President Trump’s reasons for withdrawing the United States from the Iran nuclear deal caught our attention. The stakes are huge, so Trump’s rationale merits scrutiny.
The United States was one of seven countries in the Joint Comprehensive Plan of Action (JCPOA), an agreement struck by President Barack Obama’s administration in 2015. Aside from Iran, the other countries are China, France, Germany, Russia and Britain. It remains to be seen whether the Iran deal will hold together without the United States.
We reviewed six of Trump’s claims from his May 8 speech announcing the decision to withdraw from the deal. As is our custom with roundups of multiple statements, we will not be offering a Pinocchio rating. But we invite readers to weigh in with comments.
“In fact, the deal allowed Iran to continue enriching uranium and — over time — reach the brink of a nuclear breakout. …
“The agreement was so poorly negotiated that even if Iran fully complies, the regime can still be on the verge of a nuclear breakout in just a short period of time. The deal’s sunset provisions are totally unacceptable. …
“If we do nothing, we know exactly what will happen. In just a short period of time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapons.”
Notice how Trump uses flexible wording such as “on the verge of a nuclear breakout in just a short period of time.” This is refreshing and more accurate than his Four Pinocchio claim from April 30: “In seven years, that deal will have expired, and Iran is free to go ahead and create nuclear weapons.”
The JCPOA’s prohibition on Iran’s building nuclear weapons does not sunset, and other international agreements to which Iran has committed itself also prohibit the development of such weapons.
However, critics of the JCPOA have voiced concerns that — despite these strictures — Iran could keep working toward nuclear weapons capability under the guise of pursuing peaceful goals, such as a nuclear energy program.
Trump is alluding to the fact that the JCPOA gradually lifts restrictions on the types of nuclear activities and the level of uranium enrichment Iran may conduct. These and other provisions sunset over 10, 15, 20 or 25 years.
The president argues that easing these restrictions over time would open the door to Iran’s attaining nuclear weapons capability, rendering the JCPOA ultimately ineffective. But supporters of the Iran deal dispute that and say the JCPOA at least buys time, subjecting Iran to strong constraints on its nuclear activities for 10 to 25 years. Without the JCPOA, Iran could hasten its development of nuclear weapons on an even shorter timeline than the one Trump found unsatisfactory, they say.
“Even as some of the provisions in the JCPOA do become less strict with time, this won’t happen until ten, fifteen, twenty, or twenty-five years into the deal, so there is little reason to put those restrictions at risk today,” Obama wrote in a Facebook post responding to Trump’s announcement.
Moreover, Iran is a signatory to the Nuclear Non-Proliferation Treaty and has committed itself to ratifying the International Atomic Energy Agency’s Additional Protocol in 2023. The former restricts Iran from ever developing nuclear weapons, and the latter grants international inspectors wide access to monitor nuclear-related activities within Iran’s borders.
In agreeing to the JCPOA, Iran reaffirmed its commitment to the Non-Proliferation Treaty and stated: “Iran reaffirms that under no circumstances will Iran ever seek, develop or acquire any nuclear weapons.”
“This disastrous deal gave this regime — and it’s a regime of great terror — many billions of dollars, some of it in actual cash — a great embarrassment to me as a citizen and to all citizens of the United States.”
Trump always makes it seem that the United States casually handed Iran billions of dollars in cash. But as we’ve reported, this was always Iran’s money. Iran had billions of dollars in assets that were frozen in foreign banks around the globe because of international sanctions over its nuclear program. The U.S. Treasury Department estimated that Iran would have a little more than $50 billion of usable liquid assets at its disposal after a broad lifting of sanctions under the terms of the JCPOA. The Central Bank of Iran said the number was actually $32 billion.
Trump also mentions “actual cash.” This relates to the settlement of a decades-old claim between the United States and Iran. In the 1970s, the pro-Western Iranian government under the shah paid $400 million for U.S. military equipment. But the equipment was never delivered because the two countries broke off relations after American hostages were seized at the U.S. Embassy in Iran.
It was certainly an unusual situation — an initial payment of $400 million in euros, Swiss francs and other currencies landed in Iran on Jan. 17, 2016, the same day Iran’s government agreed to release four American detainees, including The Washington Post’s Jason Rezaian.
The timing — which U.S. officials insisted was a coincidence — suggested that the cash could be viewed as a ransom payment. But the initial cash payment was Iran’s money all along.
