James discusses prospects for the signing of a US-Iranian memorandum of understanding that would frame negotiations to end the Iran war
Transcript
[Anchor Kamran Yousaf] Dr. James M. Dorsey from Singapore, he is the adjunct senior fellow as Raja Ratnam School of International Studies and author of the Troublant World’s sub-stack column and he is of course a veteran journalist, knows Middle East really very well. Many thanks indeed Dr. James M. Dorsey for joining us tonight on the Inside Foreign Affairs. First of all, what has really changed during the course of last, I should say 24 to 48 hours that both Iran and the US are now increasingly looking very optimistic to signing a deal, as you know that only recently there were threats of further escalation between the two countries.
[James M. Dorsey] Kamran, it’s always a pleasure to be with you. I think we’re at a point where all parties, that is the United States, Iran and Pakistan as the mediators, say that they have never been as close to an agreement as we are now. The Pakistanis and the Americans say that everybody has already agreed to the text of a memorandum of understanding.
The Iranians are saying that they’re finalising their view but acknowledge that they are very close. I think the problem with all of this is that we don’t know what it means. We are reading tea leaves essentially as long as we don’t see a text of the memorandum of understanding.
We’ve seen conflicting reports both by the Americans and by the Iranians of what is contained in that memorandum of understanding. I would venture that one reason why we’re seeing that is that both parties presumably have made concessions and they’re concerned about how those concessions are going to be received by their respective domestic audiences.
[Anchor Kamran Yousaf] But overall there is also interpretation that this MOU or interim agreement is essentially to stop shooting first of all and then they will discuss other contentious issues. So that’s correct?
[James M. Dorsey] I think that both the United States and Iran want an end to the war. That’s their first and foremost priority. Whether or not or how committed they are once the war is ended to carrying out the memorandum of understanding and getting a clear permanent deal on the future of the Strait of Hormuz, on the nuclear issue, on the issue of the release of frozen funds and lifting of U.S. sanctions, those are all issues to which we don’t know to what degree they have been resolved or how far the two parties are in the negotiations on that without us seeing the memorandum itself.
[Anchor Kamran Yousaf] There are of course both sides giving their own perspectives as you earlier also mentioned to appease their domestic audience. Americans essentially believe that it’s a combination of their military strikes recently that they undertook and other measures such as naval blockade of Iran played a key role and nudged Iran towards agreeing to their terms. On the other hand, Iranians are insisting no, that’s not the case.
They have actually resisted and they said essentially the U.S. is now reverting back to the same draft that they shared through Pakistan a couple of weeks ago. So in your view, what is the reality here?
[James M. Dorsey] I think there are two issues here. One issue is the track record. We’ve seen two months of a ceasefire for all practical matters with calibrated violations of that ceasefire in which the Iranians have clearly not conceded all that much and certainly not conceded to the degree that the Americans were willing to come or to finalise an agreement.
So, in other words, to what degree the recent military exchanges have played a role in Iran’s decision making, I think is questionable. The other part of this is that we also have to be very careful about the leaks of what is in this memorandum of understanding, not only because they’re partisan, if you wish, in the sense that the Americans have one version, the Iranians have another version, but we’re also dealing with forces within the United States as well as within Iran and, of course, Israel as a third party who may be leaking to the media to push their own interests and their own positions on a possible deal between the United States and Iran.
[Anchor Kamran Yousaf] About the Strait of Hormuz, Iranian Foreign Minister Abbas Rakhshi in an interview to the state TV said that basically it is going to be Iran and Oman that they will decide and he also acknowledged that under international law you cannot impose toll on ships passing through the Strait of Hormuz, but he at the same time said that Iran and Oman may charge a service fee. So, do you think that this will be acceptable to the Americans as well as regional countries that will be greatly affected by this kind of new protocols?
[James M. Dorsey] I think there’s no doubt that the status of the Strait of Hormuz is not going to revert to what it was before the war. The Iranians have adjusted their own position on this by moving away from the tolls to the notion of management and management fees. I think what we’re going to see is setting a new paradigm for these kind of waterways and choke points, not only in the Strait of Hormuz, but elsewhere, to the degree to which the Gulf states are going to go along with some sort of management will very much depend on how that management works.
I think the fact that, of course, in coordination with Oman, a member of the Gulf Cooperation Council will help. We’ve also seen the Qataris say that they were not opposed to a temporary imposition of some sort of fee that would be applied, for example, for the removal of mines in the Strait of Hormuz. Finally, we’ve also seen recently moves by both the United Arab Emirates and Qatar to cut their separate deals with Iran, to shield themselves from further Iranian attacks, and potentially to secure their own shipping to the State of Hormuz.
So, it’s not impossible that the United States ultimately would go along with that, depending on how it is framed.
[Anchor Kamran Yousaf] So, do you believe that, as you mentioned, both Qatar and UAE have engaged with Iran to protect their interests? In fact, there was also a report by Reuters where UAE is even contemplating to unfreeze around 10 to 20 billion dollars of Iranian assets, and there were also reports that a first instalment of three billion dollars have already been released to the Iranians, although the UAE government denied this. So, do you think that these regional countries in this post-Iran-US war accepted Tehran as a key regional player, and instead of confronting Tehran, they have decided to work along with it?
