The deal struck this weekend between six major world powers and Iran to temporarily halt its nuclear enrichment program is being heralded as historic – the first such after decades of negotiations, threats, and sanctions. But aside from being historic, the deal is controversial; prominent lawmakers have argued the Obama administration is giving too much ground and receiving too little in the way of concessions.
Under the deal, the U.S. and its allies will dial down sanctions while imposing restrictions to prevent Iran from being able to develop a nuclear weapon. The deal only lasts for six months, during which time the countries will try to work out a more formal agreement.
News of the deal has led to a rare bipartisan coalition of lawmakers who think the U.S. should be ramping up sanctions, rather than drawing them down. Amid all the political rhetoric, here's a quick primer on what exactly the U.S. is giving up (and what it's not).
So how much ground is the U.S. giving up here?
According to the White House, the total deal is worth around $6 to $7 billion to Iran. Under the agreement, the administration will stop its efforts at further reducing Iran's oil exports, allowing the country to keep them at around 1 million barrels per day – as of 2011, that total had been 2.5 million. In addition, the U.S. will allow the country to transfer $4.2 billion from those sales back into the country over the six months. The U.S. will also suspend sanctions on petrochemical exports, gold and precious metals, and automotive exports to Iran.
Seven billion dollars? That's huge. This must be a big relief to Iran.
Not exactly. $7 billion is only around 1 percent of Iran's GDP. The White House emphasized in a Saturday call with reporters that the sanction relief is "insignificant economically" and won't undo the massive financial and oil-related sanctions that have been imposed upon Iran over the years. In addition, a senior official characterized the sanction changes as "limited, temporary, targeted, and reversible."
From the perspective of both sides, this initial deal is a relatively small one, says one expert.
"I would say both parties made modest concessions," said Ray Takeyh, senior fellow at the Council on Foreign Relations and a former State Department adviser on Iran, in a Monday call with reporters. He added that this deal should also be viewed within the broader context of what the U.S. is hoping to eventually gain. "The deal is not just about the interim concessions being discussed. I would say probably the more important part of the deal is the agreement on principles about the final agreement."
Then again, the sanctions relief may not be quite as insignificant as the White House seems to say, says another expert.
"There are some aspects of it that are not reversible – if I give you $3 billion you're not going to give it back to me," says Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics who has written extensively on sanctions.
So is it sanctions that made this deal happen?
Depends on whom you ask. The degree to which sanctions work, period, is a hotly debated topic in international economics. There are those who argue that sanctions generally do not work. Leaders like the Ayatollah, they argue, care more about their own influence than they do the welfare of their people or even the national economy.
The question is not whether sanctions have hurt the Iranian economy, says Schott.
"The sanctions have had such a big squeeze on the Iranian economy, which I don't think is in doubt. I don't think there are people who question that," he says.
Rather, the question is whether that economic decline has inspired Iranian leaders to capitulate. Schott believes the sanctions have "helped encourage" a negotiated agreement. Still, that may not be all that's at work here. As one expert told U.S. News in September, the geopolitics of the Middle East may also have made for a more amenable Rouhani.