Editorial Board

To Stop Iran’s Nuclear Program, Cut a Deal on Oil

Only the imposition of harsh economic sanctions brought Iranian negotiators back to the table for talks on its nuclear program last week in Baghdad. Only the prospect of lifting those sanctions can keep them there.

This is the central bind that the so-called P5+1 negotiators faced in Baghdad, and will do again June 18-19 in Moscow: Remove sanctions too soon and the Iranians will go back the holding pattern of the past six years, as they continue to develop their nuclear program while stringing talks out; set the bar for relief too high, and the Iranians lose all incentive to cut a deal.

Before Western diplomats sit down again with Iran’s negotiator, Saeed Jalili, they need to agree on exactly what is their achievable goal in the talks, and to calibrate their proposals -- even for interim deals -- accordingly. For all the many sins and faults of the Iranian side in this dispute, in Baghdad last week, European Union foreign-policy chief Catherine Ashton and her patrons from the P5+1 -- the U.S., Russia, China, France, the U.K. and Germany -- appeared to get the balance wrong.

Squeeze Gets Tighter

Western diplomats said, one after the other as they went into the talks, that U.S. oil-related sanctions against Iran’s central bank scheduled to take effect on June 28, and European Union restrictions on oil imports from Iran due on July 1, would go forward no matter what. They offered only to lift a ban on the sale to Iran of spare parts for civilian aircraft, and provide it with medical isotopes.

That offer would do nothing to relieve the economic pressure now on Iran -- on the contrary, it ensured that the squeeze would get far tighter in few weeks. In return, Iran was being asked to suspend efforts to enrich uranium to 19.75 percent purity (which could be used in a medical research reactor), agree to ship its stockpile out of the country and open up to United Nations inspectors. These would be significant, if reversible, concessions -- and the approach was guaranteed to fail.

Western negotiators are right to focus first on suspending enrichment of uranium to 19.75 percent, which brings Iran an important step closer to weapons grade. A report by the International Atomic Energy Agency released Friday shows that Iran has now produced 146 kilograms (323 pounds) of the fuel, already more than enough to power its existing research reactor, making future production doubly suspicious. Meanwhile, production of 3.5 percent uranium, which is appropriate for use in civilian nuclear power plants, accelerated significantly in March, boosting Iran’s stockpile to 6,197 kilos. This would be enough for five nuclear weapons if it were further processed to weapons grade (90 percent).

The international community has two goals to choose from. The first is to stick with the aim of getting Iran out of the nuclear fuel business altogether. That has been the target ever since international inspectors confirmed in 2003 that Iran had a covert nuclear fuel program, has been set out in UN Security Council resolutions since 2006, and continues to be a red line for Israel and many in the U.S. Congress.

This would be, without question, the most desirable outcome. But after 10 years of failed negotiations, it’s clear that such a capitulation would require either regime change in Tehran or a wholly successful military strike against Iran’s nuclear facilities. It cannot be achieved through talks, and most military analysts -- including senior figures in Israel -- say that it can’t be achieved by airstrikes either.

Compromise Plan

The alternative is to clear Iran of its 19.75 percent uranium, mothball the hardened facility at Fordo and ensure full transparency to international inspectors. This would need to include installation of IAEA cameras that could monitor Iran’s continued enrichment of uranium to 3.5 percent for power plants. It would also require a halt to construction of further enrichment facilities and heavy water plants. Later talks could cap Iran’s production of low enriched uranium to match its current consumption needs, and secure a full accounting for past weaponization programs.

This compromise is the best we can hope to do through negotiations. The Obama administration appeared to open the door to a deal along these lines this year by de-emphasizing the demand for a ban on all enrichment. The White House is doubtless wary of being seen to give away too much, too early, ahead of presidential elections in November. With Israel threatening war and Iran pushing ever harder toward a nuclear breakout capacity, too much is at stake to let U.S. domestic politics dictate the outcome in Moscow next month.

The P5+1 shouldn’t give away the store for an interim freeze, and it should make clear to Iran a road map that will lead to a staged removal of sanctions, together with the understanding that a limited right to uranium enrichment would be on the table in an eventual, permanent deal.

There is a huge list of sanctions to pick from in giving Iran inducements to stay engaged in a meaningful process. One measure in particular should be on offer in Moscow: postponement of the July 1 European oil embargo. This could be used to induce a freeze on Iran’s production of 19.75 percent enriched uranium, an agreement to ship its fuel stock out of the country in exchange for processed rods, and a provision for IAEA inspectors with full access to verify compliance.

If all these conditions can be met by July 1, then the European oil sanctions should be postponed. They could always be resurrected if subsequent negotiations fail and Iran resumes production. The goal here isn’t to look tough. The goal is keep up the pressure in a way that is most likely to halt Iran’s nuclear program and avoid war.

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .

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