United States Institute of Peace

The Iran Primer

U.S. to Reform Jews on Iran Deal

On April 27, Undersecretary of State for Political Affairs Wendy Sherman discussed ongoing nuclear talks with Iran at the Religious Action Center of Reform Judaism Biennial Leadership Policy Conference. “We believe that the parameters, announced two weeks ago in Lausanne, offer the best chance at preventing Iran from obtaining a nuclear weapon,” she said. The following are excerpts from her keynote address.

 
UNDER SECRETARY SHERMAN: We will be working nonstop between now and the end of June to see if we can resolve this most pressing national security challenge peacefully, which will make Israel, the region, the United States, and, indeed, the world safer. 
 
I know that in the Jewish community here in America, a community I’m proud to be part of, there’s been a lot of discussion during the past few weeks about our relationship with Israel, and Prime Minister Netanyahu in particular, and a lot of interest and concern about our efforts to prevent Iran from obtaining a nuclear weapon. Given the importance of these issues, I’m going to spend just a few minutes talking to you about them today, and then I’d be happy to take your questions.
 
Every time I hear President Obama talk about issues that matter to American Jews, and some of you have heard directly, I’m always struck about how personally he feels about those issues and how personally he feels about his connection to the Jewish people and to Israel. This deep-seated feeling is what drives his unwavering commitment to Israel’s security and his desire to ensure Israel’s future as a democratic and Jewish state.
 
It’s also what drives this Administration’s approach to the Iran nuclear threat. We understand that Israel is in a tough neighborhood. That’s why we have given Israel more security assistance than any other Administration in history. And that’s why we’re doing everything we can to ensure that that neighborhood doesn’t become even tougher with a nuclear-armed Iran. We believe that the parameters, announced two weeks ago in Lausanne, offer the best chance at preventing Iran from obtaining a nuclear weapon, and just as importantly, that the alternatives fall far short of what we’ll have if we’re able to turn the political framework into a comprehensive agreement.
 
Without such an agreement, Iran’s breakout time to get enough nuclear material for a weapon is two or three months – what it is right now. With this agreement it will be one year, up to six times as long as it is now, for at least 10 years. Without this agreement, Iran would expand its enrichment program to 100,000 centrifuges in the next few years. With this agreement, we will have limited Iran to operating about 5,000 centrifuges for at least the next decade. Without this agreement, Iran could produce two weapons’ worth of weapons-grade plutonium every single year. With this agreement, Iran is going to have zero weapons-grade plutonium, and not just for 10 years, but for the lifetime of the reactor.
 
Without this agreement, Iran would be able to expand its stockpile of currently 10 tons of enriched uranium. With this agreement, that stockpile will be reduced by 98 percent to only three kilograms[1] of a working stockpile. And without this agreement, the international community through the International Atomic Energy Agency would only have its pre-joint plan of action – the first step – insight and inspection into Iran’s declared nuclear program and no ability to look for undeclared nuclear activities.
 
But with this agreement, we will have the most extensive system of monitoring and verification we have ever negotiated for any country anywhere in the world. We will have eyes into every part of Iran’s nuclear program from cradle to grave. And if we detect Iran is trying to break its commitments or violating the agreement, we will have every single option on the table to respond to them that we have today. So when you look at the comparison between the agreement we are negotiating and the chance that we would succeed, the better course of action is abundantly clear.
 
I could go on, but I want to have time to take your questions, and here’s the key point: Our shared values have provided a basis for partnership on critical domestic and foreign policy priorities over the past six-plus years, and they will continue to do so for the remainder of President Obama’s second term. We intend to use every single day of the rest of this Administration to work to make our country and the world a better and safer place, even when it’s hard to do. At the State Department, that means working as hard as we possibly can to achieve a good agreement with Iran that provides us and the world with the assurances that Iran will not obtain a nuclear weapon.

 

QUESTION: Thank you. That was a wonderful presentation. Before the first Gulf war, President Bush the elder had sanctions in place, and they were working. And he ended the sanctions shortly after he said they’re working, and we ended up in war. I’m very concerned that we have sanctions working and that we’ll end them too soon and we won’t get the deal and we won’t get the enforcement and we’ll end up in war and in an even more dangerous situation.
 
