Iran’s chief nuclear negotiator Saeed Jalili (C) arrives at the Iranian Consulate before his meeting with European Union foreign policy chief Catherine Ashton in Istanbul May 15, 2013. REUTERS/Osman Orsal

On Wednesday, European Union foreign policy chief Catherine Ashton and Iran’s chief negotiator, Saeed Jalili, met one on one for their regularly scheduled diplomatic dance over Iran’s nuclear program – this time in Istanbul. A solution is about as likely to materialize from these discussions as a slow waltz between them. Indeed, the two sides in Istanbul are reported to remain far apart.

The fundamental reason progress is unlikely now – and perhaps also after the Iranian presidential election on June 14 – is that the West has badly mishandled the nuclear issue since the early 1980s. Iran is also at fault.

But because Iran is an adversary, the West led by the United States, has repeatedly used its influence and powerful funding stature to politicize United Nations agencies. The West has also frequently used illegal and extra-judicial processes that made a travesty of the normal non-proliferation machinery, and set a negative precedent that is poisoning the global non-proliferation regime.

Only dramatic moves by the West – like dropping multilateral and unilateral sanctions and de-politicizing the International Atomic Energy Agency (IAEA) – can improve the situation and restore faith in key non-proliferation institutions. Fortunately, President Barack Obama has some breathing room because of mounting evidence that economic and financial sanctions imposed on Iran are backfiring. He should use this time to carry out a crucial “reset” in the U.S.-Iran relationship.

Iran was deemed in non-compliance with its IAEA nuclear safeguards agreement in 2005. Tehran has, though, now explained or corrected every substantiated and lawful concern, as confirmed by the IAEA in many reports. There is no substantive international legal reason to continue penalizing or sanctioning Tehran.

Even the initial non-compliance finding in 2005 appears to have been politically motivated. Safeguards non-compliance is a notoriously subjective determination, and Iran’s lapses before 2005 were not serious enough to qualify for this determination – particularly in light of how leniently other nations have been treated when they failed to fully comply.

While there is no substantive legal basis to justify continued harassment or punishment of Iran, there still seems to be political desire to hold Iran to a different standard from other Non-Proliferation Treaty signatory nations.

Pierre Goldschmidt, former head of the IAEA Safeguards Department, sees the problems created by the IAEA politicization. “There is a danger,” he writes, “of setting bad precedents based on arbitrary criteria or judgments informed by political considerations. … It is therefore necessary for the agency [IAEA] to formally acknowledge that in the past some of its decisions have created potentially damaging precedents that need to be corrected to avoid any impression that the implementation of the IAEA statute is selective.”

Hans Blix, former head of the IAEA, has also weighed in on this. “So far, Iran has not violated the NPT [the Nuclear Non-Proliferation Treaty],” Blix said, “and there is no evidence right now that suggests that Iran is producing nuclear weapons.”

The remaining unresolved issues mentioned in the recent IAEA reports on Iran are unsubstantiated allegations from third-party intelligence agencies, which claim there may have been “possible military dimensions” to Iran’s nuclear program more than 10 years ago – largely at Iran’s Parchin military base. Despite Tehran’s requests, it has not been allowed to see this material.

The IAEA’s reliance on this evidence is problematic, especially since some leaked material has not stood up to scientific scrutiny. This does not bode well for the quality of the rest of the secret allegations against Iran that the IAEA says it possesses. It’s possible that the agency is again in possession of fabricated evidence.

Nonetheless, the agency has been insisting on access to the Parchin military base to address concerns about “possible military dimensions.” The agency is asking for this though it is not authorized to visit undeclared non-nuclear military sites. It is also not required or equipped to investigate and assess the possible manufacture of nuclear weapons in the countries it is monitoring.

The agency’s standard safeguards treaty makes clear that its mandate is to account for fissile materials “for the exclusive purpose of verifying that such material is not diverted to nuclear weapons or other nuclear explosive devices.”

This may seem a subtle, technical distinction, but it has important implications for the role the IAEA has been given to play by its member states – including Iran. The IAEA is not a “nuclear watchdog” or nuclear policeman. It is, essentially, a fissile material accounting agency, with deliberately limited powers of investigation into states’ peaceful nuclear programs – which the Nuclear Non-Proliferation Treaty refers to as every state’s “inalienable right.”

As Goldschmidt correctly summed up, “The Department of Safeguards doesn’t have the legal authority it needs to fulfill its mandate and to provide the assurances the international community is expecting.”

By inflating old allegations about Iran’s nuclear program, the IAEA risks derailing the more urgent negotiations aimed at resolving the larger nuclear issues between the West and Iran.

Former IAEA inspector Robert Kelley, a U.S. weapons engineer, has noted: “By openly providing a questionable technical basis for inspections the IAEA is leaving itself open to a serious loss of credibility as a technical organization. … The IAEA work to date, including the mischaracterization of satellite images of Parchin, is more consistent with an IAEA agenda to target Iran than of technical analysis.”

