Trading with the Mullahs

datePosted on 18:45, September 17th, 2015 by Pablo

I was a replacement panelist invited by the New Zealand Institute of International Affairs to join a discussion in Wellington on the Iranian nuclear agreement. It was a a pleasant event that addressed the pros and cons of the deal. I was impressed with some of the speakers, particularly Dr. Parsi from Lund University (speaking via Skype). I was less impressed with the Israeli discussant and the statements (not question) by an official from the Iranian embassy who was in the audience.  All in all, it was an engaging affair and I encourage the Institute to continue with such public outreach efforts.

I spoke a bit about how the deal can be viewed on two analytic levels: as a First Image (interstate) issue and as a Second Image (domestic sources of foreign policy) matter. I mentioned that a way to conceptualise the agreement is as part of a “nested game” (to use a game theoretic term): the deal is part of a series of interlocked interactions (or “games’) that can be seen much as those iconic Russian dolls are (one inside the other) or as building blocks towards a larger whole. I noted that the core of the agreement was to exchange trade for recognition and security–in other words, Iran gets more trade and recognition of its legitimate interests and stature as a regional power by putting the brakes on its nuclear weapons development program with an eye to cancelling the weapons program altogether should the agreement prove beneficial for all sides. They main lever is another trade-off: dropping of international sanctions against Iran in exchange for a rigorous international (IAEA-managed) inspections regime.

For those who are not familiar with the agreement, it is not a bilateral US-Iran affair although they are the major players in it. Instead, the treaty was negotiated by the P5+ 1 parties and Iran, the P5+1 being the permanent UN Security Council members (the US, UK, France, China and Russia) plus Germany. For those interested in the details of the deal, the official US government position is outlined here (which includes the text of the full Agreement itself). A US translation of the Iranian interpretation can be found here. The fact that the P5 agreed to the deal is remarkable given their history of disagreement and subterfuge on matters of international security.

There was an interesting sidebar about “breakout time” introduced by the Israeli, who waxed hysterical about the apocalyptic implications of the deal. Dr Parsi noted that “breakout” refers to the time needed to enrich uranium to weapons grade, in response to the Israeli claim that the deal gave the Iranians a breakout potential of one year. Prior to the deal, that enrichment breakout threshold was two weeks. The point is that “breakout” time refers to the time needed to begin enriching uranium to weapons grade rather than the time needed to build a bomb.

Dr. Parsi noted that “breaking out” on enrichment is not the same as putting nukes on missiles. I said nothing at the time but here I actually know a bit without being a nuclear scientist ( I studied nuclear strategy under one of the original strategists behind the nuclear bombing of Japan and so-called MAD theory. He grappled with the moral dilemmas involved in front of me and my student cohort at the University of Chicago (home of the Manhattan Project) and later changed his mind with regard to MAD). The notion that Iran can start enriching uranium or reprocessing plutonium to weapons grade in a short period of time and then quickly build a missile launched nuclear warhead is simply mistaken.

From a technical viewpoint beyond the specifics of Iran’s enrichment and reprocessing programs, the problem of weaponising nuclear material is simple. Unlike the multi-ton “dumb” bombs that were dropped on Hiroshima or Nagasaki using concentrated high explosives as triggers focused on the nuclear material, the bulk of testing then and now consists of reducing the nuclear payload to a size that can be carried in the nose cone of an (increasingly small and light) intermediate range or intercontinental missile (IRBM or ICBM). The smaller the size of the delivery vehicle, the better its chances of avoiding surface to air or air to air interception. Given that requirement and the need for accuracy, nuclear payloads share very tight space with guidance systems. All of which is to say that given the weight constraints on a high velocity long range projectile, the “bomb” has to be miniaturised for maximum bang for the buck. Doing so requires downsizing the trigger mechanism from focused high explosives to something else. Laser triggers are one option. There are others.  All of them are off limits to the Iranians irrespective of the deal. So not only is the fear of “breakthrough” unfounded and exaggerated for political purposes, but the real concern regarding mounting nukes on missiles is subject to  both contractual and non-contractual enforcement.

