Iran Negotiations: The Policy Consequences of Time

Absent an agreement in July, the temptation to preserve and continue the P5+1 negotiating framework in place will be great. But there will be policy costs and consequences to maintain the status quo that may not be in the West’s interests, specifically if the impact of sanctions decreases over time or alternatively if Iran does not continue to restrain its nuclear development throughout the negotiating period.

Negotiations surrounding Iran’s nuclear program have been substantive over the past year, and some progress has been achieved. It logically justified two negotiating extensions. Whether Iran will be willing to make the necessary choices to bring its positions closer to those of the P5+1 (the United States, Russia, China, the United Kingdom, France, plus Germany) to reach an acceptable outcome remains uncertain, 15 months after the Joint Plan of Action (JPoA) was agreed in Geneva in November 2013. But, should Tehran choose to maintain its negotiating posture that it will retain a dual-capable nuclear program, the P5+1 will be unable to accommodate Iran’s position.

With the clock ticking, negotiations should be allowed to continue until June 30, 2015, when suspended sanctions are aimed to be reimposed automatically. The imposition of U.S. sanctions before July would not make a significant difference to Iran’s positions in such a short amount of time if Tehran sees additional U.S. sanctions as an isolated initiative by the U.S. Congress and not backed by the U.S. administration or, more significantly, by EU countries. Additional U.S. sanctions would also run the risk of alienating the Europeans, at the same moment that Washington is coordinating potential additional sanctions on Russia. Finally, new sanctions would undermine the P5+1 narrative, according to which they are doing everything they can to find an acceptable deal for both parties and could be used as an excuse by regime hardliners to end the negotiating process by blaming the United States.

Absent an agreement in July, the most logical temptation on all sides will be to preserve a status quo that appears preferable to the status quo ante, mostly because the JPoA created a balanced, efficient, and (so far) well-implemented agreement. But this sensible diagnosis is based on two assumptions: first, that continuation of the status quo will be in U.S. and European interests; second, that there is no alternative to the status quo other than a complete breakdown of the negotiations, increased tensions, and a collapse of the sanctions regime. Both assumptions must be tested to avoid artificially restricted Western policy options in July, or worse, be forced to accept an agreement at any cost based on the principle that there would be no other valid escape from the ongoing negotiation.

Will the status quo continue to be in the best interest of the West?

Not necessarily, if the negotiations are used by Iran to make ongoing technological progress a fait accompli. While the JPoA constrained several parts of Iran’s program, the research and development activities centered on advanced centrifuges is continuing. The mastering of the second generation IR-2m machine, and further progress on next generation IR-6s or even the IR-8 machines, would enable Iran to shorten considerably the number of machines that would be needed to produce highly enriched uranium and therefore the size of the production facility in a “sneak-out” scenario (i.e., a break-out conducted in a covert facility). Importantly, six months ago, Iran seemingly decided that it will no longer cooperate with the International Atomic Energy Agency (IAEA) on its suspected nuclear militarization activities until an agreement is reached with the P5+1 on a comprehensive agreement. The IAEA stated in November 2011 that “there are indications that some activities relevant to the development of a nuclear explosive device may still be ongoing.” Little information has since been provided by Iran to dismiss those concerns shared by the international community.

In the 2004–2005 time period, while negotiating with the Europeans, Iran continued to accumulate hexafluoride natural uranium to prepare for enrichment activities. Iran could be doing the same thing today, overtly with research and development or covertly with militarization activities. There will be a point when it will no longer be in Iran’s interest to remain in the framework of the JPoA, because it’s unlikely that Iran will want to perpetuate the current status quo over time if it is able to overcome technical constraints that it faced in November 2013.

Thus far, the JPoA hasn’t significantly altered the amount of pressure that Iran faces under the existing sanctions, which led Iran to the negotiating table in the first place. But sanctions must remain a work-in-progress to be efficient and Western sanctions have not adapted over time to Teheran’s tactic of circumvention and to sanctions “fatigue” by the sanctioning countries. Many EU designations are currently out-of-date as new front companies have been created by Iran to circumvent the existing designations. Meanwhile, the injection of billions of dollars into the Iranian economy every six months will continue to help Tehran adjust to a sanction–status quo environment more efficiently, even if Iran’s economy will not fully recover without a complete removal of sanctions that only a comprehensive agreement can bring. Low global oil prices should not be seen as having a significant impact on Iran’s current diplomatic posture, considering that Tehran cannot repatriate its oil revenues mostly held in Asia by U.S. sanctions. In this instance, the status quo works against the West.

What should happen if the negotiations fail in June?

The United States and Europe should reverse those dynamics in July, either by looking at new coordinated sanctions or alternatively at increased constraints on Iran’s program.

First, the transatlantic members of the P5+1 should work together to craft a new package of coordinated sanctions, as they have done in the past when negotiations were unable to advance satisfactorily to their objectives. Russia and China would not necessarily support this outcome, but they would not break the P5+1 format as both countries share the objective of preventing a nuclear Iran through diplomacy, and sanctions are a tool of those diplomatic efforts. Increased economic pressure could create more flexibility in Iran’s negotiating posture in order to reach a comprehensive agreement at a later stage. More Western policy measures could also be focused on making Iran’s involvement in regional conflicts a much more costly policy.

An end to the negotiating framework would not necessarily lead to a breakdown of the negotiations. Past failures to reach an agreement with Iran have never led to such an outcome. Although the confidence-building measures included in the JPoA would be terminated, the P5+1’s acknowledgment that Iran could be allowed to retain a small-scale enrichment program would be terminated as well. Tehran might restart suspended activities—mostly the production of 20 percent enriched uranium—but it would take time for Iran to get back to the stockpile it held before the JPoA, and certainly more time today than in the future if more advanced centrifuges are then operational. The construction of the heavy-water reactor in Arak would not be completed quickly, and its commissioning would not be acceptable for some in the Middle East, as Iran knows well. Therefore, it is unlikely that new sanctions would bring the West to the brink of a military conflict with Tehran, nor would they deter Tehran’s national interest to fight the Islamic State of Iraq and Syria (ISIS).

Alternatively, there could be a step-by-step negotiating approach. If the United States and Europe are unable to put additional sanctions in place, the P5+1 could shift from the ongoing negotiation of a comprehensive agreement in the direction of additional interim constraints on Iran’s nuclear program that would be the most likely to keep making progress today (R&D, transparency on possible militarization activities, enhanced monitoring). This would not be easily accepted by Iran, but having Tehran refuse any constraints on those issues would clarify its long-term objectives. Such additional constraints would also need to be “paid for” by additional sanctions relief, which would in turn reduce the P5+1 leverage in getting to a comprehensive agreement. It would therefore not be ideal but would still bring more assurances that Iran’s nuclear program would not advance while the negotiations continue and would therefore be preferable than the status quo.

In both instances, the P5+1 could declare itself willing to keep negotiating with Iran, while publicly releasing, in detail, the flexibility that the P5+1 negotiators demonstrated to inform public audiences about the reality of the negotiation and the requirement for continued sanctions. This public message would help Iranian leaders to understand that Tehran could be losing an important opportunity to free itself of the sanctions that have been harming its economic prosperity for too long. Ensuring that negotiation failure does not go without significant consequences for Iran could finally make the prospects for a comprehensive agreement more likely.

Simond de Galbert is a visiting fellow with the Europe Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.

Commentary isproduced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2015 by the Center for Strategic and International Studies. All rights reserved.

Simond de Galbert