Pubished in The Hindu on 2nd March, 2021
Of all the foreign policy challenges facing the Joe Biden administration, none is more critical than salvaging the Joint Comprehensive Plan of Action (JCPOA, or the Iran nuclear deal) that has been unravelling over the last three years when Donald Trump unilaterally discarded it. It also seems the most straightforward because Mr. Biden has consistently advocated a return to the JCPOA provided Iran returns to full compliance; Iran has always reiterated its commitment to the JCPOA maintaining that the steps it took are reversible as long as the United States lifts the sanctions imposed by the Trump administration since 2018. And yet, it is complicated and time is running out as both Iran and the US struggle to overcome the impasse.
US policy reversal
JCPOA was the result of prolonged negotiations from 2013 and 2015 between Iran and P5+1 (China, France, Germany, Russia, the United Kingdom, the United States and the European Union). It happened, thanks to the backchannel talks between the U.S. and Iran, quietly brokered by Oman, in an attempt to repair the accumulated mistrust since the 1979 Islamic revolution.
Former U.S. President Barack Obama described the JCPOA as his greatest diplomatic success. Iran was then estimated to be months away from accumulating enough highly enriched uranium to produce one nuclear device. JCPOA obliged Iran to accept constraints on its enrichment programme verified by an intrusive inspection regime in return for a partial lifting of economic sanctions. Faced with a hostile Republican Senate, Mr Obama was unable to get the nuclear deal ratified but implemented it on the basis of periodic Executive Orders to keep sanction waivers going.
Mr. Trump had never hidden his dislike for the JCPOA calling it a “horrible, one sided deal that should have never, ever been made”. After ranting about it for a year, he finally pulled the plug on it in May 2018 and embarked on a policy of ‘maximum pressure’ to coerce Iran back to the negotiating table. The U.S. decision was criticised by all other parties to the JCPOA (including the European allies) because Iran was in compliance with its obligations, as certified by the International Atomic Energy Agency (IAEA).
For the first year after the US withdrawal, Iran’s response was muted as the E-3 (France, Germany, the U.K.) and the EU promised to find ways to mitigate the U.S. decision. But by May 2019, Tehran’s ‘strategic patience’ was wearing out as the anticipated economic relief from E-3/EU failed to materialise. As the sanctions began to hurt, Tehran shifted to a strategy of ‘maximum resistance’.
The unravelling of the JCPOA
On the nuclear front, beginning in May 2019, Iran began to move away from JCPOA’s constraints incrementally: exceeding the ceilings of 300kg on low-enriched uranium and 130 MT on heavy-water; raising enrichment levels from 3.67% to 4.5%; stepping up research and development on advanced centrifuges; resuming enrichment at Fordow; and violating limits on the number of centrifuges in use. Finally, in January 2020, following the drone strike on Islamic Revolutionary Guard Corps commander Gen Qasem Soleimani, Tehran announced that it would no longer observe JCPOA’s restraints though its cooperation with the IAEA would continue.
Tensions rose as the U.S. pushed ahead with its unilateral sanctions, widening their scope to cover nearly all Iranian banks connected to the global financial system, industries related to metallurgy, energy and shipping, individuals related to the defence, intelligence and nuclear establishments and even senior political leaders including the Supreme Leader and Foreign Minister Javad Zarif. By end-2020, the U.S. had imposed nearly 80 rounds of sanctions targeting close to 1,500 individuals and entities.
Events in Iran
This came on top of COVID-19 that affected Iran badly, with 1.6 million infections and more than 60000 deaths. Iranian economy contracted by 7% in 2019 and another 6% in 2020. In mid-2020, Iran was shaken by a series of unexplained fires and blasts at a number of sensitive sites including one at the Natanz nuclear facility and another at Khojir, a missile fuel fabrication unit. The damage at Natanz, described as ‘sabotage, was significant, leading Tehran to announce that it would be replaced by a new underground facility.
Last November, Mohsen Fakrizadeh, a senior nuclear scientist and head of the Research and Innovation Organisation in the Iranian Defence Ministry was killed outside Tehran in a terrorist attack amid rumours of external intelligence agencies’ involvement. Days later, Iranian Parliament, dominated by the conservatives, passed a bill seeking enrichment to be raised to 20%, acceleration of deploying new cascades and suspending implementation of some of the special inspection provisions with the IAEA within two months if sanctions relief was not forthcoming.
No Appetite for Talks
Clearly, Mr Trump’s policy may have provided comfort to Israel’s leader Benjamin Netanyahu and Saudi Crown Prince Mohamad bin Salman, but it failed to bring Iran back to the negotiating table and only strengthened the hardliners. Iran has suffered and there is no appetite for more negotiations. The E-3’s promised relief Instrument in Support of Trade Exchanges (INSTEX), created in 2019 to facilitate limited trade with Iran has been a disappointment; its first transaction only took place in March 2020. EU-Iran trade fell from Euros 18 billion in 2018 to less than a third in in 2019 and dropped further last year.
A recent IAEA report confirmed that 20% enrichment had begun as had production of uranium metal at Isfahan. However, a recent visit by IAEA Director General Rafael Grossi enabled a ‘technical understanding’ to postpone Iran’s withdrawal from the Additional Protocol (that it had voluntarily accepted in 2015) by three months. Moreover, Iranian elections are due in June and it is likely that President Hassan Rouhani’s successor may not be from the ‘moderate’ camp. Though the nuclear dossier is controlled by the Supreme Leader Ayatollah Ali Khamenei, he too had to wait for the moderate Rouhani/Zarif combine to be elected in 2013 for JCPOA negotiations to commence.
If the U.S. waits for Iran to return to full compliance before lifting sanctions or Iran waits for the U.S. to restore sanctions relief before returning to full compliance, it can only lead to one outcome – the collapse of JCPOA with Iran going nuclear like North Korea; an outcome that would create major reverberations in the region and beyond. Only good intentions won’t be enough to overcome this impasse.
Overcoming the Impasse
The Biden administration has made a good start by appointing Robert Malley as the U.S. Special Envoy for Iran but he will need help. Positive steps along multiple tracks are necessary for creating a conducive atmosphere. Release of European and American nationals currently in custody in Iran would help. Clearing Iran’s applications to the International Monetary Fund for COVID-19 relief and for supply of vaccines under the international COVAX facility can be done relatively easily. Oman’s quiet facilitation helped create the positive environment for the JCPOA. After the Al Ula summit, Qatar and Kuwait too are well placed to play a diplomatic role and together, they can urgently explore the possibilities for forward movement in Yemen, with help from the EU and the UN Secretary General’s Special Envoy, Martin Griffiths.
The E-3/EU need to fast track deals worth several hundred million euros stuck in the INSTEX pipeline, with a visible nod from the U.S. Not all U.S. sanctions can be lifted instantly but reversing Trump’s Executive Order of May 8, 2018 is possible as also removing sanctions on Iranian political leaders; both would send a positive signal. If not with Iran, the U.S. should share with E-3/EU a 45-60 day time frame for progressive restoration of sanctions relief. Meanwhile, Iran needs to refrain from any further nuclear brinkmanship. IAEA and E-3/EU should work on a parallel reversal of steps taken by Iran to ensure full compliance with the JCPOA. Brussels has long wanted to be taken seriously as an independent foreign policy actor; it now has the opportunity to take a lead role.