The Deal

The United States has negotiated a treaty with Iran regarding its nuclear program. These are elements of the deal reached Sunday between Iran on one side and Britain, China, France, Russia, the United States and Germany on the other, according to a fact sheet issued by the White House. The initial agreement will be valid for six months.

URANIUM ENRICHMENT.  Iran is allowed to continue enriching uranium to a level of 5 per cent, but will stop enriching at higher levels. Uranium enriched to higher levels will be diluted in order to prevent its use in nuclear weapons. Stocks of lower-enriched uranium will be immediately converted into material that makes it more difficult to turn into weapons material. Enrichment plants will not be expanded, and no new plants will be built.

ARAK REACTOR.  Construction will stop at the Arak reactor, which is of concern because it would produce plutonium as a side product. Work on making fuel for the reactor will stop Iran will not build a reprocessing facility, so that no plutonium can be separated from the reactor's spent fuel and can thus not be used for a nuclear warhead.

INSPECTIONS.  Inspectors of the International Atomic Energy Agency will get access to additional sites in order to monitor implementation of the agreement. Iran will grant daily access to its uranium-enrichment sites.

SANCTIONS.  The six powers will not impose new sanctions. Embargoes will be suspended for the sectors of precious metals, car production, petrochemical exports. The group of six will also allow purchases of Iranian oil at low levels. Tuition fees by Iranian students abroad will be unfrozen. The six nations will improve Iran's access to imports of food and medicines.

Based on these terms, it's pretty clear how desperate the Iranians were to rejoin the world economy. From a financial standpoint, they are really in a bad way and had no choice. As I have said many times, the most powerful weapons the world has are democracies and free markets. There's just too much money to be made.

Obviously, this would have not happened if Iran had not just elected a new leader,President Hassan Rouhani. And, while this isn't cause to run out and declare warming trend between our two countries, it is an important first step towards normalization. Kudos to John Kerry and his team for getting the job done on this one!