Nuclear Iran I: The principle is set, now what's the price?

Stanley A. Weiss I, writing for the International Herald Tribune provides insight into the European attitude towards the US approach to Iran. To Stanley Weiss, the US is just too self-righteous, US sanctions prop up the Mullahs and Rafsanjani is his man. READ MORE

Since Iran's 1979 Islamic revolution, Washington has made much of its self-righteous principles. No negotiations. No lifting of the U.S. economic embargo. No diplomatic relations. At least not until Tehran stops supporting terrorism and pursuing weapons of mass destruction.

But these high principles yielded low returns. Washington's do-nothing, say-nothing stance toward Shiite Iran failed to change Tehran's behavior yet succeeded in depriving the United States of a valuable partner, from combating the Sunni terrorism of Al Qaeda to stabilizing Iraq. So now that Tehran is perhaps three years away from having a nuclear weapon, Washington has wisely decided it has other principles. With the recent decision to join the European Union in offering Iran economic incentives to give up its nuclear program, the Bush administration is now negotiating with the Islamic Republic, with Europe as the middleman.

Negotiations will reveal the answers to key questions. Does Tehran see a nuclear weapon as an end in itself or as a bargaining chip for economic and security concessions from the West? Is the EU prepared to embrace the one stick that Tehran fears most - Security Council sanctions backed by Europe and Japan, Iran's main trading partners? Is the Bush administration willing to offer perhaps the only carrot for which the Islamic Republic might give up the bomb - meaningful U.S. economic and security guarantees?

A grand bargain with Tehran? As George Bernard Shaw said in another context, the principle has been established, all that remains is the haggling over price. Exemptions to the U.S. embargo have already made Iran a major customer for American wheat and corn. Americans already buy more than $150 million worth of Iranian dried fruits, pistachios, carpets and caviar every year.

The Bush administration now says it is prepared to stop blocking Iran's application to the World Trade Organization and to allow the sale of spare parts for Iran's aging civilian aircraft. Iranian negotiators predictably dismissed this opening offer as "ludicrous" and "insignificant."

President George W. Bush concedes that the principle of all sticks, no carrots has failed. Explaining why he has let Europe take the lead in nuclear negotiations, he recently said, "We're relying upon others because we've sanctioned ourselves out of influence with Iran."

Washington learns an old lesson anew: Multilateral sanctions can succeed in changing behavior, but unilateral sanctions almost always fail.

The U.S. embargo has failed in its primary purpose of isolating Iran economically. While American companies watch, European companies have invested heavily in Iran's energy sector. Iran has agreed to a $40 billion natural gas deal with India and a $70 billion gas deal with China. So much for American threats to penalize foreign companies that invest in Iran's oil and gas sector.

Worst of all, the American embargo perversely reinforces the very regime it was meant to undermine. Why do Tehran's theocrats sabotage every step toward rapprochement, thwart privatization of state enterprises and oppose foreign ownership of Iranian companies? Because the embargo props up the mullahs' own business monopolies.

Iran's supreme leader, Ayatollah Ali Khamenei, and his fellow klepto-clerics pocket billions from corrupt Islamic "charities" that control an estimated 70 percent of Iran's non-oil economy. The Revolutionary Guards, the iron fist of the regime, profit from black market smuggling. The dilapidated banking system has meant a windfall for bazaari merchants and money lenders, another pillar of the regime.

Want to really undermine this mullahtocracy? Lift the embargo and begin a business invasion. But with the mullahs unlikely to sign their own death warrant and Iran's reformist movement all but dead, who's left to strike a grand bargain with Washington?

Re-enter Hashemi Rafsanjani, the powerful former president who is expected to run in June's presidential election. A leading pistachio exporter, the ever-pragmatic Rafsanjani knows that reducing the country's double-digit unemployment requires ties and trade with America. Iranians know that he is perhaps the only leader with the political clout and revolutionary credentials to strike a bargain with the Great Satan without being tagged a traitor - precisely why hard-core clerics have tried to keep him from running.

A Rafsanjani victory would be Iran's way of saying to the world, "Let's make a deal." But regardless, Washington should act in its own national interest and put all options on the table - major diplomatic and economic carrots included.

If Tehran is willing to submit to intrusive international inspections to assure the world that its nuclear program produces energy not bombs, restoring diplomatic relations and lifting the trade embargo would be a price worth paying. Let the haggling begin.

Stanley A. Weiss is chairman of Business Executives for National Security, a nonpartisan organization based in Washington.