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00:00Our colleagues at Bloomberg Economics have done something very valuable.
00:02They've put together a breakdown comparing the original JCPOA to the president's initial demands
00:07to what is in this proposed memo of understanding.
00:10Christina, what is the reporting surrounding the nuclear capability?
00:13Start or stop with that.
00:13That's right. All right. We've put this up big on the board for our TV audience.
00:16But for our audio audience, don't worry, I'm going to take you through it.
00:19OK, so during the JCPOA, what was agreed to is Iran said it wouldn't pursue a nuclear weapon.
00:24It would retain low-level enriched uranium. That's for those civilian purposes.
00:28And it's submitted to IAEA monitoring.
00:30Now, there was debate about whether or not they were cheating on that.
00:33But I've talked to folks at IAEA that said any visibility was valuable
00:36in order to keep tabs on what Iran was actually doing.
00:39This time around, the U.S. initially said it wanted a complete dismantlement of Iran's nuclear program.
00:44Now, where we are with this MOU, as reported so far,
00:48is Iran will agree not to pursue a nuclear weapon, enriching limits and monitoring and TBD.
00:55Not a lot of specifics there.
00:56And, of course, we're still working through the deal.
00:58And we've heard different things from the White House and from Iran.
01:01We've also got, when it comes to existing uranium, in 2015, and the JCPOA said it would
01:08excess low-enriched uranium would be shipped out of Iran or it would be blended down.
01:12And about 25,000 pounds of that did, in fact, leave the country.
01:15The initial U.S. demand at the start of this conflict was that all that uranium would be transferred or
01:21destroyed.
01:21Remember, the president said it's all got to go.
01:24They've got to hand it over.
01:24We've got to get rid of it.
01:26The current MOU, as reported, is Iran will agree to negotiate over what to do with that uranium.
01:32That's it.
01:33That's where we're at.
01:34All right.
01:34So we've got the nuclear issue there.
01:35How about the issue of sanctions?
01:37There's been a lot of talk here about what's going to happen with that going forward,
01:40again, if the president gets his way here and the deal is kind of shaped in the image that he
01:43wants.
01:43Yeah.
01:43So this has been really interesting, too, because in the JCPOA, remember the snapback sanctions?
01:48Remember we were talking about snapback sanctions?
01:49I feel like I heard that phrase one more time.
01:51So you had these nuclear sanctions.
01:53They were sanctions relief.
01:55It unlocked oil banking and trade.
01:561.7 billion was the settlement number.
01:59The initial U.S. demands here were that Iran would get sanctions relief only after concessions
02:04and no repeat of this cash to Iran that the president talked about, on the trail especially.
02:09Now, the MOU, as we understand it, is the U.S. commits to discuss sanctions relief
02:14and discuss the release of frozen assets.
02:16But nothing concrete so far.
02:18Appreciate you walking us through that.
02:19Chris Kennedy put that breakdown together.
02:21He's Bloomberg Economics' lead on economic statecraft.
02:24He's also served in the National Security Council under both Presidents Biden and President Trump
02:27as its international economics director.
02:29Chris, what are the most glaring differences between the JCPOA and the proposed memo of understanding?
02:35I think we talk a lot here about, you know, where we're going back to is sort of where we
02:39were.
02:40How much is that true as you've kind of gone and compared these two documents?
02:43Yes, the one that was ratified and the one that the president wants to have put in place.
02:47Well, thanks so much for having me, David, and good morning.
02:50I think we are, it seems to me that the maximum that the U.S. can expect at this point
02:56is to get back to something resembling the JCPOA.
03:00But even that's going to take significant time.
03:02And the biggest impediment is that now Tehran has leverage that it never had back in 2015.
03:08It's showed that it can control traffic through the Strait of Hormuz,
03:12choke off energy supplies to the world.
03:14And that's giving it significant leverage that it never had previously.
03:19Jeff Mason is back with us at the table.
03:22Jeff, I want to ask you, when you look at what has been established in the past with JCPOA,
03:28obviously we both covered the first administration.
03:29I covered Secretary Pompeo, who railed against this deal, said the U.S. had to pull out of it.
03:33Worst deal ever was something we heard over and over again.
03:36The very, very extreme demands at the start of this conflict and where we are,
03:40even if what ends up getting settled is somewhere in between where the president started and the JCPOA,
03:46is that something that is going to cost him politically?
