The Wisconsin Project on Nuclear Arms Control
Since the autumn of 2003, when the scope of Iran’s illicit nuclear activities became public, Britain, France and Germany (the “E3”) have led negotiations aimed at limiting the scope of Iran’s nuclear program. For several years, this diplomatic initiative was the only concerted effort made to ascertain whether Iran would be willing to freeze its nuclear work in exchange for political, economic and nuclear benefits. As part of this effort, the E3 negotiated a first uranium enrichment freeze in October 2003. When this agreement fell apart, the same three countries, along with E.U. foreign policy chief Javier Solana (the “EU3”), concluded a second accord in November 2004, which again froze parts of Iran’s enrichment program. During both of these freezes, European officials held numerous meetings with their Iranian counterparts aimed at brokering a long-term agreement. Despite these efforts, Iran resumed enrichment in early 2006, and the case moved to the U.N. Security Council.
It is a striking fact that on an issue challenging both U.S. nonproliferation efforts and U.S. national security, the E3 and then the EU3 led negotiations with Iran, although the United States was active at the International Atomic Energy Agency. This new leadership from Europe raises several questions: What can we learn from Europe’s role in confronting the nuclear challenge posed by Iran? What did the Europeans achieve? Where are the negotiations going now? And what are the implications for future leadership on nonproliferation?
In an effort to shed light on these questions, the Wisconsin Project on Nuclear Arms Control hosted a roundtable discussion in Washington D.C. last autumn. The panelists were Philip Gordon, Senior Fellow for U.S. Foreign Policy at the Brookings Institution, Hans-Peter Hinrichson, First Secretary for Security Policy at the German Embassy, Danielle Pletka, Vice President for Foreign and Defense Policy Studies at the American Enterprise Institute, Simon Shercliff, First Secretary in the Foreign Security Policy Group at the British Embassy, and Terence Taylor, Director of the International Council for the Life Sciences and Senior Advisor and Director of Biological Programs for the Global Health and Security Initiative at the Nuclear Threat Initiative
In sum, the panelists found that E3/EU3 negotiations with Iran helped create an international consensus on the threat posed by Iran’s nuclear program, and shaped the world’s response to that threat. Though Europe’s diplomatic effort has now moved to the U.N. Security Council, the panelists believe that E.U. countries should continue to play a leading role in the process, by pushing for further Security Council sanctions and, if necessary, pursuing E.U. sanctions outside the Council. European action on Iran could serve as a useful model for E.U. leadership on other foreign policy issues, though the panelists found it premature to characterize E.U. leadership on nonproliferation as an alternative to the leadership provided by the United States.
Following is the moderators’ summary of the discussion. The findings are a composite of the panelists’ individual views; no finding should be attributed to any single panelist, or be seen as a statement of policy of any government.
Finding 1: The European negotiations with Iran had a positive effect but the achievements have been largely procedural and institutional:
- they heightened international concern over Iran’s nuclear program and shed light on Iran’s intentions;
- they gave E.U. countries a stake in the success of the negotiations and raised the stature of E.U. foreign policy;
- they provided the United States a policy to adhere to; but
- it is unclear whether they impeded Iran’s nuclear progress.
When the scope of Iran’s nuclear violations began to emerge in 2003, they were not viewed by most of the world as a major security threat. The panelists found that by undertaking negotiations with Iran at that time, Britain, France and Germany helped the International Atomic Energy Agency gain information about Iran’s nuclear activities, which gradually drew attention to how these activities violated Iran’s international obligations. The negotiations educated the world about the direction of Iran’s nuclear program and brought the threat posed by this program from the sidelines to the fore.
Under the E3’s October 2003 agreement, Iran pledged to suspend uranium enrichment, to cooperate with the IAEA, and to ratify the Agency’s Additional Protocol on enhanced inspections. Pending ratification, Iran agreed to act “in accordance with the protocol in advance of its ratification.” This gave IAEA inspectors greater access to Iranian nuclear facilities, and required Iran to answer questions about its past and current nuclear work. Information provided by Iran and gathered by inspectors was published in IAEA reports, which were then circulated to IAEA member countries, discussed at IAEA governing board meetings, and reported on in the international press. A detailed picture of Iran’s nuclear intentions—with several glaring holes—began to emerge. Iran’s refusal to fill these holes, its defiance of inspections obligations, and its intermittent and uneven compliance with agreements made with Europe in 2003 and in 2004 to suspend uranium enrichment increased suspicion as to Iran’s intentions. The burden of proof, from the perspective of international public opinion, shifted to Iran. A series of IAEA resolutions, which condemned Iran’s lack of cooperation with the Agency and called on Iran to suspend proliferation-sensitive projects, further consolidated international opinion against Iran.
