Iraq trades its way into Arab fold

On Jan. 31, Syria and Iraq signed a free-trade pact worth $1billion, following the reopening of shared oil pipeline.

For a leader the US has tried to "isolate," Iraqi President Saddam Hussein is achieving remarkable success in using trade to rebuild his relationships in the Middle East.

Countries such as Egypt, Turkey, and Syria are doing business with Iraq for two main reasons: The money to be made in trading with an oil-rich state that badly needs everything from food to industrial machinery, and regional frustration with the decade-old, US-led embargo of Iraq.

Judging from the regional criticism of US airstrikes against Iraq a week ago, such actions will only deepen the inclination of many Middle Eastern governments to work with, and not against, Mr. Hussein.

Governments in the region suspect the US has reason to keep Hussein in power, especially in a weakened condition that prevents him from threatening his neighbors. According to this line of thinking, his continued rule gives the US the key justification for maintaining the military presence it established in the region during the Gulf War. From Iraq's perspective, the burgeoning trade relationships serve both economic and political goals. Trading with Iraq's neighbors, says Iraqi Vice Foreign Minister Nizar Hamdoun, is "the only way we can bust the sanctions regime." Down the road, he adds, the idea is "to try to consolidate some Arab situation that would crystallize into more Arab solidarity against US-led [UN] Security Council resolutions."

US officials deny that they have an interest in maintaining the regime of a weakened Hussein. And a Western diplomat in the region, speaking on condition of anonymity, says the eagerness to trade with Iraq does not mean any significant increase in support for Iraq's president. "There's a little less to this than meets the eye," the diplomat says. "It's mainly symbolism."

But as President Bush and his foreign policy advisers ponder what to do about Iraq, they now must consider the added complexity of Hussein's improving regional relationships. Some US allies in the region - such as Egypt, Jordan, and Turkey - are among the countries most eager to expand their trade ties with Iraq.

Syria - a country the US considers important because it is a key player in the Middle East peace process - has opted to overlook decades of animosity with Iraq. Since late last year, Syria has reopened an oil pipeline that connects Iraqi oil fields with the Mediterranean, which could provide Hussein with a long-sought means for selling oil outside the purview of the UN.

Officials of the Clinton administration insisted until the end of their tenure that their policy had succeeded in isolating Hussein, but the multibillion-dollar regional trade involving Iraq is one good reason to think otherwise.

"You can't describe him as isolated," says Judith Yaphe, an Iraq specialist at the National Defense University in Washington. "And the phrase, 'He's in his box' " - often used by former Secretary of State Madeleine Albright - "has lost a lot of its meaning. The 'box' has become huge."

The Bush administration is already wrestling with US policy toward Iraq. Amid a rising tide of global opposition to a UN embargo that has been in place since August 1990, mainly at the behest of the US and Britain, Secretary of State Colin Powell has said he wants to sharpen the focus of the trade sanctions.

The sanctions are supposed to weaken Hussein and make him submit to UN weapons inspections. But there haven't been any UN inspectors in Iraq for more than two years and most Iraq analysts agree Hussein's political standing is firmer than it has been in years.

Vice President Dick Cheney and some other US officials reportedly want to take an aggressive stand that would include increased US support for Iraqi groups opposed to Hussein, such as the Iraqi National Congress. But the State Department is said to oppose funding an insurgency.

There is little support in the Middle East for a US-backed movement against the Iraqi leader. And some members of the Iraqi opposition say the US effort is half-hearted and insincere. (See sidebar.)

But there is unquestionably a willingness in the region to do business with Hussein. In recent weeks, Egyptian President Hosni Mubarak has even been working toward a rapprochement between Iraq and its Gulf War antagonists, Kuwait and Saudi Arabia.

Egypt and other countries have an interest in a "modified Iraq" rejoining the Arab community says Abdel-Monem Said, director of the Al-Ahram Center for Political and Strategic Studies in Cairo, "but the Iraqi leadership shoots itself in the foot." Hussein's son Uday, a member of the Iraqi parliament, has recently proposed a new official map showing Kuwait as a part of Iraq.

Even so, Egypt in late January concluded a free-trade pact with Iraq and its airline has resumed regular flights to Baghdad. Jordan is negotiating a similar trade deal; its airline also has resumed regular flights. In a display of ambidextrous diplomacy, Jordan also recently concluded a free-trade deal with the US.

