Evidence: Recently Added
As the US Congress debates the deal struck between Iran and six world powers to curb Tehran’s nuclear program, many of those who oppose the agreement expect Europeans to fall into line if Washington rejects it. Some US senators, claiming unrealistically that a better deal is possible, think they will be able to persuade or coerce European allies into renegotiating. Their assumption is unlikely to hold, though, and could have damaging repercussions for trans-Atlantic relations. At this stage it would be challenging for the US legislature to reverse the political momentum clearly underway between Europe and Iran.
That’s because after years of intensive nuclear negotiations, an overwhelming number of experts and policymakers in Europe believe that the deal struck in July is as good as it gets. Europe’s most advanced nuclear states, France and Great Britain, have determined that it meets their tough technical standards on non-proliferation. By obsessing over a fantasy alternative, instead of focusing on implementing the deal, members of Congress risk undermining Western unity on Iran and future US-European cooperation over sanctions.
Opponents claim Iranian negotiators caved on key issues and were outmaneuvered by more clever and sinister American diplomats. Conservatives in Iran may be right. Iran’s opening to the outside world may weaken the ruling regime, as eventually Mao Zedong’s opening to the West did in the 1970s in China, and Gorbachev’s opening to the West did in the 1980s in the U.S.S.R. But these historical analogies also suggest that Iranian hardliners may be wrong. China’s overtures to the West undermined communist ideology and practices, but have proved essential in keeping the Chinese Communist Party in power so far. Gorbachev’s bold steps toward international integration eventually allowed both market and democratic institutions to take hold in Russia and elsewhere in the former Soviet Union. Yet the current counterrevolutionary backlash inside Russia suggests that the struggle for democracy, markets, and integration there will be long and tumultuous. There is no guarantee that Iran’s will be any less so.
No one knows what scenario will unfold in Iran. But the debate inside the country should inform America’s own debate. If the deal, as some American critics claim, sells out Iranian democrats and strengthens theocrats, why do so many Iranian reformists, democracy activists, and even dissidents support it? If it represents a financial windfall for Iranian conservatives and their terrorist allies abroad, why are Iran’s most conservative politicians so passionately against it?
Maybe Iran’s democrats are naive. And maybe the conservatives are playing a clever game of deception. Yet given America’s less-than-sterling track record of supporting Iran’s reformers, perhaps this time it’s worth listening to and betting on those in the country whom the United States claims to champion.
Rouhani crushed his conservative opponents in the 2013 presidential election in part because he advocated for a nuclear deal. This agreement is his Obamacare. Those supporting the deal include moderates inside the government, many opposition leaders, a majority of Iranian citizens, and many in the Iranian American diaspora—a disparate group that has rarely agreed on anything until now.
First and most obviously, the moderates within the regime, including Rouhani and his close friend and political ally, Foreign Minister Javad Zarif, negotiated the agreement, and are now the most vocal in defending it against Iranian hawks. Rouhani crushed his conservative opponents in the last presidential election in 2013 in part because he advocated for a nuclear deal. This agreement is his Obamacare—his major campaign promise now delivered. Former Presidents Ali Akbar Hashemi Rafsanjani and Mohammad Khatami, as well as moderates in the parliament and elsewhere in government, have also vigorously endorsed the accord. During the negotiations, Rafsanjani, for example, celebrated the fact that Iran’s leaders had “broken a taboo” in talking directly to the United States. Since the agreement was signed, he has said that those within Iran who oppose it are “making a mistake.”
Second and somewhat surprisingly, many prominent opposition leaders also support the deal. Mir-Hossein Mousavi, a popular presidential candidate in 2009 who is now under house arrest for his leadership of the Green Movement protests against Ahmadinejad’s reelection, backed the pursuit of the agreement, albeit with some qualifications. He’s joined by other government critics, some only recently released from Iran’s prisons. Shirin Ebadi, an Iranian human-rights activist and Nobel laureate now living in exile, expressed the hope after an interim agreement was reached in April that “negotiations come to a conclusion, because the sanctions have made the people poorer”; she labeled as “extremists” those who opposed the agreement in Iran and America. Akbar Ganji, an Iranian journalist who spent more than six years in prison in Iran, also praised the agreement, writing that “step-by-step nuclear accords, the lifting of economic sanctions and the improvement of the relations between Iran and Western powers will gradually remove the warlike and securitized environment from Iran.”
