Implications of failing to reach a deal, again

Despite a tremendous diplomatic effort last week, the E3+3 (P5+1: United States, United Kingdom, France, Russia, China and Germany) negotiations with Iran failed to reach a comprehensive agreement to limit Iran’s nuclear capacity in exchange for lifting sanctions by their self-imposed November 24 deadline. Negotiators from all sides said they had achieved considerable progress, and expressed confidence in the process. John Kerry, United States Secretary of State said that “real and substantial” progress had been made during the week. He expressed his belief that the deal they were close to achieving would make the Gulf States safer and more secure.

The talks have now been extended for seven months, with a specific goal of reaching a political agreement by March 1st and the having important technical deals sealed by July 1st 2015.

Iran’s President Hassan Rouhani seems to be losing support at home for his failure to achieve early sanction relief, despite the optimistic tone in his statement on Monday. Rouhani’s election promises in 2013 that more serious engagement within the nuclear talks would improve Iran’s economy, and the high expectations within Iranian civil and commercial society, puts him in a politically dangerous situation. Whilst there remains some promise, lack of progress so far is leading to mounting pressure.

Until the new formal deadline, seven months away, Iran will continue to abide by the restraints on its nuclear activities, including an end to higher level enrichment and minimal stockpiles of this uranium, agreed under the Joint Plan of Action that came into force in January 2014. In return there has been a limited easing of the financial and trade sanctions, amounting to about million a month in sanctions relief. Existing US and international sanctions have crippled the Iranian economy, cutting its daily oil exports by more than half and freezing the ability of its banks to conduct international transactions.

Nevertheless, some members of the US Congress are likely to press for new sanctions on Iran when the new session starts on 6th January, with the argument that enough time has been allowed to come up with a comprehensive agreement. Many Senators had already threatened to impose new and harsher sanctions on Iran, in a letter to President Obama if a deal had not been reached last week. The President will only be able to veto this if they do not receive more than two-thirds support of the Senate.

Senators may believe that by placing further sanctions on Iran this will pressurize the country to back down and agree to stronger terms from the United States. Equally, Iran could react by restarting its most sensitive nuclear activities. This outcome would likely threaten the cohesion of the international community, and some would clearly blame the United States for unnecessarily escalating the conflict just as negotiations were forthcoming. There may yet be incentives for both sides to make an agreement before such an outcome looks inevitable.

A complete failure of the talks is unlikely. Yet forces in the region are ranged against a compromise. Iran’s regional foes Israel and Saudi Arabia already fear a weak deal that would fail to prevent Tehran acquiring the capability to produce a nuclear weapon and lengthen the breakout timeline, and have threatened independent action if the United States appeases the Iranians. On the other hand, a complete collapse of negotiations would spur new disappointments in the region and around the world. Such an outcome could also spur states to develop their capabilities, increasing the risk of nuclear weapons proliferation in the region.

A deal that reassures the international community that Iran’s nuclear programme is intended for peaceful purposes and develops this assurance over time is now imperative to regional stability.

The new deadline is now after the NPT Review Conference from April 28th to May 9th next year. Unless state parties agree something substantial before then, the hoped-for boost to the already embattled Review Conference could further reduce any possibilities of a final document, depending upon underlying confidence from key members of the international community.

The current administrations in Iran and the United States seem to be the best chance of reaching an agreement. It is now critical to keep up the momentum within the negotiations to achieve the compromise necessary before it is too late and other less reasonable voices take control of the reins.

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