In August 2005, after several months of meetings, the EU3 offered Iran a package of economic, security and nuclear energy incentives in exchange for a freeze of Iran’s work on uranium enrichment, among other things. This offer had the support of China and Russia, and of the United States, which conceded to no longer block Iran’s application to join the World Trade Organization and Iran’s efforts to procure parts for civilian aircraft. The package included access to light-water power and research reactors, and guarantees related to external sources of fuel for those reactors. Even the prospect of indigenous nuclear fuel production was left open, after a period of confidence-building. Yet Iran rejected the offer on the day it was submitted. Iran’s refusal, and the manner in which it was delivered, strongly suggested that Iran was not prepared to negotiate its nuclear work at that time. Countries reasoned that if Iran’s intention was truly the development of a nuclear energy program to generate electricity, then such an offer would at least merit consideration. Iran’s abrupt refusal showed that it intended to enrich uranium at any cost, which, taken in conjuncture with the omissions in Iran’s disclosures to the IAEA, suggests a military aim instead of a long-term energy goal. Iran’s response further delegitimized its nuclear program in the eyes of the world.
Thus, the world came to understand that Iran’s nuclear ambitions—notably its pursuit of uranium enrichment and heavy water technology—are indeed a threat. On September 24, 2005, the IAEA governing board officially found Iran in non-compliance with its inspections (safeguards) obligations and voted nearly unanimously to send the issue to the U.N. Security Council. The panelists believe that the near unanimity of this vote was due to the E3/EU3 process, which produced international consensus as to how to respond to Iran.
The panelists also found that the negotiations raised the stature and self-esteem of E.U. foreign policy. Europe was not merely a player in the diplomatic effort; it had crafted and was leading the effort. The decision by Britain, France and Germany to include Javier Solana, the E.U.’s high representative for foreign and security policy, confirmed that the initiative undertaken by the E3 was indeed a European one. Bringing together all 27 E.U. countries behind a single policy dramatically increased Europe’s leverage. It also marked the first time the E.U.’s economic power was brought to bear on a security issue. Having taken the lead in negotiations, the European Union necessarily staked its prestige on the outcome. When negotiations failed to yield an agreement, E.U. countries led efforts to move the issue to the U.N. Security Council.
Most panelists found the delay in taking Iran to the Security Council excessive, and thought the E3 should have pressed for referral sooner. Others argued that it was better to wait and ensure that the referral, when it came, was followed by meaningful action. The example of North Korea’s referral to the Security Council in February 2003 was cited as a precedent to avoid; the Security Council took no action following the referral, which weakened the Council’s credibility.
Iran’s referral, as a result of consensus-building, was more successful. After Iran was referred in September 2005, the Security Council issued a presidential statement condemning Iran by late March 2006, and a first resolution under Chapter VII of the U.N. Charter was adopted in June. And when the Security Council finally adopted a resolution sanctioning Iran, on December 23, 2006, it did so unanimously. A second sanctions resolution, adopted on March 24, 2007, was also unanimous. These votes had a powerful impact on Iran. They sent a strong message to Iran’s leaders and to its population that the world was unified in its stance against Iran’s nuclear work. The Security Council demanded that Iran suspend uranium enrichment and its work on a heavy water reactor – the same red lines first set forth by the E3/EU3. This was a strong endorsement of Europe’s efforts.
The United States had kept its distance during the early stages of the E3/EU3 negotiations. Though not explicitly condemning the European efforts, the United States remained skeptical. Not until March 2005 did it offer its tepid endorsement. Until then, U.S. policy on Iran was adrift, with an oft-repeated insistence that Iran be sent to the U.N. Security Council, with rumors of military strikes on Iran’s nuclear facilities and hints of regime change. The panelists agreed that Europe achieved a large foreign policy success by persuading the United States that the negotiations were productive and worth joining.
Winning this U.S. support was a victory for Europe’s commitment to “soft power.” In 2003, Europe feared that the United States might use “hard power” in Iran as it had in Iraq. Indeed, all but one panelist found that the E3’s motivation to take a leading role in the Iran crisis stemmed largely from fears that without a new diplomatic effort, the United States might decide on military action. The negotiations decreased the likelihood of this prospect by giving the United States a policy alternative.
