Iran's possible bargain hunt

After nearly four years of snail-like movement on Iran's controversial nuclear dossier, there has been a recent flurry of important developments, all within a few days and weeks of each other.

First, through behind-the-scenes negotiations with Swiss intermediaries spanning over a year and a half, Iran has agreed in principle to temporarily refrain from expanding its nuclear enrichment program on the condition that the UN Security Council agrees not to impose additional sanctions against the Islamic Republic.

Moreover, the country now indicates that it may be interested in contributing to a comprehensive settlement of major outstanding issues, including those relating to Iraq, Lebanon and even the Arab-Israeli issue.

Second, in a surprise move, after years of refusing to engage the Iranians directly, the Bush administration has suddenly changed course, deciding to send its third-ranking diplomat to meet with Iranian representatives this month in Geneva, the highest-level meeting to take place between the two sides in some 28 years.

The US has also expressed a willingness to open an interest section, an administrative unit that would provide consular services, in Iran. Together with other recent reversals in the administration, such as agreeing on an Iraqi withdrawal timetable and engagement with North Korea, these developments constitute an almost frantic end-of-the-presidency attempt by US President George W Bush to leave behind a legacy of sorts.

Third, the "5+1" countries - Russia, China, France, the US and the UK [the five permanent members of the UN Security Council] plus Germany - have achieved a newfound unity and resolve in dealing with Iran, which has been absent until now. With US consent, these countries added a new security element to their incentive package offered to Iran.

Observers believe that for the two chief antagonists in the controversy - Iran and the US - the cumulative effect of these precedent-setting events would make it virtually impossible to return to the status quo: Iran can no longer continue to press on with its nuclear enrichment program unimpeded on account of existing divisions in the international community; the US can not disengage itself easily from negotiations, given a minimal of commitment from the Iranians.

Despite high hopes set for the negotiations, however, the first meeting in Geneva on 19 July produced very little in the way of substance. This was chiefly thanks to Iran's refusal to give ground on a so-called "freeze-for-freeze" agreement worked out previously between Iranian and Swiss diplomats. According to this formula, Iran would have refrained from installing new centrifuges for a period of six weeks in exchange for the US and other powers pledging not to seek new sanctions against it.

Instead, according to the New York Times, Iran's top diplomat, Saeed Jalili, distributed a two-page document at the Geneva meeting asking for concessions from the other side and calling for a protracted series of meetings before any agreement could be reached. In return, the 5+1 countries gave Iran two weeks to accede to their demand to stop enrichment or face impending sanctions from UN Security Council.

Iran's new approach

For nearly three years, Iran successfully ignored calls to halt its nuclear program. This was thanks to a skillful application of its diplomacy, US blunders, the international community's desire to avoid another ruinous war, and the precarious state of the world economy particularly as it relates to oil price levels.

By spring 2007, however, a transformation began to take shape. After two largely symbolic and ineffectual round of sanctions against Iran starting in December 2006, a number of UN Security Council members began circulating proposals for a hard-hitting set of new sanctions involving Iran's international air and shipping networks as well as severe restrictions on Iranian banks and other financial institutions.

"This was around the time that apparently Iran began to probe the idea of a mid-point compromise," an Iranian political scientist told ISN Security Watch on the condition of anonymity, referring to the freeze-for Freeze agreement.

David Albright, a former arms inspector and the president of the Institute for Science and International Security in Washington, DC told ISN Security Watch that for at least a year and a half, the Iranian and the Swiss diplomats met repeatedly, hammering out their differences with several documents exchanging hands before the freeze-for-freeze agreement was finalized.

"As luck would have it, the publication of US National Intelligence Estimate on Iran in November 2007 diluted the third round of sanctions against Iran considerably," the Iranian political scientist said, "but everybody in Iran expects the next round [of sanctions] to be very painful," he added.

For instance, the EU is currently planning major restrictions on Iranian banks while the UN Security Council will meet in September to impose major sanctions against Iran should the present talks in Geneva fail to produce results. In addition, the US and the UK are separately preparing to impose their own sanctions on Iranian oil and shipping industries. Many Iranian businesses must already pay an additional 20 to 25 percent premium on their business transactions with the outside world.

