Introduction

On July 14, 2015, the United States and its partners—China, France, Germany, Russia, and the United Kingdom, collectively known as the P5+1—signed the Joint Comprehensive Plan of Action (JCPOA) with Iran. The JCPOA is a detailed document comprising over 150 pages of carefully curated diplomatic language. It aims to limit sensitive Iranian nuclear fuel cycle activities, while placing Iran’s entire nuclear program under intrusive monitoring by the International Atomic Energy Agency (IAEA), in exchange for sanctions relief. The agreement came at a time of upheaval in the Middle East and received harsh criticism from U.S. allies in the region.1 U.S. critics of the deal also joined forces with Israel, Saudi Arabia, and some other Arab states in the Persian Gulf, to oppose the agreement.2 The emerging Republican candidate, Donald Trump, denounced the deal as “the stupidest” one ever made.3 In Iran, too, the JCPOA faced intense pushback, even though it enjoyed broad support within the populace.4

Today, two years after the JCPOA’s signing, the deal remains as divisive in Tehran as it is in Washington. President Trump had promised to “dismantle” the deal once in office and to check Iran.5 That pledge was made, and later reiterated, despite the fact that, by the Trump administration’s own admis­sion, Iran has complied with the deal’s restric­tions so far.6 Although Trump has adopted more hawkish rhetoric and has sent mixed signals, his administration has essentially continued many aspects of President Barack Obama’s Iran policy, including the JCPOA.7 However, some of the tangential benefits of the deal—particularly the various channels of communication it had opened between high level officials in Washington and Tehran—no longer exist.8 In Iran, conservatives continue to criticize the deal, but most have accepted it as the law of the land. In the United States, even critics of the JCPOA have asked the new administration to avoid tearing it up.9 Two years after the deal was first signed, with the Trump administration’s Iran policy under review and President Hassan Rouhani starting his second—and final—term in office, this policy analysis takes stock of the JCPOA’s implementation process.

What the JCPOA Does and Does not Do

Limiting a Nuclear Program: Redlines and Provisions

The JCPOA is a complex document. Its language was carefully crafted to be acceptable to both sides and to allow them to successfully sell the agreement at home. It aims to close off the two pathways for Iran to acquire a nuclear weapon domestically: using highly enriched uranium or using weapons grade plutonium. The JCPOA severely restricts Iran’s potential uranium path to the bomb, while virtually closing off its plutonium one. It also strengthens the monitoring and verification regime in place, thus placing the Iranian nuclear program under the most intrusive inspections regime ever voluntarily agreed to by any party.10

Given the politicized and visible nature of certain components of Iran’s nuclear program, the negotiators had to carefully manage both those at the negotiating table and their constituents. Ultimately, they were able to sell the agreement by presenting it as respecting the country’s priorities, framed by Supreme Leader Ayatollah Ali Khamenei as several key redlines.11 Those included ensuring the talks be exclusively about the nuclear program; allowing continued research and development; keeping all facilities open and running; and allowing Iran to work toward meeting its practical needs, such as the ability to fuel its nuclear reactors in the future.

For its part, Obama’s team had to navigate Congress, foreign negotiating partners, and the Iranians. To that end, Obama administration officials framed much of the discussion around several key ideas. First, the deal was not, as U.S. officials and negotiators often put it, built on trust but on verification.12 Second, the United States would lift only nuclear related sanctions. Third, the Obama administration’s aim was to extend Iran’s so called breakout time—or the time it takes to produce enough fissile material to build a nuclear weapon. Ultimately, both the Obama administration and the Iranian leadership were able to sell the deal as having met their own respective requirements.

Under the JCPOA, the United States and its partners agreed to forgo the notion of “zero enrichment” and to allow Tehran to preserve its uranium enrichment program, while imposing several limits to cap its capabilities for a number of years. Iran scaled back its enrichment program by moving all such activities exclusively to the Natanz complex, a partially underground fuel enrichment facility in central Iran, while repurposing its Fordow facility, just north of Natanz in the city of Qom, to only conduct research and development. At Natanz, Iran limited its uranium enrichment to 5,060 first generation centrifuges, reducing by about half its operating centrifuges at the time. It also agreed to only use those centrifuges to enrich uranium up to 3.67 percent for 10 years, well below the 90 percent enrichment needed for a nuclear weapon. And for 15 years, Iran agreed not to surpass a stockpile of 300 kilograms of 3.67 percent enriched uranium hexafluoride, making it very difficult to surreptitiously enrich excess uranium. The country also agreed to limit research and development pertaining

to enrichment.

