Washington Report on Middle East Affairs, November/December 1996, pages 26, 112

Point of View

A Made-In-Israel Irresponsible Policy Toward Iran-And America's Allies

by Laura Drake

Back in 1990 when economic sanctions were instituted against Iraq for invading Kuwait, few understood the United States was prepared to expand the tool of economic sanctions beyond Iraq. Indeed, most nations in the Middle East, Europe and Asia accepted the Iraqi embargo precisely because they thought it was specific to Iraq. That was before 1993, whan former American Israel Public Affairs Committee officer Martin Indyk, from his new position as chief White House Middle East policy adviser, announced the new policy of "dual containment" as the governing feature of the Clinton administration's Middle East policy. Iraq, it turns out, has been little more than a test case, an experiment to see what the new post-Cold War regional and international climate would withstand.

It worked, in terms of making Middle East countries that refused to make peace with Israel pay an ever-steeper price for their "intransigence," and now the Iraq paradigm has become the model of containment for use in the 1990s against any regional state deemed to be a political or military obstacle to the advancement of Israeli interests in the region. It is ready for application to any Middle Eastern country that dares to fashion its own regional foreign policy rather than accept the pre-packaged foreign agenda made first in Tel Aviv, and only secondarily in Washington.

Though few realized it, the potential for the universalization of the Iraq paradigm was there for all to see, and Libya was the scene of its next application. Iran was the next major target, since unlike Libya, Iran had become a major strategic forcean assertive medium-sized power aggressively projecting its influence within the Gulf and the Arab-Israeli arenas alike. And as Israel's new Prime Minister Binyamin Netanyahu recently has informed us, he intends for Syria to be next, following in the footsteps of its ally, Iran, into the American economic gunsights.

As early as 1993, Indyk lamented that "Iran does not yet face the kind of international regime that has been imposed on Iraq" and indicated Washington's intention to "work energetically to persuade" and "impress upon" America's European allies the "necessity to act now" to alter that situation. The strategy was clearly opportunistic: take advantage of Iran's less than favorable economic situation not only to deflate its military capabilities, but to cripple its economy. The strategy of economic warfare could now be legitimately used against any regional state whose foreign policy priorities differed from those of the Israel-focused Clinton administration. And surely the Europeans would agree. After all, why should Iran be allowed to "pursue normal commercial relations on one level" while "threatening our common interests on another level"?

The United States has resorted to economic coercion against its own allies.

Not so fast, replied the Europeans, few of whom share Washington's preoccupation with normalizing Israel's status within its Middle Eastern subregion. Perhaps they thought Tehran could be prevented from acquiring a nuclear weapons capability through the normal measures of non-proliferation. Maybe they also thought it ludicrous that Iran would ever attempt an invasion of a southern Gulf country, knowing full well from the Iraqi experience that the U.S. was determined to prevent any regional power from dominating an area containing 60 percent of the world's known petroleum reserves, and would surely crush any country that tried to do so. Or, perhaps, whatever residual fears the Europeans may have had in any of these areas were far outweighed by their significant economic interests in trade with Irannot to mention their huge economic investments in Libya.

Given this picture, the Europeans balked. They refused repeated and consistent attempts by the United States in the U.N. Security Council to expand the sanctions against Libya further, or to institute any kind of sanction against Iran. They did agree to some minor diplomatic sanctions against Sudan, but that is as far as they were willing to go. After all, they also had learned another lesson as a result of their experience with the Iraq paradigm. Sanctions of this kind, once instituted, become permanent. Because of the American veto, they can never be removed unless the U.S. decides to do so. Should the state in question try to comply with U.S. terms, or make attempts at compromise, Washington can simply move the goalposts, as it has done time after time with Saddam Hussain's Iraq. By making compliance with the sanctions impossible, the real objective, containment, becomes permanent.

Permanent Impediments

Most European states, believing the sanctions against Iraq to be a temporary measure, were ready to lift them years ago, but they have been summarily prevented from doing so. Therefore, it should be no surprise that they are reluctant to institute any more such permanent structural impediments on their ability to relate to other Middle Eastern states that have refused to accept Israel, in the absence of unique and extraordinary circumstances.

Having failed to persuade the European states of their interest in permanently severing their economic and political relations with Iran, the United States, again under unrelenting Israeli pressure, now has resorted to unilateral economic coercion against its own allies in order to force them to confront Israel's number one strategic adversary. The chosen method: that of instituting a secondary boycott against any European or other foreign firm doing business in Iran.

The recent law passed to that effect in Congress and signed by the president was drafted and all the intricate internal details worked out together by the House International Relations and the Ways and Means committees, and the American Israel Public Affairs Committee (AIPAC). It was these same committees that, in the 1970s and 1980s, designed interlocking laws and legislative devices to condemn, de-legitimize, and render illegal the compliance of any American firm with a primary or secondary boycott of Israel. Even the return of a questionnaire certifying that a U.S. product contained no ingredient or component made in Israel became a violation of U.S. law. That was, of course, at a time when the authors of the boycott were the Arab states. The justification for such draconian U.S. laws was that boycotts run counter to, and interfere with, the global exercise of free trade. That hinders the expansion of the global economy and of free markets, of which, of course, the United States is the leading example and front-line champion.

The internal negotiations among the committees on Capitol Hill and the White House on the Iran sanctions bill focused not on whether there should be such sanctions against Iran, but on how they should be structured. And, remember, Congress wanted to restrict not only trade in dual use items, but all foreign trade with Iran by any country, as is now the case with Iraq.

Therefore, the administration informed the over optimistic congressmen and shadow-congressmen that European trading with Iran could not be monitored in the absence of the kinds of mechanisms which are in place in Iraq. Without an enforcement structure the sanctions simply could not be implemented and, said the president's men, we want sanctions that are capable of being implemented. Therefore, the administration simply targeted foreign investment in Iran.

Libya was thrown in at the last minute for good measure, but again the administration informed Congress that it was too late to prevent investment in Libya. To sanction the numerous European companies already there would simply be too much for even the Europeans to swallow. After all, we were supposed to be allies. Therefore, it was decided that trade and not investment would be sanctioned in Libya, and only in those goods already prohibited by U.N. sanctions.

The European reaction is still one of anger and resentment at the extraterritorial provisions that remain in the bill. It is true that the number and depth of sanctions against European corporations have been somewhat reduced. As the administration also informed Congress, passage of the bill as originally written would have placed the United States in violation of its commitments in the World Trade Organization.

The WTO is the result of literally decades of GATT negotiations and serves as the globe's most important economic institution. So perhaps even Israel's vendetta against Iran could not justify going to this extreme. Therefore, the provisions in violation of the WTO have been excised, though the principle of extraterritoriality remains. The Europeans are angry at the United States for using coercion to try to impose its foreign policy priorities on its allies. And, given that those priorities are made in Tel Aviv and not in America, the Europeans are right.