No need for new sanctions on Iran

As the 113th Congress wraps up and the new Congress prepares for the start of 2015 it is evident that one of the central early debates on foreign policy will revolve around new sanctions on Iran.  The sanctions regime imposed by Congress and implemented by the Obama administration played a significant role in bringing Iran to the table and getting an agreement on the interim Joint Plan of Action (JPOA).  However, new sanctions now would be poorly timed and reduce the probability of a positive outcome. 

First, new sanctions at this moment are likely to lead to less flexibility from the Iranian negotiators.  Sanctions are a useful stick to bring a party to the table, but to be used effectively they must be a stick that can be credibly lifted.  One of the major challenges in the current negotiations is that the Iranians do not believe that even in the event of a deal the United States Congress will ever lift sanctions.  This is particularly true of the ultimate decisionmaker in Tehran –Supreme Leader Ali Khameini – who is a notoriously suspicious of the United States.  New sanctions now would only reconfirm his worst suspicions. 

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New sanctions could also endanger a very tenuous but positive status quo.  The JPOA, which was signed in November of 2013, is not an ideal document that should be seen as the long-term solution.  However, it did successfully freeze Iran’s enrichment program for the first time since 2005 in exchange for only very limited sanctions relief.  This freeze has bought the United States and its allies time, as the Iranians have made no substantive progress on their nuclear program in the last 12 months while even rolling back some elements – most notably by making their stock of 20% enriched uranium into a product that is more difficult to enrich further.  New sanctions would be a violation of the JPOA and could cause Iran to unfreeze its program increasing the likelihood of an impending confrontation. 

New sanctions could also inadvertently give Iran a way out of the negotiations in which it can blame the United States for failure and dramatically weaken the sanctions regime in the aftermath of a collapse. If Congress were to pass new legislation, Iran could walk away from the table and put the onus the United States for not keeping its word and violating the interim agreement.  

In such a scenario, it is unclear how some of the key implementors of the international sanctions regime – most notably China – would respond, particularly if they believe that the collapse of the talks was due to Congressional sanctions.  The Chinese might choose to continue to abide by sanctions on Iran since they ultimately care more about access to the U.S. economy than Iran’s.  Or they might choose to call the American bluff, restart trade with Iran and assume that the United States would not dare sanction China and cause grave damage to its own economy in the process.   

Finally, sanctions are not necessary at the moment as the oil market is already doing the work of increasing pressure.  Prices have dropped from a high of $120 over the summer to below $60.  This will have dramatic implications for the Iranian economy.  Bread prices have risen 30 percent in recent weeks. And President Rouhani recently introduced an austerity budget for the next year pegging the Iranian budget to $70 oil even though Iran needs a much higher price to sustain its fiscal viability in the long run.   

These trends are already creating real anxiety in Tehran and are much more likely to have the desired effect on the psychology and calculus of Iran’s leaders than a new piece of Congressional legislation that would not even go into effect unless the negotiations failed.  And the beauty of this type of pressure is that it cannot be seen as an act of bad faith on America’s part.  

Ultimately, if a deal cannot be struck by the middle of this year it might be time to revaluate and consider other options.  But for the moment sanctions are unlikely to improve the chances of an agreement.  Lower oil prices are already increasing the pressure on Iran.  New sanctions are more likely to reduce the chances of an agreement, endanger the delicate but positive status quo, and give the Iranians an excuse to walk away while taking the high ground and blaming the United States.  

Goldenberg is a senior fellow and director of the Middle East Security Program at the Center for New American Security.  He previously served as the Iran Team Chief at the Office of the Secretary of Defense and as a Senior Professional Staff Member on the Senate Foreign Relations Committee.