“At the heart of the Iran deal was a giant fiction that a murderous regime desired only a peaceful nuclear energy program. Today, we have definitive proof that this Iranian promise was a lie. Last week, Israel published intelligence documents long concealed by Iran, conclusively showing the Iranian regime and its history of pursuing nuclear weapons.”
Prime Minister Benjamin Netanyahu of Israel announced on April 30 that Mossad agents had obtained a massive cache of documents and data discs from Iran about “Project Amad,” a clandestine nuclear-weapons development program. Netanyahu said the documents proved that Iran had lied about its past nuclear efforts.
“What he is revealing with all this detail is not news,” Daryl Kimball, executive director of the Arms Control Association, told The Washington Post after Netanyahu gave a PowerPoint presentation laying out these findings. “The fact that Iran has experimented with nuclear warhead designs, and had at one point an active weapons program, makes it all the more essential that the JCPOA remains in place to prevent Iran from quickly amassing enough fissile material for even one bomb.”
Like Kimball and other experts, U.S.-allied nations in Europe described Israel’s findings as nothing new and said they strengthened the case for the JCPOA.
Trump said Israel revealed “definitive proof” that Iran was not interested in limiting its nuclear activity to peaceful purposes. But the documents produced by Israel mostly cover the pre-2003 period, during which Iran already was known to have been pursuing nuclear weapons ambitions.
Or Rabinowitz, an assistant professor of international relations at the Hebrew University of Jerusalem, wrote in an op-ed that Netanyahu and the “Project Amad” documents did not prove that Iran violated the JCPOA. However, the materials obtained by Israel showed that Iran violated the Non-Proliferation Treaty, Rabinowitz added.
“While not a clear violation of the JCPOA, by possessing the archive, Iran is violating its obligations as a Non-Nuclear Weapon State (NNWS) party to the Non-Proliferation Treaty (NPT),” she wrote. “NNWS members such as Iran are obligated by the treaty ‘not to manufacture or otherwise acquire nuclear weapons.’ Possessing documents about producing nuclear weapons contradicts the spirit of the treaty because such documents could promote nuclear proliferation — either directly by the country possessing the archive or by a transfer of know-how to other actors seeking nuclear weapons.
“That’s on top of Iran’s more serious violation of actively trying to develop nuclear weapons before 2003.” (Iran signed the NPT in 1970.)
The IAEA has found that Iran has complied with the JCPOA. The Trump administration has not disputed this assessment, and it certified in July 2017 that Iran was meeting the terms of the deal.
“In the years since the deal was reached, Iran’s military budget has grown by almost 40 percent — while its economy is doing very badly.”
According to the Stockholm International Peace Research Institute (SIPRI), Iran’s military expenditure increased nearly 30 percent from 2015, when the JCPOA was adopted, to 2017. This increase brought Iran’s military spending back to near-2006 levels. But as we’ve pointed out before, just looking at the raw increase or decrease in any country’s military budget misses important context. Instead, let’s consider Iran’s military expenditure as a share of overall government spending. In 2015, it accounted for 15.4 percent of government spending. It increased 0.4 percentage point, to 15.8 percent of government spending, by 2017. According to a White House official, this spending level is expected to remain stable in 2018. That means military spending increased alongside overall government spending — not in a silo on its own.
Looking at Iran’s military expenditure as a share of GDP, there’s a similar trend. It has increased by only half a percentage point — going from 2.6 percent to 3.1 percent from 2015 to 2017. (For comparison, in 2016, military expenditure accounted for about 3.3 percent of GDP in the United States.)
Iran’s current budget is funded largely through “oil, taxes, increasing bonds, [and] eliminating cash handouts or subsidies” for Iranians, according to an article by a Forbes contributor, Heshmat Alavi, sent to us by a White House official. Citing the semiofficial Iranian Labour News Agency, Alavi wrote that the Iranian government had increased the suggested budget for the Islamic Revolutionary Guard Corps by 42 percent, and 33 percent for the defense budget.
The nuclear accord has contributed to the overall increase in spending — including the increase in military spending — since it lifted sanctions and allowed for a rise in oil production and exports.
