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A Potential Step Toward an Iran Nuclear Deal

SOURCE: AP/Jason Reed

U.S. Secretary of State John Kerry, third from left, speaks at the Iran nuclear talks in Geneva, Switzerland, Saturday, November 9, 2013.

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After five years, President Barack Obama’s strategy of energetic diplomatic engagement with Iran combined with sanctions pressure has led to an important moment. By marshaling all the elements of America’s power—diplomatic, economic, and military—the United States and its partners are on the cusp of an agreement addressing one of the most pressing challenges in the Middle East: the Iranian nuclear program.

Iranian President Hassan Rouhani, who won a surprising upset victory in June, ran on a platform of easing Iran’s economic difficulties through “constructive interaction” with the international community. Several months of conciliatory statements from Iran culminated in a phone call between President Rouhani and President Obama in late September—the first such contact between the countries’ presidents since the 1979 Iranian Revolution.

When nuclear talks resumed in October under the new Iranian administration, U.S. negotiators noticed an immediate change. “I have never had such intense, detailed, straightforward, candid conversations with the Iranian delegation before,” said a senior Obama administration official. Secretary of State John Kerry recently said that the current talks, now in their third round, represent “the best chance we’ve had in a decade, we believe, to halt progress and roll back Iran’s program.”

This opportunity represents the success of a two-track policy that the Obama administration has pursued since the president took office in 2009. While initially dismissed by the administration’s critics as useless gestures, President Obama’s outreach to the Iranian public and its government has proven to be an important force multiplier for sanctions pressure. According to Nobel Peace Prize-winning Iranian human rights lawyer Shirin Ebadi, by demonstrating willingness to engage with Iran, President Obama showed Iranians and the world “that it is the Iranian regime that doesn’t want to talk,” thereby strengthening an international coalition to put pressure on Iran through economic sanctions.

By all accounts, Iran has changed its approach to the nuclear negotiations, and has shown itself ready to seriously and substantively engage with the international community’s concerns about its nuclear program. Iran’s Supreme Leader Ayatollah Ali Khamenei, the country’s ultimate decision maker, has repeatedly signaled his support for President Rouhani’s and Foreign Minister Mohammad Javad Zarif’s diplomatic efforts.

But this window of opportunity will not stay open forever. If Rouhani’s efforts prove fruitless, internal political pressures will eventually cause Khamenei to withdraw his support for the negotiations effort. If this happens, an enormous opportunity—for the United States, Iran, and the region—would be lost. The United States would then face two extremely undesirable possibilities: an Iranian nuclear weapon, or military action to try and prevent one. Both options present dangerous and potentially destabilizing consequences.

Iran currently suffers under the most stringent and comprehensive set of multilateral and unilateral sanctions of any country in history. These sanctions, and the economic difficulties they have exacerbated inside Iran, have clearly influenced Iran’s decision to seek relief through negotiations with the United States and its partners in the P5+1—the five permanent members of the U.N. Security Council and Germany.

Sanctions pressure is not an end in itself, however, but rather a means to an end. In this case, the end goal is a change in Iranian behavior. If Iran takes steps toward addressing international concerns over its nuclear program, the P5+1 must show that it is willing to affirm those steps in order to enable the process to go farther until Iran satisfactory addresses all outstanding questions relating to Iran’s nuclear program.

The sanctions relief currently being considered in a first-step arrangement is limited and quickly reversible, should Iran prove uncooperative. This relief is valued at less than $10 billion—not the $40 billion that has been claimed elsewhere—and includes:

  • Access to about $3 billion in hard currency assets currently frozen, distributed over a period of months according to Iranian compliance
  • Suspension of sanctions on automobiles and airline parts, petrochemicals, gold, and precious metals

The Obama administration has the backing of a strong majority of Americans for this first step. According to a recent Washington Post/ABC News poll, two-thirds of respondents supported an arrangement that offered some easing of sanctions on Iran in exchange for curbs on its nuclear program.

It’s important to note that this modest sanctions relief would actually amount to less than the compounding impact of other existing sanctions. According to U.S. Treasury Department estimates, oil sanctions alone account for some $5 billion per month in lost revenue for Iran. What’s more, according to a report from the Congressional Research Service, oil exports, which fund nearly half of Iran’s government spending, have fallen by half since 2011, from about 2.5 million barrels a day to about 1.25 million. The same report found that “The loss of revenues from oil, coupled with the cut-off of Iran from the international banking system, has caused a sharp drop in the value of Iran’s currency, the rial, [and] raised inflation to over 50%.”

It’s tempting to believe that since sanctions helped get us to this moment, more sanctions can only be good. But while sanctions have made a considerable impact on Iran’s economy, there’s little evidence that the country is at a breaking point. The Islamic Republic has shown in the past, most notably during the Iran-Iraq war, that it is willing to endure extreme difficulties in defense of what it perceives as its national interests.

Furthermore, since the Clinton administration placed a comprehensive ban on U.S. trade and investment in Iran in 1995, the United States now experiences little negative economic impact from sanctions on Iran. This is not true of our partners in Europe and Asia, many of whom have ongoing trade relationships with Iran and, thanks to the Obama administration’s persistent diplomacy, have cooperated with the sanctions efforts at considerable economic cost to themselves. This multilateral cooperation has been a key source of the sanctions’ impact and effectiveness, but if the United States were seen as undermining or refusing a reasonable deal, that cooperation would be threatened. This is a far more likely scenario for the slow collapse of sanctions than one caused by the very limited and reversible relief now being offered.

Even if a comprehensive nuclear deal is hammered out, U.S. sanctions targeting Iran’s support for terrorist groups will remain, as will U.S. efforts to highlight Iran’s domestic human rights abuses. It’s worth noting here that a nuclear deal offers the best hope of improvement on human rights in the near term. A successful negotiation that eases Iran’s economic situation while also securing what Iran sees as its nuclear rights could create momentum that would help Rouhani’s administration address these broader issues. “It would give [Rouhani] and his team more bargaining power with the hard-liners,” Iranian activist Taghi Rahmani said recently. “A successful deal would definitely, positively impact social and political conditions inside of Iran.”

An agreement that completely dismantled Iran’s nuclear program, and therefore removed any possibility that it could produce a nuclear weapon, would be ideal. But such an agreement would not be politically feasible for Iran’s leaders. A more practical and realistic option is one that accepts a small amount of Iranian domestic enrichment, under heavy and intrusive international inspection, while capping the amount of enriched uranium that Iran keeps inside the country. A satisfactory—as opposed to “perfect”—agreement is one that extends the amount of time in which Iran could conceivably dash for a nuclear weapon, thereby dramatically increasing the likelihood that international inspectors would detect such a move.

Speaking at a security conference in Istanbul earlier this month, Foreign Minister Zarif said, “the perception that Iran seeks a nuclear weapon is detrimental to our [Iran's] security.” Iran now has an opportunity to change that perception by fully addressing the international community’s concerns. Likewise, a judicious and effective use of American power has created an opportunity to address a key issue of concern to U.S. security. It should be seized.

Matthew Duss is a Policy Analyst at the Center for American Progress.

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