UNDER SECRETARY SHERMAN: Thank you. It’s a very good question. The sanctions that we have on Iran – which are U.S. sanctions, EU sanctions, UN Security Council sanctions – are quite vast and quite effective. But they are not effective at preventing Iran from having a nuclear weapon. Sanctions have helped to bring Iran to the negotiating table, but just a few years ago Iran had only 164 centrifuges. As the sanctions came on and as they got more profound, Iran went to the state where they are today, which is to have 19,000 centrifuges, because Iran is in a resistance economy and a resistance culture, and they believed that if the world was going to put sanctions on them, they were going to keep marching forward with their program in the way that they felt they needed to. The only thing that has stopped Iran’s program – and, in fact, rolled it back – is what’s called the JPOA, the Joint Plan of Action, which was the first agreement that we reached, the first step, the interim agreement. That agreement stopped Iran’s program where it is so that we would have time to negotiate a comprehensive agreement, and it got rid of its entire 20 percent stockpile of enriched material. And that’s critical because you go from small enrichment – 3.5 percent, 5 percent – then you go to 20 percent, and then you go to 90 percent and highly enriched uranium, which is fissile material for a nuclear weapon. So the only thing – the only thing – that has stopped Iran’s nuclear program at all has been that first step negotiated agreement to provide time and space to negotiate a comprehensive agreement.
 
And secondly, it’s very important to understand that the reason we were able to keep sanctions together was because we were committed to trying to find a peaceful, diplomatic solution. So countries around the world, even good allies like Japan and South Korea, were willing to limit the amount of oil they imported from Iran because they believed we were working towards a peaceful solution. If they feel we aren’t working towards a peaceful solution, they are likely to break ranks and we won’t be able to keep the sanctions together anyway.
 
And then finally, many people say – and I understand the impulse, because you get frustrated and there’s so much going on in the region that is it not good – that people say, “Take military action against Iran.” Actually, our intelligence community has assessed and said publicly that if we took military action against Iran, it would only take away their program for maybe two years. They have mastered the entire nuclear fuel cycle, and you can’t bomb away knowledge. So even if we destroyed their facilities, they could recreate it.
 
So the really durable solution here is getting an agreement with enough transparency, monitoring, and verification to understand what is going on. 
 
QUESTION: Does the Administration have a plan in place to prevent the undermining of the agreement that you’re negotiating by the Congress? Because the Congress seems to be intent to do it. Would you perhaps consider having President Obama oppose the agreement, so that the Republicans could find a way to support it?

UNDER SECRETARY SHERMAN: We’re working very hard with Congress. Senator Cardin, who is obviously my senator – and I’ve known Ben most of my life – worked very hard with Senator Corker to fashion a piece of legislation that gave the Congress a procedural way to look at this agreement without getting into the substance, per se. We’re very grateful, and grateful that Senator Corker and Senator Cardin were able to reach an agreement. This legislation will be on the floor of the Senate this week. There will be a lot of pretty awful amendments, quite frankly, and we’ll see where we end up.
 
The President has said that if the Corker-Cardin legislation stays where it is, he will not veto it; if it becomes something else, then he’ll have to consider his options.
 
Click here for a full transcript.
 

[1] Three hundred kilograms

 

Zarif Addresses UN Arms Conference

On April 27, Iranian Foreign Minister Mohammad Javad Zarif called for the complete elimination of nuclear weapons in an address to the 2015 Non-Proliferation of Nuclear Weapons Treaty (NPT) conference in New York. In his role as chair of the coordinating bureau of the Non-Aligned Movement, an organization of some 120 developing countries, Zarif also called for the “non-discriminatory and balanced implementation” of the NPT. Parties to the treaty meet every five years to review it. The following are Zarif’s prepared remarks as provided by Iran’s mission to the United Nations.

Madam President,
Excellencies
Distinguished Delegates,
 
I have the privilege to speak on behalf of the Group of the Non-Aligned States Parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). I would like to congratulate you, Madam President, on your election as President of this Review Conference and assures you of our group’s full cooperation. We hope that under your able leadership, the Conference will have a successful outcome. 
 
Madam President,
 
AS the Non-Aligned States Parties to the Treaty, we emphasize the role of the Treaty as the essential foundation for the nuclear disarmament and non-proliferation regime as well as for promoting international cooperation and assistance in support of the inalienable right of States Parties to the peaceful uses of nuclear energy. The NPT Review Conferences are very important events in our collective efforts to achieve the objectives of the Treaty. It is important that we all strive to strengthen the Treaty by adopting substantive outcome documents, which reflect the determination and commitment of States Parties to continue their efforts in good faith to achieve the objectives of the NPT.
 
However, to ensure the realization of the objectives of the Treaty, and thereby its long-term success and credibility, implementation of the obligations under the Treaty, and the agreements of its Review Conferences, is imperative. In this context, the Group reiterates that the full, non-discriminatory and balanced implementation of the three pillars of the NPT is crucial for maintaining its credibility, realizing its objectives, and promoting international peace and security.
 
Five years ago, the Review Conference succeeded in agreeing to an action plan on nuclear disarmament, nuclear non-proliferation, peaceful uses of nuclear energy, and implementation of the 1995 Resolution on the Middle East. Regrettably, the status of the implementation of the 2010 action plan is far from encouraging.
 
