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#4815, 19 January 2015
IPCS Forecast: Towards a Nuclear Deal with Iran in 2015
Ruhee Neog
Senior Research Officer, NSP, IPCS
Email: ruhee.neog@ipcs.org

2014 was a year of significant global political upheaval; one in which the US, first among equals, had to repeatedly prove its diplomatic mettle. Of these, the Iran-West rapprochement and negotiations for a political settlement on the Iranian nuclear programme between Iran and the P5+1 assumed centrestage. If successful, the deal is expected be heralded as one of US President Barack Obama’s landmark foreign policy achievements during his time in office.
Drawing from analysis conducted over the past year, this article will attempt to look at the most outstanding sticking points that will continue to bedevil negotiations in the new year and the reasons for their persistence.

Iran and the P5+1 signed the Joint Plan of Action (JPOA) in November 2013: an interim deal until a final comprehensive agreement could be reached. This was a hailed as a definite breakthrough as the only agreement to have been successfully concluded since the one reached with Hasan Rouhani at the negotiating table in the early 2000s. Under the JPOA, Iran was offered limited sanctions relief; this did not however extend to the more critical banking and oil sectors. In return, Iran agreed to freeze parts of its nuclear programme.

The JPOA was initially envisaged for a six month period - a sort of first step to cautiously gauge the opposition’s intentions while addressing concerns for a more conclusive resolution - without immediately tying either party to long-term commitments without proof of sincerity. Its functionality was therefore dual: as a confidence-building measure as well as a means to indicate, through the “limited, temporary, reversible” nature of the incentives, what the eventual pros and cons of a rapprochement could look like. This made it a concrete starting point for further negotiations of a kind that was previously missing (See Iran Nuclear Deal: A Definite Breakthrough). After the expiration of the six-month term (20 January-20 July 2014) during which time the negotiators failed to reach a compromise, the JPOA was extended until 24 November. This too expired without yielding a comprehensive solution. However, given the political capital invested in this undertaking and the P5+1 and Iran’s interests in seeing the deal through, an agreement to continue negotiations until mid-2015 has been reached. Until then, the arrangements under the JPOA will stay in place.

With this as the background, what are likely to be the main bones of contention that could threaten to derail the talks?

Domestic Politics: Unwilling Stakeholders?
It has been established that given the overarching political nature of the West-Iran rapprochement, the domestic political constituencies will have significant leverage in okaying a final deal, and the difficulties encountered in negotiations owe chiefly to backstage management by political elites at home. Not all stakeholders in Iran and the US are willing to make compromises.

Take for example the PMD issue: members of the US Congress have already expressed their displeasure by saying that it is imperative for the PMD issue to be fully cleared by the IAEA before a deal can be struck. Iran, on the other hand, has rubbished the PMD claims, made public in an IAEA Board of Governors report released in 2011, by calling them “mere allegations.” In this environment, the P5+1 may choose to sideline the PMD issue to expedite negotiations. However, given its increasing prominence owing to domestic political demands to see its full clearance, the P5+1 may not be able to eclipse it completely.

How is the Obama administration thus going to overcome opposition posed by the Congress? The Congress is famously at odds with the White House over what an ideal nuclear deal with Iran should look like, and while the latter can lift sanctions that were imposed by a presidential order, any attempt to lift those imposed by Congress will be riddled with challenges. If there is to be a way forward - one that assures the other party of additional respite - how is the Obama administration planning to navigate it, especially given growing cynicism about the deal and demands for the US to play hardball?

This same scenario is also likely to play out in Iranian domestic politics. How will Rouhani’s government seek to placate domestic audiences given the divergence of perspectives on not just the shape and contents of a deal with Iran but also whether one should be reached at all? (See Iran: An Imperfect Nuclear Deal Better than None at All? and Iran-P5+1 Nuclear Negotiations: What Is Holding It Up? )

Iran’s Centrifuges: Who’s Counting?
One of the primary concerns that have delayed the conclusion of a comprehensive deal is the question of Iran’s enrichment capacity, on which the negotiators have thus far been unable to reach any kind of consensus. Iran wants to hold on to the 19,000 centrifuges in its possession. It has also repeatedly stressed its need for an enrichment capacity that meets, among others, the requirements for the fuelling of the nuclear power reactor at Bushehr, built by Russia under an Iran-Russia contract. Russia currently supplies the low enrichment uranium (LEU) to fuel the reactor, a job that Iran sees itself taking over once the contract expires in 2021. Significantly, this would require Iran to increase its uranium enrichment capacity, which could be at cross-purposes with the eventual aim of a comprehensive agreement: to curb the possible weaponisation element of the Iranian nuclear programme in perpetuity. The P5+1, on the other hand, seek a reduction where Iran desires an expansion.

