The historic deal concluded between Iran and the major world powers at Vienna on 14 July boils down essentially to a simple bargain between the two sides: in return for the lifting of sanctions by the UN and the West, Iran has accepted stringent restrictions on its nuclear programme to ensure that it is not used for the development of nuclear weapons. Once Iran has fulfilled its obligations under the deal, all nuclear-related sanctions against it, whether imposed by the UN Security Council or the world powers like the US and EU, would be lifted in a specified manner. The lifting of these sanctions would have the effect of reopening the Iranian economy to international trade and finance, thus providing it a major boost. Besides the reintegration of Iran with the global economy, the deal would have far reaching repercussions on regional and global politics. Pakistan must take note of these repercussions to safeguard its own national interests.
To recapitulate briefly, the deal would reduce Iran’s capacity to enrich uranium by two-thirds through the reduction of first generation centrifuges from 19138 to 6104 at Natanz for ten years. The advanced centrifuges at the underground Fordow facility, numbering 1034, will be placed in IAEA-monitored storage. The facility will be converted into a physics research laboratory open to international collaboration. Iran will cut its stockpile of low- enriched uranium from 19,211 lbs to 660 lbs for 15 years.
The stockpile of medium-enriched uranium would be totally eliminated for the same period. The heavy-water reactor at Araq would be redesigned so as not to produce weapon-grade plutonium. No new heavy-water reactor would be built for 15 years. The International Atomic Energy Agency (IAEA) will have free access to Iran’s nuclear sites, and in some cases even to military facilities, to verify and ensure Iran’s compliance with these restrictions.
The sanctions will be lifted in a phased manner, when Iran makes good on its commitments. The process of the lifting of economic sanctions will begin as soon as IAEA can confirm Iran’s compliance with its obligations under the nuclear deal. Consequently, the nuclear-related economic sanctions against Iran’s financial and energy sectors may be lifted later this year or early next year. The ban on the sale of conventional offensive weapons to Iran would end in 2020. The embargo on the supply of ballistic missile components and technologies to Iran would come to an end in 2023.
The UN Security Council passed a resolution on 20 July enabling the lifting of UN sanctions against Iran subject to its compliance with its commitments under the nuclear deal. However, the UN arms embargo against Iran will continue till 2020. The European Union also on the same day took a similar decision to put in motion its own process for the lifting of its sanctions against Iran including those relating to the purchase of oil from and financial dealings with Iran. The deal has also been separately submitted by the US administration for review by the Congress which has a period of 60 days starting from 20 July to support or reject it. In view of President Obama’s threat to veto a rejection by the Congress, it is almost certain that the deal will go through the US approval process despite the strong opposition by the Republicans. As for Iran, the expectation is that the deal would not face any insurmountable hurdle in the way of its approval by the Majlis, despite some criticism by ultraconservatives, because of the support by the Iranian Supreme Leader Khamenei and the enthusiastic welcome by the general public.
By the end of this year or certainly by the beginning of the next year, Iran would be free of the onerous financial and oil related sanctions which have crippled its economy. Iran would be able to increase its oil and gas exports substantially with consequential beneficial effects on its economy. The end of financial sanctions would facilitate its foreign exchange transactions and enable its reintegration with the global economy. The implementation of the deal would also enable Iran to have access to billions of dollars of its assets which had been frozen because of the US and EU sanctions. The Iranian nuclear deal would also have the side effect of confirming the right of non-nuclear weapon states under the NPT to enrich uranium under the IAEA safeguards, a right which had hitherto been questioned by the nuclear-weapon states.
But it must be noted that terrorism and human rights related sanctions against Iran, especially those imposed by the US, would remain in place. Consequently, US trade and investment ties with Iran will remain under considerable constraints. Even otherwise the fundamental contradictions between the US and Iranian strategic interests like those concerning Israel, Palestine, Syria and the US hegemonic military presence in the Persian Gulf region would continue to cast their negative repercussions on Iran-US relations.
As expected, Israel under PM Benjamin Netanyahu has severely criticized the Iranian nuclear deal calling it a “historic mistake”. Saudi Arabia and its GCC allies, while publicly welcoming the nuclear deal, have privately voiced concerns that it would embolden Iran in meddling in Iraq, Syria, Lebanon and Yemen while enabling it to develop nuclear weapons in the long run. US Defense Secretary Ashton Carter’s visit to Saudi Arabia on 22 July was aimed at allaying these concerns. En route to the Middle East, he emphasized that the deal did not mean that the military option was off the table if it became unavoidable for preventing Iran from obtaining the atomic bomb.
The Iranian nuclear deal offers attractive opportunities to Pakistan while posing serious challenges for its diplomacy. The lifting of economic sanctions against Iran should enable us to expedite the completion of the Iran-Pakistan gas pipeline project which would play an important role in meeting our rapidly growing gas requirements. Iran can also re-emerge as a significant supplier of oil to Pakistan. The Iranian market can become an important destination for our exports of such items as textiles, rice, wheat and fruit. For Iran, the China-Pakistan Economic Corridor (CPEC) would provide an easy access to markets in China’s western provinces. The forthcoming visit of the Iranian Commerce Minister to Pakistan should enable the two sides to take full advantage of the emerging trade and investment opportunities following the Iranian nuclear deal. Ministerial and senior official level visits to Iran should be planned from our side also to develop mutually beneficial economic and commercial cooperation between the two countries both bilaterally and within the framework of ECO.
On the political side, the nuclear deal would enable Iran to play a more effective role in the handling of regional and global issues. In view of the close link between the security of Pakistan and Iran, we should engage Iran in close consultations on such issues as cross-border security, facilitation of the peace process in Afghanistan, and the security situation in the Persian Gulf region. Mutual understanding and coordination between Pakistan and Iran on these issues will serve to strengthen the security of the two countries. Above all, we should avoid repeating the mistakes of 1990’s in dealing with the Afghanistan situation, which prolonged the armed conflict in Afghanistan and damaged Pakistan-Iran relations. In view of our close friendly ties with both Saudi Arabia and Iran, we should play a proactive role in promoting mutual understanding between the two brotherly countries. The situation in the Persian Gulf region calls for mutual restraint and accommodation among the regional countries and a forum for discussing security-related issues and peaceful settlement of disputes.
The writer is a retired ambassador and the president of the Lahore Council for World Affairs.