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Iran: The Case For a Grand Bargain

Iran: The Case For a Grand Bargain
 Michel Duclos
Special Advisor and Resident Senior Fellow - Geopolitics and Diplomacy

This article was updated on 27.11.2020.

One can argue that despite all his blunders, in terms of foreign policy, President Trump has not committed strategic errors of the same magnitude as George Bush’s invasion of Iraq, or Barack Obama relinquishing his red lines in Syria. However, the fallout from his management of the Iran Deal may linger: by undermining the 2015 nuclear agreement (JCPOA), Trump may have cemented an irreversible fait accompli, one consequence of which would be to project Iran, a country that is essential to the balance of power in the Middle East, into China's orbit.

In any case, following the American presidential election, the Iranian issue now enters a new phase. 

The ticking time bombs of a departing Trump administration

Donald Trump and his Secretary of State, Mike Pompeo, intend to employ a scorched earth policy before the conclusion of their term. For them, this is about sending a message to their base: they remain absolutely steadfast in their strategy of "maximum pressure" against Iran and, more generally, with their promise to "bring the boys home". Another objective is to make the task even more difficult for their Democratic successors. One should also not exclude the fact that they may be subjected to pressure from regional allies such as Israel and Saudi Arabia.

Was the outgoing president really considering striking certain Iranian nuclear facilities, as reported by the New York Times on November 16? It is indeed quite possible, although the former property developer isn’t widely known for backing up his bellicose comments with concrete actions. In any case, he would have been dissuaded from this course of action by his advisers, including Vice-President Pence and Secretary of State Pompeo. However other options could be implemented by Washington in cooperation with Israel, such as cyber (or other types of) attacks, or other acts of sabotage. 

The White House has taken action in other domains: on the one hand, the precipitated decrease of troops stationed in Afghanistan and Iraq, reaching a low point in each country of 2,500 men; on the other hand, issuing new sanctions on Iranian leaders or sectors of activity, likely including allies of the Islamic Republic (i.e., Houthis in Yemen and Hezbollah in Lebanon). These measures will likely be accompanied by others in the coming weeks. In both cases, these final Trump administration decisions are destined to operate as hindrances for the Biden administration.

Thus the downsizing in Afghanistan and Iraq will happen in the days leading up to the inauguration of the new administration. The remaining troops will be left increasingly vulnerable. In both cases these troops could be targets of deadly attacks — Iranian militias are already routinely firing missiles at US bases in Iraq. If the blood of American soldiers is spilled, or if the new American administration wants to safeguard against such a risk, the Democrats will face a dilemma: either send additional troops back, which is contrary to Biden's campaign commitments and the current mood in the US, or move forward with full withdrawal, which would further weaken Washington’s position regarding both a settlement in Afghanistan and the play of influence in Baghdad.

Final Trump administration decisions are destined to operate as hindrances for the Biden administration.

A similar dilemma could occur regarding sanctions, especially when it comes to sanctions not pertaining to the nuclear issue but tied to human rights matters or the fight against terrorism. Either the new administration countermands them, a technically complicated and politically costly stance in Congress (which conserves bipartisan hostility towards Iran), or it leaves them in place, making any attempt to re-engage with Tehran all the more difficult.

No doubt the Trump administration has other ticking time bombs of this kind up its sleeve (e.g., the colossal arms contract with the United Arab Emirates, involving the sale of fifty F35 planes). Iranian decision-makers and their proxies will have to be very level-headed to avoid facilitating the outgoing Trumpists' manoeuvrings. 

Let us note that we would face the worst-case scenario if a regional conflict were to erupt in the final weeks, even if only due to miscalculations. It might serve as an additional pretext to cling to power for an administration that is still reluctant to admit its defeat and  supports the fiction of massive electoral fraud. 

How can the Biden administration reconnect with Iran?

We know that once Mr. Biden is settled in the White House, the process of establishing a new administration will take a long time. The usual delays are likely to be even longer this time around because of the polarization in Congress and the bureaucratic chaos left in the wake of the Trump administration.

However, it is likely that decisions pertaining to Iran will be among the first "strong signals" that the new US administration will send internationally, along with America's return to the World Health Organization or the Paris Climate Accord. The President-elect is surrounded by many specialists familiar with this issue who have previously worked on the JCPOA under Obama. On paper, the recommitment of the US to the nuclear agreement appears simple: the United States can lift the sanctions imposed under Trump and the Iranians can return to a strict application of their obligations, from which they have released themselves for over a year. This formula is known as "compliance for compliance". 

In practice the manoeuvre is instead likely to be confronted with a certain number of difficulties. For instance, the Americans cannot make a move without a guarantee that the Iranians intend to reduce their stockpile of enriched uranium, once again destroy their surplus centrifuges, etc. Moreover, how should certain irreversible advancements made by the Iranians be taken into account, for example, in research and development? What effect will the lifting, or initially the easing, of sanctions have insofar as it will be very difficult to persuade heavy-weight Western companies to re-engage, off-put by American oscillations and lack of reliability? And how could the Iranians not fear that they would never actually reap the economic benefits of a deal with the US? By backing down on their nuclear program, wouldn't they risk giving up tangible advantage for hypothetical benefit? 

