U.S.-Iran Policy: A New Approach
Shifting the U.S. Approach to Iran to one of 'Gradual Engagement'
The following is an analytical essay I wrote for a class on the MENA region I took at Duke University in 2020. The recommendations contained below should not be taken as my own personal policy recommendations or as representative of my own views on this subject.
U.S.-Iran Policy: A New Approach
The Islamic Republic of Iran and the United States have reached a critical point in their relationship; the current Trump administration policy of ‘maximum pressure’ on Iran has not been able to coerce Tehran to give in to U.S. demands. I propose that a new strategy of engagement with Iran diplomatically and economically will produce better results for both nations and allow for the U.S. to better achieve its objectives vis-à-vis Iran. Economically, this strategy calls for a reduction in the volume and severity of sanctions and for the gradual re-introduction of trade with Iran. Diplomatically, this strategy calls for the re-establishment of diplomatic relations with Iran and the encouragement and facilitation of greater Iranian diplomatic involvement in the region.
The United States and the Islamic Republic of Iran have had a tumultuous relationship stretching back over many decades which became much more adversarial in 1979 thanks to the Islamic Revolution that brought the current government to power. The relationship since 1979 has been rocky thanks to a complete divergence in the goals and actions of both nations, but it has become increasingly dangerous as of late. The catalyst: the ascension of Donald J. Trump to the Presidency of the United States. Then-candidate Trump campaigned on a platform of getting tough on Iran, and since assuming office he has pursued this exact tactic. Thanks to a series of escalations from the Trump administration and Iranian government the two nations seem to be closer to the brink than ever before. While a conflict may seem inevitable, it is anything but; a dramatic shift in U.S. policy has the potential to bring both nations closer together while decreasing the presumed threat both pose to the other. This policy should be one of embrace, not isolation; engagement rather than rejection. I argue that the current U.S. policy towards Iran being pursued by the Trump administration is reckless and ultimately ineffectual and in order to affect meaningful change and achieve U.S. objectives with regards to Iran, the policy must become one of radical engagement. I call this new policy “Gradual Engagement” and argue that if the U.S. can achieve certain levels of economic and diplomatic engagement with Iran, it will help to drastically reduce the animosity between the two nations while also integrating Iran into regional and global diplomatic and economic structures that will help to bring their behavior more in line with acceptable international norms. Economically, the U.S. needs to first reduce the number and severity of sanctions and then gradually begin to engage with Iran as a trading partner. Diplomatically, the U.S. needs to first re-establish diplomatic relations with Iran and then begin to encourage and facilitate positive Iranian engagement with other world actors, specifically those in the Middle East and North Africa (MENA) region. To explain the new plan, I will first examine the nature of the current problems between the U.S. and Iran, and why it is important that they be resolved. Then, I will provide an overview of former President Obama’s approach towards Iran and its consequences before transitioning to the current administration's approach towards Iran and how it has not produced the intended results in order to demonstrate the need for a new policy approach to this issue. I will then elaborate on my proposed policy by explaining both of its pillars, economic and diplomatic engagement, and the potential benefits and tradeoffs of both. Finally, I will conclude with a summary and recommendations for the implementation of this plan.