Polls show that most Iranians agree with these positions, and public opinion is apparent not just in the Iranian government’s numbers but also in the results of earlier surveys conducted by the University of Maryland and Tehran University. The sentiments of many ordinary Iranians were manifest in the spontaneous demonstrations of joy that took place in many Iranian cities after the agreement was announced.
We must remember recent history. In 1996, in the absence of any other international support for imposing sanctions on Iran, Congress tried to force the hands of foreign companies, creating secondary sanctions that threatened to penalize them for investing in Iran’s energy sector. The idea was to force international oil companies to choose between doing business with Iran or the United States, with the expectation that all would choose us.
This outraged our foreign partners, particularly the European Union, which threatened retaliatory action and referral to the World Trade Organization and passed its own law prohibiting companies from complying. The largest oil companies of Europe and Asia stayed in Iran until, more than a decade later, we built a global consensus around the threat posed by Iran and put forward a realistic diplomatic means of addressing it.
Some critics nevertheless argue that we can force the hands of these countries by imposing powerful secondary sanctions against those that refuse to follow our lead.
But that would be a disaster. The countries whose cooperation we need — including those in the European Union, China, Japan, India and South Korea, as well as the companies and banks that handle their oil purchases and hold foreign reserves — are among the largest economies in the world. If we were to cut them off from the American dollar and our financial system, we would set off extensive financial hemorrhaging, not just in our partner countries but in the United States as well.
Our strong, open economic relations with these countries constitute a foundation of the global economy. Nearly 40 percent of American exports go to the European Union, China, Japan, India and Korea — trade that cannot continue without banking connections.
The major importers of Iranian oil — China, India, Japan, South Korea, Taiwan and Turkey — together account for nearly a fifth of our goods exports and own 47 percent of foreign-held American treasuries. They will not agree to indefinite economic sacrifices in the name of an illusory better deal. We should think very seriously before threatening to cripple the largest banks and companies in these countries.
Consider the Bank of Japan, a key institutional holder of Iran’s foreign reserves. Cutting off Japan from the American banking system through sanctions would mean that we could not honor our sovereign responsibility to service and repay the more than $1 trillion in American treasuries held by Japan’s central bank. And those would be direct consequences of our sanctions, not to mention the economic aftershocks and the inevitable retaliation.
If a bipartisan supermajority does in fact begin to cohere in criticism of the undeniable loopholes and inadequacies of the agreement, it is likely the administration will adjust its position. Provisions that today are impossible to change will become subject to renegotiation and clarification.
The best chance for a better deal, in other words, is overwhelming bipartisan pressure from Capitol Hill about the need for one, rather than acquiescencing to the Obama administration’s claim that this is the best agreement possible because Iran will go no further.
That conclusion overlooks two truths: First, the Iranians are historically capable of adjusting positions they have claimed were immovable to new political realities, and, second, Iran, because of its depleted economy, needs an agreement much more than we do. Congress has the power now to act on these two realities.
This is an initiative, moreover, that many of our friends and partners are likely to welcome. Certainly the countries most affected by the deal — Israel and the Gulf Arab states — have made no secret of their dismay at the concessions granted to the Iranians in the quest for a settlement. Reportedly, even some of our European allies may not be wholly displeased by some congressional push-back — even if not all of them admit so publicly.
U.S. economic predominance has been increasingly tested in recent years, with the rise of the Chinese powerhouse and a resurgent Russia advocating alternatives to the dollar. Still, the dollar’s strength over the past year has demonstrated its primacy and underscored its unique status.
“I just don’t think that there’s a connection,” said John Taylor, a Stanford economist who served as the Treasury’s undersecretary for international affairs from 2001 to 2005.
Juan Zarate, a senior White House and Treasury official in the George W. Bush administration, said “it’s a very binary argument being made to sell the deal, and it overstates the risks that we face.” He has raised concerns in recent years that the overuse of sanctions could over the long run degrade the dollar’s elite status, but he says in the current context, the administration’s argument isn’t credible.
Moreover, Mr. Zarate said the argument is “undermining the power of the dollar itself at a time when it’s actually the strongest currency in the world, and you’re undercutting the effect of sanctions.”
Others said the administration’s concern could be valid but was possibly overstated.