03:49It seems weird to talk about politics at a time of war, but of course it always matters.
03:53And he's got to sell this before November.
03:56Will voters care or are they just going to go with him because they just need plausible deniability?
04:00If the president says it's a good deal, you think his voters will sign on to that?
04:04Sure.
04:04Well, first of all, I don't think it's weird to talk about it at all, but I'm a political reporter.
04:08I know, I always feel strange about it.
04:10But I think it's actually really relevant because the president went into this war with a sales pitch of sorts,
04:16and that sales pitch has changed repeatedly over the last several months.
04:20And one of the political conflicts he's facing right now is there are people on the right, hawks like John
04:25Bolton,
04:26who want him to go in and finish the job and not step away.
04:29Coming up later in the show, John Bolton.
04:30Ding, ding, ding.
04:31I don't like that, yeah.
04:32Did that on purpose?
04:34But they see this as kind of a once-in-a-generation opportunity to really do something major.
04:42And if the president pulls away without doing that, they're going to be disappointed.
04:45On the other hand, you've got a bunch of Republicans who are really concerned about holding on to their seats
04:50in Congress.
04:50So you've got the fuel price problem that we've been talking about for weeks now that is also a political
04:56issue for him.
04:58So largely, I guess I would just wrap that up by saying the politics are playing a huge role in
05:02this,
05:03not only for him but for both sides of his party.
05:06Chris Kennedy, let me go back to you here on this issue of economic statecraft
05:10because I think we've talked a lot about the prospects of a 60-day extension and what that would mean.
05:15We've also talked about how Iran closing off the strait in which it has kind of proves that they have
05:19a weapon at their disposal
05:20that perhaps they could use again, despite the president's adamance that that not happened.
05:24And I'm curious how you think about that.
05:26Were there to be an agreement where the ceasefire is extended by 60 days, how much optimism do you have?
05:31What's the likelihood here that Iran wouldn't deploy or want to lean on that weapon once again,
05:35knowing the effect that it's had not just on the U.S., but on the global economy as a whole?
05:41Well, I think the fact that the missile program, Iran's missile program and the drone program is out of scope
05:47of this agreement,
05:47it means that obviously Iran will retain that ability to close the strait.
05:51Now, will they do it?
05:53I mean, I think to the extent that I believe that it's going to be really challenging to get a
05:57deal in two months
05:58and President Trump may get frustrated with the progress and the deal might break down.
06:04There are a lot of points of failure here.
06:05There are a lot of things that can go wrong.
06:07The president has a tendency to want to claim victory at every moment during this conflict,
06:12but also in all prior geopolitical conflicts over things like trade.
06:16And Iran does not seem to be as willing to let that slide.
06:20They seem to be very untrusting of the negotiation channels that have been set up between Washington and Tehran.
06:27So they're taking seriously what Trump says publicly.
06:30So it seems to me that given all of the things that purportedly are going to have to be dealt
06:36with over the 60 days,
06:38especially the really politically sensitive items like the release of funds,
06:43which the president has hammered both Obama and Biden for because there were separate settlements during both administrations,
06:50it seems like there is a high likelihood that this will be a recurring issue.
06:55And even if we get some of these oil laden vessels out of the Persian Gulf in the first few
07:01weeks of a ceasefire,
07:03there's a real risk that those empty vessels will not want to return to the Persian Gulf out of fear
07:08of being trapped once again.
07:10100 percent. That's a completely different risk profile,
07:12whether you're willing to take the run and try to get your cargo and your people out
07:16and whether you're willing to expose them once again to what is an unstable and maybe not so durable agreement,
07:21especially the next 30, 60 days.
07:22Speaking of other outliers and things that could make this even more difficult than it already is,
07:27Jeff, I want to ask you about Israel and Lebanon.
07:29Our colleague overseas rightly pointed out that this incursion into Lebanon today by the Israeli forces is huge
07:35and the biggest in several decades.
07:37Where does Netanyahu stand in all this?
07:39Obviously, the Israeli prime minister would like Trump to finish the job.
07:43It seems now increasingly like that's going to happen.
07:46Where does this leave him and where does this leave that relationship?
07:49I think it's a fascinating dynamic.
07:50I mean, the two countries went into this war together, but Israel has been the junior partner.
07:55And that is just a reality.
07:57And the prime minister has also made clear that Israel has probably their best bet as a U.S. president
08:03in Donald Trump than they've perhaps ever had.