Iran is regularly accused of being underhanded in nuclear matters – and it has been at times, mostly during the 1990s. But why did Iran behave this way?

After the 1979 revolution, one of the new government’s first actions was to stop its nuclear program. The new leader, Ayatollah Ruhollah Khomeini, was strongly opposed to nuclear power. In 1983, Iran formally approached the IAEA for help in setting up a research-level facility for uranium enrichment. The IAEA agreed, since helping member nations in developing peaceful nuclear programs is part of its mandate. When U.S. officials learned of this, however, they intervened to stop it. Mark Hibbs documented this in an article for Nuclear Fuel.

One can debate whether this was an expedient move on Washington’s part, but it also demonstrates the IAEA’s politicization. So Iran’s underhanded behavior in the 1990s of not declaring nuclear materials – though inexcusable – was a response to this IAEA action.

The situation has only worsened – particularly from the vantage point of the non-nuclear weapons states party to the NPT. The five nations with nuclear weapons – the United States, Russia, China, Britain and France – are collectively in breach of the treaty’s terms because of their restrictive export policies of peaceful nuclear energy technologies to developing countries, as institutionalized through the Nuclear Suppliers Group. Although their reasons for restricting dual-use nuclear technology are understandable – and perhaps admirable – it is counter to the letter and spirit of the treaty. To justify a cartel of technologically advanced states restricting the supply of nuclear technology would require rewriting the treaty.

Though Iranian intransigence is often blamed for the lack of progress in talks between Iran and the West, it is increasingly clear that, as the New York Times recently put it, “Mr. Obama’s aides seem content with stalemate.”

According to Ambassador John Limbert, one of the U.S. hostages in Tehran from 1979-81, even the decision to try to make a deal with Iran has not yet been reached: “First and foremost … the president needs to make that decision – ‘I want a deal’ – and instruct his people to get a deal.”

Thomas Pickering, former undersecretary of state for political affairs, agrees. “It is time for the administration,” Pickering says , “to make the sweat equity investment in negotiations equal to what it has done on sanctions.”

It appears that the P5+1 nations negotiating with Iran — the five permanent members of the U.N. Security Council: the United States, Britain, France, Russia and China, plus Germany — are not making a serious offer.

While this impasse continues, Iranian citizens suffer and die from the tightest sanctions in history. Meanwhile, the European Court’s recent decisions show that the sanctions imposed unilaterally by the United States and the European Union are unlawful. A distinguished panel of experts on the Iran Project also concurs that the sanctions are backfiring.

As pressure has increased, the group concluded, sanctions have “contributed to an increase in repression and corruption within Iran” and “may be sowing the seeds of long-term alienation between the Iranian people and the United States.” A recent U.S. Congressional Research Service’s report on Iran supports the assessment.

All this evidence that sanctions are not achieving their purpose should give President Barack Obama political breathing room to authorize U.S. negotiators to put serious sanctions relief on the table. This could prove to be in America’s national security interest.

A reset could include giving Iran what it wants most – the recognition that it has the right to maintain a peaceful nuclear fuel cycle.

This recognition – which is a correct interpretation of international law – would cost Washington nothing but would be a significant diplomatic gesture for Iran. It is also a pragmatic necessity, since Iran can continue its enrichment program, with broad international support, whether the United States recognizes its right to do so or not.

In return, Iran could agree to ratify and implement the IAEA’s voluntary “Additional Protocol” agreement. This would significantly increase agency inspectors’ ability to verify Iran’s statements to the IAEA and confirm that no nuclear material is diverted to nuclear weapons use.

The proposed reset of relations would be a straightforward and honest solution to the stalemate caused by the West’s mishandling of Iran’s nuclear program over the past decades. A quick word from Obama in Catherine Ashton’s ear, and we could all look forward to a slow waltz between Jalili and Ashton at their next meeting.

PHOTO (Insert A): European Union foreign policy chief Catherine Ashton (L) and Iran’s chief negotiator Saeed Jalili pose for the media before their meeting in Baghdad, May 23, 2012. REUTERS/Thaier al-Sudani

PHOTO (Insert B): The director of the National Nuclear Safety Administration Li Ganjie (centre R) speaks next to IAEA Director General Yukiya Amano (center L) at the Second Extraordinary Meeting of Contracting Parties to the Convention on Nuclear Safety at the U.N. headquarters in Vienna August, 27, 2012. REUTERS/Herwig Prammer

PHOTO (Insert C): A scientist at the International Atomic Energy Agency (IAEA) environmental sample laboratory in Seibersdorf. The agency says it has the capability to find tiny traces of atomic material at a site even if a country tries to cover it up. April 24, 2013. REUTERS/Heinz-Peter Bader

PHOTO (Insert D): Former Ambassador Thomas Pickering in New York, September 24, 2008. REUTERS/Jacob Silberberg