The nuclear-weapon-States have not made progress in eliminating their nuclear weapons. The role of nuclear weapons in security policies of the nuclear-weapon-States has not diminished. Some nuclear weapons States are modernizing their nuclear arsenals and planning research on new nuclear warheads, others have announced their intention to develop new delivery vehicles for nuclear weapons. The non-nuclear-weapons States Parties have not yet received unequivocal and legally binding security assurances. The transfer of nuclear technology continues to face impediments inconsistent with the Treaty, and no progress has been made to achieve universal adherence to the Treaty in the Middle East; to give but a few examples of the lack of implementation of the 1995, 2000 and 2010 agreements.
 
The broad support for the UN General Assembly High level Meeting on Nuclear Disarmament in 2013 and the Vienna Conference on Humanitarian Impact of Nuclear Weapons in 2014 reflects increasingly widespread concern and impatience with the lack of progress towards the total elimination of nuclear weapons.    
 
Madam President,
 
We in the Non-Aligned Movement consider nuclear disarmament as its highest priority and reiterates once again that the continued existence of nuclear weapons poses the greatest threat to humanity. We remain extremely concerned at their possible use or threat of use and are convinced that their total elimination is the only absolute guarantee against such use or threat of use.
 
The nuclear-weapon-States, in the 2010 NPT Review Conference, committed to accelerate concrete progress on the steps leading to nuclear disarmament, and to fulfilling their obligations under Article VI of the Treaty and their unequivocal undertakings to accomplish the total elimination of their nuclear arsenals. We express deep concern at the continued lack of progress in the implementation of nuclear disarmament obligations and commitments by the nuclear-weapon-States, which could undermine the object and purpose of the Treaty and the credibility of the non-proliferation regime.
 
Full compliance of the nuclear-weapon-States with their nuclear disarmament undertakings is imperative, and will enhance confidence in the non-proliferation and disarmament regime. Each article of the Treaty is binding on all States Parties at all times and in all circumstances. 
 
We underline the unanimous conclusion of the International Court of Justice that there exists an obligation to pursue in good faith and to bring to a conclusion negotiations leading to nuclear disarmament in all its aspects under strict and effective international control.
 
We reaffirm our proposal for the urgent commencement of negotiating and bringing to a successful conclusion, in the Conference on Disarmament, a comprehensive nuclear weapons convention, which includes a phased program and a specified time frame for the complete elimination of nuclear weapons. In this context, our Group has put forward a working paper entitled “elements for a plan of action for the elimination of nuclear weapons”.   
 
The decision of some nuclear-weapon States to modernize their nuclear weapons is a source of serious concern. The modernization of nuclear weapons and their delivery systems undermines the unilateral and bilateral reductions made so far.
 
The improvement of existing nuclear weapons and the development of new types of nuclear weapons violate the commitments undertaken by the nuclear-weapon States at the time of the conclusion of the Comprehensive Nuclear-Test-Ban Treaty. Such actions are incompatible with action 1 of the Final Document of the 2010 Review Conference, in which all States Parties committed to pursue policies that are fully compatible with the Treaty and the objective of achieving a world without nuclear weapons.
 
We call upon the nuclear-weapon States to immediately cease their plans to further invest in modernizing and extending the life span of their nuclear weapons and related facilities.
 
We recall the commitment made by some nuclear-weapon States, under action 4 of the 2010 action plan, to further reduce their arsenals of nuclear weapons and strongly urge them to adopt all required measures in order to achieve deeper reductions in their nuclear arsenals in realization of the objective of the total elimination of nuclear weapons.
 
In this regard, reductions in deployments and in operational status cannot substitute for irreversible cuts in, and the total elimination of, nuclear weapons and, accordingly, calls on the nuclear-weapon States to apply the principles of transparency, irreversibility and verifiability to all such cuts.
 
We remain deeply concerned by military and security doctrines of the nuclear-weapon States as well as that of the North Atlantic Treaty Organization, in which they justify the use or threat of use of nuclear weapons and maintain unjustifiably the concept of security based on nuclear deterrence and nuclear military alliances.
 
We firmly believe that any use or threat of use of nuclear weapons would be a crime against humanity and a violation of the principles of the Charter of the United Nations and international law, in particular international humanitarian law. In this regard, we strongly call for the complete exclusion of the use or threat of use of nuclear weapons from military doctrines. The nuclear-weapon States shall seriously refrain, under any circumstances, from the use or threat of use of nuclear weapons against any non-nuclear-weapon States parties to the Treaty.
 
Pending the total elimination of nuclear weapons, it is the legitimate right of all non‑nuclear-weapon States Parties to receive effective, universal, unconditional, non‑discriminatory and irrevocable legally binding security assurances against the use or threat of use of nuclear weapons under all circumstances. We express our dissatisfaction over the lack of required political will and efforts by the nuclear-weapon-States to fully address this legitimate interest.
 
