USA and Iran Sign Framework Agreement – 60 Days for Final Peace Treaty

All I know is that every time we talked about the possibility of peace, the stock market shot up like a rocket, Trump said. That could have triggered an international depression. I did not want to experience an economic catastrophe. Every time we said something negative, like, for example, 'You know what, we are not going to be able to reach an agreement,' it went down very sharply. Trump's remarks stood in contrast to earlier comments in which he had said he expected higher oil prices, loved inflation, and was "not even a little bit" motivated to reach a deal because of Americans' financial situation.

Economic Background and Trump's Argumentation

According to a senior US government official, both sides agreed to an "immediate and permanent end of the war on all fronts, including in Lebanon." Among other things, the 14-point agreement commits the USA and Iran to mutually respect each other's sovereignty and territorial integrity, to refrain from interfering in each other's internal affairs, and not to start any wars or military operations against each other. Negotiations on a final agreement are to be concluded within a maximum of 60 days, with the deadline extendable by mutual consent.

Tehran will "immediately reopen the Strait of Hormuz," and the USA will promptly lift the naval blockade of Iranian ports, Pakistani Prime Minister Shehbaz Sharif announced on the platform X. The Pakistani head of government spoke of a milestone. A ceremony to honor this milestone is planned in Switzerland. Pakistan had mediated between the parties to the conflict.

The Role of Pakistan as Mediator

According to the news agency AFP, which documented the text of the declaration of intent after it was read out by a senior US official, Paragraph 1 provides that the USA and Iran and their allies "with the signing of this declaration of intent declare an immediate and permanent cessation of military activities on all fronts, including in Lebanon." Both sides commit themselves "from now on, not to start any war or military operation against each other and to refrain from mutual threats or the use of force, and to guarantee the territorial integrity and sovereignty of Lebanon."

Paragraph 4 provides that the USA will immediately after signing begin to lift the naval blockade as well as all disruptions or obstacles against Iran and completely end the naval blockade within 30 days. According to Paragraph 5, Iran will, to the best of its abilities, make arrangements for the safe and toll-free passage of commercial ships through the Strait of Hormuz for 60 days. According to the text of the agreement, the transit of commercial ships will begin immediately and, given the need to remove technical and military obstacles and for demining by Iran, will be fully restored within 30 days.

The 14 Points in Detail

According to Paragraph 6, the USA commits to working out with regional partners a final mutually agreed plan of at least $300 billion (€258.82 billion) for reconstruction in Iran. Exactly where the funds are to come from was initially unclear. According to Paragraph 7, the USA commits to ending all types of sanctions against Iran, including UN Security Council resolutions, resolutions of the Board of Governors of the International Atomic Energy Agency (IAEA), as well as all unilateral US sanctions, primary and secondary, on an agreed timetable as part of the final agreement.

In Paragraph 8, Iran confirms once again that it will not seek to acquire nuclear weapons or develop such weapons. Until the conclusion of the final agreement, both sides agree to maintain the current status quo. The disposal of stockpiled highly enriched material is to be regulated through a mechanism agreed by both sides within the timetable referred to in Paragraph 7, with on-site downblending under IAEA supervision representing a minimal method. According to Paragraph 10, the US Treasury Department will issue, immediately after signing and until the termination of sanctions, clearances for the export of Iranian crude oil, petroleum products, and derivatives, including all related services such as transactions, insurance, and transportation.

Sanctions, Oil Exports and Reconstruction

According to Paragraph 11, the USA commits to making the frozen or blocked funds and assets of Iran fully available for use after the declaration of intent enters into force. Both sides agree on the establishment of an executive mechanism that monitors the implementation of the declaration of intent as well as future compliance with the final agreement. According to Paragraph 14, the final agreement will be confirmed by a binding UN Security Council resolution.

The USA further commits to withdrawing its forces from the vicinity of Iran within 30 days after the signing of the final agreement. For the duration of the 60-day intensive negotiations, no fees are to be charged, as the text of the agreement states. The mechanism for implementing the plan will be definitively established as part of the final agreement within 60 days.

France's President Macron praised the agreement in laudatory terms. "Great job," the French head of state commended. Trump, however, used the opportunity on the sidelines of the G7 summit on Lake Geneva also to threaten Iran with new military strikes. "The agreement we reached with Iran on Sunday will be signed shortly – tomorrow or perhaps the day after tomorrow," Trump said. "If they don't behave, we will start dropping bombs right on their heads again immediately," he said. Trump was in Europe because of the G7 summit.

Reactions from the West and Criticism

White House Chief of Staff Susie Wiles acknowledged on the platform X that the "next 60 days will bring challenges." Reaching the framework agreement was met with relief. However, not all observers assessed the deal positively. Joel Rubin, a senior former US State Department official, described the framework agreement as a "strategic fiasco of epic proportions." The agreement with Iran represented "a break with nearly fifty years of US policy toward Iran supported by both parties," Rubin told the Israeli TV channel i24news. He encouraged Trump in 2018 to make the highly controversial decision to withdraw from the international nuclear agreement with Iran. Rubin warned of a scenario in which Tehran could now be "handed hundreds of billions of dollars without any restrictions."

The background to the agreement is a military conflict between the USA and Israel on the one hand and Iran on the other. At the end of February, the USA and Israel had attacked Iran, which in turn reacted with attacks on Israel and Israeli interests in the region. The fighting spread to include Lebanon, among other places. With the framework agreement now signed, the fighting is to be ended immediately on all fronts, including in Lebanon, where, according to the text of the agreement, territorial integrity and sovereignty are to be guaranteed. The agreement thus also contains a mechanism for ending violence in another regional crisis area.

Background and Outstanding Disputes

Numerous detailed questions remain open after the signing in Versailles. Disputes such as the future of the Iranian nuclear program are to be clarified during the 60-day negotiation period. It is also unclear exactly where the $300 billion for reconstruction in Iran is to come from and in what form it will flow. The US Treasury Department wants to issue exemptions for the export of Iranian crude oil immediately after signing, in order to financially stabilize the Iranian state and gradually reduce the sanctions.

The coming weeks are considered decisive for the implementation of the agreement. Observers point out that, although the declaration of intent agreed in Versailles provides for an immediate ceasefire and concrete steps such as the opening of the Strait of Hormuz and the lifting of the naval blockade, the far-reaching questions – from the future of the Iranian nuclear program to the release of frozen assets and security guarantees – must first be negotiated in the coming 60 days. Whether both sides will meet the agreed deadlines and whether Trump's threats of renewed military strikes in the event of a failure of the negotiations would be carried out remained initially open.