Bringing the U.S. and Iran out of Suspended Animation

On two principles Iran and the new U.S. administration agree: first, the Trump administration’s “maximum pressure” policy aimed at Tehran was a failure and, secondly, reviving the promise of the 2015 Joint Comprehensive Plan of Action (JCPOA) is a strategic imperative. The two sides have correctly diagnosed the problem and identified a remedy satisfactory to them both, so one would think that the hard part would be over. Yet Washington and Tehran remain locked in an avoidable diplomatic stalemate, each insisting that the other take the first step. To escape the impasse, and prevent the JCPOA’s collapse, they need to act swiftly and decisively. The best path would be quiet, direct negotiations. But if that is not possible, the European Union can mediate by encouraging both sides to make initial good-will gestures that will pave the way for direct multilateral talks. Once at the table, all sides can focus on establishing an interim arrangement that stops the standoff from worsening further, followed by an agreement on synchronised steps that bring Iran and the U.S. back into compliance with the deal. The parties should then build on the JCPOA to create a stronger and more stable follow-on accord that addresses broader concerns. 

President Joe Biden took office rightly critical of his predecessor’s Iran strategy. The Trump administration declared in 2018 that by unilaterally exiting the nuclear agreement and pursuing a sanctions-driven policy of economic coercion, it would force Iran back to the table and deliver a stronger nuclear deal that would also blunt Iran’s power projection in the Middle East. The strategy failed spectacularly, producing the opposite of its intended effects. It exacerbated regional tensions and damaged transatlantic unity while eroding the deal’s non-proliferation gains. 

Almost three years on, having methodically reduced its JCPOA compliance in response to Trump’s economic siege, Iran is enriching uranium at pre-deal levels, expanding its stockpile of enriched uranium to more than fourteen times the deal’s 202.8kg limit, deploying advanced centrifuges alongside the first-generation models to which the deal largely restricted it, and manufacturing uranium metal, which the JCPOA banned it from producing until 2031. As a result, the “breakout time” that Iran would need to produce a bomb’s worth of fissile material has dropped from a year to around three months. Meanwhile, Iran has curbed the indispensable verification and monitoring authorities of the International Atomic Energy Agency (IAEA) by suspending in late February provisional implementation of the Additional Protocol and transparency provisions outlined in the JCPOA. These remain in jeopardy of further degradation if Tehran adheres to the letter of a law the Majles, or parliament, passed following the November 2020 assassination, allegedly by Israel, of a top Iranian nuclear scientist.

The new administration in Washington brought an opportunity to turn the page. Despite its violations of the agreement’s nuclear provisions, Iran has remained a JCPOA participant. It has declared these steps to be reversible and has pledged to resume full compliance with its obligations if and when the deal’s other parties deliver on theirs, in the form of economic reprieve envisaged by the agreement and undone by U.S. sanctions. For its part, the Biden administration has, since coming to office, taken a series of actions to signal its interest in diplomatic re-engagement. It has appointed Obama-era JCPOA negotiators to its senior diplomatic ranks, eased travel restrictions on Iranian diplomats in New York and rescinded the Trump administration’s (widely dismissed) claim of having snapped back pre-JCPOA UN sanctions. It also issued a joint statement with its European counterparts (the UK, France and Germany, known as the E3) to clarify that its aim is to resuscitate the JCPOA before trying to build on it. It readily agreed to join an informal meeting of JCPOA participants that the EU offered to host. 

Yet the administration’s conciliatory moves have been overshadowed by more hawkish ones. Pressured by JCPOA opponents in Washington and the Middle East, it has adopted tough rhetoric on Iran. It has triggered an unnecessary public feud over who should move first to return to compliance and signalled that it would just as soon play the blame game as embark on serious diplomacy. Most importantly in Tehran’s eyes, it has failed to lift any of the sanctions that Trump levied against Iran, which in Tehran’s view amount to collective punishment of the Iranian people amid a deadly pandemic. Nor has Washington taken limited actions that would have signalled serious intent without rolling back sanctions. These might have included facilitating an IMF emergency loan or the transfer of frozen Iranian assets held abroad – steps justifiable on humanitarian grounds and that could have been made subject to strong due diligence in order to ensure appropriate disbursement. The Biden team baulked at even these measures, loath to make what anti-JCPOA advocates in the U.S. would have seen as tantamount to down payments on sanctions removal and Tehran could have perceived as U.S. concessions to its pressure tactics.

Iran rejected the EU’s offer of an informal meeting of JCPOA participants. It did so primarily because the U.S. has not meaningfully redressed what Iran sees as the original sin that led the parties to this situation, namely the U.S. “maximum pressure” policy and accompanying sanctions architecture. From Iran’s perspective, Washington may have jettisoned the Trump-era strategy in word, but it is continuing that approach in deed. A senior Iranian official assessed the situation as follows: “If we wanted to negotiate with the enforcers of ‘maximum pressure’, we would have talked to Trump”.

