Yeltsin Pledges to End Arms Sales to Iran : Summit: U.S. officials warn of possible loopholes in Russian leader's promise that could make it meaningless.

TIMES STAFF WRITER

Russian President Boris N. Yeltsin pledged Wednesday to cut off future sales of weapons to Iran, but American officials quickly warned that the promise may contain huge loopholes that could render it meaningless.

"There were many problems along the way, but we've come to terms," Yeltsin said at a news conference with President Clinton.

Russia, Yeltsin said, will fulfill the terms of a 1988 arms contract with Iran signed by the government of then-Soviet President Mikhail S. Gorbachev, "but no other new contracts, no other new supplies, no other new shipments of weapons and weapons goods will be shipped."

But immediately afterward, Clinton offered a notably tepid rejoinder, saying it is generally accurate "we reached a conceptual agreement in principle" but "we cannot say that it is resolved."

American officials later explained the reason for the reticence--Yeltsin's government has not yet revealed how long the 1988 contract runs, what more weapons shipments it may cover or how many weapons now are in the pipeline. "We will need to understand precisely what it is" that Yeltsin's pledge means, a senior U.S. official said. "It is a very elusive subject."

Iran has bought tanks, planes, armored personnel carriers and at least two, possibly three, submarines from Russia--roughly $1 billion in arms over the last year, U.S. officials say. The arms sale issue remains a major stumbling block preventing full normalization of economic relations between the United States and Russia, and U.S. officials said they remain skeptical the matter will be resolved before the two presidents meet again next spring.

Yeltsin's announcement provided a moment of drama at a news conference otherwise dominated by the Russian president's rapid-fire, jocular rendition of issues he and Clinton covered in their two days of talks.

The two nations had come a great distance from their Cold War enmity, Yeltsin declared, comparing the issues dividing them to quarrels among relatives. "What family doesn't have some kind of squabbles occasionally that eventually they kind of work out?" he asked.

Most of those talks dealt with economic issues, including extensive attempts by Clinton to prod Yeltsin into clearing the way for American companies to do business in Russia. From Mars bars to oil wells, Clinton took up the cases of American exporters and investors who have been stymied by Russian bureaucracy, warning Yeltsin that he will not be able to win approval of improved trade status for Russia until such problems are fixed.

The direct intervention by top U.S. government officials on behalf of American companies was, until recent years, rare. But beginning in the George Bush Administration and escalating rapidly under Clinton, such economic bargaining has become a central part of American foreign policy.

Yeltsin promised to work on the issues and asked for help from American experts in drafting something his country has never had--a tax code. U.S. officials said they were heartened by the progress but cautioned that the Russian leadership still has a long way to go.

Clinton brought three American business leaders--the chief executives of General Motors, Dresser Industries and U.S. West--to talk with Yeltsin about issues faced by the automobile, oil drilling and communications industries in Russia. U.S. officials said the meeting did appear to help, particularly in impressing upon Yeltsin the problems posed by Russia's chaotic and unpredictable tax laws.

But at the same time, the talks highlighted the wide gap between American and Russian perceptions of how an economy functions. At one point, for example, GM Chairman Jack Smith, Yeltsin and the head of a Russian company, Autovaz, which participates in a joint venture with the U.S. auto maker, became embroiled in a long discussion on how many cars the venture should produce.

"The Russians kept saying, 'We want a big project,' " a U.S. official said. Autovaz would like to produce 300,000 cars a year, rather than the 20,000 to 30,000 that now come off its assembly lines. Smith, for his part, cautioned the Russians that they had to find a way to sell the cars before they could talk about producing more.

Clinton personally intervened with the Russians to promote U.S. investments. He and Vice President Al Gore, for example, warned Yeltsin that Russia had to stop threatening to interfere with a deal reached by Azerbaijan and a consortium of American and European oil companies to drill for oil in the Caspian Sea.

Similarly, Clinton pressed Yeltsin on reducing trade barriers that have cut into U.S. exports to Russia of American products.

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