The Problem: A History of Antagonism Persists
The current heightened state of tension between the U.S. and Iran cannot be understood without at least a basic knowledge of the history between the two nations. The 1953 CIA-executed coup that overthrew Iran’s Prime Minister Mohammed Mossadegh is widely regarded as the earliest significant change in the U.S.-Iran relationship; Mossadegh’s downfall resulted in the rise of Shah Mohammed Reza Pahlavi, a dictator and close U.S. ally who ruled with Iran with an iron fist. The Shah brutally repressed dissent and eventually was himself overthrown during perhaps the most important point in the U.S.-Iran relationship: the Islamic Revolution of 1979. Iran’s government became a quasi-theocracy with democratic structures of limited authority, all overseen by a religious leader (current Ayatollah Khamenei) with authoritarian powers. The new government assumed an especially antagonistic view of America and the Iranian hostage crisis of 1979 began what became nearly a half-century of hostile sentiments, aggressive actions, and attempts to undermine the other that flowed back and forth between Iran and the U.S.. Senior government officials in Iran have regularly described the United States as ‘the Great Satan’ while U.S. officials have labeled Iran a member of the ‘Axis of Evil’. It is amidst this rhetorical and literal strife that arises the problem: Iran currently poses a serious threat to U.S. interests in the region and abroad but has been unwilling to bend to U.S. policy approaches intended to mitigate this threat. There are twelve policy objectives that the U.S. wishes to achieve with regards to Iran, laid out in a speech by current U.S. Secretary of State Mike Pompeo:
“First, Iran must declare to the IAEA a full account of the prior military dimensions of its nuclear program, and permanently and verifiably abandon such work in perpetuity...Second, Iran must stop enrichment and never pursue plutonium reprocessing...Third, Iran must also provide the IAEA with unqualified access to all sites throughout the entire country...Iran must end its proliferation of ballistic missiles and halt further launching or development of nuclear-capable missile systems...Iran must release all U.S. citizens, as well as citizens of our partners and allies, each of them detained on spurious charges...Iran must end support to Middle East terrorist groups...Iran must respect the sovereignty of the Iraqi Government and permit the disarming, demobilization, and reintegration of Shia militias...Iran must also end its military support for the Houthi militia and work towards a peaceful political settlement in Yemen...Iran must withdraw all forces under Iranian command throughout the entirety of Syria...Iran, too, must end support for the Taliban and other terrorists in Afghanistan and the region, and cease harboring senior al-Qaida leaders...Iran, too, must end the IRG Qods Force’s support for terrorists and militant partners around the world...And too, Iran must end its threatening behavior against its neighbors – many of whom are U.S. allies. This certainly includes its threats to destroy Israel, and its firing of missiles into Saudi Arabia and the United Arab Emirates. It also includes threats to international shipping and destructive – and destructive cyberattacks.”
While this may seem like a prodigious list of conditions, it essentially boils down to four main goals: ending the Iranian nuclear program, ending Iranian support for terrorists, insurgent, and other sub-state militant groups, ending hostile actions against the U.S., and ending actions that destabilize the MENA region. Unfortunately, neither the past nor current U.S. administrations have been able to convince or coerce Iran into the fulfillment of these goals.
Former and Current Policies
Having established the underpinnings of the U.S.-Iranian relationship, a discussion of the policies pursued by the former President Barack Obama and the current President Donald Trump will make the need for a new policy glaringly obvious. Then-President Obama chose to pursue a dual strategy of both engagement with and containment of Iran consisting of a mix of diplomatic overtures followed by harsh sanctions. The result of negotiating with both the proverbial carrot and stick at the same time did not have the intended effect; Obama’s desire for engagement hampered his administration’s ability to “respond to Iranian provocations across the region, and particularly in Iraq, Afghanistan, and Lebanon”. This commitment to engagement at the cost of countering Iranian missteps in the region was also unable to fulfill its goal:
“Nor did the much touted engagement track supposedly driven by the president's charisma and goodwill check the Islamic Republic's relentless march toward nuclearization and regional hegemony, which persists to this day”.
Not including the now discarded 2015 Joint Comprehensive Plan of Action (JCPOA), the Obama administration pursued a policy that was supposed to allow them to have their cake and eat it too which accordingly produced no significant, lasting changes in the U.S.-Iran relationship. It is from this muddled and unsuccessful policy that the current Trump administration policy arose.