“In 2016, the [Iranian] economy registered a strong oil-based bounce back, with an annual headline growth rate of 13.4 percent, compared to a contraction of 1.3 percent in 2015,” according to a report by the World Bank. The bank was careful to note, however, that growth prospects are “modest” because “unemployment remains high and non-oil sector activity remains subdued, as anticipated foreign investment flows have not materialized, in the absence of a full integration of the banking sector.” This signals that the JCPOA has helped facilitate Iran’s recent economic growth — and also that this growth could slow now that the United States has withdrawn from the deal and thrown it into uncertainty.
The bottom line is that it’s hard to see how the Iranian economy is “doing very badly,” although there’s a case to be made that Iran’s wealth is not spread equitably among its population, as some critics argue. The Forbes article we were sent by the White House says: “The IRGC will receive $8 billion from Iran’s fiscal budget. This is equal to cash handouts for 49 million people a year. If [Iranian President Hassan] Rouhani had not increased the IRGC’s budget by 42%, at least 21 million people would be receiving subsidies.”
The Financial Times assessed the situation in an article May 9:
“After a period of relative stability, the rial plummeted ahead of Mr Trump’s announcement on the fate of the Iran deal, losing a third of its black market value against the dollar this year alone. Compared with its level in 2015, when the nuclear deal was inked, it has lost half its value.
“That tumble threatens one of the government’s proudest boasts, the taming of inflation, which has declined from more than 40 per cent a year when Mr Rouhani took office in 2013 to less than 10 per cent. Today price pressures are increasing again, as the cost of imports heads upwards because of the rial’s weakness.
“Mr Rouhani’s administration also emphasises its record in bringing growth back to Iran. According to official figures, the economy contracted by almost 7 per cent in the sanctions-hit year of 2012 but bounced back after the accord was signed, growing by 12.5 per cent in 2016 and 4.6 per cent last year. The business community is far from convinced by such figures, which many contend reflect an inflow of oil revenues thanks to the lifting of sanctions rather than any more genuine economic progress.”
According to the BBC: “Iran’s economy was in a deep recession in the years before the nuclear agreement. But the International Monetary Fund reported that the real GDP of Iran grew 12.5% in the first year following the implementation of the deal. Growth has fallen since then, and the IMF estimates the economy will grow at 4% this year, which is healthy but below the 8% target Iran had for the five years following the deal.”
“Making matters worse, the deal’s inspection provisions lack adequate mechanisms to prevent, detect, and punish cheating and don’t even have the unqualified right to inspect many important locations, including military facilities. Not only does the deal fail to halt Iran’s nuclear ambitions, but it also fails to address the regime’s development of ballistic missiles that could deliver nuclear warheads.”
Let’s start at the top. To meet its end of the JCPOA deal, Iran first had to dismantle its nuclear program significantly. Then, Iran gave the international community wide access to investigate its nuclear activities.
As we’ve reported, the IAEA already has the ability to investigate nuclear facilities and activities disclosed by Iran’s government. The country also has committed itself to ratifying the IAEA’s Additional Protocol in 2023, which would give international investigators the power to “investigate undeclared nuclear facilities and activities” as well as “demand information from member states,” according to a 2017 report by the Congressional Research Service.
If Iran were to violate the terms of the deal, sanctions would be reinstated.
This all hinges on the access given to international watchdogs (and their ability). Supporters claim the JCPOA grants them unprecedented access. Some critics point out that Iran has been known to evade inspections in the past and that key provisions giving access to monitors sunset over time. Others say the IAEA should be given wider authority, particularly the ability to inspect military sites, to adequately police Iran’s nuclear programs.
“As long as Iran remains in the Nuclear Non-Proliferation Treaty (NPT), it has an obligation to answer the IAEA’s questions and allow inspectors access to military sites and personnel in Iran related to that effort,” the Institute for Science and International Security, which has been skeptical of the Iran deal, said in a statement after Trump’s speech.
“The Iranian regime is the leading state sponsor of terror. It exports dangerous missiles, fuels conflicts across the Middle East, and supports terrorist proxies and militias such as Hezbollah, Hamas, the Taliban, and al-Qaeda.”
This claim is not new to the president’s repertoire. Trump suggests the assistance to al-Qaeda continues to the present day. This is in line with the latest State Department Country Reports on terrorism, released in July 2017, which said: “Since at least 2009, Iran has allowed AQ facilitators to operate a core facilitation pipeline through the country, enabling AQ to move funds and fighters to South Asia and Syria.” This phrasing marked a shift from previous reports, which indicated the support was in the past.