My general view is that the agreement is worth doing. Other speakers and I commented on the downside, which mostly involves the reaction of Israel and the Sunni Arab oligarchies as well as domestic opponents in Iran and the US. I noted that there are disloyal hardliners in both the US and Iran that have potential veto power over the deal in the future should governments change, and that it was imperative for the soft liners or pragmatists to accrue tangible benefits from the deal in order to resist the sabotage efforts of hardliners who have vested interests in keeping tensions alive between the two countries. I made the point that Iran is more akin to Cuba than North Korea, and can be brought into the community of nations so long as it was recognised as a regional power with legitimate interests.

Speaker’s times were very limited (7 minutes each), so I was unable to fully address what I had intended to say. So let me do so here.

The lifting of sanctions on Iran as part of the quid pro quo at the heart of the deal opens a window of trade opportunity for New Zealand exporters and importers (more so the former than the latter). Coincidentally,  Foreign Minster Murray McCully has announced that in a few weeks he will be leading a trade mission over to Iran to discuss those opportunities. This is in advance of the implementation of the accord (which goes into effect at the start of next year) and is, as far as I can tell, the first official Western government led trade mission to Iran in the wake of the signing of the agreement.

But let us be clear on what that mission needs to entail. Although Iran’s human rights record needs to be mentioned, however pro forma by McCully, to his Iranian counterparts, the point that must be emphasised is that New Zealand’s opening of trade relations with Iran is absolutely, explicitly contingent upon Iran adhering to its part of the bargain. Should Iran in any way shape or form renege on the letter or the spirit of the agreement and the inspections regime that it authorises, then McCully needs to make clear that New Zealand will terminate or at least suspend until Iran complies all imports and exports to the Persian giant.

I say this because under McCully and Tim Groser MFAT has turned into the Ministry for Trade with Anyone for Trade’s sake. Human rights and non-proliferation are not part of the Groser/McCully negotiating agenda. But in this instance both need to be and the latter has to be. The profit margins of New Zealand exporters and importers and the tax revenues derived thereof must not and cannot supersede New Zealand’s commitment to upholding the terms of this non-proliferation agreement in the event of violations. Those involve re-imposing sanctions, and the bottom line of private interests must not come before the commitment to non-proliferation, especially given New Zealand’s long held diplomatic stance on the matter.

McCully also needs to explain to New Zealand importers and exporters that any contracts they let in Iran are contingent and externally enforceable. That is, they are contingent on Iranian compliance with the inspections regime and the overall thrust of the Agreement (which is to reduce the prospect of weaponising its nuclear program); and they are subject to outright cancellation or suspension by the New Zealand government under penalty of law in the event Iran reneges or violates its side of the bargain. There are opportunity costs and risks involved, and these need to be outlined to interested parties in advance of the mission.

From announcements so far, it does not appear that the National government is interested in making such demands of the Iranians or its market partners. Instead, it appears that it is opportunistically jumping to the head of the cue of potential trade partners and will let the private sector lead the charge into trading with Iran. That is curious because McCully speaks of “not getting offside” with the P5+1, but the very fact that he mentions the possibility of “getting offside” indicates that he and his MFAT minions are considering the costs and benefits of doing so.

The Iran deal hinges on two things: verification and enforcement. There are instruments in place to verify that Iran is upholding its part of the deal. The sanctions will begin to be lifted on January 1, 2016. But it is enforcement of the terms that is the most uncertain aspect of the Agreement. If New Zealand does not explicitly tie its renewed trade with Iran to the latter’s compliance with the terms and be prepared to halt trade with Iran in the event that it does not comply, then it will begin the slippery slope of undermining the deal. For a Security Council member that depends more on reputation than power for its influence, and which has a past record of leadership on non-proliferation, that is a hypocritical and ultimately vulnerable position to be in.

9 Responses to “Trading with the Mullahs”

  1. Daniel on September 18th, 2015 at 10:50

    As someone who has followed the Iran situation with great interest over the years I see the deal as the best option in a difficult situation.

    If no deal was reached then the only option to stop Iran was to bomb them and the technical possibility of that being successful were slim to none, not to mention the fallout (no pun intended) from such a failed attack would further destabilise an already destabilised region. The consequences of that would be much greater than any benefit form knocking Iran out of the nuclear game for a limited period of time (as even US estimates have indicated that such a strike would only slow them down, not stop them).

    The key question then is would it be worth ramping up from a cold to a hot war with Iran; destabilising of the wider region and Allah knows what blowback to the world at large just to prevent Iran from having Nuclear weapons capability? And let’s be honest to ensure that Iran wasn’t doing this (or prevent them from ever doing it again) would involve ground forces and regime change. That’s probably a pill which no-one could swallow and no matter how hawkish some parties are over this, even they would have to be willing to take that final grim step.

