Iran deal shows diplomacy can work in Middle East where guns often do talking

Executive Summary

A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives of Unites States, Iran, China, Russia, Britain, Germany, France and the European Union during the Iran nuclear talks at the Vienna International Center in Vienna, Austria Tuesday July 14, 2015. After 18 days of intense and often fractious negotiation, world powers and Iran struck a landmark deal Tuesday to curb Iran's nuclear program in exchange for billions of dollars in relief from international sanctions ? an agreement designed to avert the threat of a nuclear-armed Iran and another U.S. military intervention in the Muslim world. (Carlos Barria, Pool Photo via AP) Photo: Carlos Barria

With the signing of the nuclear accord, Iran has gone from being a member of US president George W. Bush's "Axis of Evil" and one of secretary of state Condoleezza Rice's "outposts of tyranny" to a country that has successfully negotiated what promises to eventually be an effective end to its international isolation.

And while the agreement's significance may well ultimately be much greater than simply the reduction of Iran's centrifuges and stockpiles of enriched uranium and limitations imposed on all aspects of its nuclear industry, this is not an agreement built on trust. Rather, as US President Barack Obama noted it is an agreement built on verification.

Regional power rivalries can't be resolved but they can be managed, and with the United States as the Gulf States' security guarantor, ... [Obama] feels that he has limited Iran's freedom of action as much as he realistically can.

Naturally not everyone is pleased with the outcome. Israeli Prime Minister Benjamin Netanyahu has been the negotiations' most vociferous critic and called the outcome "a historic mistake". Netanyahu sees Tehran as an existential threat, and any deal that gives Iran greater freedom of action as a net benefit to Israel's implacable foe in Hezbollah across its northern border in Lebanon.

And the Arab states, particularly those in the Gulf, see any agreement as opening the door to Iranian regional hegemony and confirmation that Obama has effectively abandoned the field to Tehran. Of course, their distrust of Iranian intentions is a mixture of classical nationalist rivalry and economic competition laced with a deep-seated sectarian and ethnic bigotry. There will always be tension in these relationships.

For Washington though, there was within the current administration a more pragmatic view of the Iran question. Obama has seen the Iranian problem as more a non-proliferation issue than a regional hegemonic one. Regional power rivalries can't be resolved but they can be managed, and with the United States as the Gulf States' security guarantor, he feels that he has limited Iran's freedom of action as much as he realistically can.

Tehran's influence gained through its allies and proxies have been built up over decades and play on issues of identity that Washington couldn't reverse even if it sought to. Many of the root causes of instability in the region such as lack of political reform, substandard education, limited employment prospects and ethnic and religious discrimination defy international efforts at resolution and will continue to bedevil the Middle East.

The potential for nuclear proliferation within the Middle East if Iran ever gained the capability however, was potentially a much more destabilising outcome. At the same time it was a security challenge that was not necessarily intractable and could have a successful negotiated outcome. Washington's unilateral 2011 Comprehensive Iran Sanctions, Accountability and Divestment Act barred foreign institutions that dealt with sanctioned banks, from doing deals in the United States or with US dollars. The tough international sanctions regime, which was more firmly tightened with the aid of this act, was designed to get Tehran to the negotiating table.

And the election of President Hassan Rouhani​ indicated that domestically the Iranian population wanted a negotiated outcome to end the economic pain it was suffering. Obama understands that sanctions regimes cannot last forever, and that with Rouhani elected there would never be a better opportunity for a negotiated outcome. Essentially it became a pretty clear choice; if not now, then when?

Both Rouhani and Obama have legal backgrounds and they both understand that negotiated outcomes deliver the most acceptable solutions, rather than the best possible outcomes.

Obama is likely to also have had one eye on a personal legacy with less than a year and a half left as President. More importantly Rouhani had to be able to sell the agreement to the Supreme Leader and the conservatives in Tehran – he doesn't have the luxury of Obama's presidential veto. As a consequence his speech highlighted the issue of economic relief and spoke of respect and how their national aims had been met. The critics will inevitably point to the concessions that the West gave to Tehran or that they failed to win from Iran, but as the Iranian Foreign Minister Mohammad Javad Zarif noted, the agreement "is not perfect for anybody but is what we could accomplish".

It is inevitable that talk will sooner or later turn to whether such an agreement will lead to greater co-ordination, if not co-operation between Washington and Tehran on other regional security issues such as Syria. The Iranians have been very careful to dissociate the nuclear negotiations from any broader regional issues, both to avoid upsetting the Arab states who already bristle at what they see as the end of Iranian containment and because they wanted to separate these issues to maximise their negotiating power in any future talks on other issues.

However, given the amount of time that Iranian, European and American negotiators have spent with each other it is only natural to ponder whether the rapport built up over these talks can be transferred to other issues.

Perhaps what is the most promising outcome of the nearly two years of negotiations is that they will result in a peaceful resolution to an ongoing security issue in the Middle East.

Since the 2003 United States-led invasion of Iraq, the approach to resolving security issues in the region has been, variously by choice and necessity, a military one. With the latest agreement between the P5+1 and Iran, the international community has shown that there is still a place for determined, pragmatic diplomacy in resolving some regional security issues. After the last decade of constant military action in the region, a negotiated diplomatic outcome, however imperfect it may be, is a welcome relief.

Rodger Shanahan is an associate professor at ANU's National Security College and a research fellow at the Lowy Institute.