Madam President,
 
Our Group reaffirms its principled position on nuclear non-proliferation, and underscores the necessity of the full and non-discriminatory implementation of Articles I and II of the Treaty by all States Parties. In our view, any horizontal proliferation and nuclear-weapon-sharing by States Parties constitute a violation of non-proliferation obligations under articles I and II. We call upon the nuclear-weapon-States to undertake to accept full-scope safeguards in order to assure compliance with their non-proliferation obligations.   
 
Proliferation concerns are best addressed through multilaterally negotiated, universal, comprehensive and nondiscriminatory agreements. Additional measures related to the safeguards shall not affect the rights of the non-nuclear-weapon-States parties to the Treaty.
 
We recognize the IAEA as the sole competent authority for the verification of the fulfillment of safeguards obligations assumed by States parties under the NPT, express full confidence in the IAEA and strongly reject attempts to politicize the work of the IAEA. In this context, the Group underlines the importance of strict observance of the IAEA Statute and relevant comprehensive safeguards agreements, in conducting verification activities.
 
We underline the importance of universal adherence to the Treaty and call upon all non-parties to the Treaty to accede to the Treaty, as non-nuclear-weapon States, and place all their nuclear facilities under IAEA full-scope safeguards. All States Parties should make every effort to achieve the universality of the Treaty and refrain from taking any actions that could negatively affect prospects for the universality of the Treaty. In this context, we welcome the accession of Palestine as the 191st State-party to the Treaty.
 
Strict observance of and adherence to IAEA comprehensive safeguards and to the Treaty are conditions for any cooperation in the nuclear area with States not parties to the Treaty. All States parties to the Treaty shall refrain from the transfer of nuclear technology and materials to States not party to the Treaty unless these conditions are met.
 
Madam President,
 
We in the Group of NAM States Parties to the NPT emphasize the significance of full, effective and non-discriminatory implementation of Article IV of the Treaty on "the inalienable right of all the parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty". This constitutes one of the fundamental objectives of the Treaty and as stipulated in that Article, nothing in the Treaty shall be interpreted as affecting this inalienable right.
 
Each State party, in line with its national requirements and in accordance with the rights and obligations under the Treaty, has a sovereign right to define its national energy and fuel-cycle policies, including the inalienable right to develop, for peaceful purposes, a full national nuclear fuel-cycle. Accordingly, the choices and decisions of each State party in the field of peaceful uses of nuclear energy should be fully respected.
 
We underline the right of all States parties to participate in the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy. We strongly reject, and call for the immediate removal of, any restrictions or limitations posed on the peaceful uses of nuclear energy, including restrictions on exports to other States parties of nuclear material, equipment and technology for peaceful purposes.
Concerns related to nuclear proliferation shall not, in any way, restrict the inalienable right of any State party to develop all aspects of nuclear science and technology for peaceful purposes, without discrimination, as stipulated in Article IV of the Treaty. States parties should refrain from any action that would limit certain peaceful nuclear activities on the grounds of their "sensitivity", as the Treaty does not prohibit the transfer or use of nuclear technology, equipment or material based on such grounds.
 
Madam President,
 
The Heads of State or Government of the Non-Aligned Movement, in their Tehran Summit Declaration of 2012, reiterated their support for the establishment of a zone free of nuclear weapons and all other weapons of mass destruction in the Middle East and as a priority step to this end, reaffirmed the need for the speedy establishment of a NWFZ in the Middle East. They also called upon all parties concerned to take urgent and practical steps for the establishment of such a zone and, pending its establishment, demanded that Israel, the only one in the region that has neither joined the NPT nor declared its intention to do so, to renounce possession of nuclear weapons, to accede to the NPT without precondition and further delay, to place promptly all its nuclear facilities under IAEA full-scope safeguards and to conduct its nuclear related activities in conformity with the non-proliferation regime. They expressed great concern over the acquisition of nuclear capability by Israel which poses a serious and continuing threat to the security of neighboring and other States, and condemned Israel for continuing to develop and stockpile nuclear arsenals. They also called for the total and complete prohibition of the transfer of all nuclear-related equipment, information, material and facilities, resources or devices and the extension of assistance in the nuclear related scientific or technological fields to Israel.
 
We are determined to continue pursuing, as a matter of high priority, the implementation of the 1995 Resolution and the 2010 action plan on the Middle East and strongly support the establishment of a nuclear-weapon-free zone in the Middle East. The 1995 Resolution on the Middle East constitutes an integral and essential part of the package of decisions reached that enabled the indefinite extension of the Treaty without a vote in 1995. This resolution remains valid until its objectives are achieved.
 
