'U.S.-Iran tango' enters new era after end of sanctions

The flurry of recent developments surrounding Iran and the U.S., culminating with the lifting of economic sanctions on the would-be nuclear power, can be seen as a new step in an evolving relationship.

But Tehran's new opening to the West, especially on the economic front, has also sparked fears that the Middle East's dominant Shia regime will be better positioned to take a more aggressive role in the region.

"There are so many moving parts to this Iranian-U.S. tango that it's really difficult to predict ahead, never mind a year, but a couple weeks ahead," says Alex Vatanka,  a senior fellow at the Middle East Institute in Washington, who specializes in Iran politics.

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Still, Vatanka said that when looking at these most recent developments the most significant achievement is the new channel of communication that looks to have been forged between the two old enemies.

"The headline is that, after 37 years of really not talking, you have now diplomatic channels open to Washington and Tehran, to pick up the phone and call one another," he said. "I don't care what people say. That's big. 

"It may not be a pleasant phone call, but the fact that they're having that phone call represents progress."

More businesslike

That progress was evident following the detainment of 10 American sailors who were captured by Iran's Revolutionary Guard after their two small boats drifted into Iranian territorial waters last week.

A number of calls were made by U.S. Secretary of State John Kerry to his counterpart, Iranian Foreign Minister Mohammad Javad Zarif, who have developed a strong rapport and  were able to secure the quick release of the sailors.

"That stuff is new. It's not necessarily a game changer. It doesn't mean there will be an Iranian embassy in Washington or an American embassy in Tehran any time soon, but it' is significant," said Vatanka.

The timing of that incident was diplomatically problematic as it came on the heels of the International Atomic Energy Agency's certification that Iran had met all its commitments under the landmark deal with the international group negotiating a stop to Iran's nuclear ambitions.

As a result of that certification, U.S. President Barack Obama  issued an executive order removing the majority of the economic sanctions against Iran. With the E.U following suit,  Iran will now have access to $100 billion in frozen assets, which are needed to boost its ailing economy.

Meanwhile, Iran freed four Americans including Washington Post reporter Jason Rezaian, who were swapped for seven Iranians in U.S. jails for violating the sanctions. Other Iranians were pardoned by Obama, and arrest notices for more Iranians were lifted.

Critics oppose lifting sanctions

The lifting of sanctions was immediately opposed by Obama's critics who have been against the nuclear deal from the beginning.

Removing the sanctions, they argue, removes any leverage the U.S. and its allies have over Iran to thwart its military ambitions in the region. 

"Now armed with an initial windfall of more than $100 billion, Iran will have vast new resources to continue sponsoring terrorism, threatening its neighbours, and funding its nuclear and missile programs,"  said Republican Tennesse Senator Bob Corker, chairman of the Senate Foreign Relations Committee.

House Speaker Paul Ryan, another Republican, also slammed the new arrangements, saying the Obama administration is lifting economic sanctions "on the world's leading state sponsor of terrorism." 

"A bipartisan majority in the House voted to reject this deal in the first place, and we will continue to do everything possible to prevent a nuclear Iran," Ryan said.

On the other hand, Reva Bhalla, vice-president of global analysis at Stratfor and an expert on Middle Eastern affairs, said it makes a lot of strategic sense for the U.S. to move ahead with the deal and the lifting of sanctions, as there are a number of other foreign policy challenges to be dealt with as well. 

"The U.S. cannot afford to maintain a hostile relationship with the Iranians and have that threat of military conflict in the Persian Gulf hanging over its head when it needs to be able to respond and preemptively work toward counter-balancing other adversaries in the world."

There are legitimate concerns about how strong is the oversight of Iran's continued nuclear activity, she said. And Kerry himself admitted this week that some of the released funds could end up with terrorist organizations. 

Yet the fear that the lifting of sanctions will only amplify Iranian aggression in the region through its proxy wars in Syria, Iraq, Lebanon and Yemen is "a little bit overblown," she says.

"The bigger area Iran needs to channel investments is in its energy sector," she said. "Iran badly needs that investment to revive those [oil] fields."

'An ailing economy'

Vatanka also feels that the new money flowing to Iran will be diverted mostly to basic needs."The Iranians have an ailing economy that they need to look after first, because if they don't  they could have social upheaval at home," he says.

"The simple truth is Iran  fights in the region relatively on the cheap. They don't need big bucks to do what they're doing in Syria for Assad, or supporting Hezbollah in Lebanon. So I don't think this money necessarily will result in Assad tomorrow getting billions of dollars in Iranian money."

Still, Iran remains a dangerous actor in a volatile area of the world, and its ruling system is steeped in antagonism toward the U.S.,  Suzanne Maloney of the Brookings Institute wrote in a recent op-ed for The New York Times.

"The new-found progress between Washington and Tehran will not immediately or inevitably alter the ideology and strategic interests that drive such Iranian behaviour," Maloney wrote. 

"However, the nuclear deal offers only the most recent evidence of Iran's capacity for pragmatic policymaking based on a rational cost-benefit assessment. Over time, further bilateral engagement may reinforce these inclinations within Iran."