    Therefore an approach which allowed Iran into the game, so to speak, on some terms set by the US et al would be infinitely preferable to no control over the process and Iran achieving the bomb anyway (I know they keep saying the research is for nuclear power generation only but who are they fooling).

    That said do I don’t see that Iran having the bomb, if it was to acquire it as being the great destabilising issue of our time. The argument that seems to proliferate (ok so I am now actively making puns now) is that Iran will behave outside the known and generally understood norms of being what a Nuclear power entails (I also studied such things as Nuclear Deterrent Theory/MAD and the rest way back at Uni) and such an argument does not wash.

    Is Iran likely to behave like North Korea? Probably not. And as Iran will be brought back into the fold, so to speak, with trade and currency restrictions lifted, it will undoubtable benefit from it. The current regime will also benefit from it and the people will certainly benefit from this. If Iran backtracks or breaks the deal it gets the sanctions slapped back on. And while information has long indicated that Iran was still able to avoid the full effects of the sanctions by various means that does not mean the effects of the sanctions were not being felt. An Iran that had its leash yanked back hard by sanctions would possibly more open to regime change as once the populace has had a bigger taste of freedom they would be a lot less likely to endure a step back.

    Iran, if it becomes a nuclear power, will be constrained by the same logic as all other nuclear powers. Even North Korea, for all its sabre rattling, knows that the use of nuclear weapons will prompt a reply in kind and while it plays the brinkmanship game a lot the essential point driving the regime there is survival. Getting nuked will not achieve that.

    And as you point out having the bomb is one thing and a delivery system is another which is also an important point but not the crucial point here. Iran remains one of the few powers able to exert some stabilising influence on the Middle East and that’s become even more important as Iraq remains in chaos and no other nation is stepping up the plate.

    None of this is an apology for the behaviour of the regime or its previous acts but as the saying goes “let he who is without sin etc etc”.

    I can understand why various interest feel threatened but I can also see that those interests are mostly driven by agendas which cannot and do not see accommodation as an option but also lack the strategic view to see that what they propose does not solve the problem they get so upset about (even if they were to achieve it).

    What this deal will do is bring the Israeli nuclear agenda out into the open, it has to and they do not want that which again ignores that it’s already an open secret. The only people they are fooling are themselves.

    It will also drive Saudi Arabia to consider finding new means of deterrent (possibly even nuclear) as the US accommodation, and the deal in general, has not really been to their liking but again this is because Saudi Arabia has benefited from its competitor across the gulf being under sanctions and the bogey man of the world.

    A nuclear Iran will probably end up effecting Israel little apart from some wounded pride and a reduction in military advantage. Saudi Arabia may suffer more, may destabilise more but again as long as the oil keeps on flowing the regime there will endure. The Arab spring, and its effects, will keep on weather Iran gets nuclear capability or not.

    I also understand that various security services also have vested interests in having Iran as the bad guy but that state of affairs is even less of an excuse to avoid this deal than anything else. They will just need to adjust to a tighter budget like all other sections of government. Perhaps if Iran is lower down on the risk list they can focus on some of the more pressing security issues that exist (I am not going to mention them here, they know what they are).

    And that does bring about a new calculation; will the removal of trade sanction mean more oil available, a reduction in oil prices, cheaper gas etc? Saudi Arabia may not like this but then again they might, oil politics is not my specialty.

    In the end the deal will upset some people but it will not upset the global applecart, it will have a lot of positive effects for a region which is close to breakdown and desperately needing stabilising influences (Iran is no friend to ISIS) but the reality is that the bomb Iran option was never going to work, suppression/sanction was failing and the surrounding region is falling apart and in need of strong regional influences rather than outsiders and their drone bombs as the status quo.

    It won’t fix all problems but it will fix the issue of how to deal with a situation that only had two paths, and as the path for foreign backed regime change has failed so resolutely in the Middle East it was never going to be that path. It’s only been parochial vested interest in having Iran under sanction (and those become fewer all the time) that have held this up and it will be those interests that do suffer for such a deal but even then no way as worse as they imagine. They are basically Canute in trying to hold back the tide.

  2. Pablo on September 18th, 2015 at 11:28

    Thanks Daniel, for the summation.