Donald Trump burst onto the political scene in 2015 with strong sentiments about Iran, and the 2015 JCPOA (commonly referred to as the Iran nuclear deal) in particular. Never a man to mince his words, during a protest rally against the Iran nuclear deal in 2015 he called the deal “catastrophic” and “the single greatest national security threat facing America”. He continued to blast the deal and repeatedly threatened to get rid of it over the course of his campaign and right through the general election. But how would he deal with Iran after scrapping the deal? At a rally in 2015, he gave a preview of the Iran policy he would ultimately pursue as president when he said “If you take a look at Iran from four, five years ago they were dying...They had sanctions, they were being choked to death and they were dying. They weren’t even going to be much of a threat”. This sentiment ultimately manifested itself as the policy of ‘maximum pressure’, whereby the U.S. withdrew from the JCPOA and has since imposed crippling sanctions on Iran. The effects of these sanctions on the Iranian economy has been drastic; the State department estimated that from May 2018 (when the U.S. withdrew from the JCPOA) to April 2019 that “sanctions have denied the regime direct access to more than $10 billion in oil revenue since May. That is a loss of at least $30 million a day, and this is only with respect to the oil”. Although the Iranian economy has been devastated, the ‘maximum pressure’ policy has yet to make a significant difference in U.S.-Iranian policy. In fact, rather than capitulating to these efforts, Iran has been ramping up a series of escalatory measures aimed at the U.S. and other regional powers: “From May 2019 to September 2019, Iran attacked oil tankers in and around the Gulf, downed a U.S. military surveillance drone, and launched a sophisticated attack against Saudi oil facilities”.
So how have two U.S. presidents pursuing significantly different policies been unable to coerce or co-opt Iran into changing its behavior? The answer lies in their chosen method of enforcement: sanctions. Iran has suffered U.S. and global sanctions for decades now and has demonstrated a willingness and ability to endure them, meaning that “sanctions will probably fail to coerce Iran into compliance, for the simple reason that sanctions rarely work and that, to the extent that they do, the conditions conducive to their success are not present in Iran”. Because sanctions have not and likely will not work as a mechanism to change Iran’s behavior and the U.S. is currently unwilling to utilize the military forces to change their behavior, it would seem a policy change is in order.
My proposed policy of Gradual Engagement has two key components, economic and diplomatic engagement, that should be pursued somewhat concurrently. As I will demonstrate, the economic approach is more important for achieving closer relations between the U.S. and Iran while the diplomatic approach is more important in achieving positive Iranian relations with MENA region nations.
The economic approach focuses on two key areas: sanctions relief and trade. As mentioned above, these sanctions are devastating the Iranian economy and so eliminating the vast majority of them should function as a significant show of good faith towards Iran to help bring them to the negotiating table. This should be the first part of my proposed policy to take place, as “Iran has refused...negotiations with the United States, to date, insisting that the United States provide JCPOA sanctions relief before any talks can begin”. The sanctions relief should occur in four successive phases. The first phase should be an immediate release of frozen Iranian assets not deemed to be related to any terrorist-sponsorship or nuclear activities, such as the $1.9 billion worth of bonds belonging to Iran’s Central Bank currently held in a Citibank account in New York. More importantly, the U.S. should remove the sanctions on the purchase of Iranian crude oil and petrochemical products such as those laid out in Executive Orders 13622 and 13846. This should allow for a sizable chunk of the Iranian economy to come back to life and provide some much-needed economic relief. It is possible that this first phase will demonstrate the U.S.’ goodwill towards Iran, and bring them to the negotiating table. If that is the case and Iran begins to negotiate, then step 2 should be implemented. Step 2 involves the removal of prohibitions on U.S.-Iranian trade and allows for trade and investment with/in Iran by U.S. firms. This should encourage Iran to begin trading with the U.S. and through the closer interaction and integration of both economies, bring the nations themselves closer. The third phase is more conditional than the first two; after an agreement on the Iran nuclear issue has been reached and Iranian entities have been deemed to be in compliance with said agreement, the U.S. should remove WMD and nuclear-related sanctions (excluding ballistic-missile development and production related sanctions). Phase four is similarly conditional and would allow for the removal of sanctions related to Iran’s demonstrated support for terrorist entities if Iran has ceased to support such entities. This would mean sanctions such as Executive Order 13324 that “mandat[e] the freezing of the U.S.-based assets of, and a ban on U.S. transactions with, entities determined by the Administration to be supporting international terrorism”.
