Trading with the Mullahs

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.

The deal within the deal.

There are several things to consider when digesting news about the recently signed nuclear limitation agreement between Iran and the P5+1 countries (the UNSC permanent members US, UK, France, China and Russia plus Germany, with the EU as a mediator/facilitator). First, what is publicly announced about international agreements is not always all that is agreed upon. Often times what is not publicly disclosed is as or more important than the announced terms.

Second, actors given majority credit for an international agreement may not have been as decisive as they and their home media would like the public to believe.

Third, no agreement stands alone or occurs in a vacuum: other geopolitical and strategic considerations are bound to frame and influence the terms of the finalized compact.

The agreement between Iran, EU and six world powers on the conditions by which Iran would de-weaponize its nuclear research program in exchange for a temporary relief from international sanctions is a case in point. The agreement is for six months, with an eye to negotiating a more permanent contract at the end of that period. The 7 billion dollars in sanctions relief is not a huge amount by global standards, but significant in that it demonstrates the effectiveness of the sanctions regime imposed on Iran as well as its the flexibility of it (since it can be reimposed in the event Iran reneges on its promises).

The technical details are pretty straight forward: Iran agrees to suspend the enrichment of natural uranium (U238) beyond five percent and to neutralize its stockpile of 20 percent enriched uranium (U235). This is a step away from weaponization because most weapons grade U235 is enriched above 80 percent, which is relatively easy to produce if 20 percent enriched U235 is on hand. Most civilian nuclear energy programs use 3 to 5 percent enriched U235 fuel, thereby making weaponization more time consuming and costly. The agreement therefore does not interfere with Iran’s ability to enrich uranium for civilian power production.

Iran will also curb its use and purchase of centrifuges employed for said enrichment as well as suspend the heavy water reactor extraction methods used to produce plutonium. The entire Iranian nuclear complex will be placed under tighter international inspection controls.

The Western media has variously described the deal as a “US-Iran” or “Iran-Western” accord, but the importance of China and Russia should not be ignored. Both of these powers have friendly relations with Teheran and have supplied it with weapons and diplomatic support. They were not at the meetings in Geneva to serve as props for the US and UK. In fact, their presence in the negotiations should be considered to be decisive rather than incidental, to the point that they may have had a large say in the broader issues being bargained over that eventually sealed the deal.

What might those issues be? That brings up the larger geopolitical and strategic context.

Iran, as is well known, is a major patron of the Assad regime in Syria, currently engaged in a civil war against a Sunni opposition backed by the West and Sunni Arab states. The Assad regime receives funding, weapons and direct combat support from the Iranian Revolutionary Guards and Hizbollah, the Lebanese Shiia militia that serves as an Iranian proxy and power multiplier in the Levant. Assad also receives weapons from Russia, which has a naval base at the port of Tartus and which considers the Assad regime as its closest Arab ally.

Should Assad fall, not only Russia but more importantly Iran will lose a major source of power projection in the region. This would suit Israel and the Sunni Arab world, as Iran is seen as an existential threat by Israeli and Arab Sunni elites alike. Defeating Assad will pave the way for Israel to turn its military gaze more directly on Hizbollah, something that will not meet with much opposition from the West or the Sunni Arab elites. Israel is less concerned about the radical nature of a future Sunni government in Syria or the fragmentation of that country into sectarian enclaves, as the heterogenous rebel coalition now fighting Assad will be consumed by factional in-fighting that will limit its ability to project meaningful military force across its borders whether Syria as presently constituted remains intact or not. Sunni Arab elites will welcome a Sunni dominance in Syria as another bulwark against Shiia influence in the eastern Mediterranean, again, whether Syria retains its present boundaries or divides into smaller Sunni states.

However, it has become increasingly clear that the leading rebel groups in Syria are led by al-Qaeda inspired jihadis who are as bad if not worse than the Assad regime when it comes to committing callous atrocities against civilians as well as armed opponents. They are people who do not have much regard for the laws of war and who have published videos of themselves gassing dogs using crude chemical weapons (which may have had something to do with the rush to reach agreement on removing Assad’s CW stockpiles in the midst of the civil war), and who have had to apologize for “accidentally” beheading a fellow Sunni rebel leader under the mistaken assumption that he was an Alawite or Shiia Assad supporter (all videotaped, of course). Their atrocities (as well as those of the Assad regime) are well documented in the propaganda war now raging on social media.

Jihadist government in Syria may not be an existential threat to Western, much less global interests, but it is the most visible. It would be the first and most important place outside of Afghanistan where Islamicists fought their way into power (Somalia does not count). That is a significant issue regardless of their actual military power because symbolism matters and diplomacy is as much about symbology as it is about substance.

Following Russia’s lead and over Israeli and Saudi protestations, Western powers have become very alarmed about a possible jihadi victory in Syria, and now see a weakened Assad remaining in power or as part of a brokered coalition as the lesser evil. Hence the previous Western moves to give material and technical assistance to the rebels have slowed considerably while calls for a negotiated solution grow louder. Not surprisingly and following on the success of the Iran nuclear accord, negotiations on the Syrian crisis are now scheduled for January in Geneva, and include the Iranians as interested parties along with those supporting the anti-Assad forces grouped in and around the non-jihadist Syrian National Coalition and Free Syrian Army.

For Iran, this was the bargaining chip. It can agree to temporarily halt its nuclear enrichment efforts in exchange not just for sanctions relief but also in exchange for a reprieve for Assad. As things stood, its nuclear program invited massive preemptive attack and Assad’s fall spelled the end of its geopolitical influence. By agreeing to curtail its nuclear program to verifiable peaceful uses in exchange for a withdrawal of Western aid to the Syrian rebels and sanctions relief, Iran is able to buy Assad enough time to defeat the rebels, thereby maintaining Iran’s influence as a regional power while it re-builds its domestic economy unfettered by sanctions. Israel and the Saudis may not be happy about this, but their narrow interests have been shown to not be coincident with those of their Western allies on a number of strategic issues, Iran being just one of them.

Political scientists would call this the nested game scenario: within the public “game” involving negotiations between Iran and its foreign interlocutors lie other confidential or private “games” that are key to resolving the larger impasse over its nuclear program (Iranian involvement in Iraqi domestic politics might be another). These games are defined as much by those who are excluded as those who are involved in them.

All of this is speculation, and any “nested game” deal on Syria would be part of the non-public aspects of the agreement  and therefore deliberately non-verifiable over the near term absent a leak. But there is enough written between the lines of the public rhetoric to suggest that this may be what is at play rather than a simple compromise on the limits of Iran’s nuclear ambitions.