Although the JCPOA only scales back Tehran’s enrichment program, it effectively closes off its plutonium path to the bomb. Under the agreement, Iran reiterated its long standing position that it would not seek plutonium reprocessing capabilities, which would be vital to its ability to use plutonium in a nuclear weapon. It also agreed not to build any more heavy water reactors, instead exclusively acquiring light water reactors—which are not optimal for the production of plutonium for use in a nuclear weapon. The country is also redesigning the problematic Arak heavy water reactor, which was a source of concern to the international community because of its ability, once completed, to produce a considerable amount of weapons grade plutonium.13

These steps effectively extended Iran’s so called breakout time. To make it more difficult for Tehran to pursue weaponization, the IAEA now has unprecedented access to inspect and monitor virtually every single stage of the fuel cycle, from milling and mining to centrifuge workshops and all declared facilities.

In exchange for the steps Iran takes toward increasing transparency and scaling back key components of its fuel cycle activities, the P5+1 agreed to lift nuclear related sanctions. The deal also provided for Iran’s being able to procure dual use items—or goods that have both military and civilian applications—through a specific channel designated for increased transparency, as well as civilian aircraft, allowing the country to update its aging fleet.

What Are the Deal’s Shortcomings?

Despite these important steps, the JCPOA suffers from a number of shortcomings, stemming from domestic politics in the countries involved and their respective bottom lines, as previously outlined.

First, Iran’s ballistic missile program was declared off the table from the outset.14 As a result, one of the three key stages of building a bomb—the development of delivery vehicles—is not covered by the JCPOA. Critics have argued that other parts of Iran’s nefarious activities, including human rights violations and support for terrorism, should also have been addressed by the JCPOA. But the JCPOA’s limited scope was essential to reaching agreement.

Second, the sunset clause of the agreement is another shortcoming. Key provisions within the JCPOA are set to expire after a number of years—different lengths of time are associated with different items, as in the case of limitations on enrichment. As a result, once all of the JCPOA’s provisions expire in 25 years, Iran’s nuclear program will be considered as that of a normal non nuclear weapon state under the Nuclear Nonproliferation Treaty (NPT)—provided that the IAEA can successfully verify full compliance by Tehran. However, although many of the provisions of the deal will expire gradually, some important checks will remain permanently in place under the NPT and IAEA Comprehensive Safeguards Agreement (and Additional Protocol, which Tehran pledged to take steps to ratify through its legislative process). In other words, Iran’s nuclear activities will still be under close scrutiny by the IAEA, which will retain access to key sites, and Tehran will still be obliged to restrict its nuclear program to a civilian one under the NPT.

Third, during the talks, it was already clear that sanctions relief would be a key sticking point in attaining and implementing the deal.15 After it was signed, the JCPOA revealed the limitations of sanctions relief. Because the JCPOA singles out nuclear sanctions, it does not allow the Iranian economy to fully normalize and reintegrate into the international financial system. The remaining sanctions—imposed by the United States, primarily, for Iran’s human rights abuses and regional activities, including support for terrorism—combined with pending and proposed sanctions have stymied Iran’s economic recovery and discouraged businesses from investing in Iran. That situation has further undermined support for the deal in Iran.

Fourth, arguably the most significant shortcoming of the JCPOA stems from the fact that it merely caps Iranian fuel cycle activities rather than stopping them altogether. Indeed, it was clear to U.S. negotiators and their P5+1 partners that the zero enrichment policy pursued by the United States in the past was neither viable nor conducive to a negotiated settlement. Instead, the negotiators sought to place limits to extend Tehran’s breakout time and to tighten the verification and monitoring regime.

Some of these shortcomings have undercut support for the deal in Iran and the United States. But they also made the agreement possible and its implementation sustainable. Ultimately, both sides were able to argue that they gained more from the agreement than they conceded and to present it as a “good deal” to their respective constituents.

How Do Iranian Domestic Politics Play Into the JCPOA?

The Iranian Political Landscape

Contrary to Beltway conventional wisdom, the Iranian political landscape is fairly dynamic and complex. Far from being a unitary and monolithic actor, the Islamic Republic is deeply divided. One faction, supported by much of the populace, wants to open up the country and integrate it into the international community. The other strives to preserve the core values of the revolution.16

The first group, typically known as the reformist bloc, is led by former president Mohammad Khatami, Hassan Khomeini (the grandson of Ayatollah Ruhollah Khomeini), and the leaders of the Green Movement—a grassroots movement that emerged during the contested 2009 presidential elections. The bloc strives for more liberal policies at home and greater openness to the outside world. It has the support of many key constituencies in Iran, particularly youth, women, and minorities.