The second part of the economic approach coincides with phase two of the sanctions relief plan (removal of prohibitions on U.S.-Iranian trade); once phase two has been achieved, the U.S. should try to be one of, if not the, first nation to begin trading with Iran. Volume and type of trade should be limited at the onset but as Iran continues to demonstrate goodwill and restraint in their actions the scope should be increased. Trade should not focus just on U.S. investment in Iran and the importation of Iranian goods but should focus on attaining a significant level of Iranian importation of U.S. goods and Iranian investment in the U.S. itself. For example, Iranian real estate holdings such as those in New York City, Texas, California, Virginia, and Maryland (owned by Iran’s Bank Melli and are currently frozen) should be allowed as this gives Iranians more of a stake in the U.S.. Tying Iranian money in with the U.S. both allows for greater U.S. influence over Iran and decreases the desire for Iranians to act in a hostile manner towards the U.S. (lest they see their holdings and capital frozen or taken).
There are a significant number of important upsides to this economic approach, though for the sake of brevity I will focus on only four. The first of these is in the short term the most important: sanctions relief offers the best possible chance of an immediate cooling of tensions with Iran and potential for bringing them to the negotiating table to engage on other matters. This has been demonstrated before, and quite recently: “The international sanctions regime of 2011-2015 is widely credited with increasing Iran’s willingness to accept the JCPOA as well the election of Hassan Rouhani as President of Iran in June 2013”. As mentioned above, these sanctions have decimated the Iranian economy and caused significant problems for the regime, which brings me to my second point: economic relief would likely relieve domestic pressure on the regime. Economic conditions have stirred up unusually high levels of domestic unrest in Iran, perhaps exemplified best by the gasoline price-hike protests in the winter of 2019. Iran’s government implemented a price-hike on domestic gasoline purchases to help make up for a budget shortfall due to the U.S. sanctions. This resulted in massive nationwide protests where “outraged demonstrators in cities large and small were calling for an end to the Islamic Republic’s government and the downfall of its leaders”. The third point is that early economic engagement with Iran, specifically in trade and investment, could help limit the influence of hostile foreign powers like China and Russia. Finally, the benefits of participation in legal trade in the global economy could convince Iran to reform its behavior in order to continue this trade.
Because this plan represents a complete divergence from established U.S. policy it is almost impossible to predict the potential challenges that will arise. However, I predict there are three that may possibly occur, although they are not as serious or as likely as they first seem. The first is that Iran could reject any overtures from the U.S. including but not limited to sanctions relief and offers to trade. As mentioned above, the downsides of this refusal and upsides of accepting are so great that it seems highly unlikely that Iran would not accept the majority of these measures. A second potential problem is that reinforcing the domestic legitimacy of the hardliners currently in power by improving Iranian economic conditions will ensure they remain in power for longer and thus make it more difficult to achieve more significant breakthroughs in the U.S.-Iranian relationship. Domestic support for hardliners in the short term is likely to increase with these measures but not by much and not for long. If the record-low voter turnout of 42.57 percent in the 2020 Iranian elections in which only hardliner candidates were allowed to run are any indicator, domestic support for hardliners is not significantly high. Additionally, pro-engagement politicians such as current Iranian President Hassan Rouhani will likely benefit the most in the long term which would provide for a much less hostile political climate for the U.S. to engage with. Finally, greater financial leeway could allow Iran to increase their support for terrorist and other militant groups around the region. This may be the most likely of the three scenarios, but it can be dealt with quite easily: the U.S. could simply reinstate sanctions until Iran again complies.
