This article was last updated on April 16, 2022
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As a November 24 deadline looms for a nuclear deal with Iran, some influential voices in Washington—including President Obama’s former Iran adviser Dennis Ross—have argued that “muddling through” without an agreement, postponing things yet again, is preferable to signing an imperfect deal. The premise of that argument—that we all still have time, and a better deal could be achieved at a later date—is almost certainly wrong. It fails to recognize that Iran and other nations would react in ways that are beyond the control of U.S. policymakers. The evidence suggests, in fact, that failure to conclude a deal now will see Iran’s position grow less accommodating, while Western leverage through sanctions will decline dramatically.
Putting off a deal yet again would, in fact, produce a perilous slide back towards crisis and confrontation.
To understand what’s at stake, it’s worth remembering both what has been gained through the past year’s negotiations as well as the consequences that followed the time the United States turned down a nuclear compromise offer from Iran.
But a failure to conclude a permanent deal now could easily undo any progress that was made and instead send relations spiraling downward as happened after the 2005 breakdown in talks between Tehran and European powers. It’s worth noting that two of the key figures in the rapprochement that began last year—President Hassan Rohani and Foreign Minister Javad Zarif—also led Iran’s previous failed effort to negotiate a nuclear deal. From 2003 to 2005, when the reformist Mohammad Khatami was president, Rohani had headed Iran’s Supreme National Security Council, while Zarif had served as ambassador to the United Nations. During that time, the pair made a similar offer to negotiate limits on Iran’s nuclear activities in exchange for normalization of relations, but were rebuffed by European negotiators—actively encouraged by the Bush administration—on the grounds that they could not tolerate Iran keeping a single centrifuge enriching uranium. Tehran’s offer, at that time, proposed maintaining 500 centrifuges for R&D purposes with an option to increase the number to 3,000 over time. At the time, Iran had only a few operating centrifuges, which they refused to dismantle.
After the collapse of those negotiations, Rohani and Zarif were accused by hardliners of humiliating Iran by making excessively accommodating offers to the West, only to have those rejected. After Mahmoud Ahmadinejad rode the wave of opposition into the presidency, Zarif was fired and removed from public sight, while some of his most prominent colleagues were hauled into court on spurious charges of espionage, or were forced to flee the country. Iran began a concerted acceleration of its nuclear development.
Today, Tehran is in possession of some 20,000 centrifuges, half of which are operating, in addition to a backup uranium enrichment site buried deep in a mountainside to protect it from air strikes. Tehran entered talks with a stockpile of 20-percent enriched uranium that inspired Israel’s Prime Minister Netanyahu to flourish a cartoon bomb at the United Nations, and with construction under way on a plutonium-producing reactor. Those, and other worrisome developments in the nine years since have made Tehran’s 2005 offer look very good in retrospect.
Over the same period, domestic political opposition to compromise hardened in Tehran and in Washington. Israeli leaders spoke publicly of launching a military strike against Iran, while the U.S. leadership used more muted threats (“all options are on the table”). And the United States put in place a series of financial sanctions that put Iran’s economy in a chokehold.
The dynamic changed again with the 2013 election of Rohani as president and his appointment of Zarif as foreign minister. New negotiations began shortly after, presenting all parties with another opportunity to retreat from confrontation—but with the cost of failure potentially far higher.
Even if things don’t follow exactly the same course as 2005, it is reasonable to expect that a second diplomatic failure would strengthen hardliners in Iran, the United States and elsewhere, all of whom will proclaim that their doubts about the other side’s intentions have been vindicated.
A harder line from Iran could see a return to producing and stockpiling 20-percent enriched uranium, and a reduction in the unprecedented level of international inspections it has recently permitted. It could activate its full array of centrifuges—currently only half are spinning—and lift its suspension of construction work on the heavy-water reactor at Arak. Iran’s conservatives could once again sideline Rohani and his team.
As if it weren’t bad enough for Iran’s nuclear policy to fall increasingly under the influence of hardliners, the failure to reach a deal by Nov. 24 would in all likelihood have a second effect that would compound the problem: weakening the external leverage that the United States could bring to bear on Iran. The primary leverage that the U.S.-led side has brought to the table is the international sanctions regime that has limited Iran’s energy exports and choked off its access to international financial networks. But those are not U.N. sanctions; they rely primarily on Washington’s ability to persuade or pressure companies in countries whose governments do not endorse those sanctions to refrain from trade with or investment in Iran, under threat that noncompliance could result in their being shut out of the international banking system. But if Iran is internationally perceived to have made a good-faith offer of compromise to no avail, the dynamic could change. Washington might no longer have that leverage.
China and Russia, as well as the European powers, would welcome an agreement that removed the constant threat of a military confrontation over Iran’s nuclear program, and gave Iran a potent incentive to become a responsible international citizen. To that end, all parties have been willing to back what has increasingly become a bilateral U.S.-Iran negotiation, tacitly recognizing that no agreement on the issue is possible without full U.S. involvement.
But deference to the United States, whose control over crucial international banking mechanisms gives sanctions their bite, is not unqualified. If the United States should reject what is perceived to be a reasonable Iranian offer, there are growing signs that the coalition might begin to fray.
China has not allowed its involvement in the P5+1 prevent it from cultivating closer relations with Iran, as evidenced by deepening trading ties and recent joint naval maneuvers. Russia and Iran have reportedly concluded a five-year barter arrangement in which Russia would purchase significant quantities of Iranian oil in return for industrial products. The two nations have also agreed to settle their accounts in local currencies, thus bypassing the dollar. Iran is clearly preparing for a surge of business in the expectation that an agreement will soon begin to remove sanctions. The country is a major untapped reservoir of demand for consumer products, as well as demand for modern technology in its oil and gas industry and industrial sectors. It is not widely known that, despite sanctions, Iran currently consumes more steel than France or the UK, produces twice as many cars as Turkey and is the world’s leading user of natural gas-powered vehicles.
Iran has been sponsoring preparatory business fairs in Tehran and in foreign capitals, seeking to stir up interest and to establish commercial relations in advance of any actual movement on the sanctions front. Most foreign firms are unwilling to risk Washington’s wrath as long as negotiations are underway, but that reluctance is likely to evaporate if these corporations come to believe the United States rejected an Iranian offer acceptable to their own governments.
Russia and China have profited greatly from the sanctions regime since they were able to purchase Iranian oil and pay with their own (sometimes shabby) manufactured goods in lieu of hard currency. They now seem poised to move to a more normal trading relationship, and if so they are likely to be joined by a number of other countries—including Turkey and India, which continue to import large amounts of Iranian oil—who would not wish to miss out on the lucrative commercial possibilities. European firms, some of whom have long-established ties with Iran and who have been injured by the sanctions, would be faced with a similar dilemma.
The United States has sculpted the application of sanctions into a formidable instrument of international diplomacy and power. A successful challenge to American primacy in this arena would have negative consequences that go far beyond the success or failure of the nuclear negotiations with Iran. The next few weeks could mark a critical turning point, for better or worse.
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