Senior White House officials have admitted to the Israeli government, Israeli sources tell Haaretz, what their counterparts have maintained for a while: The sanctions relief provided in the temporary Geneva deal with Iran is worth a lot more than the $7 billion the White House claimed. The realistic estimate is now something more like $20 billion.
In the wake of the Geneva deal at the end of November, the White House released a fact sheet laying out the terms of the deal, including its estimate of the economic value of all the sanctions. They claimed that the looser restrictions on the transfer of oil revenues would be worth $4.2 billion, and relief for sanctions on the trade of precious metals, cars, and petrochemical products would be worth about $1.5 billion. There are prima facie problems with the White House’s info: It entirely omitted one concession in the deal, the loosening of sanctions on trading aircraft parts — that’s ostensibly a humanitarian measure to improve civil-aviation safety, but it’s of real economic value, and military utility, too (the Revolutionary Guard tends to make off with the parts).
But a closer look reveals even more problems: As Benjamin Weinthal noted below, a new report from the Foundation for the Defense of Democracies points out that the White House’s estimate of the economic benefits for the auto industry, $500 million, seems like a serious underestimate: While plenty of sanctions remain on the industry, if the industry recovers to just 10 percent of the contribution it used to make to the Iranian economy, that would be worth $2.5 billion, five times as much economic activity as the White House claimed.
And the Haaretz report lays out even bigger gaps. Security sources note that China has expressed interest in resuming $9 billion in oil deals with Iran, and came to the following conclusion: “Economics is a matter of expectations. The Iranian stock exchange is already rising significantly and many countries are standing in line to renew economic ties with Iran based on what was already agreed in Geneva. . . . In any case, it’s about 20 or 25 billion dollars. Even the Americans understand this.”
On the other side, the restrictions the deal places on Iran’s nuclear program, the White House hasn’t been honest either, as Greg Jones and Henry Sokolski laid out for NRO yesterday.