The diplomatic approach focuses on cultivating better Iranian relations with both the United States and MENA nations by re-establishing U.S. diplomatic relations with Iran and encouraging greater positive Iranian engagement in the MENA region. Like the economic approach, the re-establishment of diplomatic relations with Iran must take place before the U.S. can begin to advocate for greater positive Iranian engagement in the region. Unlike the economic approach, the three steps I advocate to re-establish diplomatic relations with Iran do not need to be taken consecutively. The first step I advocate is the rescinding of the travel restrictions on Iranians laid out in Presidential Proclamation 9645 (commonly known as the Travel Ban). This act will help to signal the U.S.’ change of attitude towards Iran from adversarial to friendly. The second step would be the public establishment and use of communication channels between leaders and high level officials within both the Iranian governments. As much as the current U.S. administration prefers to make policy announcements over Twitter, official lines of communication will signal to both parties and to the world that both sides are committed to engaging in ongoing diplomacy. Finally, the last and largest step would be to reopen the Iranian embassy in Washington and the American embassy in Tehran. Currently, the United States runs its in-country diplomatic operations through the Swiss embassy in Tehran and Iran does the same through the Pakistani embassy in Washington. This is the biggest diplomatic step and also the hardest to achieve due to the aforementioned history of the two countries; after the Iranian Hostage Crisis, the U.S. severed diplomatic ties with Iran and seized the Iranian embassy in Washington. To achieve this goal would likely require a great deal of reconciliation between the two nations and would thus make the gesture even more significant.
The second part of the diplomatic approach focuses on encouraging greater positive Iranian engagement in the MENA region, particularly with its adversaries. Much as the economic approach aims to appeal to Iran by offering a chance to soothe its economic woes, so too does the diplomatic approach offer a chance to both improve Iran’s regional security situation and offer it the chance at greater regional influence that it so desperately wants. Iran’s cultural and religious isolation, coupled with a history of foreign powers such as the U.S., United Kingdom, and Russia meddling in their internal affairs culminate in a deep seated Iranian foreign policy belief that “the regional balance of power must be to their advantage or their country’s very survival and territorial integrity will be jeopardized”. Of perhaps equal importance is the belief prevalent among Iranian leaders that “Iran’s history, geostrategic location, resources, and human capital make it an important power in the region that should exercise an important role in shaping the Middle East and South Asia”. Both ambitions are incredibly important to Iranian regional strategy and are accounted for with my proposed policy.
The first possible path towards achieving this goal is the creation and implementation of economic agreements, pledges of non aggression and cooperation, and other similar agreements between Iran and singular other nations. If the U.S. is able to achieve a not-insignificant amount of influence in Iran via the previously discussed diplomatic and economic measures then they would likely be able to act as a third party to help facilitate the creation and implementation of these kinds of agreements, especially between Iran and key U.S. regional allies like Saudi Arabia. If not, other more neutral third parties may be willing and able to fill this role as nations like Oman, Iraq, Pakistan, and Japan have indicated in the past. Saudi Arabia should be the first target for an agreement with Iran of this kind, as these two are the “most consequential states along the Sunni-Shi‘a fault line…[and] can be forces for stability when they respect the principle of noninterference in neighbors’ affairs or when they pursue cooperation”. Because of the two countries’ influence in the region, agreements between the two would likely have positive impacts on the security of the entire region.
The second possible path would involve an integration of Iran in regional diplomatic and economic structures. Much as the previous point would help to improve Iranian relations with specific regional powers, this path would help Iran to improve its relations with many more states in the region and begin to sate Iran’s appetite for more influence and help to mitigate their security concerns. Integration of Iran into these regional and sub-regional structures will likely be more difficult than fostering agreements with single states but if these singular agreements can help Iran attain better individual relations with these states it should become easier. Early efforts could include actions such as bringing Iran onto the Arab League as a non-voting member. While the Arab League has been described as a “glorified debating society” due to its inability to enforce compliance with its resolutions and thus affect the region in a unified manner, the incorporation of Iran as a non-voting member could help to foster greater cooperation among Iran and the other member states and lead to greater Iranian involvement in other such organizations. Actions like this would hopefully be simply to ‘get the ball rolling’ and pave the way for Iranian participation in more legitimate regional organizations and agreements like the creation of some form of joint security resolution.
