Officials are seen at Iran nuclear talks at the United Nations Palais in Geneva November 24, 2013. (Reuters)

If all goes according to plan, sometime during 2014 Iran will sign a comprehensive final agreement to end a nuclear crisis that, over the course of a decade, has threatened to escalate into a war in the Middle East. But in light of the unresolved issues that must be addressed, it would be unwise to bet that events will unfold as planned. Unrealistic expectations about the Iran deal need to be revised downward.

In Geneva on November 24, Iran and the five permanent members of the United Nations Security Council – China, France, Russia, the United Kingdom, and the United States – plus Germany agreed to a Joint Plan of Action. For good reason, the world welcomed this initial agreement because it squarely put Iran and the powers on a road to end the crisis through diplomacy.

The deal calls for Tehran and the powers to negotiate the “final step” of a two-stage agreement inside six months. In the best case, the two sides will with determination quickly negotiate that final step. Iran will demonstrate to the International Atomic Energy Agency (IAEA) that its nuclear program is wholly dedicated to peaceful uses and agree to verified limits on its sensitive nuclear activities for a considerable period of time. In exchange, sanctions against Iran will be lifted.

insight carnegie new INSIGHT: A Year of Too great Expectations for IranAn effective final deal could emerge. But Iran and the West will continue to have major differences whether or not there is a final nuclear pact. Residual mutual suspicion is significant, and the United States and Iran have competing hardwired security commitments in the region. The United States will not pivot away from Israel and the Arab states in the Persian Gulf, and Iran will not abandon the Alawites in Syria and push Hezbollah to renounce force. The November deal will not lead to a transformation of the West’s relations with Iran, and the act of signing a deal will not mean Washington and Tehran have somehow overcome their multiple fundamental differences and become partners, as some observers either hope or fear.

The clock is ticking

U.S. Secretary of State John Kerry knew what he was talking about when he announced in Geneva that the initial step of the Iran nuclear deal had been agreed to and warned that “now the really hard part begins.” The Joint Plan of Action says that Iran and the powers “aim to conclude” the final agreement in “no more than one year.” But the issues that remain to be resolved and the amount of work that needs to be done could delay agreement on the final step for many months.

“…[N]egotiators understand that Iran will not accept a total halt to enrichment, whatever the cost.” – Mark Hibbs, Carnegie Endowment

The main problem is not that Iran will refuse to implement what it agreed to in the initial deal. It will almost certainly stop producing and installing more uranium-enrichment centrifuges, limit that enrichment to no more than 5 percent U-235 (enriching to higher levels would bring Iran closer to weapons-grade material), and convert its enriched uranium gas inventory to less-threatening oxide. It is also likely to halt essential work on the Arak heavy-water reactor project, where Iran is developing the capability to produce plutonium, which can be used for making nuclear weapons.

Tehran has every incentive to comply with these measures. Were it to cheat, Iran’s adversaries, convinced that Iran cannot be trusted, would be vindicated and would gain leverage to add sanctions or use force. Iran knows this.

Instead, the potential showstoppers looming before the parties concern matters that the negotiation of the final step itself must resolve. Crucially, the Joint Plan of Action left open how Iran, the powers, and the IAEA would resolve two critical matters: unanswered questions about sensitive and potentially embarrassing past and possibly recent Iranian nuclear activities, and unfulfilled demands by the U.N. Security Council that Iran suspend its uranium-enrichment program. Since 2006, Tehran has refused to comply with the Security Council’s suspension orders, and since 2008, it has refused to address allegations leveled by the IAEA that point to nuclear weapons research and development by Iran.

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A portion of Iran's Arak heavy water nuclear facilities is seen near the central city of Arak. (AP/FARS file)

The Joint Plan of Action is deliberately vague about how to handle these issues, not because Western diplomats were naive but in part because the powers intended the initial deal to build confidence. That means that groundbreaking and deal-making were paramount, inviting bold statements, not nitty-gritty outlines. Also leading to this outcome is the fact that when the United States revved up the negotiation this fall in direct bilateral talks with Iran, what was originally a four-step road map became a two-step process featuring an initial step and a final step, with the fine print of steps two and three in the original scheme left to be worked out.

If the parties do not work out the two major challenges they face, the negotiation may fail. If differences result in a stalemate, Iran’s hardliners could gain the upper hand, continue pursuing unfettered nuclear development, and eventually terminate the initial accord. Alternatively, U.S. lawmakers could respond to a lack of progress by adding to Iran’s sanctions burden, which would likewise doom the negotiation. There is much at stake.

Answering questions about nuclear activities

During the negotiation of the final step, the IAEA could be the elephant in the room. The IAEA is not a party to the initial step, but it remains closely involved with Iran’s nuclear program. Since 2006, the IAEA Board of Governors and the U.N. Security Council have urged the agency to resolve outstanding allegations that Iran has worked on developing nuclear weapons, an issue referred to in IAEA reports as the “possible military dimension” (PMD) of Iran’s nuclear program.

