Obama’s Iran Policy: Engage or Isolate?
December 24, 2010
Background on the Latest Sanctions
On June 9, 2010, the United Nations Security Council passed a resolution imposing new sanctions on Iran for its ongoing nuclear development program, with 12 nations voting in favor, Brazil and Turkey voting against, and Lebanon abstaining. The vote ushered in the fourth round of UN sanctions on Iran since March 2008.
The resolution prohibits the transfer of heavy weapons to Iran and calls on member states to conduct cargo inspections—at sea as well as in port—of Iranian vessels suspected of carrying items tied to missile or nuclear arms development. It also calls on governments to freeze the assets of corporations connected with Iran’s Islamic Revolutionary Guard Corps and to bar Iranian financial institutions involved in the government’s missile and nuclear development programs from opening local branches overseas. In addition, it sets up a panel to monitor compliance and adds one individual and 40 organizations to the list of Iranian entities targeted.
The assenting votes cast by China and Russia (which have veto power) and the dissenting votes of Brazil and Turkey were indicative of key developments in the international climate surrounding Iran. To better understand these trends, we will need to review the events leading up to the passage of the resolution.
On May 3, day one of the 2010 Review Conference of the Parties to the Treaty on the Nonproliferation of Nuclear Weapons at UN Headquarters in New York, Iranian President Mahmoud Ahmadinejad explicitly attacked the United States, charging that it “has not only used nuclear weapons but also continues to threaten to use such weapons against other countries, including Iran.” He then accused the five powers (Britain, China, France, Russia, and the United States) permitted to keep nuclear weapons under the Nonproliferation Treaty of trying “to monopolize both the nuclear weapons and the peaceful nuclear energy.” US Secretary of State Hillary Clinton countered with a warning that those who flouted the NPT would “pay a high price for breaking the rules” and called for stronger penalties for the violation of safeguards.
The testy exchange occurred as the United States was maneuvering for the new round of UN sanctions against Iran. Washington had initially aimed for passage by the end of April, but the Security Council was deadlocked, and it had become clear that passage would have to wait at least until Lebanon—a country with close ties to Iran—relinquished presidency of the Security Council in June. Meanwhile, the resolution faced challenges not only from permanent SC members China and Russia, who had persistently rejected calls for tougher economic measures against Iran, but also from nonpermanent members Brazil and Turkey, who had taken the initiative to broker a diplomatic solution. On May 17, Tehran agreed to a plan proposed by Brazil and Turkey under which Iran would ship low-enriched uranium to Turkey in exchange for processed nuclear fuel. On May 19, in a bid to take the steam out of Washington’s push for additional sanctions, Brazil and Turkey submitted a letter to the members of the Security Council urging continued negotiations with Iran.
While the United States, Israel, and others distrustful of Iran’s motives dismissed the mediation plan as a gambit to delay new UN sanctions, others were more optimistic about this turn of events, seeing in it new possibilities for resolving the Iranian nuclear crisis. Still, the Obama administration rejected the mediation plan, and on June 9 the Security Council adopted the US-backed sanctions.
Passage was made possible by the support of China and Russia, who had previously resisted sterner measures against Iran. On June 11, moreover, the Kremlin confirmed that the sanctions would apply to the S-300 surface-to-air missile system that Russia had planned to sell to Iran over the objections of the Israeli government. Aware that the system had the potential to thwart an Israeli air strike against Iran’s nuclear facilities, Prime Minister Benjamin Netanyahu had urged the Russians to cancel the deal during talks with President Dmitry Medvedev in Moscow on February 15.
Quid Pro Quo
Although China and Russia voted for the latest round of UN sanctions, they were critical of subsequent moves by the United States and the European Union to add on sanctions of their own, complaining that such measures could impede efforts to resolve the crisis. Washington had announced that it was applying its sanctions to dozens of Iranian individuals and organizations not covered by the UN resolutions, including Iran’s Post Bank (bringing to 16 the number of Iranian-owned banks on the sanctions list), 90 front companies that had been used to evade sanctions on Islamic Republic of Iran Shipping Lines (IRISL), and 17 energy and insurance companies located outside Iran but owned or controlled by the Iranian government.
Referring to the criticism from Moscow, Secretary of Defense Robert Gates told the Senate Armed Services Committee that Russia’s desire to maintain profitable commercial ties with Iran even while imposing sanctions was “schizophrenic.” But viewed in a broader context, it seems clear that China and Russia’s assenting votes were part of a quid pro quo in which each of them gained something from Washington—for example, a US-Russia civil nuclear cooperation agreement on the one hand and a respite from American pressure to appreciate the yuan on the other—in return for helping the Obama administration achieve one of its top foreign policy priorities, a new round of sanctions against Iran.
