Trump should refuse to certify the Iran deal as the first step to fixing a deeply flawed agreement

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close Dennis Kucinich and Jonathan Wachtel weigh in.

Should Trump decertify the Iran nuclear deal?

Dennis Kucinich and Jonathan Wachtel weigh in.

The Washington Post and New York Times reported Thursday night that President Trump will soon announce his refusal to certify that the nuclear deal with Iran is in America’s national interest. This is the right call, because decertification is the indispensable first step toward fixing a deeply flawed agreement that puts Iran on the path to becoming another North Korea.

Decertifying the deal, which was designed to limit Iran’s ability to develop nuclear weapons for over a decade in return for the lifting of economic sanctions, does not mean pulling out of the agreement. If President Trump refuses to certify by the Oct. 15 deadline, Congress could reimpose sanctions, but it should first give the White House a chance to negotiate a better deal.

The nuclear deal with Iran was reached in 2015 by President Obama’s administration and the governments of Russia, China, Britain, France and Germany. The agreement prohibits the U.S. from reimposing the original sanctions on Iran’s nuclear program, but does not rule out tough sanctions on Iranian entities responsible for terrorism, missile development, regional aggression, corruption and human rights violations. These kinds of sanctions could exert the pressure necessary to bring Iran back to the negotiating table.

This kind of pressure could work because Iran does not want to give up the extraordinary economic benefits delivered by the nuclear deal. While attention has justifiably focused on how the nuclear deal has failed to stop Iran from launching nuclear-capable missiles or blocking U.N. inspectors access to military research facilities, Americans should also focus on the perpetual windfall the deal gives Tehran.

Iranian income from oil and natural gas exports increased by $24 billion, or 70 percent, in the first full year after the nuclear deal went into effect. The International Monetary Fund projects that energy exports will continue to grow steadily during the next five years, providing Tehran with $174 billion more of oil revenue than it would have earned if sanctions remained in place.

This windfall should not surprise anyone, although it may come as news to senior Obama administration officials who insist that the deal is not providing Tehran with the means to promote its agenda of terrorism and aggression throughout the Middle East.

According to Adam Szubin, who served as undersecretary of the Treasury for terrorism and financial intelligence during the final years of the Obama administration: “There are, to be sure, benefits to Iran for staying in the deal, but those benefits will take years to accrue. And contrary to the warning, Iran’s client Hezbollah has been under unprecedented financial pressure.”

Szubin’s opinions, contained in an op-ed he wrote for The Washington Post, command respect even among critics of the nuclear deal, because he was a leading architect of the comprehensive sanctions regime that put so much pressure on Iran. Though he has deep first-hand knowledge of this subject, in this instance the data and the facts tell a very different story.

As noted above, Iranian oil and gas exports began to surge immediately after sanctions were lifted. According to the International Monetary Fund, oil exports increased from 1.4 million barrels per day to 2.4 million in the first full year after the nuclear deal took effect.

Since oil drives the Iranian economy, this surge in exports translated into impressive overall growth of 6.6 percent. In sharp contrast, Iran’s economy shrank by 1.8 percent prior to the implementation of the nuclear deal and by 6.6 percent when sanctions were biting hardest in 2012. The World Bank reported a similar reversal of fortune. Moreover, both organizations project Iranian economic growth to be close to 4 percent this year and then stay above 4 percent for several years to come.

The economic benefits that followed the implementation of the nuclear deal also included lower Iranian inflation, which peaked near 35 percent in 2013 yet has now fallen to single digits, according to World Bank figures. In addition, Iran’s currency went into freefall as a result of sanctions pressure, but stabilized after the beginning of the negotiations that led to the nuclear deal.

Szubin does not acknowledge any of these extraordinary benefits. Instead he writes that Iranian gross domestic product (GDP) will still be 35 percent lower in 2017 than it was in 2011, thereby suggesting that Iran is nowhere close to recovering from the damage imposed by sanctions.

Arriving at this figure of a 35 percent decline requires some creative use of statistics. There are several ways to measure GDP, but Szubin chooses the only one that shows this kind of sharp contraction. Also, 2011 is a misleading year to use as the baseline for measuring changes in GDP, since oil prices shot up to an average of $108 per barrel that year, supercharging every oil- dependent economy. Had he used 2009 or 2010 as a baseline, there would be little or no decline to speak of.

In addition, Szubin understates by tens of billions of dollars the value of frozen assets released to Iran upon implementation of the nuclear. Whereas he offers a figure of $50 billion, a 2015 study by our colleagues at the Foundation for Defense of Democracies shows that this estimate is far too low, because of its narrow focus on liquid assets. A broader look at Tehran’s foreign holdings shows that it gained access to somewhere between $90 billion and $120 billion – a remarkable infusion for a $400 billion economy.

Szubin also asserts, without providing data, that the terrorist group Hezbollah is “under unprecedented financial pressure.” A new study of Hezbollah’s finances, also by our colleagues at the Foundation for Defense of Democracies, reaches a very different conclusion.

Our study reports that Iranian support for Hezbollah fell sharply in 2014 and 2015, “likely due to international sanctions and low oil prices.” Yet even though oil prices remained low following the implementation of the nuclear deal, Iranian assistance returned to its previous level of about $700 million to $800 million per year, or 70 to 80 percent of Hezbollah’s estimated budget. It seems Iran has money to spare.

In light of the extraordinary economic benefits Iran has received from the nuclear agreement, it is certainly a good deal for Tehran. But it is getting harder and harder to see how anyone can look at the facts and serenely insist that this is also a good deal for the United States.

Saeed Ghasseminejad is a research fellow at the Foundation for Defense of Democracies. You can follow him @SGhassem.

David Adesnik is a visiting fellow at the Center.

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