Formally and legally, the IAEA track and the six powers’ political track are separate. The powers are supposed to negotiate with Iran a political solution to the crisis. The IAEA, on the basis of its verification mandate, independently seeks answers about whether Iran is in compliance with its bilateral agreement on nuclear safeguards. The forthcoming negotiation over the final step will have to reconcile these two imperatives.

Since 2008, Iran has balked at answering the IAEA’s questions about PMD. On November 11, Iran and the IAEA issued a Joint Statement on a Framework for Cooperation in an effort to overcome this impasse. The statement says that both sides will “strengthen cooperation and dialogue aimed at ensuring the exclusively peaceful nature of Iran’s nuclear program through the resolution of all outstanding issues” but neither it nor the November 24 Joint Plan of Action spells out when or to what extent Iran must comply with the IAEA’s request for information concerning activities related to nuclear weapons development. It is possible that Iran may strictly implement the suspension terms in the Joint Plan of Action but not cooperate to the extent the IAEA deems necessary on PMD. In that case, if the powers conclude that lack of cooperation between the IAEA and Iran stands in the way of a final agreement, they might pressure the IAEA to relent on its requirements in the interest of making a deal.

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U.S. Secretary of State John Kerry (R) chats with Iranian Foreign Minister Mohammad Javad Zarif at the United Nations Palais in Geneva November 24, 2013. (Reuters)

Tensions between the IAEA and the Western powers might then arise since until this point all have agreed that the IAEA should remain steadfast in seeking Iran’s answers to its questions, including about activities not directly involved in the production or processing of nuclear materials. Moreover, the logic of the negotiation between Iran and the powers implies that the IAEA must have a robust verification mandate, permitting it to eventually conclude, perhaps in a few years, that Iran’s nuclear program is transparent and without clandestine activities. The Joint Plan of Action says what the endgame is: “The Iranian nuclear program will be treated in the same manner as that of any non-nuclear weapon state party to the NPT [Nuclear Non-Proliferation Treaty].” But to get there, the IAEA has to express its confidence. And to obtain that, the PMD issue requires closure.

One possible contribution to resolving this impasse would be for the powers to negotiate an agreement with a verification component committing Iran not to do specific things related to the development of nuclear explosives and delivery systems. A forward-looking commitment like this could maintain diplomatic momentum while building Iranian confidence that the answers Tehran provides regarding past activities will not be used to punish it.

But if expediency prompts negotiators to ignore important unresolved issues about Iran’s capabilities, the IAEA’s credibility will be damaged, and a final agreement with Iran may not survive attacks from critics claiming thereafter the deal has dangerous loopholes. Moreover, the stated goal of the IAEA-Iran Framework for Cooperation is to “ensur[e] the exclusively peaceful nature of Iran’s nuclear program.” It is difficult to see how this could be done unless Iran tells the truth about its most sensitive nuclear history.

Security council demands

Since 2006, the Security Council has ordered Iran to suspend all enrichment-related and reprocessing activities. Until recently, the powers agreed that a comprehensive solution requires Iran to suspend these programs, but they didn’t agree on the length of the suspension. In an interview in early 2011, one negotiator from a Western state put it this way: “The Russians propose suspending enrichment for forty-five minutes, and we want it suspended for one hundred years.” Russia proposed a road map that would have required Iran to suspend enrichment for three months. That compromise found no takers.

The Security Council’s orders to suspend enrichment were meant to halt Iran’s progress toward the point where it could “break out” of its international obligations and make a nuclear weapon in a hurry. But Iran for seven years refused to cease enrichment, and so its “breakout” timeline has continued to shrink. The Joint Plan of Action shows that negotiators understand that Iran will not accept a total halt to enrichment, whatever the cost. Thus the final step will include a provision permitting Iran to enrich uranium “with agreed limits.” Negotiators might even be willing to override Security Council suspension resolutions with a new resolution that does not require suspension – provided that Iran builds confidence by agreeing to and quickly implementing other steps. For example, Tehran could decide not to build a heavy-water reactor at Arak, reduce its number of centrifuges, and ratify and implement the Additional Protocol to its IAEA safeguards agreement.

The Joint Plan of Action refers to “additional steps in between the initial measures and the final step, including . . . addressing the U.N. Security Council resolutions.” Since these resolutions imposed sanctions on Iran as well as obligations, Tehran and the powers must carefully calibrate the sequence in which sanctions would be lifted with steps taken by Iran to reduce its nuclear threat.

This post was originally published on CarnegieEndowment.org.

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 INSIGHT: A Year of Too great Expectations for Iran

Mark Hibbs

Mark Hibbs is a Berlin-based senior associate at the Nuclear Policy Program of the Carnegie Endowment for International Peace.