France: Saudi Arabia's New Arms Dealer
In late July, PSA Peugeot Citroën’s CEO announced that the company reached an agreement to sell its DS model in Iran (until three years ago, Iran was PSA Peugeot Citroën’s second largest market and the French car manufacturer sold nearly half a million vehicles in Iran each year until western economic sanctions were imposed.) In addition to PSA Peugeot Citroën, other French businesses—including Total and Renault—are eyeing a reopening of the Iranian market with great anticipation. In September, representatives of the Mouvement des Entreprises de France (MEDEF)—France’s largest employers’ federation—are expected to visit Iran.
The EU and Iran’s mutual concerns about Daesh (the Islamic State) in Iraq and Syria have led European officials to also explore the idea of greater European-Iranian cooperation in security sectors. Late last month, EU foreign policy chief Federica Mogherini met with Iranian Foreign Minister Mohammad Javad Zarif in Tehran, where the two diplomats discussed regional issues. Mogherini hailed the nuclear deal as having “the capacity to pave the ground for wider cooperation between Iran and the West.”
From the Saudi Arabian perspective, the reintegration of Iran into Western-led economic and security initiatives would constitute a strategic loss for Riyadh, which sees its rivalry with Tehran as a zero-sum game. Indeed, if the international community views Iran as compliant with the July 14 agreement throughout upcoming months and years, relations between the West and Iran have much potential to improve significantly, even if it will take years for relations to fully normalize with Iran.
An Important Ally, but Not the Most Important
Regardless of developments in French-Iranian relations following the nuclear agreement, France’s defense companies are likely to continue pursuing lucrative opportunities in the GCC, which outspends Iran on arms ten to one (as the world’s top arms importer, Saudi Arabia outspends Iran more than five to one). On the political front, other issues—including the question of Palestine, the Syrian crisis, and Riyadh's war in Yemen—further align France and Saudi Arabia, and create more fertile ground for the two nations to explore a stronger alliance.
Although France is unlikely to entirely supplant the United States as the kingdom’s most important ally, Paris does compete with Washington as an arms supplier and provider of advanced military technology. With Saudi Arabia’s war against the Houthis in Yemen unlikely to be resolved in the near future, the growing threat of Daesh and other extremist organizations inside the kingdom, and Riyadh’s cooling relationship with Washington, the kingdom is likely to remain a major client of France’s arms industry.
Saudi Arabia’s enormous oil wealth and its strategic leverage in the Middle East give the kingdom the luxury of easily choosing the powers it wishes to draw closer. Political turmoil and declining U.S. influence in the Middle East have given rise to a new order, which is of grave concern to officials in Riyadh. Leaders in Saudi Arabia and other Gulf states appear to be hedging their bets by investing in a deeper military partnership with France.
Yet for all their anger and disappointment, Saudi leaders seem to understand that their ability to entirely reconstitute their geopolitical alliances is rather limited. Although France’s growing commercial interests in Saudi Arabia and overlapping interests in the region can pave the way for a stronger alliance, the kingdom cannot expect Paris to replace Washington as the power responsible for guaranteeing its security from foreign enemies. Historically, and for the foreseeable future, there is only one country capable of providing that security umbrella to the kingdom—and that country is the United States.
Giorgio Cafiero is the Founder of Gulf State Analytics (a Washington, DC-based geopolitical risk consultancy) and a frequent contributor to Al Monitor, Foreign Policy in Focus, and Huffington Post.
Daniel Wagner is the CEO of Country Risk Solutions (a Connecticut-based cross-border risk advisory firm), and author of the book "Managing Country Risk". He previously served as Senior Vice President of Country Risk at GE Energy Financial Services.