As it currently stands, Iran has voiced its opposition to any meaningful reduction its uranium enrichment capacity - one that would delay its breakout time or the estimated time required to produce a nuclear warhead by a year - and this position that is seen as unacceptable to the P5+1. Although there have been some vocal demands for a complete end to Iranian uranium enrichment as an end-goal of the comprehensive agreement, it has also been recognised that this would not be politically realistic.

In this light, therefore, a lower capacity for enrichment is being sought. It has been argued that this would be a win-win for Iran and the P5+1. First, it would still allow Iran to meet the “practical needs” as recognised in the JPOA of its civilian nuclear programme, such as fuel for the Tehran Research Reactor (TRR), Bushehr, and the four light-water research reactors that Iran has expressed an interest in building. Second, this is expected to extend Iran's break-out in the event that it decides to exit the agreement, and enrich uranium to weapons-grade levels. Third, Russia may apparently be willing and able to extend its contract to supply fuel to Bushehr post 2021. Additionally, as argued by Mark Hibbs of the Carnegie Endowment for International Peace, “Iran has no agreement with Russia licensing the Atomic Energy Agency of Iran (AEOI) to make Bushehr fuel, giving Iran access to the intellectual property for the design of the reactor core internals, for the design of the fuel assemblies, and for the chemical and physical specifications of the fuel.” If Russia, given its commercial interests in retaining the contract, is unwilling to hand over fuel supply to Iran, then Iran’s argument for greater enrichment capacity on this basis can be considered invalid.

Iran's stand is that it will not forego its right to enrich uranium for peaceful means as promised to it by the NPT (Nuclear Non-proliferation Treaty) and in pursuit of its civil nuclear ambitions. This right, used often and publicly by Iranian statesmen to define their expectations from the P5+1, informs the Iranian approach to the talks and is therefore non-negotiable. (See Iran: An Imperfect Nuclear Deal Better than None at All?).

Iran’s Possible Military Dimensions (PMD): A Lose-Lose Situation?
PMD here refers to covert indigenous work carried out by Iran in the past, whether design or research-oriented, towards a nuclear weapon.

Nuclear negotiations with Iran have thus far taken place on two different tracks. One of these was with the P5+1 that resulted in the six-month Joint Plan of Action (JPOA). The Framework Agreement struck between Iran and the International Atomic Energy Agency (IAEA) looks to the technical aspects of Iran’s nuclear programme. In this regard, there has been some debate about a possible conflict of interest between the two tracks. In 2011, IAEA Director General Yukiyo Amano submitted an exhaustive report to the Board of Governors on Iran’s ‘possible military dimensions’ (PMD). The report was apparently based on numerous reliable sources as well as IAEA’s own independent investigation, and it claimed that Iran had in the past pursued activities related to the development of a nuclear weapon. The IAEA would therefore naturally seek answers to these allegations from Iran. However, it has been alleged that in the enthusiasm for a comprehensive agreement, the P5+1 could ignore the PMD aspect if all other conditions are met.

It could stand to reason that if Iran’s break-out capability is indefinitely delayed and the technology available to it is severely limited, in addition to greater transparency and IAEA access to its facilities, the PMD question may not have to be directly dealt with at all. In addition, even if the P5+1 agree to discuss the issue, Iran is unlikely to admit to any such activity in the fear of a backlash, and due to its fatwa against nuclear weapons. If Iran chooses to disclose these details, it could quite possibly derail the negotiations process. It will be a very hard sell for the Obama administration to convince the tough customers of the US Congress that a final deal that trades sanctions relief for a capped nuclear programme is in the best interest of the US, especially after Iran’s past activities come to light. Proof of weaponisation work can create an environment not conducive to rapprochement, and that these activities were conducted in the past will be irrelevant as popular sentiment quickly turns against Iran.

The bottomline however remains that a resolution of the PMD issue has implications for future verification of Iran’s nuclear programme (See Iran-P5+1 Nuclear Negotiations: What Is Holding It Up? and A Comprehensive Nuclear Agreement with Iran: Four Potential Roadblocks).

Since the negotiations began, technical issues and domestic politics were expected to throw a spanner in the works - a misgiving that has since been justified. Recent frustration notwithstanding, this extension provides the necessary space for a stock-taking of where the negotiations stand, what the sticking points are, and how best to move forward in the right diplomatic direction. Also, this extension should not read as failed diplomacy, and take away from the good work done so far and the noteworthy achievements made under the JPOA. Most importantly, Iran and the West have met at the negotiating table for the first time since Iranian President Hassan Rouhani led the last (failed) talks in his former avatar as Iran’s top nuclear negotiator. As starting points go, therefore, the deal itself is a diplomatic breakthrough, and in this give and take, it is hoped that the negotiating parties build on past mileage by focusing not so much on what is ideal, but what is achievable.

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