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The Iranian Nuclear Deal at a Standstill: What’s Next?

Authors: Yong Hwee Shi, Nandini Agrawal

Region Head: Yong Hwee Shi

Editor: Chok Geow


Abstract


It’s a tense game between America and Iran, over the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal. Iran is on board to win freedom from burdensome sanctions, and America is in to prevent a domino proliferation effect in the Middle East. The last round of negotiations ended in a stalemate, as Trump exposed the core defects that underlie the deal. Eventually, he ditched the nuclear deal entirely in 2018.


A year later, Iran announced that she would be breaking from various components of the agreement, and she made good on those threats. To the panic of international spectators, Iran ramped up her nuclear program once again.


Now, Biden has substituted Trump in the field and he seeks to salvage this unfinished business. However, the deal remains at a standstill as both sides are coaxing each other to make the first concessions before showing their own hand. This is how we think the gameplay should unfold.


How the Previous Round led by Trump Ended in a Stalemate


In 2015, the JCPOA was signed by world powers including Germany, and the permanent five of the United Nations Security Council to address nuclear proliferation in the Middle East (Haltiwanger, 2020). The deal imposed restrictions[1] on Iran’s nuclear program, in exchange for lifting economic sanctions against Tehran. (Haltiwanger, 2020). (Fig. 1, Fig. 2, Fig. 3)

(Fig. 1) Extent of Restrictions on Enrichment of Uranium in Iran (Source: NPR)

(Beauchamp, 2018)


(Fig. 2) Extent of Restrictions on Iran’s Enriched Uranium Stockpile (Source: NPR)

(Beauchamp, 2018)


(Fig. 3) Extent of Restrictions on Iran’s Centrifuges (Source: NPR)

(Beauchamp, 2018)



However, Iran’s nuclear program will ultimately be free from these restrictions as the many of the deal’s terms will expire (Fig. 4). Moreover, the deal does not hold Iran back from supporting the various militia groups such as Hezbollah in Lebanon and Syria, and the Houthis in Yemen, nor did it restrict Iran’s ballistic missile programme (United States Senate Republican Policy Committee, 2021). It is due to these defects in the agreement that led to Trump abandoning the deal.


(Fig. 4) Sunset Clauses in the Iran Nuclear Deal (Source: NPR)

(Beauchamp, 2018)


Is the Ball in Biden’s Court?


Biden not only inherited an unfinished game from Trump, he also entered it near the nadir of US-Iran relations.


After Trump ordered a deadly strike which killed Iran’s Commander Soleimani in January 2019, the Iranian government announced that it will not comply with the deal (Eqbali et al., 2020). Since then, Iran has ramped up her nuclear program, violating many rules in the JCPOA. As of December 2020, Iran's stockpile of low-enriched uranium was over 12 times the limit set by the JCPOA, and Iran’s uranium enrichment was 4.5%, also above the limit (BBC News, 2020). (Fig. 4)


Currently, the deal is at a standstill with a sequential ‘compliance-for-compliance’ state of play (Ravid, 2021). The Biden administration’s stance is to offer Iran relief from Trump’s sanctions after Iran returns to compliance with the JCPOA terms. Tehran on the other hand, is insisting that the US lifts the sanctions first (Ravid, 2021). Besides violating the agreement terms, Iran has even sought to gain leverage over the US by producing uranium metal, a necessary input in making atomic bombs (Ghosh, 2021).


But we think that Iran’s threat of a nuclear arms spree is unsustainable and unlikely. Trump’s sanctions have given Biden a significant advantage by bruising Iran’s economy. According to the IMF (2020), Iran’s gross domestic product (GDP) shrank consistently by 5.4% in 2018 and a further 6.5% in 2019, with inflation skyrocketing to 41% in 2019 (Fig. 5). Moreover, the Iranian rial also fell by 49% (Ziabari, 2020). With its sanctions-hammered economy in a parlous state, Iran may have no choice but to cooperate with the US.

