Big Powers Arm-Wrestle Over Iraqi Sanctions

ABANDONING all pretense about a united front to confront Iraqi leader Saddam Hussein, the world's great powers are bitterly divided over just how to contain his belligerence.

Diplomatically, the conflict has been playing out at the United Nations Security Council, where the five permanent members are struggling over just how long to maintain an economic blockade on Iraq. They are also weighing other options to further isolate the rogue country. Behind the scenes, pro-sanctions American and British negotiators team up against their Chinese, French, and Russian counterparts, who want the restrictions lifted.

The fight is manifested most practically in the marketplace, where cash-strapped Iraqis attract foreign suppliers with promises of big payments and lucrative contracts in the future. Cultivating those commercial ties, the anti-sanctions group sees billions of dollars in business deals and strategic access to the plentiful oil fields in Iraq.

``It's just as crass as it appears to be,'' says James Placke, an oil specialist and Washington-based director of Cambridge Energy Research Associates, in Cambridge, Mass. ``Iraq could be a major player in the international oil industry and they are positioning themselves to take advantage of that potential.''

Baghdad has been a revolving door for visits from Chinese, French, and Russian dignitaries, among others, who are anxious to strike deals with oil, military, and other ministry officials.

French firms early

As early as mid-1991, just months after the Gulf war ended, French energy firms - Elf Aquitaine and Total SA - sent emissaries to Baghdad for talks on developing two giant oil fields in southern Iraq. Among those following in their tracks: A French parliamentary delegation visited Iraq to scope out the potential for farm exports, and telecommunications companies have negotiated agreements.

Late last August, Iraq's Foreign Minister, Muhammed Said al-Sahhaf, met in Beijing with Chinese officials to further bilateral industrial and trade ties. China's deputy foreign minister, Wang Changyi, pledged that ``China would do its utmost to end this unfair blockade'' and underscored his ``country's desire to promote and enhance its [commercial] relations with Iraq.

In September, Iraq and Russia signed a $10-billion bilateral cooperation agreement in the oil and industrial sectors. Russian Minister of Foreign Economic Relations Oleg Davydov made a public push to lift sanctions.

While these high-profile meetings always end with pronouncements about the need to end Iraqi suffering under the embargo, many international suppliers have already transferred goods in violation of UN sanctions. Intent on rebuilding its war-torn country, and making technological strides with the help of foreign suppliers, Iraq has an elaborate procurement network to facilitate the process, with a premium on so-called dual-use equipment - products designed for either civilian or military application.

According to US Pentagon and Customs officials, Iraq has provided lists of its military needs (and potential sources of these materials) to both pre-Gulf-war members of their procurement network and to new entrepreneurs who aggressively pursue the business. Many of these suppliers lobby their governments to end the embargo.

Iraq's tactics

``Iraq has tried smarmy tactics to limit our authority to monitor their military programs,'' says a senior UN official.

This week, the UN hopes to make some progress. In conjunction with the Iraqi Sanctions Committee and the International Atomic Energy Agency, the UN Special Commission for Iraq is looking for a way to curb Saddam's military development over the long-term, says Tim Trevan, special adviser to the chairman of the commission.

``We are in the process of establishing an export-import control mechanism so that countries exporting dual-use equipment and materials to Iraq will have to notify us. Under the arrangement, Iraq, as an importer, will also have to notify the UN of such actions,'' Mr. Trevan says. And Iraq must give a projection of its needs.

Mr. Trevan says a host of parties will contribute to the formation of the control regime, including countries that have been major suppliers and those serving as major conduits of illegal exports. Trevan and his colleagues expect that the multilateral system, which is to be in place before the sanctions are lifted, ``has more of a chance of succeeding than national export controls.''

But will Saddam continue unbridled in his pursuit of items for his biological, chemical and nuclear warfare capabilities?

``If Iraq wants to build a completely clandestine site, it has to rely on two things,'' Trevan says. ``One is that the exporting country would be willing to work in collusion with Iraq. The other is that no other intelligence system - from aerial monitoring to human spying - can expose it. If we find an illegal transfer and we can trace it to a manufacturer, we will go back to [the company's host country] and ask for assistance.''

But China, France, Russia, and others will sell Iraq anything it can afford, if given the chance, says a Pentagon official. Saudi Arabia and Kuwait are firmly in the hands of the Americans and the British, he says, but the others see Iraq as the last opportunity to collect petro dollars.

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