«The deal cannot be put on autopilot»
Ali Vaez on the future of Iran and the Nuclear Deal under a Trump Presidency
U.S. President Barack Obama has said that he considers the Iran Nuclear Deal one of his administration’s greatest foreign policy achievements. The deal, which was negotiated between Iran and the P5 + 1 (the five permanent members of the UN Security Council and Germany), went in effect early this year, and lifts economic sanctions against Iran in exchange for Iran abandoning its nuclear build-up. But since the election of Donald Trump, the future of the deal has looked shaky, as both Trump and members of his transition team have repeatedly criticised it in the past, and threatened to pull out of it.
On November 16, 2016, Asia Society Switzerland discussed the future of the deal — and the future of Iran — with Philippe Welti, Former Swiss Ambassador to Iran, and Ali Vaez, Senior Iran Analyst at the Crisis Group in Washington, D.C. Just before the event, I sat down with Ali to ask him some additional questions.
Asia Society Switzerland: What will the Trump Administration’s Iran agenda be? Will they try to kill the Nuclear Deal?
Ali Vaez: I don’t think that the Trump Administration knows what its Iran agenda is going to be. They are probably still at the stage where they are trying to decide on their priorities. But I’m worried by the general attitude of the people in the Trump transition team, who are for the most part highly skeptical of this agreement and hostile towards Iran. And that is a source of concern because even if they don’t scrap the agreement, the deal cannot be put on an autopilot and survive. By nature, it requires a lot of affirmative action to upkeep it.
So even if they do nothing to pull out of the agreement, a tenser relationship between Iran and the U.S. could eventually spill over into the implementation of the Nuclear Deal. For example, Congress could pass sanctions that are not nuclear-related and thus not considered a violation of the agreement, but would still undermine Iran’s ability to normalize its economic ties with the outside world. And over time, the cumulative effect of these sanctions would push Iran to go ahead and withdraw from the deal. Remember, that is precisely what happened in the case of North Korea: In 2000, the incoming Bush administration was highly skeptical of the Agreed Framework and the achievements of the Clinton administration, and was looking for an opportunity to withdraw from the deal, but it wanted the blame to go on North Korea. So it’s possible that the Trump administration will try to kill the deal not with an axe, but with a thousand paper cuts.
But I hope that the Trump administration realizes it has enough problems on its hands, and doesn’t want to reopen an issue that — after the expenditure of much time, energy and diplomatic capital — has been resolved. The deal that is actually working, and has at least removed one source of tension in a region that is already in turmoil. So a Trump administration should be as committed to the deal as the Obama administration is, and try to figure out ways of working with Iran.
The election in the U.S. has also been closely followed in Iran itself. Who in Iran is happy, and who is concerned about Trump in the White House?
Some people in Iran prefer a U.S. President who lacks nuance and gives credence to their anti-American sentiments. For them, it’s much easier to point the finger at an administration that is widely seen as unreasonable, and to shift the blame to them. This is mostly the attitude of the hardliners, although I’ve heard it from pragmatists as well. Others are quite concerned about what the Trump administration is going to do, but still hope that, because it is a multilateral agreement, Iran is not going to be as isolated and cornered as before the deal, because the other signatory states will stand by it no matter what. I think it’s a bit naive to believe that if the Trump administration really wants to undermine the deal, it will do it in such a brazen way that the blame would clearly fall on the U.S.
If it is the Trump administration’s intention to sabotage deal, who could stop them from doing that, and how?
I think the political options for the U.S. Democrats, who are in the minority in both houses, are limited. And remember that Senate Minority Leader Chuck Schumer was the only Democrat who actually voted against the deal.
The international organizations like the IAEA and the UN itself should highlight the fact that this deal is working and has delivered what it was supposed to deliver. And the other signatories can send a strong signal to the Trump administration that they are happy with where things are standing, and don’t want to see the agreement undermined. They can make sure the Trump administration understands that if the US walks away from this deal, it will walk away alone.
Iranian president Rouhani promised that the deal would lead to economic growth. And while that has happened, it has been pretty limited so far. Why is that?
I think there were unreasonably high expectations in Iran about what the nuclear deal could deliver. People thought it would improve Iran’s economic wellbeing overnight. This was partially because the Iranian government wanted to build support for the deal, but also because of the international attention and the sense that Iran was a growing economy, and reconnecting it to the global economy would create big dividends.
But it’s important to understand that the agreement was never about trade and investment. It never promised Iran a certain degree of economic growth. It promised to lift the sanctions, and it did. And Iran has already been able to reap some of the benefits, though admittedly they are lower than what Iranians expected. This is partially because of the complexity of untangling a spider web of sanctions that have been created around Iran over the years. And partially because of Iran’s own shortcomings corruption, weak rule of law and poor governance.
Companies also still see significant political risk in engaging with Iran, and the U.S. election has proven that point. But nonetheless, economic recovery is happening in Iran: GDP will grow around 5% this year, up from nearly zero last year. Iran has also received more foreign direct investment in the last ten months than in any other year in the last 20 years.
There are presidential elections coming up in Iran as well next year. How likely is it that President Rouhani will be reelected?
Iranian elections are famously difficult to predict. The conventional wisdom for a long time was that if the economic benefits are not felt in a tangible way by Rouhani’s constituency, he is going to politically suffer. But he and his allies did well in the February 2016 parliamentary elections. So the Iranian people, despite their complaints, understood that the recovery is going to take some time, and gave Rouhani an opportunity.
If the deal collapses before the elections in May, Rouhani would be in a tricky situation. But it doesn’t mean he will certainly lose: His team of smiling diplomats could still very effectively blame the U.S. for it, and his team of economic technocrats will be needed to keep the economy afloat.
But all of this is just one element of a more complex calculation of the system, which is preparing for the succession of Supreme Leader Khamenei, and needs a certain degree of stability and desires a certain class of the political elite to be in key positions.
If the deal collapses, what are going to be the global consequences? How will the world change?
It would set a very negative precedent. It would send a strong signal that multilateralism doesn’t mean much. And it could put the non-proliferation regime at extreme risk. I can well imagine that in case of an escalation, Iran would pull out of the deal and even more towards developing nuclear weapons as the ultimate deterrent. Finally, increasing tensions between Iran and the U.S. would have adverse effects on the regional level, and lead the two sides to retaliate towards each other in Syria or Iraq and else where. That would deepen those crises and make their resolutions even less likely.
