New piece at LobeLog, on threats to the nuke talks with Iran

It’s been hard to stay optimistic about the chances of a nuclear accord being reached with Iran, what with all the talk about how the two sides are so far apart on the issue of Iran’s uranium enrichment program and the July 20 deadline rapidly approaching to either complete an agreement, extend the talks by another 6 months, or walk away. But I think if you understand how negotiations work, and that the two sides are obviously going to be staking out hard lines as crunch time approaches in order to get the most advantageous compromise terms they can, then it’s easier to stay hopeful.

For one thing, both sides have big incentives to make a deal. The UN/EU side really has no alternative to a negotiated settlement that offers any real hope of preventing Iran from developing nuclear weapons (which is not to say that they are or will pursue weaponization, just that the West will have no way to check and verify Iran’s nuclear activities if these talks fail) — regularly repeated military strikes are a crapshoot at best and a very bad idea for a whole host of other reasons — and Iran really needs this deal if it has any hope of being able to engage with the global banking and energy markets it needs to get its economy moving again. Plus, if you look around the edges, you do see movement, like Iran’s proposal to convert the very contentious Fordow enrichment facility to R&D, and to keep it in place only as a backup to its larger (and, it should be said, easier to hit in an airstrike) enrichment facility at Natanz. The P5+1 wants Fordow closed, mostly because they’re not sure they can destroy it militarily if push comes to shove, but if Iran is willing to use it only for R&D then that’s probably a deal that the P5+1 can/should/will accept. So there’s still good reason for optimism, OK?

Now, allow me to discourage you again. Because the uranium enrichment disagreement, while the most immediate point of contention between the two sides in Vienna, is not the only element of these talks that has the potential to completely sink the deal. The nature of how, when, and how quickly the US and EU reduce sanctions on Iran is not only a thorny issue to negotiate up front (Iran wants major relief up front and a short term on the deal so that it can begin expanding its nuclear program without limits, and the P5+1 wants exactly the opposite), it also is perhaps the biggest potential pitfall to blow the deal up down the road. My latest at LobeLog covers a panel that was held yesterday at the US Institute of Peace on this very issue:

The two sides will surely compromise on a deal that lifts sanctions progressively, with relief tied to specific Iranian activity under the terms of the accord. But the devil is always in the details, and working out the specific timetable for sanctions relief and the steps to which it will be pegged is certainly among the more difficult challenges the negotiators are facing in Vienna. This process is made all the more complicated by the fact that the US has been imposing sanctions on Iran since its 1979 Islamic Revolution, for reasons that have had nothing to do with Iran’s nuclear program. For example, Iran’s support for the militant Lebanese group Hezbollah was used as the justification for some of the earliest and strongest US sanctions against Iranian banks, and those sanctions are unlikely to be altered if a final deal is reached.

The panel kept coming back to the issue of uncertainty; businesses are going to be understandably wary of dipping a toe into the Iranian market when they know that a nuclear deal will lift some, but not all, US sanctions on Iran. Which sanctions are going to stay in place? Will European companies have to worry about complying with two different sets of remaining sanctions (American sanctions against Iran are likely to be a lot tougher than the EU’s after a deal is reached) lest they run afoul of US regulators? This isn’t speculation, really, since we’ve already seen exactly this kind of reaction to even the small sanctions relief that Iran received in November’s interim agreement. If the international business community responds very slowly to the suspension or lifting of some sanctions, are the Iranians going to be patient about that or are they going to begin to feel like they’re being cheated? If that happens, will they they pull out of the deal? And if sanctions relief is staggered, does this mean the process of slow business acclimation and the risk that Iran will take offense has to be repeated again and again for years to come?

Also, and the panel touched on this only briefly so I didn’t talk about it in my write-up, but what happens when Iran wants permanent sanctions relief from the US? In the short-run, the president (whoever that may be) can waive sanctions for a 6 month, renewable period if he deems it in the national interest. But since presidents change, and partisan politics being what they are, the Iranians are going to want those sanctions to be permanently lifted at some point. But that requires Congress getting on board, and that’s yet another pretty tall mountain to scale.

So, hey, I would say it’s still OK to be optimistic about the possibility of reaching a deal, even if they have to extend the talks beyond July 20 (though that won’t be a great sign if it happens). But everybody should understand that there are issues in play here that could undermine an accord even long after it’s been reached.

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