How to Make Iran Trust a New Nuclear Deal

The Biden administration is nervously watching Iranian President Ebrahim Raisi’s next move. Talks over a U.S. reentry into the Iran nuclear deal have ground to a halt as what once appeared as a near-done deal has become a toss-up. But while the ball is in Raisi’s court, there’s much U.S. President Joe Biden can do to save the landmark nuclear agreement.

Biden has sincerely sought an agreement since mid-March. Yet, the cost of his dithering during his first two months in office is only starting to become clear now. What could have been resolved with the government of former Iranian President Hassan Rouhani instead has become entangled in Iranian election politics, as many warned it would unless Biden acted quickly. Predictably, Iran’s new hard-line president now seems poised to drive a harder bargain and, by that, potentially jeopardize the opportunity to revive the landmark agreement.

A key sticking point is Tehran’s demand that Washington guarantee that future administrations won’t quit the deal again. Former President Donald Trump’s reimposition of sanctions inflicted unprecedented damage on the Iranian economy, and Iran bizarrely found itself under more sanctions after it had signed and complied with the nuclear deal than when it stood accused of violating the Nuclear Non-Proliferation Treaty.

“There is no such thing as a guarantee,” lead negotiator Robert Malley said last month, as future administrations must enjoy the freedom to make their own choices. If the agreement is sufficiently attractive, future administrations will stick to it, the U.S. side has argued.

Yet, a guarantee to never build nuclear weapons is precisely what the United States asked of Iran in the 2015 nuclear deal. The third preamble of the agreement reads: “Iran reaffirms that under no circumstances will Iran ever seek, develop or acquire any nuclear weapons.”

Iran was asked and did provide such a guarantee in writing. The U.S. side insists it cannot do the same because it is a democracy. The executive branch has the right to execute treaties or make other forms of agreements with other countries with the expectation that these will be upheld by future administrations. But even if a guarantee is not possible, there are other things that can be done to ensure that the U.S. signature has some minimum value.

In this regard, the pact, as written, suffers a significant imbalance: A substantial asymmetry exists between Tehran’s and Washington’s incentives to honor the deal. The only side that truly would suffer from withdrawing would be Iran, while the United States would pay little to nothing if it did the same.

There is virtually no cost to withdrawing from the perspective of a future U.S. administration that opposes the deal. The United States is too powerful to be isolated politically. It has no economic stake in the survival of the Iran deal and, as a result, suffers no financial cost if it betrays the agreement.

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Biden—and any administration that recognizes the value of the Iran deal to U.S. national interests—correctly argues that quitting the agreement is costly to the United States, as it compels Tehran to restart its nuclear program. But a U.S. president who doesn’t favor the nuclear deal in the first place will not be constrained by such reasoning. Just ask Donald Trump.

It is not surprising that European Union governments are sympathetic to the Iranian position. They, too, paid a cost for the United States’ exit from the agreement in 2018. European companies lost billions of dollars as Trump’s sanctions kicked them out of Iran. They will likely not return to the Iranian market unless they have confidence that Washington will stand by its word this time around. Consequently, Biden’s sanctions relief has little value to Tehran if European companies share Iranian Supreme Leader Ali Khamenei’s fears about U.S. unreliability.

At the broadest level, the Iran deal can be tied more closely to United Nations Security Council Resolution 2231, which embodies the nuclear agreement. The Trump sanctions are currently not considered a violation of that resolution. This should be corrected so that any party that quits the agreement without noncompliance by the other parties would find itself in violation of the Security Council resolution. This would open the possibility for additional political and financial costs for the withdrawing party.

Alternatively, existing economic contracts—and their financing—can be protected from sanctions for three or more years after a party to the agreement withdraws without cause. When sanctions were introduced in the late 2000s under then-President Barack Obama, international companies were allowed to complete agreements that had been signed prior to the introduction of sanctions. Employing such a measure now could provide sufficient assurances to energy companies, whose projects usually take three to five years. This would not give Tehran the long-standing assurances it seeks but would nevertheless be a potent measure to spread the risk and cost of the nuclear deal a bit more evenly.

A more limited measure would shift the focus toward protecting specific contracts rather than trade as a whole. Since the main give-and-take of the nuclear deal was Iran’s full compliance in return for sanctions-free investments and trade, Tehran will be looking for mechanisms that would prevent a disruption of the desired economic benefits if Washington exits.

Both sides’ true objectives don’t require guarantees upfront.

As such, the permanent members of the Security Council, Germany, and Iran could come to an agreement on project-based guarantees as opposed to blanket assurances. Iran could present a list of desired projects to be guaranteed in advance of a full return to the nuclear deal.

In other words, the completion of specific economic projects that are agreed upon while the United States is a party to the agreement should be guaranteed by Western governments. This could include investments, transfers of technology, or the purchase of airplanes.

Britain, France, and Germany can also create a dedicated fund that would include commitments from the sovereign funds of the European nuclear deal signatories. This fund could be endorsed by Washington and engage in financing projects that wouldn’t implicate financial transactions to Iran—for example financing the purchase of Boeing and Airbus planes by Iranian airlines.

Most importantly, the best way to guarantee the United States’ long-term commitment to the Iran deal is through a larger agreement with give-and-take between Washington and Tehran on additional matters in return for the lifting of U.S. primary sanctions on Iran.

By opening trade between the two countries, the U.S. government not only will have a financial stake in the survival of the agreement, but the trade that likely will emerge between Washington and Tehran will also especially benefit Republican states and congressional districts, and by that, potentially break the partisan opposition to the agreement in Congress. Had such trade emerged under Obama’s watch, chances are that Trump wouldn’t have left the agreement in the first place.

None of these measures can be negotiated before the nuclear deal has been restored. At best, the two sides can signal today their openness to measures of this kind and instill confidence that once a compliance-for-compliance agreement has been reached, serious discussions to revisit elements of the 2015 agreement can take place.

Both sides have sought justifiable yet unattainable guarantees, and the end result is deadlock. Their true objectives don’t require guarantees upfront, however. Both sides are in need of amendments to the agreement. That should suffice to give them confidence that it is better to negotiate those changes once the nuclear deal has been fully restored than to risk everything by insisting on promises that will prove meaningless if there isn’t an agreement in the first place.