09 October 1997
Copley News Service
Commentary by James O.Goldsborough

The bad laws that make for bad foreign relations

The Iran-Libya Sanctions Act, passed last year to impede nations from trading with Iran or Libya, has had its inevitable effect. The United States is in another nasty face-off with its European allies.

This one, because of the stakes involved, could be bigger than the last one, the Atlantic confrontation over the Helms-Burton law. Helms-Burton involves Cuba, which exports cigars. Iran and Libya export gas and oil.

The Iran-Libya law, also called the D'Amato law after its chief sponsor, Sen. Alfonse D'Amato, R-N.Y., is being invoked by the Clinton administration to punish Total, a French oil company. Total heads a French-Russian-Malaysian consortium that has just signed a $2 billion deal to develop Iran's natural gas fields.

Lionel Jospin, the French prime minister, is "delighted" with the new deal. "American laws," sniffed Jospin as the deal was signed last week, "apply in the United States, not in France."

If the law has been violated, said Defense Secretary William Cohen in Paris this week, it will be enforced. The law provides for a variety of sanctions against the offending country, including banning its sales in or exports to the United States a ban that would be a violation of international trade law. Such a prohibition also would subject U.S. companies to retaliation.

Total, which doesn't do much business in America, is unworried, but Elf Aquitaine, the largest French oil company, is also preparing contracts with Iran and Elf does 15 percent of its business here.

Other Europeans are weighing in on the French side. " I hope the U.S. administration will think long and hard about the wisdom of taking any action against Total, " said Leon Brittan, vice chairman of the European Commission.

The French also are supported by Russia and Malaysia, which have large stakes in the Iranian deal.

Helms-Burton and D'Amato are bad laws economically ineffective and politically counterproductive. The United States, a nation born of resistance to laws that restrict trade, should be embarrassed by them. Our first war as a nation the War of 1812 was fought against a British law that attempted to tell Americans with whom they could trade.

The two U.S. laws have some interesting differences.

Helms-Burton's main provisions including legal action against foreign business people operating in Cuba and the sanctioning of U.S. court action against companies doing business in Cuba are so clearly a violation of World Trade Organization law that they have never been applied. President Clinton has waived them for fear of retaliation against U.S. companies or a judgment against us in the World Court.

Helms-Burton reflects tired policy by a Congress in thrall of Cuban exiles in Florida. It flouts the proven formula for defeating communism: engage it, don't isolate it.

The D'Amato law is more complicated. Its target is not a down-at- the-heels tropical island, but wealthy Islamic oil producers up to their turbans in terrorism. Trading with Iran and Libya raise national security questions not raised by Cuba, for Europe as well as America.

Another complication is that Europe, unlike with Cuba, has a tradition of trade with Libya and Iran.

Italy has been deeply involved in development and purchase of Libyan gas and oil for decades. Since Iran reopened to foreign investment three years ago, France, Germany, Russia and China all have sought contracts. Total took over a Conoco oil deal with Iran three years ago when the Clinton administration forced the U.S. company to cancel which became the genesis of D'Amato's bill.

The Europeans don't deny that Libya and Iran have terrorist connections. Britain, along with the United States, holds Libya responsible for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, in which 270 people died. Last spring, a German court accused Iranian President Hashemi Rafsanjani and spiritual leader Ayatollah Ali Khamenei of ordering the murders of four Iranian Kurds in Berlin. Iran is a suspect in the bombing of the U.S. Marine barracks in Saudi Arabia last year, and still has a murder order out against writer Salman Rushdie.

Many Western nations have grievances against Iran and Libya. The difference is that Europe, unlike the United States, cannot pretend these nations don't exist. Geographically, they are too close. There is a historical relationship that goes on, and a feeling that trade helps to reduce political conflict.

The United States and the European Union have had many disagreements over the use of trade as a political weapon. The most damaging quarrel came in 1981, when the Europeans announced a $10 billion pipeline deal to bring Soviet natural gas to Europe.

The Reagan administration sought sanctions against European companies involved in the pipeline deal and met fierce resistance, including from British Prime Minister Margaret Thatcher. Eventually the sanctions were dropped, and the pipeline went ahead. A few years later, the Soviet Union had ceased to exist.

We ought to have learned something from the pipeline affair, but the Helms-Burton and D'Amato laws prove we did not. The Constitution gives Congress the power to regulate commerce with foreign nations, not between foreign nations.

Helms-Burton and D'Amato are feel-good laws. Internationally, no nation will respect them, as we would not were they directed at us. Any attempt to apply sanctions under these laws, opening up U.S. companies and business people to retaliation, would be a mistake.

James O. Goldsborough is the senior foreign affairs columnist for The San Diego Union-Tribune.

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