The diplomatic deadlock is indicative of an uncomfortable truth: Iran and the U.S. both entered the post-Trump period with inflated expectations, overestimating their leverage, and now both could overplay their hand. Tehran believed that Washington would re-enter the JCPOA unilaterally and afford significant up-front sanctions relief even while Iran was ratcheting up its nuclear program and possibly greenlighting its allied Iraqi militias’ attacks on U.S. troops and interests in Iraq. For its part, Washington believed that Iran was so desperate for sanctions to be lifted that it would eagerly concede to negotiations without foreknowledge of deliverable returns, and that strikes on Iran-backed militias in the region would dissuade Tehran from imposing a new cost on the U.S. Both sets of notions turned out to be unrealistic.

As a result, the fundamental dynamics between Tehran and Washington remain only marginally different from those before 20 January. True, where previously the two sides were talking at and over each other, now they are at least talking about talking to each other. But they are not yet negotiating directly. The E3, for their part, by increasingly siding with Washington instead of pushing both sides to live up to their JCPOA obligations, are frittering away the political capital they accumulated through their strong support for the deal during the Trump presidency. Iran increasingly suspects that the West is intent on using U.S. sanctions as leverage – not to revive the JCPOA as previously negotiated, but to coerce Tehran down what it sees as a slippery slope of concessions on Iran’s ballistic missile capabilities and regional power projection. 

If the parties stay the course, with each side waiting for the other to blink first and in the meantime insatiably seeking more leverage, they will find themselves in an increasingly grim place. For Iran, it will mean watching the country’s finances buckle under the weight of U.S. sanctions, while Washington works to close ranks with the E3 to show the Islamic Republic a reunified Western front. For the U.S., it will mean facing the further erosion of Iran’s breakout time as JCPOA breaches and regional tensions surge – amply illustrated in recent incidents in Yemen, Iraq, Syria and the Gulf of Oman. All of these incidents have happened while there is still hope for the JCPOA’s revival. If that hope is dashed, it will become more difficult to restrain hawks on both sides who have been pushing for bolder and more perilous escalation. 

Where to go from here? If, as President Biden and top U.S. officials argue, the destination is the revival of and mutual compliance with the JCPOA as a stepping stone toward negotiations over a better-for-better nuclear deal and addressing broader concerns, the parties can chart an alternative path. 

In the past few days, they have given signs of preparedness to salvage the deal. Iran signalled good-will by working around the Majles’ action forcing it to restrict international oversight of its nuclear program. Rouhani did so by negotiating a temporary technical agreement with the IAEA on 21 February that extended much of its oversight capability. The agency’s director-general, Rafael Grossi, stated that this understanding makes it possible “to continue to monitor and to register all the key activities that are taking place” over the next three months. The temporary agreement prompted a majority of Iranian lawmakers to lodge a legal complaint against the Rouhani government. For their part, the U.S. and the E3 treated this gesture as conciliatory and reciprocated by deciding not to press ahead with a censure resolution at the IAEA’s Board of Governors this week that would have condemned Iran’s suspension of the Additional Protocol and failure to respond to outstanding IAEA questions about its past nuclear activities. 

An immediate step out of the stalemate could be an agreement on an initial exchange of gestures that could break the deadlock. Such an agreement would require either quiet U.S.-Iran discussions or third-party mediation. The EU, which coordinates the JCPOA’s implementation and maintains lines of contact with all stakeholders, is perhaps best placed to play intermediary between the Biden administration and Tehran, indirectly orchestrating initial steps that could make convening the informal meeting possible. Such initial steps might include, for example, the U.S. facilitating Iran’s access to some of its frozen assets for humanitarian imports in return for Iran halting one of the proliferation-sensitive nuclear activities it is now pursuing. Once at the table, the parties should negotiate an interim arrangement designed to prevent a further worsening of the situation, followed by a timetable for simultaneously reversing Iran’s nuclear breaches and U.S. sanctions.

Time is of the essence. While it is possible to roll back Iran’s nuclear program amid the country’s presidential campaign, which begins in mid-April and culminates in the 18 June election, negotiations are bound to become more difficult if the parties do not build significant momentum by then. It is equally risky to postpone Washington’s JCPOA re-entry until a new Iranian president comes to office in August, as restoring the agreement with its strongest proponents in Iran would be easier than with their critics, should they win. The longer the diplomatic stalemate continues, the more it is likely to be filled with the kind of brinksmanship that could jeopardise what remains of the nuclear deal and further inflame regional tensions. 

The Iran-U.S. impasse of the Biden administration’s early days could turn out to be a blip before reason prevails on both sides. Thus far, however, it risks being a waste of precious weeks marked by posturing or, worse still, the trigger of a dangerous regional standoff. The same logic that brought Iran and world powers to fashion the JCPOA, and which led its remaining signatories to preserve it after Trump withdrew, holds today. The alternative – a race between sanctions and centrifuges that could culminate in Iran obtaining a nuclear bomb or being bombed, or both – would be immeasurably worse. That outcome still can and should be avoided.