All these questions require high caliber diplomatic engineering to be properly addressed, yet they may find answers with the help of the other JCPOA signatories (the three Europeans — Germany, France, the United Kingdom — but also China and Russia). This requires consensus on the "sequencing" of measures that would need to be respected by each side, work that can be done within the JCPOA Commission. An encouraging sign is that after Iran appeared to be dragging its feet (multiplying conditions attached to the notion of "compliance for compliance"), local experts, followed by Minister Zarif in his official capacity, indicated that Iran would be willing to comply if the Americans did so as well. 

However, the economic aspect of the agreement will require large scale collective effort, and Europe in particular will have an important part to play: companies cannot be forced to reinvest in the Iranian market, but credit or support for certain transactions can be adapted to suit Iranian needs. This is in fact what the Europeans had begun to do with the INSTEX mechanism. The Americans will need to allow the Iranians to carry out operations in dollars, raising the issue of compliance by the authorities in Tehran with the FATF recommendations. 

In practice the [recommitment of the US to the nuclear agreement] is likely to be confronted with a certain number of difficulties.

A restrictive political environment 

What of the political environment surrounding the possible return of the United States to the Iranian dossier, taking into account its particularly restrictive character?

In Tehran, everything depends on the decisions of the Supreme Leader. New presidential elections will be held in June, likely bringing to power a so-called "conservative" government (Mr. Rouhani's current administration is considered "reformist"). There is concern that the Leader will not allow the current administration, familiar with the Obama teams, to negotiate, or that the post-June administration might question what would have been achieved. Ultimately it comes down to whether the Leader will be surrounded by persons whom he trusts (hypothetically the hard liners), who could argue that given the current state of the country's economy, it would be foolish not to search for an oxygen tank from the West, and that only he himself can accomplish this historic endeavour. They could argue that promises of cooperation with China, assuming they are not illusory, might only materialize in the long term and may prove more dangerous for the independence of the Islamic Republic than a new arrangement with the West.  

Another complicating factor is the American approach. The United States drew the conclusion from the JCPOA experience that a nuclear agreement with Iran is not enough. As suggested by President Macron, the Democratic administration will want to supplement the JCPOA with a regional component and a post-JCPOA agreement (extending the freeze on Iranian nuclear activities). Mr. Biden apparently understands (this remains to be seen) that this can only be achieved in stages: first resurrect the JCPOA, then address the other issues. However, the Iranians know that if they accept the first step, that of the JCPOA, they will be faced with other demands, including ones pertaining to their ballistic missiles program, which they consider non-negotiable.

The United States drew the conclusion from the JCPOA experience that a nuclear agreement with Iran is not enough.

Another lesson learned by the Democrats is the need to bring American regional allies on board, including Israel and Saudi Arabia. The return of the United States to the nuclear deal is contrary to their views. They could prove uncooperative in broader discussions, from which at least the Gulf states cannot be excluded when it comes to addressing the regional dimension. Indeed, practically speaking, the more parties gather around the negotiating table, the longer the list of discussion points becomes, and the more difficult it will be to reach an agreement. 

Towards a grand bargain? 

It might perhaps be helpful for the Iranians and their relevant foreign counterparts to quickly engage in substantive discussions through unofficial channels, addressing all of these problems and taking into account all of their complexities. It should be understood that an overly limited agreement would not benefit from a political or even a legal endorsement (by the Senate) in Washington. In retrospect, this was the JCPOA’s main weakness, rebuked by Republicans and only timidly supported by Democrats. 

Likewise, the economic argument, however important it may be on the Iranian side, is only one aspect among others. At least from the "moderate" perspective, one might have thought at some point that the stakes of the JCPOA for Tehran was also in the "normalization" of the country's relations with the outside world. What is the situation like today?

What of Iran's strategic situation, particularly after the normalization of relations between some Arab countries and Israel, foregrounded again this weekend by the Israeli Prime Minister's trip to Saudi Arabia? From Tehran’s perspective could the perception potentially be that the means of aggression of the Hebrew state (planes and such) are coming dangerously close to Iranian territory? What is the optimal response to this new threat? Is it to exploit the planned withdrawal of American forces from Afghanistan and Iraq? But isn't the "strategy of tension" precisely the surest way to convince the United States not to abandon the region? 

This is but a glimpse of what we have called the "political (and strategic) environment" for a possible return to negotiations with Iran. What is striking is the extraordinary complexity of the problems raised. Unfortunately the future American administration, once the first steps have been taken, might not have the determination or the freedom - having so many internal challenges to address first - to deal with these in the long term. However, one could be tempted to draw this conclusion: due to the immense complexity of the Iranian dossier - more than ever key to peace in the Middle East, and thus to the possibility for the Americans to disengage - the US should aim for a "grand bargain" with Iran; while starting with a simple return to the status quo on the nuclear dossier, it would be in their best interest to display these intentions from the outset.

On this point, we agree with the analysis from a good observer at the Atlantic Council, Barbara Salvin, in her latest article for Foreign Policy. Let's add a final point: wouldn’t a global agreement with Washington allow the Islamic Republic to not only regain its economic sovereignty, but also to cement some of its regional gains while emancipating itself from a situation of permanent confrontation? 



Copyright: MANDEL NGAN / AFP

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