“It’s a reasonable debating point…but it’s probably one of the weaker aspects,” said Edwin “Ted” Truman, a longtime international finance official at the Federal Reserve and the Treasury Department.
In a bid to prop up its valued allies in Syria, Iran has dispatched 6,000 to 8,000 Hezbollah fighters to fend off the Sunni militants seeking to topple the Bashar al-Assad regime. The war has taken its toll on Hezbollah, as body bags draped in the group's yellow flags continue to stream back from the front. An estimated 1,000 Hezbollahis have fallen since the group first began fighting there in 2013.
The Iran deal may soon give Hezbollah an exit strategy. Tehran is set to receive upwards of $100-$150 billion in cash (frozen funds plus funds released from escrow accounts holding oil proceeds that were only to be spent on approved foreign goods). Even more is coming to Iran in the form of increased oil, petrochemical, auto and gold revenues. The Assad regime could become a major beneficiary. This means that the regime could soon have more cash to pay its fighters and to buy more weapons to target the Sunni rebels waging war against it.
In that event, Hezbollah's services may no longer be in demand and the group could redeploy its troops fighting in Syria. How long that takes depends on how quickly Iranian cash and weapons help the Assad regime consolidate. But once its fighters are safely home, Hezbollah will soon benefit from the same Iranian sanctions relief windfall. As Iran's most important non-state proxy, Hezbollah stands to gain considerably -- from advanced weaponry to cash and training.
But even without a withdrawal from Syria, Hezbollah's battle-hardened fighters may not be content with quiet on their southern front. The group's rhetoric certainly has not mellowed; Hezbollah has been bruising for a fight with Israel since the guns fell silent from the last encounter in 2006. More importantly, Hezbollah views the nuclear deal (like the rest of the region) as a sign that its patron Iran is a burgeoning regional power, and that the military advantage is shifting away from Israel in the Middle East. It may not take long before the first provocation on the border.
And for Israel, it will not take much to be provoked. The Israelis have been quite clear about their frustrations, after having been negotiated into a corner by the P5+1 world powers that ironed out the nuclear deal. Should Israel carry out a military strike on Iran under the shadow of the deal, the country would risk becoming a world pariah.
But Israel is under no such constraints with Hezbollah. In fact, Washington openly acknowledges the possibility of a conflagration between the two, and the White House is now openly touting the fact that it wishes to help arm the Israelis to handle Iran-sponsored regional aggression of this sort.
With the perception that its deterrence is shriveling amidst the very public spat with the Obama White House, Israel will almost certainly wish to make an example of Hezbollah. A victory against the strongest Iranian proxy in the region could make the kind of unequivocal statement Israel believes it needs while it waits to see if Iran holds up its end of the nuclear deal.
However, a war with Hezbollah would not be just another war in the Middle East. It could be the war to end all wars between these two bitter foes. The Israelis are not eager to settle for a partial victory or a bloody tie, as it has in the past. To establish deterrence in the age of an empowered Iran, Israel may seek total victory.
Hezbollah, for its part, will also not stand down. Armed with 100,000 rockets, a deadly arsenal of other ordnance, and now the deep pockets of Iran, it's hard to imagine a negotiated ceasefire.
Among those legitimate concerns are: the almost immediate unfreezing of about $50 billion (figures of $150 billion are wide of the mark) of Iranian assets, some of which could be used to strengthen Iran’s proxies in the region, such as Hizbullah; whether International Atomic Energy Agency inspectors will get timely access to suspicious sites; whether the provisions for sanctions “snapping back” in the event of Iranian cheating will work; the impact of lifting the embargo on ballistic-missile technology after eight years; and, most crucially, what can prevent Iran from making a dash for nuclear weapons after 15 years, when most of the constraints lapse.
The right response to all these worries is not scrapping the deal but reinforcing it. The problem of what happens after 15 years can at least partially be dealt with by a firm and enduring American commitment, backed by Congress, to use all means, including military force, to prevent Iran from ever crossing the nuclear threshold. America must also commit both money and intelligence resources to help the inspectors in their work. And it must have agreements in place with the other signatories for expediting access to suspicious sites and for punishing even minor Iranian infractions with restored sanctions. Whatever the status of the arms and missile embargoes, America must be clear that it will use all other tools at its disposal to curb Iranian military power and Iranian support for terrorist proxies. The threat of a wealthier Iran stirring up more trouble can only be tackled by determined American re-engagement with the region.
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