    I concur with your remarks. One thing that we did not have time to get into on the panel was, as you mentioned, what having nukes is all about. I had prepared some brief remarks on how nukes are defensive, deterrent weapons and that the possibility of an Iranian first strike was very unlikely given the consequences (and here I draw the contrast with the DPRK, which I believe could in fact launch a first strike due to some twisted internal dynamics and logics within the regime).

    The Iranian official brought up the subject of Israeli nukes but his remarks were undermined by his comments about AIPAC’s influence on US foreign policy. The hard fact is that this deal has the potential to shift the balance of power in the ME away from the Gulf states, which to my mind is a good thing. Israel has to learn to live with that.

  3. Korakys on September 18th, 2015 at 13:53

    Sanctions against Iran have only made it stronger and more resilient nation. The best way to defeat your ideological enemies is to trade with them.

    There was a study done recently of the effectiveness of trade sanctions which I had a read of and if sanctions don’t work within one year then it is pointless to continue them.

    Also this deal is crazy good for P5+1 side.

  4. Phil Sage on September 19th, 2015 at 22:18

    Korakys – The research you refer to is obviously wrong. It is rather ironic that you make it on a post about Iran. The only reason Iran is that the table is sanctions relief.

    I agree with statements about the deal being sensible for all parties and the technical aspects are interesting.

    DPRK leaders much know that AD would apply. They might take out Seoul but that would lead to immediate total war and oblivion for the regime with a South Korean leadership and American force protection.
    I am much less certain I am willing to rely on MAD with religious islamists who truly believe in an afterlife. That is entirely unpredictable. The likelihood of Islamists terrorists exploding a bomb supplied by corrupt religious military sources is imho the next most likely non test nuclear explosion.

    Two things I am interested in exploring. To what extent is US policy towards Iran consciously influenced by the desire to have an Islamic counter influence to the obviously mad Salafist-Sunni Islamists? The Shia face extermination/domination if the likes of Daesh win. My enemy’s enemy is my friend.

    Secondly why the the Israelis and Republicans crying wolf so loudly? I can almost understand the rabid anti Obama Republicans scoring political points but any sane analysis must recognise that Iran nuclear capability has been deferred.

    New Zealand trade with Iran is non threatening and very unlikely to put five eyes offside. They just negotiated a massive deal with Iran based around lifting trade sanctions. We will simply follow the lead of the West if Iran is found to break the rules.

  5. Pablo on September 20th, 2015 at 11:36

    Phil:

    At least as far as the great nuclear powers are concerned, MAD has been replaced by flexible response (something that happened in the 1970s and 1980s). That is why we now have tactical and battlefield nukes. There is little point in conducting counter-value strikes while leaving hard military targets intact, so counter-force through the full kinetic spectrum is now the norm. OTH, perhaps smaller nuke powers still believe in MAD, which is, indeed, quite nuts.

    I believe that Iranian military planners are rational and fully understand that the value of nukes is in their deterrent and defensive value, first, and as a battlefield option second. I also believe that getting them to the table on the nuclear issue is indeed part of a shift away from the Sunni-centric view of the ME and towards a re-calibration of the geopolitical balance in the region in which Shiia interests are increasingly recognised, as is Iran;s legitimate role in defending them. After all, the Sunni petroligarchies have proven to unreliable allies in the fight against Whahabbist and Salafist extremists (to put it nicely), the demise of the secular nationalist Arab authoritarian regimes have brought chaos rather than democracy and allowed the entry of al-Qaeda and IS into the fray (to include in Egypt, Libya, Syria, Algeria and Tunisia). Only Jordan and Morocco have managed to counter the trend, something has to do with the relatively liberal nature of their respective monarchies.

    The barking from the GOP and Israel is in recognition of this. The GOP are just being their usual decadent partisan selves, and the Netanyahu government employs them as useful fools because it knows that, as a result of its own actions, the US is in the process of strategically distancing itself from it. Although Israel will still remain a primary partner of the US, the days of sleeping comfortably in bed together on every issue are over and done with.

    My point regarding NZ trade with Iran is that as a temporary member of the UNSC and a long champion of non-proliferation, NZ cannot be seen as undermining the deal by continuing to trade in the vent Iran violates its part of the bargain. The P5 would not cotton to that, among other adverse reactions.

