Iran Nuclear Agreement

With U.S. President Donald Trump’s announcement that CIA Director Mike Pompeo’s meeting with North Korean leader Kim Jung Un to prepare for a summit meeting went “very smoothly,” demands for a strategy for the direct talks become even more pressing. While the Iran nuclear deal contains technical constraints and verification provisions that provide important groundwork for a North Korea deal, there are five lessons from the deal’s shortcomings that should serve as the main pillars for developing President Trump’s strategy. 1. The leverage from sanctions is strongest now and difficult to rebuild. Go for a permanent deal. The Iran deal was the first major arms control deal of its kind, where tough, multilateral sanctions provided the leverage for the deal, and their removal was a central part of the agreement. At the heart of the concerns about the Iran deal is that it is not permanent. The sanctions were removed, but several of the most important provisions blocking the pathways to their nuclear weapons development expire within a decade or so. It took years to build a global consensus for Iranian sanctions. It would take a long time to rebuild that pressure after the constraints expire, longer than it would take for the Iranians to rebuild their program. The same would be true for North Korea. Among the approaches that are being publicly debated is that the administration should take a phased approach ― first seek to achieve a freeze and then pursue follow-on negotiations to achieve denuclearization. This would be a grave mistake. A phased approach will only kick the crisis down the road, as the consensus to maintain sanctions diminishes after a freeze. The U.S. has the economic leverage now and should remain steadfast on demanding a permanent deal that requires North Korea abandon its nuclear weapons program and return to the Treaty on the Non-Proliferation of Nuclear Weapons. The U.S. removed its nuclear weapons from South Korea in the 1990s. South Korea and North Korea’s other regional neighbors are permanently bound by the nonproliferation treaty. North Korea is the outlier in the region. 2. Include verifiable constraints on ballistic missiles. The last-minute rush to include ballistic missiles in the Iran talks led to an ambiguous solution. Ballistic missile constraints were not included in the deal itself, but rather were addressed in a weak provision in U.N. Security Council Resolution 2231 endorsing the deal, which only “called upon” Iran to not undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons. In diplomatic parlance, that is not a clear prohibition and one the Iranians have not felt obligated to abide by. The result has been the erosion of trust in the overall deal. The threat of the North Korean ballistic missile program includes the significant threats the missiles present to our allies in the region and to our homeland. Ballistic missiles are also a central part of North Korea’s destabilizing black market proliferation, from which it derives important economic benefits. Given the rapid advancement of the North Korea ballistic missile program, these missiles need to be constrained quantitatively and qualitatively, and the proliferation of missiles and missile parts need to be halted by carefully considered, verifiable provisions. 3. Get congressional approval. As the past couple of years have underscored, domestic support is essential for the U.S. to be able to fulfill its obligations under the Iran deal. A nuclear deal with North Korea will need to have domestic support, and that can only be successfully achieved with congressional approval. The Iran deal was concluded as an executive agreement that did not require the approval of Congress. Although a compromise was eventually reached to consider a resolution of disapproval, the spadework was not done to build and ensure domestic support for the agreement. President Trump will basically have two options for congressional approval: Submit the deal as a treaty to the Senate for advice and consent, or follow President Richard Nixon’s model of submitting the interim agreement of the Strategic Arms Limitation Talks Tready (SALT I) as an executive agreement that requires an up-or-down majority vote in both houses of Congress. While the former is preferable on constitutional grounds, the latter is at least a better option than circumventing Congress and leaving the domestic support unattended and vulnerable to erosion. 4. Let China provide the carrots. The U.S. is better at sticks. As the struggle with waiving sanctions in the Iran deal demonstrates, the U.S. is better at putting sanctions on an authoritarian regime than it is at taking them off and providing economic benefits. This will be equally as difficult, if not more so, with the Kim regime, which has one of the worst human rights records globally and whose economy is built on black markets. While the U.S. will have certain responsibilities to enforce the terms of a deal if negotiated, the responsibility for the longer-term incentives should shift to China. It has a lot to offer: security guarantees, by strengthening its 1961 mutual assistance agreement; more investment in North Korean industry and infrastructure; membership in the Asian Infrastructure Investment Bank; and integration into its “One Belt, One Road” initiative, among others. 5. Get the support of our allies. A significant achievement of the Iran deal is that it was negotiated by a coalition of partners ― the U.S., the U.K., France, Russia, Germany and China. Nonetheless, its main shortcoming is that it did not have the support of regional allies ― most importantly, Israel and Saudi Arabia. The lack of regional support, dramatically demonstrated by Israeli Prime Minister Benjamin Netanyahu’s address to Congress against the deal, has contributed to the erosion of America’s commitment to the deal. A North Korea deal will ultimately fail without the support of our regional allies ― most importantly, South Korea and Japan. If our regional partners do not feel secure, there are many ways the agreement could be undermined, including, perhaps, most importantly, with the dangerous conclusion that their security is at risk under the agreement and that they need to develop their own nuclear weapons.

