The Iran Deal’s on Life Support: Time to Pull the Plug

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by Esfandyar Batmanghelidj 

The saga of the Iran nuclear deal has taken another bizarre turn. Eli Lake, a longtime skeptic of the deal, yesterday published a much-discussed Bloomberg View piece in which he surprisingly argues that “to withdraw from the Iran deal now would be a mistake.” Lake’s piece reflects a new line of thinking that has emerged from the campaign to “fix” the Joint Comprehensive Plan of Action (JCPOA).

With the recent appointment of John Bolton as national security advisor and the prognostications of Israeli Prime Minister Bibi Netanyahu, it is now being taken largely for granted that Trump will withdraw from the Iran deal. But summarily nixing the deal on May 12, the date when Trump would need to once again waive U.S. secondary sanctions in order to remain in the deal, might pose a problem. The “fix not nix” strategy, which has been advanced since Trump’s de-certification of the agreement in October 2017, reflects a concern in Washington that if Trump abrogates the deal in a flourish of executive privilege, he will harm transatlantic relations and make the U.S. seem responsible for any subsequent escalation or blowback.

For some months, the date of May 12 has loomed over the U.S.-E3 negotiations to find a fix to the deal by giving Europe the chance to compel Iran into a package of add-ons and concessions. Time is running out, and Trump seems determined to kill the deal by his own small hands. Ever aware of the optics, Mark Dubowitz, CEO of the Foundation of Defense of Democracies (FDD), has suggested a “safe harbor” period which would extend to November 12, during which the sanctions re-imposed in May would not be enforced, thereby granting a greater window for negotiations on a “real fix.”

At first glance, this might look like a reasonable accommodation. But in truth, it is an effort to bait Iran into a harsh reaction that kills the deal. The failure to renew sanctions waivers on May 12, even if sanctions snapback is delayed, will trigger substantial political pressure for the Rouhani administration or other elements within Iran’s state to respond. Should that response be escalatory—and if it takes place within the window of time before the United States has actually redesignated entities and reimposed sanctions—it will look like the Iranians were the party that abrogated the deal first during a period of “extended negotiations.”

Unworkable Fix

There are four clear signs that the strategy to pursue a “fix,” even with more time, is unworkable. The first sign is that Trump has never independently articulated what an acceptable fix would look like. His antipathy for the Iran deal is clearly more emotional than rational, stemming from his view of the deal as a key achievement of the Obama administration. Even if a rational fix were to be devised, it would still be vulnerable to Trump’s sentiment that the deal should not be saved. It may even be the case that the JCPOA is the primary reason why Trump cares about Iran at all. With the deal off the table, the unlikely tag team of Saudi Crown Prince Mohammad bin Salman and Bibi Netanyahu may have less success weaponizing the White House against Iran.

Second, the elevation of Mike Pompeo to secretary of state and John Bolton to national security advisor only compounds the problem of Trump’s impulses as he has surrounded himself with individuals who have a nearly pathological obsession with Iran as an adversary. These new advisors may find the pretense to escalate even if the JCPOA were “fixed.” Iran can no longer rely on the nuclear deal alone to underpin a basic detente with the Americans and therefore needs to begin investing in other methods of counterbalancing.

Third, there has been reduced capacity for reasonable action among the bureaucracy. The Treasury Department’s Office of Foreign Assets Control (OFAC) has failed to issue a single new license for commercial activities in Iran to date. OFAC has a clear institutional interest in creating a robust but navigable regulatory environment. The Trump administration’s Iran posture has overriden this interest, even prior to snapback, which suggests that waiver renewal would be insufficient to ensure that Iran receives the expected economic benefit from the nuclear deal.

Finally, the “fix not nix” approach is just a tactic, not a complete strategy, and has been put forward as a policy option by advocacy groups and think tanks whose larger ambitions are to seek regime change in Iran. Even if a fix were to emerge, groups such as FDD and the American Enterprise Institute (AEI) will continue to push for a more confrontational policy with Iran, emboldened by the fact that they were able to secure concessions through the acquiescence of European governments, such as the new sanctions currently being considered.