08:05So the relationship is strong.
08:08But Netanyahu also has his own agenda and his own things that he cares about.
08:13And that's manifesting in this incursion.
08:16And it's been manifesting in sort of war planning writ large.
08:19I would also like to go back to the JCPOA connection or comparison that we were talking about earlier.
08:25We love the JCPOA here on this weekend's show.
08:28Don't you just love acronyms?
08:30Everyone loves acronyms.
08:32It's so D.C.
08:33The president hated that agreement.
08:35We all know that.
08:36The president hates the idea of giving money to Iran.
08:39He was super critical of Obama for that.
08:41Pallots of cash.
08:42Exactly.
08:43But what he has not answered when he says repeatedly that Iran has already now agreed to not having a
08:48nuclear weapon is how they're going to enforce that and how they're going to monitor that.
08:51And that was a big part of the JCPOA is they had that monitoring.
08:56So if there's not, and there may be a piece that they just haven't told us about, but if there's
08:59not that piece already, they have, A, the risk politically, again, of having a deal that is either similar to
09:06the JCPOA or not as good and having to explain why and what led to this.
09:12And that monitoring, there was a lot of criticism and correct criticism that Iran was cheating, Iran was hiding facilities.
09:18But I remember speaking to Laura Holgate, who was the U.S. ambassador to the IAEA, and she was saying,
09:23yes, we know that not all these countries are playing fair, but you can see what they're doing by what's
09:27not in a facility, by what's on people's shoes, what kind of equipment is working, where power cords are going.
09:33She's like, not having any of that access really puts them on the back foot when it comes to whether
09:37Iran is trying to pursue a weapon.
09:38And they had access.
09:39They had an ability to get in.
09:41Yeah.
09:42Chris Kennedy, let me stick with Israel here.
09:43As Jeff points out, playing the role here of a junior partner, there is that call between Gulf nations and
09:48the president.
09:48And then he called Benjamin Netanyahu on the heels of that.
09:52Jeff's saying that they have their own agenda.
09:54And I'm very curious how you see their role in the codification of this draft memo of understanding.
09:59It strikes me that if they have their own agenda, that could very well involve pursuing military action after the
10:05U.S. agrees to stop doing that, should the U.S. agree to stop doing that.
10:09How do you think about that variable as you think through the way that this could be codified by the
10:14president and by Iran?
10:17Sure.
10:18Well, I think there's a couple of factors.
10:19We've seen, of course, Israel ramp up its incursions into Lebanon, potentially in anticipation of being forced to back off
10:27if an MOU does come together.
10:29But it's hard to imagine that Israel would be satisfied with an agreement that doesn't have the level of stringent
10:38monitoring that we had in the JCPOA, at least.
10:42Because, of course, Israel was very critical of the JCPOA in its original form.
10:47And, you know, I think Secretary Rubio said, you know, admitted to the fact that it would be really challenging
10:53to get, you know, a really tough monitoring system in place.
10:57That can't be just that can't be done just between the U.S. and Iran.
11:02That's going to require third party neutral monitors like we had in the case of the JCPOA.
11:07And, of course, any relief that the U.S. wants, you know, is going to provide to Iran as part
11:12of this deal, as part of their agreement to submit to additional monitoring will require the U.N.
11:19Because the U.N. will have to roll back its sanctions again.
11:21That means you're going to have to get other parties in Europe and elsewhere to agree to, you know, whatever
11:26deal is worked out.
11:27So we're talking the JCPOA took 20 months to negotiate.
11:30We're talking a long time to get to that point.
11:33And Israel, of course, is going to be watching very closely because they know that, you know, if Iran is
11:39able to get a nuclear weapon, that's going to really change the dynamics in the Middle East forever.
11:43Jeff, very quickly, we'll have about 30 seconds.
11:46Who is leading this effort on the U.S. side?
11:48It seems like Vance is now a bit on the outs, according to some reporting.
11:51Is it still just this small group of Wyckoff and company who is really advising the president?
11:57I think so.
11:57I think it's Wyckoff and Kushner.
11:59Vance will sort of come in once in a while.
12:01But it's still that.
12:03Rubio is factoring in where?
12:03Rubio is factoring in to possibly running for president in a couple of years or less than that.
12:09But overall, it's the same team.
12:13And last very quick point is legacy is a big part of this, too.
12:17And that is its legacy for President Trump and for those people who are involved.
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