Iran deal won't survive beyond May 2018, sanctions expert says

  • Policy experts warn the Iran nuclear deal may not survive past May 2018, with U.S. President Donald Trump demanding European allies and Congress alter it
  • Trump waived sanctions on the Iran in mid-January as part of the 2015 nuclear pact, but pledged that this time it was the country's "last chance"
  • While the International Atomic Energy Agency (IAEA) has verified Iran's compliance, Trump continues to call for more sanctions on the Islamic Republic
A general view of streets in Tehran, Iran on the first anniversary of nuclear deal between Iran and world powers on January 16, 2017.
Fatemah Bahrami | Anadolu Agency | Getty Images
A general view of streets in Tehran, Iran on the first anniversary of nuclear deal between Iran and world powers on January 16, 2017.

The Iran nuclear deal is on life support and on a trajectory for collapse, many policy experts believe, despite U.S. President Donald Trump's current continuation of sanctions relief.

Trump agreed to waive sanctions on the Islamic Republic in mid-January as part of the 2015 nuclear pact, but pledged that this time it was the country's "last chance", threatening a U.S. walkout.

"I am very concerned that it will not survive May 2018. Mr. Trump has set an unreasonable list of demands out that I do not think any realistic European or Congressional agreement could satisfy," Richard Nephew, program director at the Center on Global Energy Policy at Columbia University, told CNBC. Nephew served as the lead sanctions expert for the U.S. State Department negotiating with Iran from 2013 to 2014.

The Joint Comprehensive Plan of Action (JCPOA), signed by all five United Nations Security Council members and Germany in 2015, allowed the lifting of international sanctions on Iran in exchange for compliance with restrictions on its nuclear program. The U.S. president is required to recertify it every 90 days or leave its fate to Congress.

While the International Atomic Energy Agency (IAEA) has verified Iran's compliance, Trump continues to deride the agreement, calling for more sanctions on the Islamic Republic particularly for its ballistic missile program and human rights abuses, which were not part of the JCPOA. Trump announced on January 12 that if Congress and the deal's European signatories did not fix the deal's "disastrous flaws", the U.S. would withdraw.

"The simple reality is that Trump hates the JCPOA even as he doesn't understand it," Nephew said. "And though his advisors are attempting to get him to think about it more pragmatically, their perennial struggles don't auger well for its survival."

Then-candidate for the Republican Presidential nomination Donald Trump speaks during a rally held by the Tea Party at the United States Capitol to speak out against President Obama's nuclear agreement with Iran in Washington, on September 9, 2015.
Samuel Corum | Anadolu Agency | Getty Images
Then-candidate for the Republican Presidential nomination Donald Trump speaks during a rally held by the Tea Party at the United States Capitol to speak out against President Obama's nuclear agreement with Iran in Washington, on September 9, 2015.

Trump's demands would require altering the original parameters of the deal. They include adding punitive measures for missile tests and regional activity, and amending "sunset clauses" that currently allow certain conditions to expire after a number of years. EU leaders and Russia have urged the U.S. to respect the integrity of the original arrangement.

However the president may not like the deal, however, he cannot legally end it without consensus from its other signatories, notes Pat Thaker, regional director for the Middle East and Africa at the Economist Intelligence Unit. "None of [them] have shown real appetite for a renegotiation of its terms, and have instead lobbied Trump to keep it," she told CNBC. "This will not change."

National security community vs. Trump

Much of the diplomatic and national security community in Washington breathed a sigh of relief when Trump agreed to extend the deal on January 12. "It is the national security bureaucracy that ought to be credited," Nephew said, naming National Security Advisor H.R. McMaster, Secretary of State Rex Tillerson and Defense Secretary James Mattis as key figures who emphasized to Trump the risks inherent in dropping the JCPOA. "It addressed a very real problem in a very real and verifiable way, when we were looking in the face of either an Iranian nuclear weapon or war."

Critics of the deal disagree, arguing that continued economic relief only empowers the country's nuclear weapons pursuits and reward a regime that has ramped up its missile testing in recent months.

Newly-imposed U.S. sanctions unrelated to the deal target 14 individuals and groups in Iran's military and judiciary, and have little effect on the country's economy. But any moves to curtail economic relief for the country will kill the deal for the Iranians and prompt a comeback for hardline anti-western forces in government, analysts say. Nephew notes that any externally-imposed nuclear requirements, like a cap on the number of permitted uranium centrifuges or enriched uranium, could do this.

"If they challenge Iranian economic access, then I think they could very well contribute to hardline aggressiveness toward Rouhani, of which the JCPOA would be just an example."

P5+1 and Iran representative pose prior to the announcement of an agreement on Iran nuclear talks on April 2, 2015 at the The Swiss Federal Institutes of Technology
Fabrice Coffrini I AFP I Getty Images
P5+1 and Iran representative pose prior to the announcement of an agreement on Iran nuclear talks on April 2, 2015 at the The Swiss Federal Institutes of Technology

Not all policy wonks have handed down such a negative prognosis. James Jeffrey, a former deputy national security adviser during the second Bush administration, told Politico the JCPOA can continue under Trump's new demands.

"Trump is leaving the door open to staying in the agreement if France, Germany and the UK work with Washington," he told the magazine.

Iran may also choose to stay in an effort to diplomatically isolate the U.S., said Ryan Turner, senior risk analyst at Protection Group International. But practically, he told CNBC, "the deal may collapse after that regardless." The current uncertainty alone will likely see many investors rethink their interest in Iran.

In mid-January, European leaders issued statements in defense of the agreement, with the EU's top diplomat saying it "made the world safer and prevented a potential nuclear arms race in the region."

Robert Litwak, director of international security studies at the Wilson Center and a member of Bill Clinton's National Security Council, said whether the deal would live or die past May is hard to say, but that the choice will be difficult and walking away has serious downsides.

"If the United States unilaterally withdraws from the nuclear deal it would isolate Washington," Liwak told CNBC. "It would change the dynamic from the United States and the world versus Iran to Iran and the world versus the United States."