EU/IRAN: US involvement boosts nuclear talks hopes

Analysis

Since October 2003, the United Kingdom, France and Germany (the "EU-3") have attempted to offer trade, technological and political incentives in a bid to help Iran emerge from its isolation, and to persuade it to abandon its suspected efforts to acquire a nuclear weapon (see IRAN: EU deal averts nuclear crisis - for now - October 24, 2003). Many US officials denounced the EU approach as equivalent to rewarding Iran for abandoning nuclear ambitions that were at variance with its commitment to the Nuclear Non-Proliferation Treaty (NPT) (see US/ISRAEL: Strike on Iran highly unlikely - October 4, 2004).

EU objectives. The EU, particularly since the election of the relatively reformist president Mohammed Khatami in 1997, has pursued four main objectives towards Iran:

1. Constructive engagement. The EU wants to demonstrate that constructive engagement with problematic regimes is more fruitful than coercive diplomacy or the overt use of force. This strategy is predicated on the belief that political forces in Iran will oblige the theocratic conservatives in power to engage fully with the West. The EU is above all counting on modernising pressures stemming from a youthful population (two-thirds of Iran's population of 70 million is under 30 years old).
2. Regional stability. The EU's approach to the broader Middle East stresses the regional dimension of overall security. In this context, Iran is viewed as a potential force for regional stability once its more fundamentalist tendencies can be reined in -- either through internal evolution or external incentives.
3. Commercial lever. As part of these incentives, the EU sees considerable leverage in commercial exchanges aimed at tying the Iranian economy into global networks. EU-Iranian trade approached 20 billion dollars in 2003. While 80% of Iran's exports to the EU consist of oil products, it imports from the EU power generation systems, large machinery, electrical and mechanical appliances. A general EU-Iranian trade agreement has been dangled as a "carrot" for it to abandon any nuclear weapons programme.
4. Weapons programme. The aim of the EU's overall strategy is to prevent Iran from acquiring nuclear weapons. This includes offers to supply Iran with light-water nuclear reactors and the fuel to run them, rather than to allow it to become autonomous in nuclear energy -- which would run the risk of it developing a weapon.

Nuclear potential. Iran has agreed, as part of a deal with the EU-3, temporarily to halt its uranium enrichment programme and to limit work on all but a dozen of several thousand centrifuges capable of generating weapons-grade uranium. However, it has refused to put a definitive stop to these programmes, which it is entitled to pursue under the terms of the NPT. Moreover, when the Russian-built Bushehr nuclear reactor becomes operational in 2006, Iran will be one step closer to producing plutonium. The terms of the Bushehr contract specify that spent fuel rods will be returned to Russia. However, there may be scope for slippage, allowing Iran access to fuel convertible into plutonium.

Offering incentives. The EU's strategy, now supported by the United States, is to suggest to Iran that it can have either a modern economy or nuclear weapons, but not both. It is far from clear that a majority of Iran's leaders believe that to be the case, which makes the EU strategy appear as something of a gamble.

The EU alone cannot offer incentives attractive enough to ensure the desired outcome. Iran remains fearful of US -- or even Israeli -- military action, particularly since the announcement of the US doctrine of pre-emption. Tehran seeks from Washington a non-aggression commitment. That is not currently on the cards. Moreover, some of the key items it seeks from the West include spare parts for its ageing US-supplied aviation sector. Dangled EU promises of Airbus aircraft remain hypothetical compared to its present need for US spare parts.

However, US Secretary of State Condoleezza Rice made clear in her March 11 statement on Iran that spare parts are all that might be on offer -- and even that remains conditional, in ways which were not made explicit. Moreover, the United States, while joining the EU effort, has insisted that it will not engage in direct bargaining with Iran. Nonetheless, US inputs -- however limited -- are seen in Brussels as useful increments, since the EU strategy depends on the gradual accumulation of sufficient numbers of incentives to tip the political balance inside Iran.

Future developments. The two sides are now facing what will probably be a long wait, punctuated by a number of key dates:

• NPT review. In June, the IAEA may decide to review Iran's compliance with the NPT, in view of its apparent reluctance to give explicit assurances about its enrichment and reprocessing intentions. The EU's recent decision to join the United States in threatening sanctions was motivated by disappointment at the slow rate of progress on nuclear discussions.
• Presidential elections. In the same month, presidential elections will be held to replace Khatami, who is ineligible for re-election. It is widely expected that manipulation of the electoral process will produce a conservative president (see IRAN: Hardline conservatives consolidate power - January 27, 2005). When a new president is elected, the EU-3 will enter a new stage of bargaining to gauge the intentions of the new incumbent. The United States has already signalled that it will tolerate no further procrastination on Iran's part after the elections.
• Bushehr debut. In early 2006, the Bushehr plant will come on stream, along with the Iranian potential to acquire weapons-grade plutonium. This will also be a window of opportunity for US officials urging military action.

The official position of the UK and French governments is identical to that of Washington: a nuclear Iran is "unacceptable" (see UNITED STATES: Bush binds EU into tougher Iran posture - March 14, 2005). However, that position is not so solidly held in Berlin. Moreover, in Paris and London too there are some who consider a nuclear-armed Iran to be an eventual inevitability. The challenge for the EU-3 is therefore, with US support, to hold together long enough to produce results.