It is important not to mistake the reformists for liberals, however. Even though they tend to attract the more liberal and progressive factions of the Iranian electorate, the reformists still subscribe to the basic principles of the Islamic Revolution. Many reformists have been criticized for changing their positions on critical issues, such as civil rights, only after having partaken in a system that cracked down on them in the formative years of the revolution.

Next are the moderates or pragmatists, the bloc led by President Rouhani. They also favor international engagement and far reaching domestic reforms, as evidenced by the platform that candidate Rouhani ran on during the 2013 and 2017 presidential campaigns. The moderates have integrated many reformists, creating a de facto bloc against the conservatives in recent years. In fact, virtually all key reformist figures supported Rouhani’s candidacy in 2013 and 2017. And Rouhani himself has shifted further left since his first presidential bid.17 But although the moderates share the vision of the reformists for a more open Iran, they distinguish themselves thanks to the political capital they possess in the post 2009 era—because while key reformists were subsequently put under house arrest or sidelined, the moderates maintained their presence in the political landscape. Indeed, although many reformists have become toxic as a result of the Green Movement and are unable to run for office, the moderates are able to do so. The moderates enjoy wide public support, as demonstrated by the 2017 presidential elections, which led to a landslide victory for Rouhani, and by the 2016 parliamentary elections, in which they gained considerable ground, with 42 percent of the seats going to the moderates and roughly 30 percent to independents, including reformists.18

Lastly, the conservatives or “principalists” are the bloc striving to preserve the core values of the revolution. They strongly favor a more independent and self reliant Iran, are deeply suspicious of negotiating with the United States, and seek more restrictions on civil rights. Today, they are divided into two groups. The moderate conservatives adopt a tougher line than the pragmatists on most issues but still favor some flexibility where needed. They supported the nuclear talks. In contrast, the hard liners are the most ideologically driven part of the Iranian political landscape and are strongly opposed to the nuclear talks. They are typically represented by figures such as former president Mahmoud Ahmadinejad and chief nuclear negotiator Saeed Jalili, who saw the negotiations as one sided and was notorious for his delaying tactics.19

After a period of deep division, the principalists are now seeking to unify to oppose the moderate and reformist agenda more effectively. To that end, they have proposed the creation of a “shadow government” that would try to frustrate Rouhani’s vision.20

However, it is important to note that support and opposition to the nuclear talks, and ultimately the JCPOA, also crossed party lines. Some hard liners favored them and some reformists rejected, or at least criticized, them. Khamenei, typically a hard liner, favored the nuclear talks and played a critical role in shielding the Rouhani government and negotiating team from hard line pushback. Likewise, key Revolutionary Guards commanders also supported the talks, despite being associated with the more conservative or hard line camp.21

The JCPOA and the Future of the Islamic Republic

Iranians’ perceptions of the JCPOA have evolved over the past two years. Initially, the populace enthusiastically welcomed the deal, which it saw as the key to its country’s economic and political reintegration into the global community. Within the regime, the nuclear talks enjoyed broad support, especially among its key figures. And once signed, the JCPOA received some criticism but was hailed as both necessary and satisfactory by the majority of the establishment.

Khamenei and Revolutionary Guards commanders cautiously praised the negotiators but also warned that America could not be trusted. Throughout the process, Khamenei was careful not to implicate himself too directly, even though he was made aware of every detail of it. As a senior Iranian negotiator noted, the supreme leader is not one to micromanage foreign policy issues, but in the case of the nuclear talks, he was very much involved every step of the way.22

In the weeks and months after the deal was signed, Khamenei gradually distanced himself from the agreement. That move opened the door to substantial criticism by hard liners, who accused the Rouhani government of having negotiated with the United States for nothing.23 Rouhani had made too many concessions and achieved too little, hard liners argued. And as most Iranians did not feel the trickle down effect of sanctions relief, the broader population also began to shift from its initial enthusiasm to a “wait and see” approach, before becoming more pessimistic that the deal would not lead to economic recovery.