  6. Daniel on September 22nd, 2015 at 12:36

    Would it be out of line to suggest that being a nuclear power makes you a rational actor?

  7. Pablo on September 22nd, 2015 at 18:07

    Daniel:

    There was a sort of imposed, or bounded symmetrical rationality while MAD was in effect: all sides knew that a first strike, even if preemptive, meant obliteration given the impossibility of neutralising all three legs of the rival nuclear triad in one blow (and hence of eliminating a nuclear armed response).

    Over years and with the move to counter-force flexible response targeting, the assumption is that having something other than an “all or nothing” nuclear capability, from the battlefield to strategic intercontinental missiles with multiple manoeuvrable warheads (MARVs), can damper the desire to escalate into all-out nuclear armageddon. Plus, the move to counter-force targeting is believed to reduce the immediate threat to high value targets like cities, allowing for negotiation during the lower-level nuclear armed exchanges. After all, removing the military capability of a rival is the first order of business, and then you still have to have someone to negotiate a surrender or peace settlement with.

    The problem with states like the DPRK is not so much that they want to have the capability to strike across continents. That is clearly a deterrent asset. The problem is that it, and other states like India and Pakistan, have worked hard to develop intermediate ballistic missiles and artillery fired as well as air-launched nukes. The assumption is that Iran would like to do the same.

    The question then becomes one of whether regional rival nuclear armed states will adopt a MAD approach to their use, emulating the imposed symmetrical rationality of the Cold War adversaries. The US has a nuclear response guarantee for the ROK in the event of a DPRK nuclear attack, and has tactical nukes in theatre to that end. But the other regional rivals have to fend for themselves and it is not always clear that they have the same military or political logics as do the bigger nuclear armed states (although even Pakistan, for all of its internal weirdness sand turmoil, appears to share the overarching rationale of nukes being deterrent, last resort weapons).

    Having said all of that, my guess is that indeed, an imposed symmetrical rationality governing the use of nukes still obtains, although the DPRK remains as the outlier.

  8. Daniel on September 23rd, 2015 at 08:40

    Pablo:

    Those are good points and Im in agreement. But even in that scenario I think the US has acknowledged that its still better to have Iran doing what it wanst to do as part of the club rather than totally out of it.

    If I remember correctly I think Saudi Arabia has been considering a move to aquire nuclear weapons in response to Iran getting them. That would provide the balance required.

    The point behind my previous question was in response to the concern voiced that Iran having nukes would place them in the hands of religious extremists. ie that aquiring such weapons end up being more for attack than defence.

    The rational being that while individual minds might hold views of apocalypse the actual regime and control systems that normally build up around such weapons would create rationality/systems/structures and act as a buffer against individual agendas.

    While its not an impossible scenario, I consider the fact that even groups like ISIS are firmly fixed on building a presence in this world as a major limiter on any actual scenarios with suitcase bombs or suicide strikes.

    This is a classic case of the weapon/system imposing its own relaity on those who wish to adopt it. My favorite example is the rise of navel power in the 19th century to such absurd limits that they had almost the same effect on geopolitics as nuckes did in the last century (with treaties, limitations and arms control talks) and then to finaly have an opportunity in the world wars to strut their stuff and then either simply be to big to risk destruction in battle, be countered by new technology (ie naval air power) or simply have their roles subsumed by events.

    If my money was to be on anything as the next big risk for this century it will be cyber weapons, nukes are just too last century.

  9. Korakys on September 23rd, 2015 at 16:26

    The sanctions are in place because Iran defied the US when they overthrew the US-backed Shah. I think the EU eventually joined them later (making them uncommonly strong) as a favour to the US.

    The sanctions have hurt Iran a lot, but look harder and you will see that they have had to develop a lot of independence in manufacturing to counter the effects of reduced access. The regime had a major shock in the form of the Green Revolution, it survived it (unfortunately), but that wasn’t caused by the sanctions.

    I think the true goal of the sanctions has been ending the theocracy in Iran and in that objective they have failed.

    By the way an unstable (Sunni) Muslim government has had nuclear weapons for decades and yet receives billions in aid.

    Cross-examine who developed nuclear technology and who got sanctioned for it. Those that did were those that had defied the US previously. This is pretty simple stuff.

    I count five regional powers in West Asia, none would make ideal allies, but I would choose in this order: Turkey > Iran > Israel > Egypt > Saudi Arabia.

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