Sherwin Pomerantz

Why the Iran Deal is a Bad Deal

In a 48-minute one-on-one interview with columnist Tom Friedman on Saturday, President Obama laid out why he believes the “agreement to agree” that was reached with Iran in Switzerland last week was a good deal and the best that could be negotiated.  He also took great pains during that interview to assure Israel and the U.S.’ allies in the region that America would back them if Iran became an aggressor nation against their interests.  And, of course, he reiterated the mantra that the West always has the option of reinstituting sanctions should the current process fail.  I don’t buy any of it.

The fact is, and this is what Prime Minister Netanyahu should be stressing, once the agreement is actually signed (presumably by the end of June) a roll back of any description will be simply impossible.  Why?

Without economic sanctions, most of the countries of the P5+1 will rush to do business with Iran, which will then become the dominant economic and military power in the Middle East and if it chooses, it will build nuclear weapons as well.  Netanyahu is right when he says they will probably get nuclear weapons in any event but why hand those to them on a silver platter?

The lifting of economic sanctions has the potential to create an economic superpower with malevolent, anti-Western aspirations.  Remember, as Peter Morici, an economist and professor at the University of Maryland, recently pointed out:  “Iran has the oil reserves of Saudi Arabia, the natural gas reserves of Russia, the mineral resources of Australia — including iron ore, bauxite, copper and the world’s largest supply of zinc — a sophisticated manufacturing sector, a stock market with strong corporate reporting requirements, a well-educated population of 80 million and a large middle class.”

“In 2010, Iran produced 1.6 million automobiles — across virtually all vehicle classes — through indigenous manufacturers and joint ventures with Western firms. Although sanctions pushed that number down to 1 million in 2014, it bears noting that autos are among the most difficult and complex mass production items to make, and Iran’s technological potential could quickly put it in the same category as South Korea or even France.”

“Iran provides Western Europe and China with an alternative to Russian natural gas.  The surge of European, Chinese and American investment into Iran will be remindful of the Gold Rush that gave rise to modern California. And once those euros, yuan and dollars are in, political pressures will make it very tough to re-impose Western economic sanctions.”

While the agreement significantly reduces the number of Iranian centrifuges and other nuclear infrastructures, it only limits Tehran’s ability to quickly “break out” from these restrictions and accumulate enough fissionable material to create a nuclear weapon in less than a year. Theoretically, we are told that is enough time for the West to detect Iranian violations and respond — but it is not.  Should that situation occur it will take the West a good year just to assemble a coalition to deal with the issue and, by that time, Iran will have nuclear weapons capability.

While till now the U.S. trump card has been its unique grip on the global banking and payments system, China’s recent success in recruiting European allies to join its Asian Infrastructure Bank demonstrates that Asian alternatives to U.S.-dominated Western financial institutions will soon emerge.  When that happens the U.S. will lose that clout as well.

When you add to all of this Obama’s abysmal record in not holding to his own red lines across the region and Iran’s existing fiefdoms in Lebanon, Syria, Yemen and Lebanon along with Iran’s constant diatribes against Israel and Jews, one wonders if any “deal” will really deliver the conditions for regional peace that Obama seems to believe is possible.

So Netanyahu is right when he says the P5+1 should have pressed for a better deal given that they had Iran on the ropes, as it were.  We are also correct in not trusting an America led by an individual who has walked back on his own red lines so often it is simply impossible to accurately list all of them.  There was a time if an American president said “We have your back” it really meant something, but no more.

David Frost, the comedian, once opined that diplomacy, the noun, is the art of letting somebody else have your way.  It would have been a good thing for Obama and the P5+1 negotiating team to have remembered.

A decade from now, when U.N. inspectors discover Iran is building a nuclear weapon, Western leaders will ask how they could have let this happen.  By that time all of the horses will have left the barn and all the West will be able to do is watch and suffer the consequences.

About the Author
Sherwin Pomerantz is a native New Yorker, who lived and worked in Chicago for 20 years before coming to Israel in 1984. An industrial engineer with advanced degrees in mechanical engineering and business, he is President of Atid EDI Ltd., a 32 year old Jerusalem-based economic development consulting firm which, among other things, represents the regional trade and investment interests of a number of US states, regional entities and Invest Hong Kong. A past national president of the Association of Americans & Canadians in Israel, he is also Former Chairperson of the Board of the Pardes Institute of Jewish Studies and a Board Member of the Israel-America Chamber of Commerce. His articles have appeared in various publications in Israel and the US.