May 12, 2014

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TSG IntelBrief: Iran Nuclear Talks Enter Crucial Phase

Current Situation

As of mid-May, a crucial round of nuclear talks between Iran and the P5+1 (US, UK, France, Russia, China, and Germany) begins on May 13 in Vienna. This round, the fourth since talks on a “comprehensive solution” began in February, is to include the first exchanges of an actual draft agreement. The parties say that, from this point on, negotiations will intensify in order to finalize a comprehensive nuclear agreement before the July 20 expiration of an interim “standstill agreement”—the Joint Plan of Action (JPA). The JPA, which essentially froze most aspects of Iran’s nuclear program in place, provides for a six-month extension, until January 2015, if more time is needed to reach a final nuclear deal.

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Areas of Agreement and Disagreement

What has made negotiators more optimistic going into the May 13 talks are several Iranian concessions and indicators of flexibility. In late April, the head of Iran’s civilian atomic energy agency, Ali Akbar Salehi, announced that Iran had accepted P5+1 proposals to re-engineer the Arak reactor, still under construction, from a heavy water reactor to one that produces only insignificant amounts of plutonium. (A heavy water reactor would produce significant quantities of plutonium, which could be reprocessed into material needed for a nuclear weapon.)  In early May, Iran moved to begin satisfying the demands of the International Atomic Energy Agency (IAEA) to open up access to more sites as the IAEA seeks to investigate the possible military dimensions of Iran’s nuclear program. It offered IAEA inspectors access to a uranium mine and a uranium-thickening facility, both in central Iran.         

On the primary issue dividing the two sides—Iran’s long-term uranium enrichment program—there has been some cause for optimism as well. Iranian officials are privately acknowledging a willingness to reduce the total number of operating enrichment centrifuges from the current level of 19,000 to a figure closer to the US position of about 3,000 – 4,000.  However, Iran reportedly is insisting that, in exchange, it be allowed to install more capable, newer model centrifuges, a position the US and its P5+1 partners strongly oppose.

The weeks since the last round of talks in early April have also seen clear setbacks. In recent weeks, Iranian officials reiterated their position that Iran’s ballistic missile program is not on the table for discussion as part of a comprehensive settlement. That position flies in the face of the statement in the JPA that any comprehensive solution must satisfy outstanding UN Security Council Resolutions on Iran, and the resolutions clearly stipulate that Iran cannot develop or test any nuclear-capable ballistic missiles.  

Perhaps an even larger dispute is mounting over the issue of sanctions relief, which is the primary objective for Iran in making the concessions it has agreed to. Iranian officials insist that all sanctions relief agreed to in the final settlement must be delivered up front and without delay. US officials have publicly stated that sanctions relief will be phased in as Iran fulfills its commitments under the final agreement. The two sides also appear to have differing definitions of “comprehensive sanctions relief.” Iran interprets that term to include the lifting of US sanctions that predate the nuclear dispute, such as the Iran Sanctions Act, in order to lift any restrictions on foreign energy firms making new investments in Iran’s oil and gas fields. The US view is that these sanctions would only be lifted in the event of a bilateral settlement on issues involving Iran’s support for militant movements in the Middle East.      

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Opponents Mobilizing on Both Sides

With an agreement potentially in sight, hardliners on both sides are mobilizing to resist concessions. Some analysts say the US will not, for example, press for a settlement that clearly requires Iran to answer all outstanding IAEA questions about its past research on a nuclear explosive device. Others maintain the US will ultimately drop the ballistic missile issue in a final deal. Members of the US congress have issued letters and statements insisting than any final deal include the full dismantlement by Iran of its uranium enrichment capability, a position far stricter than that taken by the Administration.

The Iranian side has been somewhat more muted on the specifics of an emerging deal. However, hardliners have been challenging President Hassan Rouhani ever more boldly on a number of issues, particularly his decision to phase out subsidies on gasoline and other products. Supreme Leader Ali Khamenei has continued to express skepticism that the negotiations will yield an acceptable result, and last month he countered Rouhani’s efforts to present a more reasonable Iranian face to the world by questioning the Holocaust.

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Forecast:    

• The coming round of talks will affirm areas of agreement but also expose those issues that are more intractable, particularly the scope of Iran’s long-term uranium enrichment program

• The issue of sanctions relief is likely to emerge as a key point of contention as Iran’s economy continues to suffer under worldwide sanctions and the US insists that sanctions relief be gradual and reciprocal

• Hardliners in the US congress, in Israel, and the proliferation community are likely to become more active in opposing the emerging deal as leaving Iran as a “threshold nuclear state.”

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