Middle East Notes and Comment: A Self Defeating Strategy on Iran
July 20, 2015
Much of the debate over last week’s Iranian nuclear agreement is badly misplaced. Some—including the president—call it an historic victory akin to President Nixon’s approach to China. Others call it an historic surrender, akin to Neville Chamberlain’s concessions to Adolf Hitler.
History will have to wait, and it will not be judged for years. Right now, the American people and the U.S. Congress have a different and more serious task before them: To decide whether to block implementation of this deal or not. Doing so would have profound strategic consequences for the United States, and some are even more serious than the consequences of Iran developing a nuclear weapon.
There are few people involved in nonproliferation work who wouldn’t like modifications to the agreement. The centrifuge number could be lower, the inspections could be more intrusive, the ban on arms sales more long lasting. It would be surprising if the U.S. negotiators themselves wouldn’t want a slightly different agreement, but they must have concluded that this agreement represented the maximum they could get not only from the Iranians, but also the Russians, Chinese, and others in the negotiations. Ultimately, advocating for improvements on the agreement that already has been made is moot point. The time to improve it has passed.
The important question is where to go from here. Congress has 60 days after notification to approve the agreement or scuttle it, and if the president vetoes their disapproval, they need to summon two-thirds of both houses of Congress to override the veto.
It is worth thinking deeply about what the consequences of a foiled agreement would be. One would certainly not be a continuation of the current multilateral sanctions regime nor Iranian restraint on enrichment. One presumes that Iranians would feel betrayed and act out against U.S. demands. European and Asian partners would feel frustrated and misled.
Broadly, the action would distance the world from the United States and rally them around Iran after more than a decade when the reverse was the case. Further, it is hard to imagine any successful future negotiating effort with the Iranians on any topic. Even more important, it is hard to imagine that rejecting the deal would prompt Iranian behavior to improve, yet rejection would remove powerful, successful tools with which the United States has been able to affect that behavior.
Those consequences pale in comparison, though, to what would almost certainly happen to the U.S. position in the global financial system. The United States is so deeply integrated into that system that there are few international entities that U.S. law cannot touch. It was the United States, after all, that was able to attack years of bribery and corruption in the international soccer organization FIFA—not because bribes were offered on U.S. soil, but because they passed through entities connected to U.S. banks. Even far-flung networks of informal money transfer agents in South Asia, known as “hawalas,” are part of the web.
If the robust secondary sanctions contained in U.S. law were applied in defiance of international consensus, there would surely be a rush to develop robust financial instruments that would be beyond U.S. reach. The reason, of course, is that sovereign states agree to abide by international agreements, not by the political vicissitudes of the United States in an election year. The UN Security Council Resolution, which is likely to arrive today, will drive home the notion that this agreement—and not some imaginary perfect agreement that has not been made and probably could not be made—is the basis for international action going forward.
Computer experts talk about creating an “air gap” to ensure that sensitive information is never put on a computer that can in turn be exposed to the public Internet. One could easily see a drive toward financial institutions that are protected from U.S. scrutiny, and from U.S. law enforcement. They would have no connections to U.S. banks or U.S. networks, and the U.S. Treasury Department would be unable to touch them. China’s new Asian Infrastructure Investment Bank (which has 50 founding members, including many U.S. allies) could be part of the architecture for this parallel organization, and even many Asian allies of the United States with keen energy interests in Iran would be tempted to sign up.
The establishment of a parallel banking system would be a blow to U.S. prestige, but that would be the least of it. Its establishment would destroy an apparatus that has been painstakingly built—in large measure during the Bush administration—to give the U.S. government unprecedented visibility into criminal transactions around the world and to sanction individuals and institutions who abet terrorism. Americans would be at much greater risk.
The deal struck in Vienna is certainly not perfect. Iran’s implementation of the deal is not likely to be perfect, either. But Congress needs to consider whether it is better to confront Iranian transgressions alone, or to do so with international backing. Militarily, the United States does not need others’ participation to destroy any target in Iran. But influencing Iranian behavior has a strong economic component, and in that, the United States is hard-pressed to act unilaterally. This will be even more the case when investment begins to flow into Iran in the wake of this agreement, led by Asian and European investors.
Should Iranian offenses occur—both in the non-proliferation field, or against U.S. allies in the Middle East—there will be opportunities to act against them. There is nothing in the Vienna agreement that bars sanctions on Iran unrelated to the nuclear program. But this agreement, whatever its flaws, represents a broad international agreement. Little good will come to the United States from its defeat in Congress, and the costs of doing so are all too apparent.