Two years later, the JCPOA has lost some support, for several reasons. First, the Rouhani government initially oversold its ability to generate economic recovery after the deal and failed to manage expectations properly.24 The slow pace of sanctions relief reinforced the idea that the United States is unlikely to change its policies toward Tehran, regardless of what Iranians do. The Department of the Treasury’s Office of Foreign Asset Control, for example, has been slow to issue licenses to companies like Boeing and Airbus, delaying planned deals to update Iran’s aging and unsafe commercial airline fleet.25

Second, to make matters worse, some of the rhetoric and reports coming out of Washington only exacerbate the feeling in Iran that the United States is not pursuing the deal in good faith, instead looking for “excuses” to further isolate Iran. For example, President Trump’s visit to Riyadh in May 2017 and his statement there, largely focused on Iran, sent a clear message of animosity to Iranians, who were voting in the 2017 presidential elections at the time. The president stated, “Until the Iranian regime is willing to be a partner for peace, all nations of conscience must work together to isolate Iran, deny it funding for terrorism, and pray for the day when the Iranian people have the just and righteous government they deserve.”26 Likewise, according to a report in the Wall Street Journal, “White House officials said they expect the U.S. won’t withdraw from the nuclear deal, but enforce it to the letter and possibly reinstate sanctions that were lifted as part of the accord under different reasons, such as human rights abuses or Iran’s ballistic missile tests.”27 As a result, even though many in Iran do not see eye to eye with their government, and mock and criticize its anti American stance and rhetoric, they increasingly see sanctions as indiscriminate, targeting the entire population regardless of Iranian policy. And the “sticks and carrots” approach is merely seen as “sticks and more sticks” by Iranians. They blame the United States, not their own government, for antagonistic U.S. policies and rhetoric.28

The Rouhani government has taken steps to remedy lingering economic grievances by highlighting the importance of cleaning up Iran’s financial and business sectors. As a result, it has announced plans to tackle regulatory reform, corruption, mismanagement, the lack of transparency, and the extensive political and economic influence of the Revolutionary Guards.29 Rouhani has also argued for the “JCPOA 2,” which would allow the country to seek additional sanctions relief to further boost the economy.30 But these are not quick fixes.

Despite the drop in enthusiasm, Iranians accept the JCPOA as the law of the land. Iranians of all stripes, including hard liners, recognize that even though the agreement is flawed, it is here to stay and should be implemented properly. Where conservatives differ from moderates and reformists today is on the future approach to the JCPOA.

Notwithstanding the fraught politics around it, the JCPOA has opened some venues for engagement and cooperation, welcomed by Iranians. Since 2015, the European Union, led by High Representative Federica Mogherini, has held a series of talks with Tehran on a number of vital issues of contention between the Islamic Republic and the international community, including its ballistic missile program, regional activities, support for terrorist groups throughout the Middle East, and human rights abuses.31 These talks have been approved, and even welcomed, by all quarters of the regime, including hard liners. For example, the hard line head of the Iranian judiciary, Sadeq Larijani, has been kept informed on the human rights discussions and has accepted them.32 This type of engagement, especially with buy in on this level, is critical in helping change Iranian behavior in various areas.

Policy Recommendations

The United States should take a number of steps to sustain and build on the JCPOA:

Continue implementation of the JCPOA. Continuing to implement the JCPOA is vital for the future of U.S. leadership and its ability to effectively pursue arms control and nonproliferation agreements. Failure to implement the JCPOA would send a signal to U.S. partners and adversaries alike that America cannot be relied on as a negotiating partner. Abandoning the deal would render sanctions ineffective as a tool of foreign policy, as sanctions cannot be viewed as an end but as a means for the United States to achieve a given policy objective. Maintaining the JCPOA also allows the United States to enforce the agreement more strongly. Indeed, if Washington is seen as upholding its end of the bargain and remaining consistent, it will have more leverage and support from its P5+1 partners, particularly the Europeans, to respond to any violations by Tehran.

Clearly reaffirm the U.S. commitment to the JCPOA and avoid muddying the waters. Reaffirming our commitment to the JCPOA would help reassure America’snegotiating partners. It would also help empower Rouhani and his team and undermine the hard liners’ message that the United States is not trustworthy. Clearly stating Washington’s intention to uphold the deal would also help alleviate the concerns of businesses and would incentivize Iranian policymakers to reform their financial infrastructure, clean up their regulatory landscape, and institute policies to deliver economic recovery. Iran could then be more compliant with international regulations, which would benefit the United States and its allies.

