By Jofi Joseph for Global Risk Insights
After eighteen months of intensive diplomacy, the negotiations over the future of Iran’s nuclear program have entered their decisive endgame. Over the next ten or so days, we will learn whether Iran is ready to accept binding, albeit time-limited, constraints on its nuclear program in exchange for comprehensive sanctions relief from the United States and its partners in the P5+1.
Considerable analysis has been expended in recent weeks on the substantive merits of the agreement under development, and the role that the United States Congress may play in the approval and implementation of a final deal.
Nevertheless, analysts and investors will want to keep a close eye on the following developments as they assess the prospects of an agreement finally coming to fruition.
Key Compromises are Emerging
It was only a month ago when the mood surrounding these talks was decidedly dour, with both sides admitting little progress and actively engaging in posturing intended to blame the other side if the talks eventually collapsed.
So what happened? By all accounts, a set of meetings between U.S. Secretary of State Kerry and Iranian Foreign Minister Zarif on the sidelines of the Munich Security Conference in mid-February produced some key breakthroughs.
First, the Iranian side finally accepted the political imperative of a minimal one year breakout timeline, the amount of time Iran would need to produce sufficient fissile material for one nuclear weapons and the corresponding need to climb down from its insistence that it retain its existing levels of operating centrifuges. Instead, Tehran is reportedly prepared to go down from an existing 10,000 centrifuges to approximately 6,500 centrifuges.
In combination with its previous agreement to export a large majority of its enriched uranium to Russia on a continuous basis, this provides the United States and its P5+1 partners the technical confidence that any effort by Iran at an overt breakout would be detected with enough time for a response.
Second, the negotiators appear to have agreed that, instead of furiously haggling over a sole timetable of any agreement, any deal would consist of multiple timetables. This is why press reports indicate the P5+1 is prepared to insist Iran only cap its enrichment program at reduced levels for as few as ten years, even as the overall agreement endures for fifteen or twenty years, with some restrictions accepted by Iran for an indefinite duration.
This compromise allows both sides to claim victory: the P5+1 can say that Iran has agreed to overall limits on its nuclear program, including unprecedented transparency and verification measures, for a period of “double-digit” years, while Iran can declare the size of its enrichment program will be capped at its lowest levels for only a decade.
The Clock is Ticking
Unlike past rounds of talks over the past eighteen months, where the official talking points emphasized the urgency of reaching a final deal while officials haggled over the terms of another extension of interim measures already in effect, there is none of that today.
All sides recognize that the negotiations are approaching their final endgame, with a permanent agreement as the crowning success or a painful recognition that the gaps are simply irreconcilable for now.
From a U.S. perspective, this reality is only underscored by domestic politics in Washington, as evidenced by the recent contretemps over the advisability of the Congress inviting a foreign leader to question the policy of a standing President and the issuance of a press release disguised as a letter to Tehran from 47 U.S. Senators.
The White House recognizes that it either must secure a deal at this time, or face the prospect of the U.S. Congress passing sanctions legislation later this spring that will serve as an ideal excuse for Iran to pull out of the talks and blame Washington.
Similar dynamics exist inside Iran. President Rouhani was elected primarily because of his promise to secure concrete economic improvements for the Iranian people, and he concluded early on that the most efficient means of doing so was forging a nuclear agreement with the international community to reduce the burden of sanctions.
Almost two years later, he has succeeded in stanching the bleeding and ensuring sanctions will not get worse, but crippling measures on Iran’s oil sales and financial sector remain in place, all but freezing foreign investment.
Rouhani and his like-minded ally, Foreign Minister Zarif, recognize that they, too, must produce results soon if they are to hold back hardliners in the Majles and Iranian Revolutionary Guard who remain deeply skeptical of diplomatic overtures to the West, especially the United States.
Patience is Advised
Even if a framework deal is reached this month, with all details are ironed out by the end of June, the implementation of the agreement will likely roll out more slowly than many may anticipate.
First, both the Obama Administration and the Rouhani regime will need to sell their domestic audiences on the agreement, and success is far from guaranteed. In Washington, expect lengthy Congressional hearings and efforts by the Republican majorities in both Houses to either overturn the agreement or, more likely, introduce legislation that obstructs certain elements of implementation.
Second, neither the P5+1 nor Iran will be eager to hastily proceed with implementation of their commitments, if only to maintain leverage to ensure the other side does.
For the P5+1, that means a phased, iterative approach to sanctions relief, where each incremental measure is tied to verification of Iranian good behavior. From Tehran’s perspective, it will be hesitant to halt operations involving its nuclear infrastructure, lest any concessions on its part be pocketed without corresponding sanctions relief.
The first months of any agreement will involve a tentative dance by both sides, with major concessions likely deferred until the six or nine month mark. No one wants to get burned here.