FPI Bulletin: The Alternative to a Bad Deal with Iran

July 27, 2015

Defenders of the nuclear deal with Iran are right to ask what the alternatives are to the offer that’s now on the table. What’s excessive is their confidence that the only alternative to this deal is war. In fact, the alternative is not hard to describe and is not terribly dramatic.

War is not imminent because the structure of the deal now on the table gives Iran very strong incentives to remain cooperative at least until the next American president takes office and Tehran finishes negotiating long-term contracts with the multinational energy firms that are so eager to claim a share of the Iranian market.

Therefore, if a two-thirds majority in Congress prevents President Obama from waiving sanctions, the result will not be an Iranian sprint toward the bomb, but rather the first step toward restoring America’s diplomatic leverage. In addition, if Congress says no, Iran may find it very difficult to access the $100-150 billion of escrow funds and frozen assets it hoped to collect as the result of deal.  

Finally, given what strong incentives the Iranians have to remain in compliance, the next president and the next Congress will almost certainly have the same opportunity as today to accept the terms negotiated in Vienna. Thus there is nothing to lose by waiting and much to be gained.

A vote of disapproval by Congress, even with a veto-proof majority, will not affect the nuclear deal for at least nine months, since that is the earliest point at which Iran would be eligible for relief from sanctions. On July 20, the U.N. Security Council voted to approve the deal with Iran but delay implementation for 90 days. Experts have estimated that Iran will require at least six months to pare down its stockpile of enriched uranium, put thousands of centrifuges away in storage, disable the core of its heavy water reactor, and carry out the other tasks necessary for inspectors to certify it has met the criteria for sanctions relief.

In effect, the U.S. will remain in de facto compliance with the deal through April 2016, despite a vote of disapproval by Congress. From a legal perspective, nothing will change on the morning after the vote.

There is a slight chance, however, that a veto-proof disapproval by Congress will upset the political balance in Tehran, leading the Iranian government to withdraw from the nuclear deal. Yet if Tehran withdraws while President Obama is still working aggressively to implement the deal, Iran will become the spoiler and dispense with all the good will it has generated in Europe and Asia. It will also forgo the benefits of extensive foreign investment. By contrast, President Obama would maintain the sympathy of his negotiating partners and be in an ideal position to secure their commitment to maintain or strengthen the international sanctions regime.

There are good reasons, however, for even the most hostile Iranian leaders to support implementation of the nuclear deal after a vote of disapproval by Congress. Above all, the U.N. Security Council resolution of July 20 will ensure that the EU and all other non-American parties to the sanctions on Iran lift them completely once inspectors certify Tehran’s initial compliance. The door would then swing open to the extensive foreign investment Iran needs to resuscitate its energy sector and other key industries.

Once all of this happens, the U.S. will be only months away from a presidential election. If the campaign plays out as expected, one major candidate will support the deal with Iran while his or her opponent opposes it.  Once again, Tehran will have extremely strong incentives to remain patient, since a victory for the pro-deal candidate would bring Iran several steps closer to the long-awaited end of American sanctions.

If an opponent of the nuclear deal prevails, Tehran will wait for him or her to renounce the agreement, thus providing Tehran with the necessary pretext to walk away from the deal while pocketing its gains. Yet that may not happen. If the current Congress prevents President Obama from waiving sanctions, a successor who opposes the deal would have no need to renounce the agreement. Instead, he or she would retain critical leverage to negotiate a better deal.

Even a pro-deal president might seek additional concessions from Iran, in order to build consensus on behalf of the nuclear deal. Once again, the main source of leverage available to that future president would be an offer to lift American sanctions.

While Tehran is taking the measure of President Obama’s successor, it will also be busy negotiating with multinational oil and gas giants, as well as other firms rushing to claim their share of the Iranian market. For as long as those negotiations last—and negotiations with Tehran rarely proceed quickly—the regime will have yet another incentive to avoid provocative measures.

There is every reason to believe that Iran will continue its covert pursuit of a nuclear weapons capability in the coming years, just as it would if Congress allowed President Obama to waive sanctions. In contrast, the regime in Tehran is most likely to comply with those parts of the deal that are easiest to monitor, such as the limits on producing weapons-grade uranium at acknowledged nuclear facilities such as Natanz and Fordow.

In other words, Tehran will avoid precisely those activities that would put the United States in the difficult position of choosing between an unwelcome war and the acceptance of a nuclear-armed Iran. That is why a veto-proof vote of disapproval by Congress would strengthen America’s negotiating position without a substantial risk of armed conflict. As the president and secretary of state said so often during the negotiations with Iran, a bad deal is much worse than no deal at all.

- Originally posted on The Weekly Standard Blog

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