Raising the stakes for the nuclear negotiations is the only way to test if Tehran is serious.
This post is part of "Obama and the Middle East: Act Two," a series produced with the Washington Institute for Near East Policy on U.S. foreign policy in the president's second term. See our full coverage here.
The main issue regarding Iran is what nuclear offer to make. While most attention has focused on how to step up pressure on Tehran, the bigger sticks should be matched with juicier carrots, in a change from the past strategy of focusing on small confidence-building measures while leaving vague the end game. Neither Iranian leaders nor public opinion - in Iran or around the world - has been impressed by the very modest incentives offered Iran during the 2012 Baghdad talks. The "refreshed" offer that the big powers known as the P5+1 (Britain, France, Germany, Russia, and the U.S.) are said to have agreed to is not much more generous. Not surprisingly, the reaction has been: Why should Iran make a deal if that is all it gets?
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Iran has insisted on two benefits from a deal: sanctions relief and nuclear enrichment. An agreement is more likely if these issues are addressed with a generous offer. Surprisingly, the sanctions relief may be harder to do than nuclear enrichment. The U.S. and European practice, from Burma to Zimbabwe, has been to phase in sanctions relief, insisting on clear evidence of commitment to change before offering any rewards. That will certainly be the instinct regarding Iran, given the Islamic Republic's spotty record of implementation and quick suspension of past agreements.
On top of which, Iranian expectations about sanctions relief are entirely unrealistic. Iran's economy is in dire straits primarily because of the government's botched populist policies, such as increasing the money supply 80 percent while output grew 6 percent and then being surprised when the result was raging inflation. The public and the elite both expect that sanctions relief will be a magic formula for ending all economic problems, when in fact the impact would be modest so long as corruption is rampant, state micromanaging hampers business, and credit goes to the politically well-connected rather than to those with good business plans. In short, Iran is not likely to get much sanctions relief early on, and Iranians are likely to feel that they have not gotten the expected benefits from any deal - which augurs poorly for Iran sticking to a deal.
On enrichment, the U.S. position has long been more supple than realized. In 2011, Secretary of State Hillary Clinton told the House Foreign Affairs Committee: "It has been our position that under very strict conditions Iran would, sometime in the future, having responded to the international community's concerns and irreversibly shut down its nuclear weapons program, have such a right [to enrich] under IAEA [International Atomic Energy Agency] inspections." So yes, the United States could accept Iranian enrichment.
In effect, the P5+1 have adopted an old trick for reviving hung-up talks: change the question. Stopping Iran's enrichment was always the means to an end, not an end in itself; the goal is instead to push Iran farther away from a nuclear weapons capability. Ever since the 2011 proposal about the Tehran Research Reactor, the outlines of a deal have been becoming clearer: If Iran were to agree to ship out of the country any enriched uranium as soon as it was made, such a step would arguably address Western objectives almost as well as if Iran destroyed its present centrifuges but retained the knowledge and facilities to make centrifuges as it desired.