What future for the Iran nuclear deal?

The prospect of President Donald Trump withdrawing from the Iran nuclear deal, or “Joint Comprehensive Plan of Action” on 12^th May—when he has to consider whether he will renew the sanctions waivers—is causing understandable consternation in European capitals, where there has been a concerted effort to persuade the United States to stay in.

The agreement was reached after two years of detailed and at times tedious negotiations, and resulted in restrictions being placed on Iran’s nuclear programme in return for a gradual lifting of those sanctions pertaining to the nuclear programme.

Trump has of course never hidden his disdain for the agreement and his vocal opposition and continued prevarications over whether to issue the necessary waivers have already served to undermine the efficacy of the agreement and to place it on life support. Nonetheless, his political theatrics—ably supported in this regard by the Israeli Prime Minister—have also served to disguise the flaws in the agreement which even European partners agree need to be addressed sooner rather than later.

Leaving aside for the moment Trump’s bluster, the handling of the agreement itself has been founded on two false assumptions that need correcting. The first has been to see the agreement as an endgame rather than a stage in an ongoing process. The agreement as structured is at heart a confidence-building measure; a process to be tested, refined and built upon. This is true of any number of diplomatic agreements which usually contain ambiguities that are ironed out as the agreement is implemented. The JCPOA contains an arbitration mechanism to deal with such eventualities but such are the sensitivities over the agreement that even talk of a supplementary agreement is treated with apprehension and anxiety. The consequence of course is that disagreements are left to fester and a process intended to build confidence actually serves to undermine it.

The second flawed assumption has been the tendency to see the nuclear programme as a cause rather than a symptom of the wider political malaise between the United States and Iran. In focusing on the particular rather than the general we avoid those wider political issues.

With respect to the agreement itself there are weaknesses on both sides that should be addressed and improved though naturally each side has tended to focus on those elements that adversely affect its own interests. The west therefore has focused on the question of missile technology, which was left intentionally—though with hindsight perhaps recklessly—vague. The other issue which has hit the headlines refers to what are known as the “sunset clauses.” The argument that Iran has in fact agreed to permanently eschew the pursuit of nuclear weapons is disingenuous insofar as this refers to Iran’s adherence to the Treaty on the Non-Proliferation of Nuclear Weapons, not the JCPOA, which is by definition a confidence-building measure that is time-limited and deals with practicalities rather than intentions.

Obama has himself already conceded that when the terms of the agreement lapse, Iran’s breakout time will potentially be very brief. The situation has been made acute by Iran’s stated intention of ultimately developing an industrial scale nuclear enrichment programme, an ambition that the west finds inconceivable and which will necessitate further negotiations and a supplementary agreement. Yet Iran has already served notice that it considers this position to be in contravention of the JCPOA.

The flaw as far as Iran is concerned of course relates to the relative paucity of sanctions relief. The blame for this has been laid at the door of the current White House but the causes are more structural than political. There is little doubt that Iranian President Hassan Rouhani over-sold the prospects of sanctions relief which only related to nuclear sanctions and left a great deal in place. But more than that, the Iranians never negotiated access to the US$ or US financial markets, a strategic blunder which severely restricts the ability of banks to work with Iran. The absurdity of the situation was made all too clear during the last year of Obama’s presidency, as what the US State Department sought to give, the US Treasury immediately took away.

The solution to all this of course is not to withdraw from the agreement, as Trump threatens to do, but to strengthen it by addressing its shortfalls. But the sad truth is that for reasons of expediency the political will on either side does not exist.

While Rouhani has staked his presidency on the JCPOA delivering, the interests of Iranian Supreme Leader Ali Khamenei lie elsewhere. For him, in smashing the international coalition and exposing US perfidy, the JCPOA has already delivered.

All this international gamesmanship is masking a far more serious issue and that is the dire state of the Iranian economy. And in this Rouhani is complicit. In staking all on the JCPOA Rouhani neglected to address the very real structural weaknesses of the Iranian economy, and these are now coming home to roost. With the run on the Rial and demonstrations continuing, our preoccupation with the JCPOA may prove incidental to the real—domestic—crisis facing Iran.