The benefits of the diplomatic approach are not as concrete as those of the economic approach but are no less important to the overall strategy. First, the re-establishment of formal diplomatic ties with Iran allows for greater logistical ease of communication and negotiation, as well as communicating that both powers are committed to improving the relationship. Second, positive Iranian engagement with other powers in the MENA region should help to lessen tensions and thus ease Iranian security concerns. This would hopefully lead to a lessening of Iranian support for terrorist and militant groups around the region as well as reduce the supposed need for their nuclear program. Similarly, the expansion of Iranian influence via diplomatic means should lessen the Iranian need and desire to spread influence via violent means.
The challenges to this approach are as follows; first, as with the economic approach, Iran may reject any diplomatic overtures altogether. This is entirely possible and more likely than Iran rejecting economic relief, but ultimately not very likely if these diplomatic efforts are tied to the economic relief. Second, U.S. allies such as Saudi Arabia who are significant rivals to Iran may be unwilling to engage with Iran. This too is unlikely as Ridyah and Tehran have demonstrated a willingness to work with each other as recently as 2019:
Representatives of Saudi Arabia and Iran have directly exchanged messages in recent months and also communicated through intermediaries in Oman, Kuwait and Pakistan, according to Saudi, European and U.S. officials. The main focus of the communications, these officials say, has been easing tensions between Saudi Arabia and Iran. According to Iran’s ambassador to Paris, Bahram Ghasemi, and other officials, Tehran has floated a peace plan to the Saudis that includes a mutual pledge of nonaggression and cooperation, aimed at securing oil exports following a spate of tanker attacks.
Finally, Iran may attempt to utilize any newfound regional influence to attempt to seize greater power via the destabilization of rival regimes. This too is unlikely as any Iranian attempt to exert greater control via these means would likely cause it to lose all influence it had already accumulated as well as unify regional actors against it. This phenomena has already begun to play out; the traditionally hostile nations of Israel and Saudi Arabia have grown closer over the past few decades in opposition to Iran’s actions in the region and have been “quietly exchang[ing] intelligence for years, particularly about Iran”.
Conclusion: The Time for Change is Now
As explained above, the need for a change in U.S. policy towards Iran has never been greater; the two nations are edging closer and closer to the brink of conflict with each escalation, and neither seems willing to give in. In order to have the best possible chance of preventing such an outcome and achieving the outlined U.S. objectives for Iran, Washington must change their strategy from one of maximum pressure to Gradual Engagement as quickly as possible. This could be immediately implemented in part by performing the first of my recommendations for the economic and diplomatic approaches: reducing the number and volume of sanctions on Iran and an elimination of the travel restrictions on Iran laid out in Presidential Proclamation 9645. These actions should go a long way towards convincing Tehran of Washington’s desire to change the nature of their relationship and help to bring them to the negotiating table in order to achieve the rest of my recommendations.
A note: while critics of my proposed policy may note my omission of issues such as the Iran-Israel relationship or the Iran nuclear problem, this has been done on purpose. Both of these issues are very important to the U.S. and Iran and some form of agreement must be reached on both to achieve lasting, positive relations. However, I omitted issues such as these because any agreement on them would require both countries to be in a much more stable place in their relationship, which can only be achieved by changing the current U.S. policy towards Iran.
In totality, the strategy of Gradual Engagement represents a valuable opportunity for the U.S. to dramatically change its relationship with Iran for the better. The implementation of any of the aforementioned policy recommendations would likely work to help the U.S. achieve its stated objectives towards Iran, and the implementation of them all under my proposed strategy would have an unprecedented impact on reforming what has been for more than a half-century one of the United States’ most antagonistic foes in the MENA region.
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