Help Iran reintegrate into the international economy. A more integrated Iran will have more incentive to minimize its nefarious activities. It would also help empower the more moderate factions within Iran, which have had to choose between the country’s economy and other struggles, such as human rights, over the past decade. Moreover, a more integrated Iran would make economic coercion, should it become necessary in the future, more effective.

Engage Iran, rather than isolate it. By engaging Iran, the United States can undermine the hard liners, empower the moderates, and secure U.S. interests. The United States should also encourage its Gulf Arab allies to engage in dialogue with Tehran to settle regional conflicts and decrease tensions.

Re‐​create official channels of communication to avoid misperception, which can in turn lead to miscalculation. Washington can use those channels, as former secretary of state John Kerry did, to deescalate and put an end to unwarranted crises that can torpedo the JCPOA and even drag the United States into conflict with Iran. Formalizing official channels of communication is easier now, because some officials on both sides who worked on the negotiations are still in government. It will be increasingly difficult to re create those channels of communication the longer the two sides are allowed to drift apart. The two sides have to maintain a working relationship as part of the JCPOA, and sustaining those channels will enable more effective implementation. Lastly, for the channels to be sustainable, it is critical that they involve career diplomats, at lower levels.

Support the work of the European Union and High Representative Mogherini. The European Union seeks to build on the achievements of the JCPOA and to engage Tehran on its more nefarious activities, including support for terrorist groups, its missile program, and its human rights violations. Mogherini and her team have direct access to Iranian leaders and have a level of trust in Iran that the United States lacks. This advantage affords them the ability to discuss a range of issues and to do so effectively. Washington should continue to work closely with Mogherini to find ways to engage Tehran more productively.

Identify areas where U.S. and Iranian interests converge. The United States should not try to contain Iran at any price and oppose Iranian policies at every turn. Instead, Washington should look for ways in which Tehran’s regional influence can be leveraged to advance U.S. interests. For example, Iran has a strong interest in a stable Afghanistan and may be willing to work with the United States, as it did in unseating the Taliban following the 9/11 attacks, to achieve a lasting political settlement there. In addition, Iran is fighting al Qaeda and the Islamic State in Iraq and Syria, which may suggest another area of cooperation for the United States. It is critical to assess and respond to Iranian activities on a case by case basis rather than to view them all through a single adversarial lens.

Conclusion

Two years after it was signed, the JCPOA remains one of the most controversial agreements in recent history. In Iran, despite losing some support from the population and political and security establishments, the deal is still viewed as the law of the land. In the United States, its future remains uncertain. On the one hand, the president and various members of his administration have made conflicting statements about the future of U.S. Iran policy and commitment to the JCPOA. On the other hand, even critics of the deal are pushing to preserve it. But simply keeping the JCPOA in place, without strengthening it and building on it, is unlikely to achieve U.S. objectives. Instead, stasis can be counterproductive.

Rouhani enjoys renewed political capital as a result of his landslide victory, and he has expressed interest in engaging the West and Iran’s neighbors to settle other contentious areas. The United States has an opportunity to capitalize on this renewed political momentum, and even though Rouhani’s ambitious agenda will inevitably be stymied by his opponents, Washington stands to gain from any overture and progress made with Tehran. Continued diplomacy would allow the United States to send a clear signal to the Iranian population and ruling elite that America is not “out to get them” and that their compliance with international norms and laws will be rewarded. Under this approach, Washington can have a larger impact than if it consistently keeps the pressure high. A commitment to diplomatic engagement would also strengthen U.S. credibility and leverage in the international community, which are vital if the United States wants to have the option of imposing multilateral sanctions on Iran if it does not uphold its end of the bargain.

Notes

related publications from the cato institute

Step Back: Lessons for U.S. Foreign Policy from the Failed War on Terror by A. Trevor Thrall and Erik Goepner, Cato Institute Policy Analysis no. 814 (June 26, 2017)

Obama’s Foreign Policy Legacy and the Myth of Retrenchment by John Glaser and A. Trevor Thrall, Cato Institute Working Paper no. 43 (April 24, 2017)

Millennials and U.S. Foreign Policy: The Next Generation’s Attitudes toward Foreign Policy and War (and Why They Matter) by A. Trevor Thrall and Erik Goepner, Cato Institute White Paper (June 16, 2015)

Friends Like These: Why Petrostates Make Bad Allies by Emma Ashford, Cato Institute Policy Analysis no. 770 (March 31, 2015)

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