U.S. Secretary of State nominee Mike Pompeo said yesterday at his Senate confirmation hearings that he would actively try to “fix” the Iran deal, working with U.S. allies to “achieve a better outcome and a better deal.” The oil market didn’t appear to believe he would succeed. While Pompeo was laying out his views, Brent prices topped $72 a barrel amid reports that there had been an unsuccessful drone strike on Saudi Aramco’s Jizan refinery in southwest Saudi Arabia. The foiled drone attack by Yemeni Houthi rebels was unnerving for two oil-related reasons. Firstly, it was yet another indication that the proxy war between Saudi Arabia and Iran in the region was both escalating and continuing to target oil related facilities. Secondly, and perhaps even more disturbingly, it was a sign that “asymmetric warfare” posed a greater threat to oil than could have been previously understood. Increasingly, there has been evidence that sub-national groups can build make-shift drones that can deliver payloads into hard to reach targets. The Jizan refinery attack was the first time a makeshift drone attack has been widely reported to have targeted an oil facility. The drone onslaught follows a serious cyber breach that has plagued a commercial safety system used in oil refineries. Both means of warfare pose serious risks not only to the Saudi oil industry but to Western and other regional facilities as well, upping the ante on a host of conflicts that involve Iran.  The United States is due in May to decide whether to take steps that would effectively re-impose oil sanctions against Iran. During his visit to Washington, Saudi Crown Prince Mohammed bin Salman lobbied the Trump administration to reopen the Iranian nuclear deal and pressure Iran for better terms that would ensure Iran never obtains nuclear weapons, rather than the publicly announced terms which reduces the number of Iran’s centrifuges and limits the level of uranium enrichment to 3.67 percent, far below weapons grade, for fifteen years. Under the nuclear deal, Iran is tasked to remove the core of its heavy-water reactor at Arak, capable of producing spent fuel that can yield plutonium.  Last month, European leaders were sounding out the possibility that fresh sanctions be imposed on Iran aimed to moderate the country’s ballistic missile program and its role in regional conflicts in a manner they hope would maintain the Iran nuclear deal. Saudi Arabia is likely to oppose that approach. The Saudi diplomatic message regarding the Iran deal could put the kingdom under pressure to offer to replace Iranian oil that would be lost to buyers, should a re-imposition of oil sanctions against Iran become necessary. Saudi Arabia has failed to act to replace declining Venezuelan oil production, as it could have done in past decades, preferring rather to replenish depleting financial resources by tapping higher oil prices. That has led to divisions within the Organization of Petroleum Exporting Countries (OPEC) on what could constitute too high an oil price that would begin to harm oil demand.  Rather than talk publicly about replacing any “sanctioned” barrels, Saudi Arabia has been pushing a plan to have “decadal” cooperation with Russia regarding oil prices. Saudi leaders would like to structure a long lasting agreement that could eliminate the debilitating cyclical swings in oil prices. But it remains unclear how that would be accomplished, short of coordinating investment rates for most of global oil production capital spending, as was tried (also relatively unsuccessfully) by the Seven Sister oil companies back in the post-World War II era. One alternative suggestion, said to be a non-starter among fellow OPEC members, would be to return to the fixed oil price system of the 1970s. That system was undermined when OPEC members were forced to cheat behind each other’s backs using non-transparent, complex price discounting schemes such as barter deals, secretive tanker freight discounts, and extended credit terms to ensure their oil wasn’t replaced by sales by producers offering spot market related pricing.  The appointment of more hawkish foreign policy members to the Trump administration's national security team has already affected Tehran, which has had increased difficulty marketing its oil in recent weeks and is now offering additional discounts to sway buyers who are worried about the effects of future sanctions policy. European companies are considering contingency plans, and Japan reportedly curtailed its oil imports from Iran in March. Some loss of Iranian volume is probably built in to current price levels, but the geopolitical ramifications of escalating conflicts could create more uncertainty in oil markets.  At this particular juncture, from the U.S. point of view, the oil aspect of Iranian sanctions policy could be more tangential compared to concerns about Iran’s role in the various Mideast regional conflicts. The United States has tried to counsel Saudi Arabia to find a way to deescalate the conflict in Yemen but so far, little progress has been made. The United States also would like to fashion a Syria strategy that limits Iran’s role in the Levant. One lever in that process is that neither Russia, Turkey, or Iran are in a financial position to pay for Syria’s reconstruction, creating a possible starting point to assert influence by the United States and its allies. Commentator Hassan al-Hassan argues that now is the ideal time for the United States to make a strong response to test whether the current facts on the ground render President Bashar al-Assad as suddenly more dispensable to his own supporters. He suggests whatever actions the United States takes be designed to force parties to abandon the military option. U.S. sanctions moves that recently cratered $12 billion in the wealth of Kremlin insiders and hampered their ability to work with large commodity traders were a step in the right direction.    