Also included is the threat of a military strike by Israel, as small as it currently is. Finally, presumptive Democratic US presidential candidate Senator Barack Obama, whom the Iranians believe will in November, has recently hardened his position on Iran, calling for an end to enrichment activities before his administration would open discussion with them.

It is in this context that, in a major departure from recent practice, Iran has assumed a decidedly more cooperative approach toward the international community of late. Supreme Leader Ali Khamenei endorsed the Geneva talks during a speech in mid-July, the second time he has done so in three years. This was followed by an interview in the French paper Liberation given by former foreign minister Aliakbar Velayati, Ayatollah Khamenei's special foreign policy advisor, in which he indicated that Iran was ready to negotiate all issues on the table with no pre-conditions.

On 1 July, Iranian Foreign Minister Manoochhr Mottaki also took an unusually soft line during a New York press conference, refusing to mention the oft-repeated Iranian position that the country would never give up its right to enrichment even though he was asked the question four times by the members of the press.

Tough bargaining ahead

It is no wonder that Iran's sudden change of tactics in Geneva - appearing seemingly uninterested in an agreement - has surprised many observers. According to diplomatic circles, Iran's primary backers within the 5+1 framework, Russia and China, have expressed bewilderment at Iran's behavior. Albright is also baffled by the turn of events. "I did not expect such defiance at all […]. The Iranians have alienated the Russians who are their main backers. That's also a surprise," he told ISN Security Watch.

Albright speculates that either this is part of an elaborate Iranian scheme where they may return later to the table with a better bargaining position, or they had not expected all sides to agree to the freeze-for-freeze.

Ironically, the timing of US' participation in the talks seems to have been the main cause of Iran's sudden about-face in Geneva. Iran interpreted the new US position as a sign of a general backtracking on earlier positions driven by the Bush administration's apparent need to leave a positive legacy and help the Republicans in November. This view is reflected in a 22 July Sobhe Sadegh editorial, the main organ of the Revolutionary Guards' Ideological Department published for its officer corps, which concludes that Bush is acting out of political infirmity.

"The official entry of the US neo-conservatives in the 5+1 negotiations is under conditions of weakness," the editorial said. "Therefore by recourse to its strengths and opportunities, the Islamic Republic can remove all the remaining obstacles from its path to its legitimate nuclear rights."

Iran's present defiant stance is not the last word the world will likely hear on its position vis-à-vis the 5+1 concession package. Rather, the hard-line posturing is aimed at wringing maximum concessions from the US - which Iran considers to be its principal antagonist in the nuclear talks - before agreeing to a compromise.

Stephen Clemons, senior fellow of US foreign policy at the New American Foundation in Washington DC, also believes that US ability to maneuver around the ongoing nuclear talks with Iran is severely circumscribed at present. Clemons attributes this to the administration's mistakes starting with the 2003 invasion of Iraq followed by the outright rejection of an offer made by Iran in the same year for a comprehensive settlement of all outstanding issues and "similar blunders" in dealing with the Syrians, among other things.

"Structurally, the Iranians are waiting out the end of Bush term before they enter into serious negotiations," he said to ISN Security Watch

Barring this, Iran wants much more from this administration than it is offering at this point, including a linkage of the nuclear discussions with other security and strategic matters such as Iraq, Lebanon and the Arab-Israeli situation, where Iran clearly enjoys many bargaining chips in its arsenal and the US refuses to discuss as an overall package.

During a 24 July press conference in Geneva, Iranian Vice President Gholamreza Aghazadeh, also head of the country's atomic energy agency, said that the flexibility of the 5+1 countries in negotiations could help resolve many "important problems," including "the Middle East, Afghanistan, Lebanon, and also Iraq and also the problem of the price of oil."

As another sign that Iran plans to drive a very hard bargain in the coming weeks and months, the Turkish press reported recently that Mottaki and Turkish Prime Minister Tayyip Erdogan had discussed the possibility of Turkey acting as an intermidary between Iran and the 5+1 countries, should relations start to deteriorate.