The confluence of these factors has put the JCPOA into the intensive-care unit. This characterization might unnerve deal supporters, who insist that the deal remains strong, particularly with the continued verification by the IAEA that Iran remains in compliance with its commitments under the deal. But it is important not to misunderstand the origins of the Iran deal’s strength. Deal supporters ought to remember that “JCPOA” is just a particular instantiation of the larger idea that diplomatic engagement with Iran is the best way to achieve greater security and prosperity in the Middle East. Deal supporters must also realize that the strength of the Iran deal does not derive from the mechanisms of the deal itself, but rather from the pre-existing factors and forces that made the deal possible in the first place, such as the aspirations of Iran’s citizenry, the economic need for internationalization, and the longstanding deterrents and disincentives for proliferation activity.

The total subjugation of normalized relations between Iran and the West to the uncertainties of the JCPOA has created a quagmire. Pro-engagement stakeholders in the U.S., Europe, and Iran have spent nearly all of their energies in the last year seeking to preserve the deal. In the meantime, the underlying sources of strength in Europe-Iran ties have been neglected and underutilized. The general sense of trust between stakeholders on both sides has eroded as accusations of European appeasement have collided with accusations of Iranian intransigence.

With the Iran deal in the ICU, there is an argument to keep the deal on life support. Barbara Slavin has recently argued that coming shifts in American politics could offer a strong reason for Iranian patience in regards to the nuclear deal. But the waiting game is itself harmful, eroding confidence and leading to the whittling away of strategic options.

Pulling the Plug

It may be time for Iran to pull the plug on the JCPOA. It should consider reallocating efforts and resources toward new initiatives, programs, and agreements to shore up diplomatic and economic ties between Europe and Iran, as well as the wider international community, where Trump can’t directly interfere. This would create an opportunity to declare the deal dead at Trump’s hands because of what he has already done, rather than what he may do. It would give Iran and its European, Russian, and Chinese partners a chance to craft a new plan for engagement outside the moribund JCPOA that will no longer be beholden to sentiments in Washington and less exposed to craven lobbying from the leaders of Saudi Arabia and Israel.

In Iran’s domestic arena, such a step would also allow pro-engagement stakeholders, namely the Rouhani administration, to reassert their control over the diplomatic and economic agenda. In effect, Iran could preempt Trump’s decision and pull out of the JCPOA from a position of strength, doing so without violating the spirit or letter of the agreement, and transposing its commitments to a new set of multilateral engagements. There are several steps that would need to be taken to executive such a strategy.

First, Iran should use the dispute resolution mechanism outlined in the JCPOA to orchestrate its exit from the agreement but in a manner that does not trigger the snapback of UN or EU sanctions. As per the text of the agreement, Iran would present the U.S. failure to implement the deal as grounds to “cease performing its commitments under [the] JCPOA in whole or in part and/or notify the UN Security Council that it believes the issue constitutes significant non-performance.” The degree to which Iran opts to cease performing its commitments is critical. This is because an unresolved dispute triggers a UN Security Council “vote on a resolution to continue the sanctions lifting.” The goal for Iran must be to be to ensure that the Security Council does not vote to reimpose UN sanctions. In order to avoid this outcome, Iran should confirm to the IAEA that it intends to remain in full compliance with its commitments presently outlined in the JCPOA and ensure continued access for IAEA inspectors despite its formal withdrawal from the nuclear deal.

Second, Iran should strongly consider other mechanisms through which to formalize its avowed commitment to never seek nuclear weapons. Though currently a signatory to the Nuclear Non-Proliferation Treaty (NPT), as Seyed Hossein Mousavian has argued, it should also consider signing the Treaty on the Prohibition of Nuclear Weapons. Iranian officials, who have publicly praised the nuclear ban, will need to understand that their effective communication of intentions will be absolutely crucial at this stage in the strategy. After all, abrogation of the deal is currently assumed to lead to an Iranian “dash to the bomb.” Getting key stakeholders and advocacy groups to attest to the new circumstances of Iranian non-proliferation comittments will require proactive communication and transparency. If this can be done successfully, Iran could exit the agreement without punishment from the UN or EU.