With John Bolton’s appointment as national security adviser, the odds have significantly risen that President Trump will abandon his predecessor’s nuclear deal with Iran. But there’s no need for hysteria. If Trump abandons the deal, the Islamic Republic still isn’t likely to run amok, ramping up its nuclear program and killing American soldiers in the Middle East. The calculated caution of Ali Akbar Salehi, the head of Iran’s Atomic Energy Organization, will probably win out. His tortoise-beats-the-hare approach to his country’s nuclear quest will be reinforced by the wild card that surely scares the mullahs the most: Trump. A bit of history. Salehi, an MIT-trained nuclear physicist and the likely architect behind the Islamic Republic’s massive illicit dual-use import network, is close to Supreme Leader Ali Khamenei. Salehi was dismayed by former President Mahmoud Ahmadinejad’s rapid accumulation of primitive IR-1 centrifuges, which offered Tehran neither an efficient path to nuclear energy nor an intelligent route to atomic weaponry. These clunky machines are prone to breakdown, and many thousands were required to produce enriched uranium, making their cascades impossible to hide. Salehi wanted to leapfrog to more advanced, high-velocity IR-6 and IR-8 centrifuges. With Hassan Rouhani’s presidential election in 2013, Salehi moved ahead with his ambitious plan to modernize atomic infrastructure. His principal problem: it would take Tehran at least eight years to fully develop a new generation of centrifuges. The clerical regime needed an arms-control agreement that would not just lift sanctions but also be permissive enough to allow the development of these machines. As Salehi has explained: “We do not take that [the Iran deal’s restrictions on centrifuges] as a constraint. So I would say on R&D, the apparent limitations that we have accepted, that we have agreed to, it’s not really a limitation.” Contrary to the nightmare scenarios of former secretary of state John Kerry, Iran is unlikely to rush to a bomb using one of its monitored facilities and the thousands of IR-1s that such a task would demand. It would take time to reinstall the higher-yield 1,000 IR-2ms currently under the surveillance of the International Atomic Energy Agency. Such stark actions would be detected, likely bringing on U.S. military strikes. The advantage of the most advanced centrifuges is that a small number can rapidly enrich uranium to weapons-grade. Their cascades can be easily concealed in a warehouse, making them extremely difficult to detect. They are key to a nuclear fait accompli. And technical problems are compounded by politics: President Trump obviously unsettles Tehran’s oligarchs. The regime follows Western media. The Europeans, much of the U.S. press, and especially former Obama officials are palpably scared of the president’s perceived bellicosity. Bolton’s appointment has amplified that fear. A headline in a Revolutionary Guard publication sums it up: “Trump’s Raging Bull Has Arrived.” So it’s reasonable to assume that Tehran will not want to challenge Trump and his new team, at least until the Iranians have had a chance to take their measure. It is worth recalling that the Iranian hostage crisis came to an end when Ronald Reagan, the “reckless cowboy,” replaced the hapless Jimmy Carter. Tehran temporarily froze its atomic program when George W. Bush geared up to invade Iraq. What Rouhani once explained about that decision is as applicable today to Iran’s actions if Trump abandons the nuclear accord: “Back then [the United States] was drunk with pride and victory. Had we shown passivity or radicalism, we would have given the knife into the hands of a drunk Abyssinian [George W. Bush]. We managed to put that phase behind us by prudence. .  .  . We managed to pass through that perilous curve. .  .  . Salehi cannot do much to speed up the development of advanced centrifuges. It routinely takes a country at least a decade to design and construct a new generation. Which is why Salehi, Khamenei, and Rouhani and their nuclear scientists want to preserve the agreement and thus their ingenious accomplishment. The clerical regime may still embark on some nuclear activities as a gesture of defiance to Trump. It may reinstall some of its mothballed centrifuges and continue to perfect the IR2ms. It may stockpile uranium currently committed to shipping abroad. It may even enrich uranium to 20 percent. All these moves are troublesome and will provoke hyperventilating headlines, but they hardly constitute a mad rush to the bomb. Tehran cannot have a realistic weapons option until Salehi finishes work on the advanced centrifuges. As the French tried to argue before the nuclear agreement was concluded, the West actually had more than one option to slow down, possibly halt, Iran’s atomic ambitions. It wasn’t, as President Barack Obama argued, his way or war. Paris was willing to take a slower approach, make fewer concessions, and let sanctions bite more deeply. Alone now, Washington has to be willing to play hardball with Tehran by insisting that it does have military options. But our primary task ought to be to squeeze the theocracy relentlessly. Enormous economic pressure can still be brought to bear on Tehran. As the recent nationwide anti-regime demonstrations in Iran revealed, economic frustration and political disgust are widespread in areas the mullahs had assumed were still faithful to theocracy. We should always want a different regime. The Islamic Republic is a discredited relic of the twentieth century, and the sooner we can expedite its demise, the safer the Middle East will be.

