ANALYSIS/OPINION:

If it’s true that in politics you are judged by the caliber of your enemies, Yukiya Amano is off to a stellar start. The 62-year-old Japanese technocrat has only been at the helm of the U.N.’s nuclear watchdog, the International Atomic Energy Agency (IAEA), for two months, but he is already exceedingly unpopular with the Iranian regime.

On Feb. 21, Alaeddin Boroujerdi, the influential head of the National Security and Foreign Policy Commission of Iran’s legislature, known as the Majles, took the unprecedented step of publicly chastising the newly-installed Mr. Amano. “We had announced earlier that the agency’s director general should avoid linking his reports to political issues, but Mr. Amano’s reports seem to be moving toward politicization,” the legislator told reporters.

Mr. Boroujerdi’s discontent stems from the IAEA’s latest report on Iran’s nuclear program, released publicly on Feb. 17. The study, the first issued by the agency with Mr. Amano at the helm, provides the IAEA’s most critical view to date of Iran’s nuclear endeavor, and of the possible dangers associated with it. Intelligence amassed by the IAEA, the report says, “raises concerns about the possible existence in Iran of past or current undisclosed activities related to the development of a nuclear payload for a missile. These alleged activities consist of a number of projects and subprojects, covering nuclear and missile related aspects, run by military-related organizations.”

The new IAEA assessment is all the more striking given the distinctly counterproductive role the IAEA has traditionally played in the international debate over Iran’s atomic effort. Under the direction of Egyptian diplomat par excellence Mohammed ElBaradei, the organization busied itself with all manner of issues, nuclear and otherwise, while giving short shrift to the strategic logic underpinning the ayatollahs’ enduring interest in the bomb. In the process, the organization and its famous head came to be seen as something less than an honest broker in the international effort to prevent the Islamic Republic from going nuclear. (Depending on how you view it, Mr. ElBaradei’s confession last year that he thought the Iranian regime may indeed be striving for nuclear weapons status after all was either a true change of heart, a savvy burnishing of his legacy, or an effort to bolster his credentials ahead of a possible bid for the Egyptian presidency.)

All of which makes the IAEA’s latest critical look at Iran’s nuclear program all the more devastating for Iran - and helpful to the West. More than two months after President Obama’s informal year-end deadline for “engagement” with the Iranian regime, momentum is building within the Capital Beltway for serious economic sanctions against Iran. A wide range of measures - from the sweeping ban on Iran’s gasoline imports favored by Congress to the more “targeted” sanctions against Iranian financial interests and actors embraced by the White House - is now on the table. The common denominator in all of these, however, is leverage.

Simply put, Washington does not have much. After three decades of embargo, trade between the U.S. and the Islamic Republic is minimal; in 2009, the bilateral trade balance between the United States and Iran stood at less than $250 million, according to the U.S. Census Bureau. America’s coalition partners, by contrast, have much more.

Europe, for example, wields considerable power vis-a-vis the Iranian regime. Two-way trade between the Islamic Republic and EU states is estimated to have surpassed $10 billion last year, and Iran is reliant on Europe for nearly 40 percent of its high technology needs. Increasingly, moreover, countries there are putting their money where their mouths are, and curtailing their commercial dealings with Iran. In recent weeks, a spate of European companies - including Italy’s ENI and Germany’s Siemens - have begun to rethink future trade with Tehran. These decisions have been further buttressed by the evolving European position toward the Islamic Republic. The European Parliament is said to have recently begun lobbying telecommunications firms like Nokia and Siemens to sever economic ties to Tehran entirely over its violations of human rights and censorship practices in the wake of last summer’s contested presidential election.

The IAEA’s new, more sober reading of Iran’s nuclear intentions should serve to reinforce these trends, and help to add new members to the emerging international consensus regarding the need to isolate Iran. If it does, Mr. Amano’s tenure as the IAEA’s director general could already be considered more successful than that of his predecessor.

Ilan Berman is vice president of the American Foreign Policy Council in Washington.

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