International and Domestic Imperatives
The big question is what this successful push for new sanctions signifies for US policy on Iran. Is President Obama—who once called for diplomatic dialogue “without preconditions” even with countries, such as Iran, that the Bush administration had ostracized as “rogue states”—on the brink of a new hard-line policy that seeks to isolate rather than engage Iran? What factors are motivating the change in tone?
In terms of the international environment, the key factors are to be found in US relations with Israel—which seems prepared to bomb Iran’s nuclear facilities if all else fails—and with other states in the region. On the one hand, the Obama administration worries that by developing nuclear weapons, Iran could trigger a Middle East nuclear arms race. Leaders of other Arab countries, including Egypt, have spoken of the need for nuclear armament to check Israel, a de facto nuclear state and a nonparty to the NPT. In a bid to prevent Middle Eastern countries with nuclear power programs from converting fuel into weapons-grade material, Washington concluded an agreement with the United Arab Emirates in December 2009 to provide peaceful nuclear technology and nuclear fuel so as to minimize proliferation risks, and it is currently negotiating similar agreements with Jordan and Saudi Arabia.  Washington believes it must nip Iran’s nuclear program in the bud in order to prevent nuclear proliferation in the Middle East.
The United States is also anxious to avert an Israeli military strike against Iran’s nuclear facilities, since such action would be sure to ratchet up tensions in the Middle East and deal a blow to the global economy as well as to anti-terrorism efforts. From Washington’s viewpoint, tough economic sanctions were necessary in part to mollify the alarmed Israelis and avert any such action. Since its inauguration the Obama administration has taken a tougher stance toward Israel than the Bush administration did. In some ways such a shift was necessary if Obama was to make progress toward peace in the Middle East as he hoped to do. Even so, we should not be surprised if the administration changed course at this point, realizing that Israel could be dangerous if pushed too far.
In an opinion piece in the Australian , Ehud Yaari of the Washington Institute for Near East Policy predicts that the Obama administration’s policy of promoting dialogue with Tehran while keeping Israel at arm’s length will give way to a hard-line policy toward Iran. In support of his prediction, he points out that the dialogue policy has elicited no concessions whatsoever from Tehran and that the leaders of Saudi Arabia and other Arab countries friendly to the United States have let Washington know that they have serious concerns over the prospect of a nuclear-armed Iran. 
Another factor driving such a policy shift is the domestic political climate. In the period from July 7 to July 21, voter approval of President Obama’s job performance averaged 46.6 % in the major polls, while disapproval stood at 47.4%.  Adding to dissatisfaction over the continuing economic slump and high unemployment are a host of other negative factors, including anger among conservatives and moderates over health care reform, criticism of the administration’s handling of the oil spill in the Gulf of Mexico, and concerns over the lack of progress in the war in Afghanistan. The American people as a whole have tended to regard Iran with hostility ever since the 1979 hostage crisis at the US embassy in Tehran. With tough midterm elections looming in November, a hard-line stance toward Iran would doubtless appeal to the Obama administration as a clear political winner.
In a recent opinion piece, syndicated columnist Gwynne Dyer takes a highly cynical view of the latest sanctions. Casting doubt on their effectiveness, he calls them a “charade” designed to assuage the deep-rooted suspicions of Americans and avert an air strike by Israel.  In fact, it is too soon to say how tough the latest sanctions are, how they will play out, and whether they signal a wholesale shift by the Obama administration from engagement to isolation. We can only say that such a shift is well within the realm of possibility and that current circumstances and signs point to a policy in transition.
In mid-June, Secretary of State Clinton appointed Robert Einhorn, the State Department’s special advisor for nonproliferation and arms control, to serve as US coordinator for the implementation of sanctions related to Iran and North Korea. Einhorn will be responsible for monitoring compliance with UN Security Council resolution 1929, which imposes the latest round of sanctions against Iran, and ensuring full compliance with resolutions 1781 and 1874, imposing sanctions against North Korea. He will also be charged with drafting a US resolution for sanctions aimed at preventing the transfer of North Korean equipment and technology that could lead to nuclear proliferation. Washington has called on Japan’s government and financial institutions to cooperate with the sanctions imposed on Iran by the Obama administration in addition to those in the UN resolution. It is critical, therefore, that the Japanese understand the significance of these sanctions and accurately gauge the seriousness of Washington’s intentions in imposing them. (Translated from a report in Japanese published on July 23, 2010)
 Edith Lederer, Associated Press, “Israel Key to NPT Conference on Banning Nukes,” Christian Science Monitor , May 29, 2010.
 Ehud Yaari “U.S. Rethinks Its Tactics for the ‘Muddle East,’” The Australian , July 21, 2010.
 Real Clear Politics, President Obama Job Approval, http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html#polls
 Gwynne Dyer,“Iran: The Sanctions Charade,” June 12, 2010; see Gwynne Dyer’s website, http://www.gwynnedyer.com/articles/Gwynne%20Dyer%20article_%20%20Iran%20Sanctions%20Charade.txt