We express our serious concern over the long delay in the implementation of the 1995 Resolution and urge the three cosponsors of the Resolution, the United States, the United Kingdom, and the Russian Federation, to take all necessary measures to fully implement it without any further delay.
 
We recall the consensus decision of the 2010 NPT Review Conference on convening, in 2012, of a Conference on the establishment of a zone free from nuclear weapons and all other weapons of mass destruction in the Middle East, and are profoundly disappointed by the failure of the conveners to convene the conference in 2012 as scheduled. This failure is contrary to the letter and spirit of the 1995 Resolution on the Middle East and contradicts and violates the collective agreement of the States Parties reached at the 2010 NPT Review Conference. We strongly reject the arguments presented by the Conveners for not convening the Conference as mandated.
 
We also strongly call for the withdrawal of any related reservations or unilateral interpretative declarations that are incompatible with the object and purpose of those treaties establishing nuclear weapon free zones and their protocols.
 
Madam President,
 
Our Group underscores the importance of renewed political will by all States parties to achieve a successful conclusion of the 2015 review process and stands ready to engage constructively with other partners towards this objective. We are of the view that the 2010 NPT action plan represents an outcome that the 2015 NPT Review Process can build upon to strengthen the implementation of the Treaty, especially in nuclear disarmament, and in achieving its universality. We are determined to continue our collective efforts in pursuing the realization of NAM priorities in the 2015 NPT review process, in particular to begin negotiations on a comprehensive nuclear weapons convention as called for by the UNGA Resolution 68/32.
 
Let us work together to achieve real success by agreeing on a comprehensive, balanced and practical substantive outcome document, containing in particular clear time-bound undertakings by the nuclear weapon States to eliminate all their nuclear weapons and related delivery systems and infrastructure. Only such an outcome can bring a shred of hope that we would be able to rid the world of these inhumane weapons and to bring a safer world for our children.
 
 
Photo credit: Robin Wright

Latest US Polls on Iran Deal

The following are key findings from recent polls asking Americans about the blueprint for a nuclear deal announced on April 2 by Iran and the world’s six major powers and the talks in general.

AP-GfK Poll

A survey conducted by AP-GfK from April 23-27 found that a slight majority of Americans approve of the interim agreement reached by Iran and the world’s six major powers in late 2013. The following are key results:
 
Do you approve, disapprove, or neither approve nor disapprove of the preliminary agreement reached between Iran and six world powers that is designed to curb Iran’s nuclear program?
 
Total approve
54 percent
 Approve
24 percent
 Lean approve
31 percent
Neither —don’t lean
1 percent
Total disapprove
43 percent
 Disapprove
23 percent
 Lean disapprove
20 percent
Refused/Not answered
2
 
As you may know, as part of the preliminary deal Iran agreed to allow inspections of its nuclear facilities, ship plutonium out of the country and shut down almost half of its uranium enriching centrifuges. How confident are you that Iran will follow through with this agreement?
 
Extremely/very confident
3 percent
 Extremely confident
1 percent
 Very confident
2 percent
Moderately confident
25 percent
Not too/Not confident at all
69 percent
 Not too confident
34 percent
 Not confident at all
35 percent
Refused/Not answered
3 percent
 
Click here for the full results.
 
Quinnipiac University National Poll  
 
A majority of American voters support the blueprint for a nuclear deal, according to a new poll by Quinnipiac University conducted April 16-21. The following are key takeaways from the survey’s findings.
 
·  58 percent support the preliminary agreement with Iran to restrict that country’s program while 33 percent do not.
·  35 percent of voters are “very confident” or “somewhat confident” the agreement would prevent Iran from developing nuclear weapons, while 62 percent are "not so confident" or "not confident at all.”
·  Supporting the agreement are Democrats 76 - 15 percent and independent voters 60 - 33 percent, with Republicans opposed 56 - 37 percent. 
·  65 percent of voters support making any Iran agreement subject to congressional approval while 24 percent do not.
·  77 percent of voters back a negotiated settlement rather than military intervention to limit Iran’s nuclear program while 13 percent do not.
 
Click here for more information.

 

Economist/YouGov Poll
 
A new Economist/YouGov poll found that most Americans support the nuclear talks with Iran. The survey, conducted April 4-6, found that 61 percent of respondents believe the United States should negotiate with Iran over its nuclear program.
 
 
But barely a quarter of respondents said they would trust Iran to adhere to an agreement.  
 
Support for the nuclear framework announced on April 2 varied along party lines. Among Democrats, 57 percent support the framework, but only 20 percent of Republicans support it.
 
