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Iran Throwing Off Its Isolation
U.S. Remains Dubious After Decades of Mutual Distrust

by John Ward Anderson, Washington Post, 31 March 2001


ISTANBUL -- Four years ago, an unknown, mid-level cleric named Mohammad Khatami won a stunning landslide election as president of Iran by promising to soften the country's rigid interpretation of Islam and end its years of international isolation.

Today, Khatami is in the political fight of his life with religious conservatives who are blocking his political and social reforms. But the second half of his agenda -- reintroducing Iran to the world -- has been extraordinarily successful, despite the best efforts of the United States to keep his country alienated with economic sanctions.

Shortly after he was elected president in 1997 with 70 percent of the vote, Khatami launched an aggressive international charm offensive -- deliberately wooing close U.S. allies, according to Iranian political analysts -- that was so effective that today Tehran is enjoying a renaissance in foreign affairs. Now it is Washington's policies toward Iran that are isolated as its sanctions regime approaches complete collapse.

Iran recently signed security agreements with Saudi Arabia and Greece, and its navy held exercises with Pakistan and India. It is exploring oil deals with China, Japan and numerous European companies. It has exchanged high-level trade and political delegations with Italy, Austria, France, South Korea, Chile, Turkey, Germany, Egypt, Jordan, Spain, the Vatican and Russia, from which, according to Khatami, Iran will buy $7 billion in military equipment over the next five years. Iranian trade with the European Union shot up 64 percent last year, to more than $12 billion.

"This is what Khatami's model became: Increase channels to the United States, first in the region with Saudi Arabia, for example, then in Europe with the U.K., France and Spain," said a Tehran-based Iranian business executive. "That raised the pressure for U.S. companies to speed up their lobbying efforts" for Washington to normalize relations.

In fact, some of the biggest companies in the United States have done just that. The heads of Exxon Mobil Corp., Chevron Corp. and Conoco Inc. jointly met with Iranian Foreign Minister Kamal Kharrazi in New York in January to discuss U.S. policy toward Iran. That meeting coincided with aggressive lobbying of Congress and the White House by the oil industry to drop the unilateral U.S. sanctions against Iran that have prohibited American companies from investing in lucrative Iranian oil projects, leaving the business wide open to foreign firms.

Many analysts say the lobbyists have a sympathetic ear in the Bush White House. The new administration has said only that it is reviewing its policies toward Tehran, but it is replete with former oilmen who, many believe, want to get American oil companies back into the game in Iran.

For example, when Vice President Cheney was chief executive of Dallas-based Halliburton Co., a major oil equipment supply company, in the mid-1990s, he blasted the Iran sanctions as "self-defeating."

"There seems to be an assumption that somehow we know what's best for everybody else, and that we are going to use our economic clout to get everybody else to live the way we would like," he said in 1996 in Abu Dhabi, in the United Arab Emirates.

In what some analysts say may be a violation of U.S. sanctions law, Halliburton began working in Tehran during Cheney's tenure with the company, the Financial Times reported last October. Cheney said the business was allowed because it was conducted through a foreign subsidiary.

The United States has two tools for levying sanctions against Iran: executive orders dating from 1995, which President Bush renewed two weeks ago, and the 1996 Iran-Libya Sanctions Act, known as ILSA, which was imposed on the two countries as punishment for their support of international terrorism.

Under ILSA, the United States could levy penalties against foreign companies that make annual investments of more than $20 million in Iran's oil industry, but the Clinton administration waived the penalties in every case, saying they could damage relations with important allies.

ILSA comes up for renewal in August, and many analysts say they believe Congress will allow it to expire or modify it to focus the embargo more narrowly around weapons-related materials. The Bush administration is considering similar changes to U.N. sanctions against Iraq.

Since Iranian radicals held 53 U.S. diplomats hostage for 444 days in the late 1970s, Iran and the United States have had no formal contact. Yet despite their 22-year alienation, top officials in Washington and Tehran seem eager for a rapprochement, observers say, and the timing for a breakthrough has never been better, largely because both countries are in a political transition when old policies can be reviewed. But with their historic grievances -- Iran blames the CIA for sponsoring a coup in 1953, and the United States blames Iran not only for the hostage-taking but for support of international terrorism -- they remain the world's most reluctant suitors.

"The fundamental problem is that the Iran government will not talk to U.S. officials, and if you don't talk, you can't solve your outstanding problems," said Geoffrey Kemp, a specialist on the Persian Gulf region at the Nixon Center in Washington. "While the strategic logic for better relations is overwhelming, the political realities are very different."

>From the U.S. standpoint, warmer relations would not only open up a sizable source of oil, but would also tighten the containment of Iran's neighbor, Iraq, and help curb the resurgent influence of Russia, analysts said.

In Iran, the future of Khatami's political and social reforms remains unclear. He has not said whether he will seek reelection on June 8, but if he does, he is expected to win overwhelmingly. That, some analysts believe, could invigorate his mandate, which in the last year was stymied by conservative opponents, and make it easier for his administration to accept a U.S. proposal for government-to-government talks.

"This is the main issue" between the two camps, said Hasan Ghafori-fard, a conservative independent and former vice president of Iran. "The reformists believe we can have closer relations with the U.S., but the conservatives don't believe the U.S. is sincere in wanting better relations with the Islamic Republic of Iran, or they would take bigger steps to turn it around."

Furthermore, U.S. intelligence officials and political observers question whether Khatami speaks for Iran, and whether he can deliver on any deal he might make to improve relations with the United States. Religious ultraconservatives view opposition to the United States as a guiding principle of the Iranian revolution, and would undoubtedly attack any move by the president to normalize relations, analysts say.

Hard-liners loyal to Iran's supreme religious leader, Ayatollah Ali Khamenei, control the military and Iran's intelligence agencies, for instance, and probably would not feel bound by agreements the president could make to curb the country's support for international terrorism, promote Middle East peace, or stop trying to acquire weapons of mass destruction. U.S. policymakers consider those three issues the biggest obstacles to better relations.

Nonetheless, some analysts still expect that shared U.S.-Iran interests in achieving such goals as containing Iraq and Afghanistan's ruling Taliban movement, stemming the trafficking of illegal drugs and developing Iran's oil and gas reserves will help push Iran and the United States closer together. But, they say, it will be hard for both sides to overcome years of mutual vilification and arguments, and warn that concrete action, not concessions, must precede any reconciliation.

Correspondent Molly Moore contributed to this report.

Copyright © 2001 Washington Post
Reprinted for Fair Use Only.

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