Third, on the basis of the continued commitment to preserving the core security benefits of the JCPOA, Iran should formally invite the European Union into a new set of multilateral and comprehensive consultations on political, economic, and security matters modeled on the periodic meetings of the Joint Commission. Importantly, these new consultations should not be led by the E3 governments of France, Germany, and the United Kingdom. Under the auspices of the European Union and the European External Action Service, which has been the most proactive stakeholder for the expansion of political and economic dialogue between Europe and Iran, Iran must engage the wider EU 27 to create a greater space for countries such as Austria, Denmark, Sweden, and the Netherlands, which have actually made greater relative strides in expanding political and commercial ties than the E3 in their respective bilateral contexts. Of course, such efforts should also include non-EU states such as Switzerland and Norway. Bringing these smaller European states into a formal multilateral dialogue would provide a much more durable forum for engagement than the over-reliance on the JCPOA has provided thus far. Of course, Iran should also continue to hedge by finding constructive ways to deepen its relationship with Russia and China, especially outside of the realm of security cooperation.

Fourth, Iran must continue its process of domestic reform necessary for both political and economic internationalization. Most importantly, it should continue its commitment to the Financial Action Task Force action plan regardless of the snapback of U.S. sanctions. This will ensure that critical reforms are made to the Iranian financial system that will build confidence in Iran’s intentions to solve some of the most stubborn barriers to the facilitation of trade and investment. Additionally, Iran should improve openness and transparency in the domestic political sphere by tackling corruption, expanding access to media and information, and better protecting dual-nationals from undo persecution.

These four steps constitute a bold rethinking of Iran’s path to a more productive, prosperous, and peaceful place in the international community. The strategy certainly introduces technical complexity that cannot be fully considered here. But any sober assessment of the current situation surrounding the JCPOA makes it clear that Iran will need to consider new ways to leverage its fundamental geopolitical significance and its ongoing multilateral engagement in order to derive from its international relations the essential domestic political and economic dividends that have for five years underpinned Iran’s tentative turn towards openness.

Without such an effort, Iran may find itself externally isolated at the hands of Trump’s throttling of the nuclear deal. The Iranian government would also struggle to live up its ambition to ameliorate the terms of the social contract with the electorate. Whichever strategy is taken, however, the integrity and scope of Iranian diplomacy is not something to be cynically certified by an erratic American president. To save diplomacy and to prove integrity in the international system, it may be time for Iran to kill the deal.

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Esfandyar Batmanghelidj

Esfandyar has spent the last 5 years working on projects related to "business diplomacy" between the West and Iran. He is the founder of the Europe-Iran Forum, the leading annual gathering for business, government and civil society leaders committed to Iran's economic development, and the executive editor Bourse & Bazaar, a digital business publication with a focus on Iran. He is a graduate of Columbia University.

13 Comments

  1. This is brilliant. Pull the plug. The US “coalition of the willing” effort against Iran has been totally illegal. We owe the hardliners in Iran a vote. And Iran wouldn’t be “externally isolated” it would be a leader in the nonaligned movement as it has been before. Iran would now have Russia and China fully at its side, given other developments. Be tough, but ready to talk, like DPRK.

  2. Mr Rouhani is picking the fruits of the tree he planted in 2003 when he was the chief of National Security Orgof Iran. In that position Rouhani stopped the entire nuclear research program as directed by Khameneii the supreme leader of Iran! Of course, Denuclearization of the ME has always been and still is the Iranian regime’s goal but they knew it’s an unachievable goal because Israel will never give up its nuclear weapons. As I’ve said many times before Iran has miscalculated its position and has made its biggest political mistake by NOT completing its original mission of developing a nuke bomb that it had decided to do so following Saddam’s imposed war on Iran with much help from the west! Very soon Iran is going to be forced to out maneuver Trump, Pompeo, Bolton and possibly EU. Fortunately or unfortunately Iran will never trust Russia and to a lesser extent China for their support in their response to the US and or EU! Let the chess match begin!

  3. This is the kind of thinking that is needed. Congratulations!
    On the second step, Iran could continue to implement its Additional Protocol (AP) and move to ratify it in its Parliament. That would continue the most important IAEA inspection activities now taking place under JCPOA, thus providing similar assurance of the peaceful nature of Iran’s nuclear programs as the AP provides for other States.

  4. You know they say that the JCPOA deal is a multilateral deal and so even if one party pulls out, the rest are in and the deal continues. However in reality, that one country pulling out essentially kills the deal and any benefit Iran was hoping to obtain under the deal, and so effectively there is no more deal. If the EU further moves to impose additional sanctions on Iran, the deal is for all intents and purposes just dead letter.

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