 
Click here for more information on the poll
 
Reuters/Ipsos Poll
 
A new Reuters/Ipsos poll, conducted April 3-7, found that 36 percent of respondents support the preliminary nuclear deal between Iran and the world’s six major powers. When broken down by party, 30 percent of Republicans support the deal compared to 51 percent of Democrats.
 
 
Support
Oppose
Not sure
Republicans
30 percent
30 percent
40 percent
Democrats
51 percent
10 percent
39 percent
Independents
33 percent
21 percent
45 percent
The poll also found little support for using military force as the sole way to curb Iran's nulcear program. Only 5 percent of Democrats, 11 percent of Republicans, and 6 percent of Independents supported that approach.
 
Click here for more information on the poll
 
NBC News/SurveyMonkey Poll
 
A new NBC News/SurveyMonkey Poll, conducted April 6-8, found that the majority of Americans consider Iran’s nuclear program a “major threat.” More than 70 percent of Republicans gave that response, compared to just over 40 percent of Democrats.
 
Iran’s nuclear program is:
All
Republicans
Democrats
Independents
Major threat
53 percent
74 percent
41 percent
50 percent
Minor threat
37 percent
23 percent
47 percent
39 percent
Not a threat at all
8 percent
1 percent
11 percent
9 percent
 
Click here for more information on the poll

 

Americans United for Change/Hart Research Poll

A poll commissioned by Americans United for Change, conducted April 6-8, found that 65 percent believe Congress should allow the agreement to move forward and monitor its implementation, while 30 percent believe Congress should take action to block the deal before it is implemented.

 
Congress should:
All
Republicans
Democrats
Independents
Allow agreement to go forward and closely monitor implementation
65 percent
47 percent
82 percent
64 percent
Block the agreement now and prevent implementation
30 percent
48 percent
15 percent
27 percent
 
Click here for more information on the poll
 

 

Tags: Poll, Reports

Kerry, Moniz Op-ed

As the United Nations conducts its five year review of the Nuclear Non-Proliferation Treaty (NPT), Secretary of State John Kerry and Energy Secretary Earnest Moniz said it remains “at the heart of the global effort to prevent the spread of nuclear weapons, and it has helped keep the world safe for 45 years.” The following are excerpts from their joint op-ed in Foreign Policy.

The NPT is elegant in its simplicity: Under the treaty, parties that do not possess nuclear weapons agree to forego them, parties that possess nuclear weapons agree to work in good faith toward nuclear disarmament, and all parties are able to access peaceful nuclear benefits like nuclear medicine and energy.
 
Nearly every country in the world has joined the NPT. The treaty is the irreplaceable foundation for international efforts to achieve the peace and security of a world without nuclear weapons, a goal repeatedly affirmed by President Barack Obama as part of his ambitious Prague agenda.
 
The NPT opened the door to reducing the world’s stockpiles of nuclear weapons — and reducing the threat of nuclear war. Since the United States signed the NPT in 1968, we have cut our nuclear arsenal by almost 85 percent. Through 20-plus years of cooperation with Russia, together we turned the equivalent of 20,000 Soviet nuclear warheads into energy that is lighting homes and offices across America.
 
The barriers to proliferation are strong and growing stronger. The International Atomic Energy Agency (IAEA) plays an essential role in verifying that nuclear energy programs remain peaceful. The organization will be critical to verifying Iran’s compliance under any final understanding and monitoring the means adopted to prevent Iran from acquiring or misusing technologies and materials that could be used to secretly to build a bomb.
 
 
The United States knows that future nuclear reductions will require enhanced verification methods and that all nations share the responsibility to identify and develop them. We recently started the International Partnership for Nuclear Disarmament Verification, which will bring countries together to develop the best techniques and tools for monitoring nuclear stockpiles at lower numbers.
 
 
Through word and deed, the United States is fighting nuclear dangers across the board, but there is still much to do. Reducing and eventually eliminating the nuclear threat will never be easy, but the NPT is our best tool in this fight. The accord represents a heroic, if quiet, triumph of pragmatic cooperation to protect the world from nuclear dangers while promoting the safe, peaceful uses of the atom that can benefit mankind.
 
Click here for the full text.
 

U.S.-Iran Trade After Sanctions

Garrett Nada

A gradual lifting of sanctions on Iran could reopen the Middle East’s second largest economy (after Saudi Arabia) to U.S. and Western companies. Many European companies were active in Iran until 2010, but American companies have avoided doing business in the Islamic Republic for decades, either by choice or due to sanctions.
 
As negotiators from Iran and the world’s six major powers work to finalize a nuclear deal by June 30, businesses are investigating their prospects in Iran. An agreement that lifts even some sanctions might, over time, allow American firms access to a consumer-rich market.
 
Iran’s population, at about 80 million, is the third-largest in the region, after Turkey’s 81 million and Egypt’s 86 million. Its consumer base is also young and well-educated. And the middle class has had a taste for U.S. goods dating back to the days of the Shah.
 