The negotiations also offered a benefit for the United States. The U.S. efforts to convince banks, companies and governments around the world to either reduce or end business in Iran got an important boost. Thanks to the E3/EU3 negotiations, the world learned about Iran’s nuclear violations and its continued defiance, which led to a perceived increase in the risk associated with Iran. Without being obliged to do so, many banks, particularly in Europe, began limiting their exposure. This made more potent the warnings issued later by the U.S. Department of the Treasury.
Despite these benefits, some panelists expressed concern that the U.S. had allowed itself to focus too much on the negotiations and not enough on what they were meant to—but had not—achieved. Namely, a freeze of all Iran’s enrichment related activities. The Europeans did obtain two freezes, one in 2003 and a second in 2004. The panelists judged these freezes to be the principal achievements of the process, insofar as delaying Iran’s nuclear progress is concerned. Even during these periods, however, Iran continued auxiliary efforts, including uranium conversion and centrifuge component manufacturing. Therefore, it is uncertain whether the freezes materially delayed Iran’s program.
Finding 2: E.U. member countries should be ready to impose increased sanctions on Iran independently of the United Nations.
- Most panelists found the time for such action to be imminent and emphasized that neither E.U. nor U.N. sanctions need be ironclad in order to have an impact.
- Britain, France and Germany should still use their good offices to keep the U.N. sanctions process moving forward in parallel to any E.U. action.
The panelists agreed that maintaining unity among the E3 countries during the early stages of negotiations with Iran was relatively easy. Achieving consensus among the larger group of countries now involved in negotiations is more difficult; unity takes more time and requires compromise. Since March 24, 2007, the date of the most recent Security Council Resolution, the E3+3 countries (Britain, France and Germany, joined by China, Russia and the United States) have taken a long time to agree on a timetable for stepping up sanctions against Iran, and on the specific penalties that might be imposed. This slow response runs counter to the principle that has guided European diplomacy with Iran since 2003: a lack of compliance by Iran is meant to lead to increased pressure, which at this point means further sanctions.
Given the impasse, most panelists found that the European Union should not wait indefinitely for the Security Council to act. They argue that there is a “tipping point” at which concessions made to Russia and China in order to keep the coalition together are detrimental to the overall goal of preventing Iran from achieving a nuclear weapon capability.
Independent E.U. action could include targeting additional Iranian financial institutions and banning E.U. companies from undertaking new energy development projects in Iran. The E.U. could also require member states to reduce export credit guarantees to firms seeking to do business in Iran. The sanctions should aim to further isolate Iran economically and exploit the weaknesses of Iran’s economy. They should also increase awareness within the Iranian ruling elite as to the costs of the country’s nuclear policy. The European Union already acted outside of the Security Council last April, when it froze the assets of additional Iranian organizations and individuals linked to proliferation, banned the individuals from travel within the European Union, and instituted an official ban on E.U. arms sales to Iran. According to the panelists, the pressure of additional E.U. sanctions may not be sufficient to persuade Iran to compromise, but it will certainly not do so in the absence of such sanctions.
Most panelists found Europe could take the lead in implementing sanctions outside the Security Council, and then try to convince other countries that trade with Iran, like Malaysia, Singapore, South Korea and the United Arab Emirates, to follow suit. By showing a willingness to sacrifice its business with Iran, Europe could hope to win support for similar measures from more reticent countries.
If additional sanctions cause an increasing number of companies and banks in Europe to cut ties with Iran, there would be a multiplier effect. If a German bank does not to extend a line of credit to those doing business with Iran, a message is sent to other banks and companies: Iran is a risk. This message of increased risk already has been conveyed in statements made by inter-governmental groups like the Financial Action Task Force and the Group of Seven. Most panelists found that an official requirement by European governments that their companies and banks disengage from Iran would have a powerful effect beyond Europe; it could prompt banks around the world to disengage as well.
Though businesses in Russia and China may step in—and in many cases already have—the loss of trade with Europe could still be costly. Iran’s new partnerships with the east have been made by necessity, not choice. It now costs Iran more to get a letter of credit because Iran may have to query three banks. And Iran would prefer to buy high technology items from Germany rather than from Malaysia. The fact that Iran continues to use illicit procurement networks in Europe is proof of this.
