09 October 1997
Journal of Commerce
EditorialIran divides the West
Ten years ago, in the Majlis (parliament) in Tehran, President Ali Akbar Hashemi Rafsanjani crowed with gleeful contempt as he produced the Bible sent him by Ronald Reagan. It was sent c/o Col. Oliver North as a goodwill token designed to secure the release of American hostages held by Iranian-backed Shiite Muslim militants in Lebanon.
The United States has had serious difficulties dealing with Iran since Ayatollah Khomeini toppled the shah from his peacock throne in 1979. Now President Clinton is firing the opening salvos in what could be a new trans-Atlantic trade war between America and Europe, although it is only the latest noisy installment in the old and long-running story of America's obsession with truculent men in turbans.
Official Washington insists its threat to impose sanctions against the French oil giant Total is perfectly justified. Massive foreign investment in Iran's oil and gas industry, it argues, helps the country acquire weapons of mass destruction.
Evidence gathered by intelligence agencies that Iran has an active nuclear program cannot be dismissed as lightly as suspicions about Saddam Hussein's atomic ambitions before the Gulf War.
And although Iran's strident ideological support and practical assistance to terrorists have not caused the latest crisis in the Middle East peace process, its role is destructive. Worse, in a way, is Iran's habit of torturing or killing its own dissidents, abroad as well as at home. In April a Berlin court trying the infamous "Mykonos" case provided a "smoking gun" that linked the assassination of Iranian Kurdish activists directly to Tehran.
Iran is prickly, resists U.S. hegemony and challenges its allies in the gulf and beyond. It is also canny enough to play Europe against America.
Some nevertheless believe change is in the air. Mohammed Khatami, elected president in May, is a relative liberal on domestic matters, although there are few signs that he will adopt any new policies on regional or security issues. Ironically, before the Total contract, events conspired to ensure that the United States and European Union were closing ranks on handling Iran.
The Mykonos verdict brought a suspension of the EU's "critical dialogue" - long viewed by Washington as a fig leaf for business as usual. It also forced Germany to re-examine its lucrative relationship with Tehran and all EU countries to withdraw their ambassadors; despite attempts to negotiate a deal, none has yet returned.
Britain's failure to make progress over the Salman Rushdie fatwa and the absence of a significant commercial relationship with Iran place it even closer than usual to America - although many in Whitehall say that Washington errs on the side of demonizing.
Britain fully shares European disapproval of U.S. legislation threatening any company investing over $20 million a year in the Iranian and Libyan energy sectors. Its author, Sen. Alfonse D'Amato, R-N.Y., produced a carbon copy of the controversial Helms- Burton law on Cuba, forcing a reluctant Democratic administration to punish non-American companies operating in the United States for actions in a third country - a sin against the orthodoxy of globalization.
Part of the problem is America's status as the world's only superpower at a time when Europe - while advanced in pursuing its trading interests and generally cynical enough about human rights - is incapable of agreeing to a common foreign policy. Washington's pursuit of "dual containment" - of Iraq and Iran - is the cause of bitter resentment in the Middle East and beyond.
And sanctions, a blunt instrument that harms ordinary people far more than their rulers, are going out of fashion. Only last week, the United States and Britain were ambushed at the United Nations when Russia joined Arab and African states in attacking sanctions imposed on Libya because of the Lockerbie affair.
Far more severe measures in force against Iraq since the invasion of Kuwait now enjoy little active support beyond Washington and London. Meanwhile, others, particularly the French, wait for them to wither and die.
Total is one of more than 60 companies poised to sign oil deals with Iraq when the embargo goes. Saddam Hussein, sitting on the world's second largest oil reserves after Saudi Arabia, is a patient man.
So far the United States plans merely to "investigate" Total's contract. If the EU and the United States fail to reach agreement on Iran by Oct. 15, Brussels is to submit a formal complaint to the World Trade Organization. But there is room for flexibility, and diplomats were already hinting on Tuesday at a movable deadline.
One likely solution would be for President Clinton to waive his right to punish Total, extract a cosmetically tougher EU line and deny Tehran a significant tactical victory.
If cool heads reign on both sides of the Atlantic, it should be possible to avoid the commercial equivalent of a shooting war - and keep the baddies firmly in their boxes.
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