 
However, if a nuclear deal is signed, international companies are unlikely to flood Tehran immediately. The lifting of sanctions is likely to be a lengthy and uneven process for the United States and European countries. And some sanctions—imposed in response to alleged human-rights abuses and support for extremist groups by the Iranian government—will remain in place. The difficult business climate, rife with corruption, could be an additional obstacle.
 
Historical Context
 
Before the 1979 revolution, the United States and Iran had a close relationship based on energy trade and common Cold War-era security priorities. Bilateral trade peaked in 1978, when the United States exported $3.7 billion worth of goods to Iran and imported $2.9 billion worth of goods from Iran.
 
On the eve of the revolution, the United States and West Germany were Iran’s largest trading partners. Nearly 50,000 Americans worked and lived in Iran. In turn, American goods—mainly arms, industrial equipment, technology, and agricultural and consumer goods—accounted for some 16% of Iranian imports. Iran bought between 50% and 75% of its imported rice, wheat, and cereals from the United States in the 1970s.
 
U.S.-Iran trade plummeted after the 1979 revolution, especially when American hostages were held for 444 days at the U.S. embassy compound in Tehran. The Carter administration suspended Iranian oil imports in late 1979, and severed diplomatic relations with Tehran in 1980. But U.S.-Iran trade resumed in 1981 after the hostages were released. U.S. exports totaled $300 million in 1981—down from $3.7 billion in 1978. Iranian exports to the United States totaled $64 million—down from $2.9 billion in 1978.
 
Through subsidiaries, American energy companies continued to buy Iranian oil—worth up to $3.5 billion a year—off the international market in Rotterdam until the mid-1990s, when sanctions were broadened.
 
Over the years, Washington has imposed waves of sanctions on Tehran over three broad issues: support for terrorism, failure to comply with United Nations on its nuclear program, and human-rights violations. Yet American companies have legally continued to export a wide array of goods under equally broad exceptions that covered food, medicine, and humanitarian goods.
 
U.S. Interests and Non-Oil Trade
 
Trade has fluctuated from year to year. It dipped after the Clinton administration imposed new sanctions in 1995. But trade increased slightly in 2000 when sanctions on carpets and caviar were lifted in modest outreach to Iran’s reformist government.
 
Major U.S. exports to Iran in recent years have included wheat, rice, soybeans, corn, dairy, pulpwood, plastics, medical equipment and pharmaceuticals. Iran is the region’s second-largest grain importer after Saudi Arabia. U.S. exports to Iran in 2014 ranged from medical instruments to chocolate, even bull semen.
 
The following is a sampling of American products exported to Iran in 2014, which totaled $182.1 million:
 
Butter
$35,535,582
Non-electric medical instruments
$24,863,265
Seeds, fruits and spores (for sowing)
$19,992,618
Pharmaceutical products
$8,958,871
Bull semen
$8,036,388
Computers
$869,000
Essential oils, perfume and cosmetics
$827,892
Toiletries and cosmetics
$802,000
Chocolate and products containing cocoa
$253,970
Live Cattle
$216,000
Rice
$141,000
Plastic tableware and other household articles
$52,000
Live chickens
$46,197
Lamps, lighting fittings and parts
$34,673
 

U.S. and Western businesses are already interested in reentering the market. “Iran is the last, large, untapped emerging market in the world,” Ramin Rabii of Turquoise Partners, an Iran-based investment firm, told the BBC. About 65% of the population is under 35 years old, and literacyamong 15- to 24-year-olds is 98%. Total adult literacy is 85%. About half of all Iranian households reportedly have internet access.

As of 2013, the World Bank classified Iran as an “upper middle-income” country. It estimated that per capita income—based on purchasing power parity (PPP)—was $15,610. Even under sanctions, Iran’s economy has been the second largest in the region, once again after Saudi Arabia, and its gross domestic product (GDP) was ranked 32nd worldwide in 2013.
 
Iran’s consumer culture has long been heavily influenced by Western trends. Western-style grocery stores and shopping malls have been gaining popularity over the past decade. American and European luxury brands are popular with the elite in major cities, especially Tehran, because of their reputations for quality.
 
Iconic beverage brands such as Coca-Cola and Pepsi have prospered in Iran for years at the expense of local rival Zamzam Cola. The presence of bootleg versions of American restaurants and coffee shops—from “Mash Donald’s” to “Pizza Hat”—suggests opportunities for U.S. franchises to expand and thrive.
 
American electronics brands, such as Apple and Dell, are still smuggled into Iran. Computer stores in Tehran are modeled after their U.S. counterparts and stock the latest merchandise. Apple iPods, iPhones, and iPads are particularly popular. An Iranian company that resells Dell products even offers warranties. Both Apple and Dell reportedly contacted potential Iranian distributors in 2014.
 