The panelists found that leadership renewal in Europe has already bolstered the prospect of independent E.U. action. For France—an opponent of the U.S.-led Iraq war in 2003—to be arguing for stepped up sanctions against Iran sends a message that the effort to curb Iran’s nuclear program is not a goal shared only by Britain and the United States. French President Nicolas Sarkozy and German Chancellor Angela Merkel are Atlanticists who have taken firm positions on this issue, and British Prime Minister Gordon Brown will not want to appear weak on one of his first major foreign policy challenges. For instance, in a speech last November, Mr. Brown announced that Britain “will lead in seeking tougher sanctions both at the U.N. and in the European Union, including on oil and gas investment and the financial sector.” In the absence of E.U. action, some panelists predicted that member states such as Britain and France may act on a national level.
The panelists also found that Europe could serve as a bridge during negotiations at the Security Council between the United States, which is arguing for more stringent sanctions, and Russia and China, which are reluctant to agree. In particular, Europe could fill the vacuum left by the poor state of relations between the United States and Russia. Most panelists believe that a concerted campaign by European leaders, in which the importance of the Iranian nuclear case is emphasized, could help persuade Russia to support a more robust line on Iran in the Security Council. This campaign would not, on its own, tip the scales in favor of tougher Security Council sanctions, but it could have a positive influence on the direction of the sanctions process.
Most panelists would like to see E.U. member states help constrain what they regard as the excessive political activities of IAEA Director General Mohamed ElBaradei. In their view, his decision last August to pursue a “work plan” on resolving questions about Iran’s nuclear past, which it had repeatedly refused to answer, sidelined negotiations at the Security Council on a third sanctions resolution and provided cover for countries seeking to delay additional sanctions. These panelists argue that E.U. countries could use their combined influence in the IAEA governing board to encourage Dr. ElBaradei to confine his activities to his official mandate which is to verify nuclear material and inform the board if there is a doubt about the peaceful nature of a country’s nuclear work.
The panelists emphasized that strong sanctions are needed at some level to send a message to the world that proliferation has costs. If Iran is not punished and isolated because of its nuclear violations and its defiance of binding Security Council resolutions, the message to other countries will be that proliferation goes unpunished. The nonproliferation regime will be weakened as a result.
Finding 3: The European Union is not an alternative to the United States on nonproliferation, despite Europe’s leadership in negotiating with Iran.
- U.S. participation in the E.U.-led negotiations was essential and increased their value and credibility.
- The negotiations are a model for E.U. action on foreign policy issues.
The panelists dismissed the suggestion that through its leadership in negotiations with Iran, Europe had proven itself to be an alternative to the United States in meeting the challenges posed by nuclear proliferation. They found that U.S. endorsement of and participation in the process was crucial. Without U.S. support, the incentives package offered to Iran in August 2005 would have lacked credibility. It included, among other things, promises of nuclear technology sharing and the sale of aircraft parts. Such goods would not have been supplied to Iran by European companies fearful of jeopardizing their larger volume of trade with the United States, and their assets under U.S. control.
While Europe may not have replaced the United States, it continues to play an important role in the Iranian nuclear crisis. European economic ties are a “stick” against Iran that is unavailable to the United States, which has not traded with or invested in Iran for decades. The panelists found that alone neither the European Union nor the United States has the necessary leverage over Iran to force a change of direction. Fortunately, the U.S. position on the Iranian nuclear crisis has not been dramatically different from Europe’s. After the divisiveness over Iraq, the convergence of views on the Iranian nuclear threat has projected the image of a united front and has allowed Europe and the United States to work together.
Because of this convergence, the panelists found that any attempt by the United States to enforce laws that punish foreign companies for investing in Iran could backfire. One such law, the Iran Sanctions Act (ISA), penalizes development assistance to Iran’s oil and gas sectors and could ensnare several major European energy companies. If European governments are unwilling to bar their own companies from such investment as part of the sanctions process, then these governments are unlikely to do so as a result of an economic threat from the United States. Indeed, if the ISA were enforced after years of neglect, European countries might follow through on a threat to challenge the legality of such laws at the World Trade Organization. Still, most panelists found that the threat of enforcing U.S. laws like the ISA might help pressure European energy companies and banks to avoid Iran. In their view, U.S. congressional initiatives to tighten ISA by closing loopholes and eliminating waivers could have a deterrent effect.
Though Europe may not be ready to take over as the world’s national security leader in lieu of the United States, the European negotiations on Iran could become a model for the European Union on other foreign policy issues. The panelists found that the example of a small, avant-garde group of countries leading the rest was effective. This is true despite the fact that it takes time to achieve consensus among the 27 E.U. member states. The negotiating format had the benefit of making it harder for Iran to play different European powers off each other. It also heightened the impact of the policy on Iran and showed that Europe could act as a unit.