For the last half-decade, the UN has allowed Iraq to sell some of its vast oil supplies - the world's second largest after Saudi Arabia - in order to buy humanitarian goods. This oil-for-food program has created huge trading opportunities, and it has only partly supplanted an already lucrative smuggling trade.

Since the time the program began in earnest in 1996, Egypt's trade contracts with Iraq have reached a value of $1.9 billion, Jordan's $1.4 billion, and Turkey's $975 million. Even Saudi Arabia, notwithstanding its reluctance to improve relations with Hussein, has contracted $339 million worth of trade.

Turkey, along its mountainous border with Iraq, has long hosted smugglers who have made it possible for Iraq to export oil and import goods in contravention of the embargo. The appointment of a full-fledged Turkish ambassador to Iraq last month drew a public complaint from the US State Department. In this case, the motive for improved relations is not purely economic: The two states share an interest in repressing Kurds agitating for a homeland.

And four Persian Gulf states - Bahrain, Oman, Qatar, the United Arab Emirates - have diplomatic or trade representatives in Baghdad, who help to facilitate commercial ties. A European diplomat in Baghdad explains that these countries see improved relations with Iraq as a counterweight against Iran.

Perhaps the most interesting of Iraq's rebuilt friendships is the one with Syria. The two countries share many things: a 376-mile border, the waters of the Euphrates River, and a quasi-socialist ideology called Ba'athism that is the foundation of each nation's ruling party.

Since the late 1970s, however, Syria and Iraq have been adversaries, in no small part because of the suspicions that Hussein and Syria's late leader, Hafez al-Assad, felt for each other. During the 1980s, Syria sided with the Iranians in the Iran-Iraq war; in the Gulf War, Syria again went against its neighbor and joined the US-led coalition.

Goodbye to all that, it seems. On Jan. 31, Syria and Iraq signed a free-trade agreement, promising to try to triple the value of their annual trade to $1 billion. After the signing ceremony, Iraqi Vice President Taha Yassin Ramadan said he and Syrian Prime Minister Mohammed Mustafa Miro had discussed a "long-term strategic cooperation agreement," according to a report in the London-based Al-Hayat newspaper.

Most crucial is the reopening of the pipeline that links Iraq's Kirkuk oil fields with Syria's Mediterranean port of Baniyas. The oil-industry trade press has reported an increase in Syria's own exports since the pipeline came into use and speculation within the industry that the proceeds from the extra Syrian sales may benefit Iraq.

Syrian Deputy Foreign Minister Walid al-Mouallem acknowledges the pipeline is in operation, but says the oil moving through it is a gift from Iraq that Syria does not pay for in any way. "This quantity of oil is irregular, it is an Iraqi grant, and it is used in Syria to fulfill Syrian needs," he says.

Iraqi exiles criticize US tactics

In London and Washington, Iraqi exiles opposed to President Saddam Hussein are exulting that the Bush administration is in power. "The prognosis is good - better than the Clinton administration," says Ahmed Chalabi, a leader of an umbrella group called the Iraqi National Congress (INC), in a phone interview from London.

After the Gulf War, Mr. Chalabi and other members of the INC were warmly supported by the US government, particularly the Central Intelligence Agency, which offered logistical and financial support in the hope of toppling Mr. Hussein's government. The INC set up shop in northern Iraq, but their insurrection was not to be.

The Americans backed away in 1996 - leaving the would-be insurgents exposed to Iraqi troops, who massacred INC fighters - but are now supporting the organization with greater gusto. In one of its first foreign-policy decisions, the Bush administration cleared the disbursement of $4 million to the INC under a program initially devised under President Clinton. The money is supposed to fund the gathering of information inside Iraq.

Here in Damascus, at least one former INC member, a civil engineer named Falah al-Nakib, says that gathering information won't remove Hussein. "You are dealing with a brutal means, so you have to be strong," says Mr. Nakib, who was once a part of the INC effort in northern Iraq. His father, Hassan, is a former Iraqi general who was once a leader of the INC.

Nakib says the words and funding coming out of Washington do not seem to him to be part of a concerted campaign against Hussein. "The policy seems unfocused and not dedicated to toppling him," he says.

Chalabi says his group is gearing up to pursue tactics that the situation requires as it resumes activities inside Iraq. "We expect Saddam to react violently and we will be prepared to deal with this."

(c) Copyright 2001. The Christian Science Publishing Society

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