If he pulls out on his own his critics can accuse him of cutting and running or “abandoning our Iraqi allies.” But if the Iraqis throw us out, Trump can simply say, “Hey, I didn’t want to do it. But it’s their country. What choice did I have?”
Then, as soon as we’re out of the country, Trump could go to his next rally and say that yet another campaign promise has been kept. To once again steal (and paraphrase) an observation that Allahpundit recently made, threatening Trump with kicking our troops out is akin to threatening to let him build another Trump Tower in Baghdad. It’s a win-win for Trump either way. All he has to do is spin the story correctly in the aftermath.
I would urge the White House to seriously reconsider these threats of sanctions on Iraq. They only serve to drive that nation further into the arms of Iran and Russia while gaining nothing much for us. Once the crowds calm down about Soleimani, a minimal amount of positive diplomacy should be able to return our relationship to its previous condition. And failing that, the worse thing that happens is we bring a bunch of our troops home. Yes, that will have ramifications in the Middle East in the long run, but that ship may have already sailed anyway.