[James M. Dorsey] I think, first of all, it’s not clear whether that reported release of funds is part of a separate Emirati-Iranian deal or part of the larger US-Iranian negotiations. The United States has insisted it would not release funds immediately on the signing of the document. This would give the United States a way, through third countries, of releasing funds without being seen to be doing it itself.
Keep in mind that the bulk of those estimated 100 billion dollars in frozen Iranian assets are not in the United States. In the United States, there’s something of six billion dollars, which is really just a fragment of that. I think the second thing to keep in mind here is that the Gulf states and Iran have a geographically determined Catholic marriage.
There’s no divorce. They have to find a modus vivandi. So, the fact that they would seek arrangements with the Iranians should not be surprising.
They already have an enormous cost of the war to shoulder, a war that they had not opted for, in which they also did not participate.
[Anchor Kamran Yousaf] As far as Iran is concerned, Lebanon is another key sticking point. The Iranian foreign minister also indicated that under part of the deal, it will be implemented across the region. Iranian officials are also saying that Israelis will have to leave southern Lebanon.
Do you think that this will be acceptable? Because apparently, Israel is not directly part of either the negotiations or apparently this deal that is going to be signed between Iran and the US.
[James M. Dorsey] Let’s separate issues. First of all, Israel is not a party to whatever agreement the United States and Iran conclude, nor have they been involved or have they been at the negotiating table. I don’t think that an Iranian-US agreement is going to lead to an immediate withdrawal from, Israeli withdrawal from Yemen.
The question is whether an end to the war or the concept of an end to a war agreed by the United States and Iran applies simultaneously to Iran as well as to Lebanon. If it does, what that would mean is that we would get a halt, or should get a halt, to Israeli military activities. An Israeli withdrawal ultimately is going to be subject to a negotiation between Iran and Lebanon.
Ultimately, it has to be a negotiation to which Hezbollah in one form or another concedes and is included.
[Anchor Kamran Yousaf] What do you think, if even this memorandum of understanding is signed, what are the biggest risks that could derail the process? Do you think that Israel would still want this process and this diplomatic effort to fail?
[James M. Dorsey] Well, Israel has already said that it is not a party to the agreement and that it retains the right to strike at Iran with regard to its nuclear programme if it sees the necessity to do so. So, I think there are multiple issues that could lead to a breakdown of the negotiations between the US and Iran, even after a memorandum is signed. Lebanon is obviously one of those.
Another is the nuclear issue, and there are differences that have yet to be ironed out between the United States and Iran on the nuclear issue. There’s also the issue of whether or not Iran’s ballistic missiles programme and its relationship to its allies or partners in the Arab world is going to be part of that negotiation. Those are issues that Iran has said are non-negotiable.
[Anchor Kamran Yousaf] As far as Iran’s nuclear programme is concerned, it appears that Iran is ready to give some concessions regarding this 60 percent stockpile of enriched uranium. And the Iranian foreign minister came up with this proposal that Iran wants to dilute it and they want to do it in Iran. So, do you think that this will be acceptable to the Americans, that if they get rid of the 60 percent stockpile by diluting it within Iran and then hand over to any third country?
[James M. Dorsey] I think in some ways the nuclear issue is one of the easiest issues to resolve. The Iranians, even prior to the war, or prior to last June’s war, were willing to dilute it on their soil under international supervision. At the same time, the Iranians have made clear that they would agree to a period in which the enrichment of Iranian uranium on Iranian soil would be suspended.
There’s differences over how long that period should be. But as a matter of principle, those were things that were being discussed and the Iranians had volunteered. So, I think that you may very well see that those kinds of issues are solvable in U.S.-Iranian negotiations. They’re not easy to solve. They take time, whether 60 days is going to be enough remains to be seen, but they are solvable.
[Anchor Kamran Yousaf] The Trump administration is trying to sell this imminent deal as a major success, and one of the senior U.S. administration officials the other day in an off-the-record briefing said that this will be a good deal and Iran would be reintegrated into the global system. It will act as a good actor. Do you think that even if there is a deal, Iran will drastically change its approach as far as the Middle East is concerned, towards Israel, towards the United States and other Western countries?
[James M. Dorsey] Well, first of all, all parties in a conflict, when they negotiate an end to the conflict, declare victory. Trump is in a difficult position because he has to demonstrate that what this war has produced justifies the war itself and also justifies his walking away from the 2015 international agreement, the JCPOA, that curbed Iran’s nuclear programme. I don’t think we’re going to see a fundamental change of Iran’s position towards Israel, but I think we also have to look at both the rhetoric that comes out of Iran that at times is questionable, to put it mildly, but also positions that Iran has taken de facto.
At the bottom line, Iran’s position has always been that it would accept whatever the Palestinians accept, and if you go back to the November 2023 Islamic and Arab summit in Riyadh at the beginning of the Gaza war, the Iranians signed on to a final document that called for a two-state solution.
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