An important legislative deadline passed last week in Washington without much mention. You might remember that back on October 13, President Donald Trump announced he would not certify that Iran was complying with the Joint Comprehensive Plan of Action, or the Iran nuclear deal as it is more commonly known. Trump’s decision triggered a provision of the 2015 Iran Nuclear Agreement Review Act (INARA) giving congressional leaders sixty days to submit legislation to re-impose sanctions on Iran or even torpedo the agreement. Legislation submitted during the sixty-day window would receive expedited consideration. That window closed last Wednesday. Benjamin Shaver, who interned for me this semester, discusses the consequences of the passing of the deadline. INARA recognized that a president might determine that Iran was not complying with the nuclear deal. If that happened, the act stipulated that the majority and minority leaders in the House or the Senate would have sixty days to introduce legislation to reintroduce U.S. sanctions on Iran. Under the terms of INARA, any motion that congressional leaders introduced would be given expedited consideration, meaning that the typical legislative maneuvers used to delay or block legislation could not be used. Just as important, no other members of Congress could submit legislation on Iranian sanctions during the sixty-day window. INARA’s sixty-day window closed at midnight last Wednesday, December 13, without leaders on either side of the aisle submitting legislation. It’s not surprising that Democratic leaders stood pat. They say the deal is working. It’s more surprising that neither House nor Senate Republican leaders introduced a bill to punish Iran for what Trump said was Tehran’s noncompliance. After all, they had been critical of the deal since it was unveiled, and Trump leads their party. Of course, Republican leaders have been busy trying to pass a tax reform bill. Now that the sixty-day window has closed, any member of Congress can submit a bill to re-impose sanctions on Iran. Two senators who just might do that are Bob Corker (R-TN) and Tom Cotton (R-AR). On the same day that Trump declined to certify, Corker and Cotton announced a plan to fix what they saw as the Iran deal’s flaws. Their plan hasn’t gone anywhere over the last two months, at least not publicly; it remains just a fact sheet on Corker’s website. Here’s the rub. Even if Corker and Cotton do submit a bill based on their plan, it won’t receive expedited consideration. It would face the same obstacles that any bill faces once it is submitted, including a Senate filibuster. Corker and Cotton would need to round up sixty votes in the Senate to stop inevitable Democratic efforts to derail the legislation. With Republicans holding just fifty-two seats—fifty-one once Doug Jones of Alabama is sworn in—sixty will be a tough number to reach. It won’t help that some Republican senators were skeptical, at least initially, of the Corker-Cotton approach. They worry that it would antagonize European allies and that it would be wiser to try and pass legislation that would impose sanctions on Iran for its ballistic missile program and support for terrorism. What does all this mean? Congress isn’t likely to pass new Iran-related legislation any time soon, if ever. So the ball is now back in Trump’s court. If he wants to re-impose sanctions on Iran, he will have to do it himself. The good news for the White House is that the president has the power to do just that. All he has to do is stop signing executive orders waiving the sanctions that were suspended once the Iran nuclear deal went into effect. He has waived them twice so far in his presidency, most recently in September. The sanctions can be waived for up to 120 days, which means Trump will have to decide whether to waive them again before January 12. Mark that date on your calendar. It’s going to be important.

Even if Congress declines to reinstate sanctions on Iran after President Trump’s address, the nuclear agreement will still be on shaky footing.

Israel is alarmed about Iran's intentions — but that's nothing new. Flawed as it is, the nuclear deal is holding.