Iran Deal Meets First Major Hurdle, Marking a Win for Obama

Iran Deal Meets First Major Hurdle, Marking a Win for Obama

REUTERS/Yuri Gripas

We’ve just lived through a little bit of history. As of Saturday, the International Atomic Energy Agency announced that the contentious-from-the-start deal between the U.S. and Iran has met its first and most important challenge under the accord governing its nuclear program.

“Iran has undertaken significant steps that many people—and I do mean many—doubted would ever come to pass,” Secretary of State Kerry said at the IAEA’s Vienna headquarters.

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True words. No one who has followed the many-sided effort to reach an agreement since talks began in the autumn of 2013 can miss the faintly miraculous aspect of the weekend’s news. So it’s official:

• Iran now recovers roughly $100 million in frozen assets, and numerous restrictions on trade, investment, banking, and other activities are lifted. Three and a half decades of isolation—political and in large measure economic—have ended.

• The six powers that negotiated with Iran have stripped the nation of its capacity to weaponize nuclear materials for at least 15 years and, in practical terms, probably longer; a nuclear threat—real or imagined—is eliminated for at least that period. The potential for constructive relations with what is indisputably a leading regional power remains unexplored but could prove immense. 

It is, but let’s be clear: This is a bigger score for Washington and its European allies than it is for the Iranians. Now that “implementation day” is behind us, anyone who does not recognize the magnitude of the victory for the U.S. either (1) doesn’t understand the 21st century or (2) presumes a degree of American primacy and prerogative that’s simply unrealistic in today’s evolved global environment.

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Two realities lead to this judgment.

One, the Iranians compromised vastly more than they had to under international law. They’ve cut their stockpile of enriched uranium by 98 percent—most of this now in Russia, which will send back small batches as Iran’s non-military needs progress. Some 12,000 centrifuges have been dismantled and one key reactor disabled.

Iran surrendered some rights when it signed the agreement last July. Sovereignty being an exceedingly touchy question in Iranian political culture, President Rouhani and Foreign Minister Mohammad Javad Zarif took a considerable risk as they pushed the accord through. Washington asked for a lot in this regard and got what it asked for.

Two, with many years of tough sanctions and two of tough negotiations the U.S. has done much to bring a reformist regime to the fore in Tehran. And if this doesn’t serve America’s purposes, I’ve simply lost the plot.

We’ve already had two litmus tests proving this point: one, the swift, amenable resolution of the Persian Gulf incident last week, wherein two U.S. Navy vessels entered Iranian waters. Two, the release—timed for effect, plainly—of four imprisoned Americans, including Jason Rezaian, The Washington Post correspondent jailed on espionage charges since last year.  

The message is plain: Rouhani and Zarif, with Supreme Leader Ali Khamenei behind them, are committed to getting along with Washington and will go extra miles to keep the new relationship on track.

Related: EU Officials to Visit Iran in February to Develop Energy Ties

On Sunday the first of what will surely be many complications entered the picture. As longstanding sanctions related to Iran’s nuclear program fell, the Obama administration imposed new ones in response to two ballistic missile tests Iran conducted late last year.

I see three reasons for this plainly choreographed move: It is partly an effort to keep the peace with members of Congress opposed to the accord, partly intended to assuage Israel’s anxieties, and partly an advisory to Iran: We’re still vigilant and will remain so.

Will these sanctions derail the deal: It’s a risk but a small one: They’re attenuated to the point they’re nearly symbolic, applying to only 11 people and institutions and blocking access only to the U.S. banking system.   

Netting all this out, the nuclear accord has jarred loose all of Washington’s established relationships in the Middle East. Change of this magnitude is tricky by definition, but it was bound to come given Iran’s indisputable emergence as a regional power. 

Related: U.S. Lifts Ban on Foreign Units of American Companies Operating in Iran

The Obama administration and its successor now have three alternatives: They can play this well, badly, or not at all. Saudi Arabia is already a clear case in point.

Given the Saudi regime’s newly manifest commitment to the Sunni cause in a widening Sunni-Shia divide, Washington can now position itself far more flexibly than it could before the nuclear pact. If it so chooses, that is—and it should so choose.

This could begin to play out as early as January 25, assuming multi-party talks on the Syria crisis convene in Geneva as scheduled. At writing, the Saudis are none too keen to share the mahogany table with an Iranian delegation.

It will be interesting to see how Kerry, who has an easy, amiable relationship with Zarif, situates himself between Riyadh and Tehran. Europeans, we should note, were openly sympathetic to the Iranians after the Saudis executed a prominent Shiite cleric, Nimr al-Nimr, at the turn of the year.

When I reported briefly from Tehran some years ago, it was clear that one of the unmeasured burdens of sanctions was psychological: The pain of pariah status was acute for a sophisticated people who enjoy the most democratic political system in the Middle East.

Related: U.S. Imposes Ballistic Missile Sanctions on Iran After Prisoner Release

The picture now brightens, but not entirely.

One, numerous U.S. sanctions remain in place apart from those imposed Sunday. Two, with oil prices cratering, implementation day couldn’t be worse timed from the Iranian perspective.

Iran now pumps 2.7 million barrels daily, down roughly 1 million barrels from 2010. On Sunday, Iran immediately announced plans  increase production to 500,000 barrels a day.

It’s not clear how much impact its restored freedom to trade in world markets may have on prices, in part because its discounting policies, if any, aren’t clear either. However great or small, the pressure of new Iranian supply is going to be downward.

One final point worth noting. As Iran re-emerges, it is into a very different global environment. The nation has strong ties to other rising powers, notably Russia, China, and India. This counts and is bound to count more. Washington would do well to recognize that the U.S. is no longer either the only market or the only source of technology and investment capital that matters.

The sanctions on Iran, now lifting, hurt for sure. But restoring them would be very difficult. Many nations, not least America’s European allies, have had enough.