Iran: deal or defeat?

United States President Donald Trump prides himself as an ace dealmaker. He boasts that with his art of dealing, he could overawe any other world leader into terms that advantage his own country, including juggernauts like Russian President Vladimir Putin and Chinese President Xi Jinping, even enfant teribles  like North Korea’s Kim Jong Un. Not that he has demonstrated this as a proven fact, though. 

He just signed off on a pact to end the war his administration has waged with Iran, and it isn’t so certain he got the best for America and allied interests. Actually, many perceive the pact as tilted in Iran’s favour and not justifying the exertion on a four-month-long war that came out stalemated.

Trump signed the 14-point pact dubbed  memorandum of understanding at a post-Group of Seven Industrialised Nations (G7) dinner in France on Wednesday. Iranian President Masoud Pezeshkian signed from Tehran, even as a ceremony was fixed for Geneva to formalise the signing at the weekend. The signed document comprises preliminary trade-offs for sustaining the ceasefire in the US-Iran war pending negotiation of a formal peace agreement. The timeline set for the negotiation is 60 days, but there is provision it could be adjusted on agreement by both parties.

To the world’s relief, the memorandum provides for immediate reopening of the Strait of Hormuz on which Iran applied a chokehold following attacks launched against it, 28th February, by the US tag-teaming with Israel. The shuttering of that globally strategic waterway by Iran suffocated the economies of many countries – Nigeria inclusive – fuelling energy costs and posting harsh knock-on effects on other consumer items and services. A win for the international community is that the chokehold is being reined in by the truce pact, among other things.

But taken even on diplomatic face value, the truce deal leaves in place many sticking points flagged by Trump when he launched the war against Iran. A summary and implication of some of the major points are as follows:

The document stipulates an end to conflicts. Specifically, it mandates the US and Iran, along with their allies, to declare “immediate and permanent” termination of military operations on “all fronts,” including Lebanon. By implication, Washington binds Israel to a ceasefire in hostilities against its long standing adversary, Hezbollah, while also committing Iran to hold Hezbollah in check. Tehran has always insisted that any peace deal must cover its protégé, Hezbollah, and this clause seems a concession to it. It was unclear at the weekend how Israel took this clause.

Another clause prescribes that the US and Iran should “respect each other's sovereignty and territorial integrity” and refrain from interfering in respective internal affairs. This is a hardly disguised check on Trump and would likely be received sorely by Iranian dissidents. Just before the war began, Iranians staging anti-government protests were violently repressed by Tehran and Trump promised that help was on the way. It is widely suspected that Washington calculated on strengthening the hand of the protesters to force a regime change by launching the war at the time it did. That calculation fell flat. Now, the US must leave Iran to its internal affairs, as Iran never possessed the capacity to meddle in US affairs.

In another clause, the US is required to begin dismantling its blockade of Iranian ports. Washington had mounted the blockade to pressure Tehran over its chokehold on Hormuz, but had not succeeded in getting the waterway reopened. The document provides that the US will begin removing its blockade and “any disturbances or impediments” that have been placed on Iranian ports once the memorandum got signed. The blockade is expected to end in 30 days, during which time the number of vessels the US allows through Iranian ports will be in proportion to the traffic restored by Iran in the Hormuz strait. Also, within 30 days of a final deal being signed, the US commits to removing American forces from the “proximity of Iran.” In practice, this means American forces and assets will return to pre-war posture.

A clause specifically on the Strait of Hormuz mandates Iran to “make arrangements, using its best efforts” to allow safe passage of commercial vessels through the waterway, with no charge, upon the signing of the memorandum. This has been a major objective of Washington since the war began, and the document prescribes that traffic should start flowing immediately, taking into account the need to remove technical and military “obstacles” and conduct de-mining operations.

In the longer-term, though, the document provides for Iran to work with other Gulf nations for a “broader” agreement on how to manage Hormuz. Stripped of diplomatese, this means Iran could in near future toll the strait if it convinces regional neighbours of that necessity. Reports cited Washington officials saying they believe the Islamic republic would assert its rights aggressively, but that Gulf states were unlikely to accept a future when there will be a tolling system in place at the strait.

A notable clause in the document is the provision for the US and regional partners to develop a “definitive, mutually agreed plan” worth at least $300billion for reconstruction and economic development in Iran. In blunt terms, read: reparations. The definitive mechanism of the fund will be agreed within 60 days of the final deal, and all licences, waivers and permissions will be granted by the US. This, however, does not mean Washington will be financially involved. 

“The Iran peace deal shows the war to be a wild, failed gamble”

Trump and Washington officials went to great lengths to explain that the pact is performance-based. They also strained to make clear the US will not be paying Iran directly, in contrast to the 2015 nuclear pact signed by the administration of former President Barack Obama that paid the Gulf nation $1.7bn to settle a decades-old arbitration claim regarding a failed military equipment purchase. In his post-pact signing press conference, Trump angrily rejected suggestions that the US would be contributing to the $300bn fund, instead saying payouts by Gulf states would be conditional on Iran’s good behaviour. “Anyone who wants to can invest. What do you expect me to say: that no one is allowed to invest? But we’re not investing, we’re not putting up even 10 cents,” he said.

There are other benefits for Iran. The memorandum provides that Washington will terminate all economic sanctions against the country, including those included in United Nations Security Council resolutions and those implemented unilaterally by it. The timeline for this is tentative though, with the document saying the schedule would be agreed upon as part of the final deal, but that both sides acknowledge intention to “immediately” address the issue in subsequent talks. This portends huge relief for Iran that has been hard-hit by sanctions.

But there are also responsibilities for the Islamic republic. Tehran, in another clause, agreed to not procure or develop a nuclear weapon, and both sides agreed to deal with the enriched uranium it already has. The method to manage the material is not yet determined. The document notes that the mechanism “will be mutually agreed upon” in subsequent talks, but that, at a minimum, it will be “downblended” in a place under the supervision of the International Atomic Energy Agency (IAEA). This clause is a major win for Trump who said preventing Iran from having a nuclear weapon was “99 percent” of what he wanted by launching Operation Epic Fury in February. Besides, because the deal is performance-based, sanctions relief promised Iran is tied to its complying with the de-armament clause. The document is, however, not categorical on the country’s industry.

Still another clause presents Iran with a major win, namely the unfreezing of its offshore assets, thereby conferring it a huge economic lifeline. Until now, this point has been a hurdle in negotiations as Iran insisted that its frozen assets be released. The document notes that the US “undertakes to make fully available frozen or restricted funds” once the memorandum is signed, and that procedures will be agreed upon during negotiations. At his press parley, Trump sounded a conciliatory note on returning Ian’s frozen assets – a stipulation in the Obama administration’s peace deal that he had attacked in 2015. “We have taken a lot of their money,” he told reporters. “It’s not our money, it’s their money and we froze it at a certain point in time. I guess we’re going to have to give it back. You know, if we didn’t give it back, nobody would ever invest in the dollar again.”

The Iran peace deal shows the war to be a wild, failed gamble. None of Trump’s objectives in launching the war got accomplished; among them, destroying Iran’s nuclear programme, obliterating its missile capacity, neutralising its support for resistant groups and, though not formally stated, triggering a regime change in Tehran. Trump is apparently being forced to backtrack because of the baggage of worldwide economic hardships even as the US goes into mid-term elections in November.

Meanwhile, Iran emerged more provisioned than when the war began, and the theocratic regime is more entrenched in power. It did not need to win militarily, it only needed not lose politically and that seems what has happened.