(Fig. 5) Real GDP growth and Inflation Rate in Iran, 2020

(Source: IMF DataMapper, October 2020)


As Biden seeks to revive the nuclear deal, he also needs to repair relations with Iran. One thing is clear: His strategy should differ from Trump’s “maximum pressure”, draconian sanctions and hardcore aggression.


That said, Biden should not be quick to roll over. Patience is key in this game of political brinkmanship. Currently, he is playing the right cards, as the US is tolerating Iran’s nuclear hustle. Under Rob Malley, a pivotal advisor who helped negotiate the deal in 2015, Biden has also put together a flock of both hawks and doves to renegotiate the deal (Ravid, 2021).


Biden’s policy should be neither a response to Trump’s, nor a resumption of Obama’s (Ghosh, 2021). He should use the leverage that his predecessor left behind, while exercising regional diplomacy.

Peace and Stability: Iran is Making Trouble, But Her Foes Are Making Up


While Iran stirs tensions over their nuclear program, her regional rivals are restoring their diplomatic relations at the Gulf Cooperation Council Summit. Saudi Arabia, Bahrain, Egypt and the UAE who initially imposed an embargo on Qatar, have agreed to bring it to an end (Gardner, 2021).


Consequently, Iran’s missile program has brought Israel and the Gulf states closer, causing the anti-Iran axis to grow bolder ("Towards a better nuclear deal", 2020). They view the Iranian nuclear deal as legitimising Iran’s nuclear infrastructure, barring only temporary limitations, and thus oppose the deal (“Who’s Next?”, 2021). These countries are thus nudging Biden to wring concessions from Iran.


But Biden is not ready to play by their instructions—Iran is not a scapegoat to appease them. Moreover, Biden has taken a tougher stance on Iran’s rivals, having openly expressed his opposition of Saudi’s offensive operations in Yemen (“A shock for the Saudis”, 2021). As such, Biden’s moves have led many of Iran’s neighbours to be wary of him. He should find an approach that inhibits the impulses of the anti-Iran axis, and curbs its greatest concerns.


Conclusion: What are the chances of modest reset in the game?


Just three days ago, the Biden administration made the first move, by offering to begin talks with the Iranians for the first time in four years (Turak, 2021). Whether Iran will agree to the talks remains unclear. Iran previously vowed that it will expel U.N.’s nuclear inspectors if oil and banking sanctions were not lifted by February 21, 2021 (Turak, 2021).


There are doubts over Biden’s plans to resuscitate the nuclear deal (Turak, 2018). But the game still stands at America’s disposal, as sanctions over the years have already battered Iran closer to its forfeit.


Biden should negotiate a longer and stronger agreement than Obama’s version, one that addresses Iran’s non-nuclear threats and involves the anti-Iran axis in discussions ("Towards a better nuclear deal", 2020). In a game of give and take, Biden can push Iran to give up long-range rocket launches and stop providing arms to their proxy militias, in exchange for a gradual easing of some sanctions. Holding regional dialogues on other innocuous issues such as pandemic aid, are useful precedents to more contentious negotiations as well. (“Back to the future”, 2020).


This sets the board for nuclear talks where America has a leverage to push for Iran’s nuclear rollback. While the next best steps in sight are extending the sunset clauses and granting the IAEA unlimited and complete support in their inspections, it is hopeful that it will be a launchpad to victory of global disarmament and non-proliferation.


Then again, with 4 years of tensions and a tedious runway to work out, a speedy American return to the JCPOA seems elusive. Hopefully, this reset does not end in a stalemate again.

[1] The restrictions included limiting Iran’s centrifuges, enriched uranium stockpiles and nuclear research activities, to levels that were sufficient to maintain the country’s energy needs only.



References


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9. International Financial Statistics. (2020). Country Data: Islamic Republic of Iran. International Monetary Fund. https://www.imf.org/en/Countries/IRN#countrydata


10. Ravid, B. (2021). 1 big Thing: Biden team wants to avoid groupthink on Iran. Retrieved February 21, 2021, from https://www.axios.com/newsletters/axios-tel-aviv-4dfed989-44af-4ff8-8592-bdd66bc2abc7.html?chunk=0&utm_term=twsocialshare#story0


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