Iran is also one of the largest car markets in the Middle East. American cars were popular before the revolution. General Motors partnered with an Iranian company to produce cars for several years before 1979. The auto industry has historically been Iran’s largest non-oil industry. Domestic production peaked in 2011, at about 1.6 million vehicles per year, before tightened sanctions cut off imports of car parts and bank transfers that halved output. But auto sales rose 32% in 2014 over 2013. American cars and trucks have already begun to make a comeback.
 
 
With a female population of nearly 40 million, Iran is reportedly the second-largest cosmetics market in the Middle East. For more than a decade, Iranian merchants have sold big American clothing brands, such as Victoria’s Secret, in storefronts that mimic their U.S. counterparts—but without legal franchises.
 
Iran also represents a promising market for U.S. tobacco producers.Marlboro has especially been popular for years. Until 2006, cigarettesmade up a large share of American exports to Iran. Western brands are commonly smuggled into Iran to meet demand. About a quarter of Iran’s annual $11 billion cigarette imports are smuggled.
 
Until fall 2014, sanctions had prevented U.S. companies from selling aerospace parts to Iranian airlines. Iran Air’s aging fleet includes 12 Boeing aircraft, some of which are more than 30 years old. Boeing’s small sale of aircraft manuals, drawings and navigation charts to Iran Air in Oct. 2014 carried symbolic weight as the first publicly acknowledged transaction between U.S. and Iranian aerospace companies since the 1979 U.S. hostage crisis.
 
Iran has reportedly signed three contracts with Boeing since an interim nuclear deal was negotiated in late 2013. Two were extensions of existing agreements and one was a new contract between Iran Air and the American company. So far, Boeing has repaired seven of Iran Air’s plane engines, according to Iran Air CEO Farhad Parvaresh.
 
American music and movies are still popular in Iran. Bootlegging of Western tapes and later discs—especially of material that might otherwise be banned by the Iranian government for perceived immorality—has been common since the revolution. Smuggling DVDs and CDs has given way to illegal downloading, so some movies are now sold on memory sticks on Tehran’s streets. The latest American releases, even ones still in theaters, are popular. If Iran and the United States were to recognize each other’s copyrights, the American movie and music industries could benefit hugely.
 
Costs and Obstacles
 
For more than a year, Iran has been courting investors, hosting foreign trade delegations, and dispatching envoys abroad to investigate new business opportunities. But Western businesses are not likely to enter Iran too quickly if a nuclear deal is reached. American companies may hesitate to make serious investments until they are convinced of the long-term durability of any agreement, experts predict.
 
The complex layers of U.S. and European sanctions would also take time to unravel. Western sanctions linked to Iran’s support for terror and its human rights abuses will remain in place until Tehran’s behavior changes. And some two dozen U.S. states have enacted their own punitive measures on companies operating in certain sectors of Iran’s economy, according to Reuters. In more than half of those states, sanctions will remain in place unless Iran is removed from the list of state sponsors of terrorism or if all federal sanctions on Iran are lifted.
 
International companies that have operations in the United States and European Union risk facing sanctions or punitive fines if they move into Iran before sanctions are lifted. Violating sanctions can be expensive and damage a company’s reputation.
 
In 2014, the French bank BNP Paribas pleaded guilty to two criminal charges for violating sanctions against Iran, Sudan, and Cuba. It ended up agreeing to pay $9 billion to the U.S. government, a record fine for violating U.S. sanctions. U.S. regulators banned the bank from conducting certain transactions in U.S. dollars for a year.
 
Western companies would also initially face difficulties starting businesses or partnerships in Iran. Widespread corruption and significant government involvement in the economy have created a challenging business environment, even for European companies that were active in Iran before sanctions were ramped up in 2010. The line between the private and public sector also is not always clear because the Revolutionary Guards have affiliated companies working in many major industries.
 
Iran ranked 130 out of 189 economies in the 2015 World Bank report on business regulations and property rights protections. The Islamic Republic performed worse than the regional average in most categories. It ranked 62nd for starting a business, 89th for acquiring credit and 172nd for obtaining a construction permit.
 
 
Data from World Bank
 
U.S. producers may face difficult obstacles to selling and investing, but the Iranian market is too large to ignore, especially given the dearth of other emerging markets with a middle class eager and able to buy imported goods. “I am already seeing a rush to market by U.S. and E.U. companies,” a director of the British-Iranian Chamber of Commerce told The Wall Street Journal“And no one wants to be left behind.”
 
Garrett Nada is the assistant editor of The Iran Primer at USIP. This article first appeared on Quartz. 
 
*Values converted to real 2015 dollars using the average annual Consumer Price Index
 

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