By Alex Brummer
President Obama finally has won the foreign policy victory he has craved with the signing of a nuclear disarmament deal with Iran. The agreement between Tehran and the world’s six largest powers, including the United States, signals the end of decades of hostility dating back to the Iranian revolution which brought the Ayatollahs to power.
The deal, announced in Geneva, sent global oil prices tumbling on the assumption that the normalisation of relations between Obama and the Iranian President Hassan Rouhani will mean an end to the United Nations and US sanctions which made Iran a pariah state and cut-oil sales to the West including Britain. Crude oil prices fell two per cent heading towards $50-a-barrel.
The deal owes much to the perseverance of US Secretary of State John Kerry who having failed to deliver on an Israel-Palestinian peace deal turned his attention to forging curbs on Iran’s nuclear capability. The deal comes at a huge risk to America’s moderate friends in the Middle East Israel and Saudi Arabia. They see Iran as an expansionist state exporting terror across the globe through radical groups including Hezbollah and Boko Haram. Israel was quick to react to the deal describing it as ‘a bad mistake of historic proportions.’
What will be of particular concern to Israel and to the US Congress is the decision of the negotiators to lift sanctions. A combination of the oil sanctions and in recent years financial sanctions, starved Iran of capital and credit, and are seen as having forced the country to the bargaining table.
Under the terms of the deal most sanctions will be lifted although the Western powers have insisted that some sanctions could be re-instated within 65 days under a ‘snapback’ clause should it be found that the nuclear agreements have been violated. A much tougher deal which eased sanctions only after inspections confirmed that Iran was meeting targets for reducing its nuclear capability would have been a preferred solution.
Obama can expect a bitter fight in both houses of Congress over the deal which has put in place legislation which would make it tough to ease sanctions. This followed heavy lobbying by Israel with the Prime Minister Benjamin Netanyahu taking the fight against an Iranian deal directly to Capitol Hill earlier this year in the face of opposition from the White House.
President Obama could well veto any attempt by Congress to reject the deal – it would then require a two-thirds majority in the Senate to overturn the veto. The top Senate Republican Mitch McConnell already has warned that even with a strict inspectorate and a freeze on future development Iran is already ‘a threshold nuclear power.’
At the core of the deal is the right of the United Nations nuclear watchdog, the International Atomic Energy Authority, being able to inspect Iranian nuclear sites. The inspectors will also demand that Iran provides detail of previous military research and testing including the development of ballistic missiles. Under the terms of the deal Iran has agreed to freeze the development of nuclear centrifuges, that potentially could be used for developing weapons grade material, for ten years.
The big concern among moderate Middle East states is that an Iran armed with new financial resources, as a result of an end to sanctions, will have the resourced to export further terrorism around the world. Despite the deal Iran’s Supreme Leader Ayatollah Ali Khameni has vowed that the fight against American ‘arrogance’ will continue.
Britain, as the world’s financial centre, has been at the forefront of imposing sanctions against Iran proscribing dozens of Iranian banks and business entities. Two British banks, HSBC and Standard Chartered, have been heavily fined in the US for sanctions busting. If, as expected, the sanctions are rapidly lifted we can expect to see a gold rush of Western banking and business to the region.
A more acceptable deal would have linked the lifting of sanctions to a timetable dictated by verifiable progress on halting and dismantling nuclear facilities.
Alex Brummer is City Editor of the Daily Mail and former chairman of the Board’s International Division