President Clinton appears to have resolved a long-running dispute between the United States and the European Union with his promise to waive U.S. sanctions against foreign firms doing business in Cuba, Iran and Libya.
The administration's agreement with the European Union, which Clinton and British Prime Minister Tony Blair announced on May 18, could represent more than an easing of tensions among allies. It could serve to initiate a break in the 20-year-long deadlock in U.S.- Iranian relations.
Iranian President Mohammad Khatami, a political moderate, has taken a lead in trying to open a dialogue with the United States. Khatami, who was elected last year, has urged more cultural exchanges to tear down what he has called a "wall of mistrust" that has existed between our two nations since revolutionary students overran the U.S. embassy and seized hostages in 1979.
The administration has welcomed Khatami's conciliatory rhetoric but sharply criticized Iran's continued support for international terrorism. At the same time, the administration has indicated its interest in direct talks with Iran, and taken several tentative steps to improve relations, including friendly diplomatic messages, cultural exchanges of athletes and academics and a relaxation of restrictions on travel to Iran.
In waiving sanctions, the administration has arrived at a judicious decision: to make common cause with our European allies and bring Iran more closely into line with the family of nations. But at the same time, the decision creates a terrible competitive disadvantage for U.S. companies, at least for now. The EU agreement now allows the French, Russian and Malaysian oil companies participating in a $2-billion Persian Gulf gas field to proceed without incurring the wrath of the United States, while American companies are still prohibited from doing business in the region by executive order.
It's time to go further. It's time to end Iran's isolation from the international community. Several powerful voices outside the administration have been urging precisely this course of action for some time now. In an April 15 speech to the Council on Foreign Relations, Rep. Lee H. Hamilton (D-Ind.) said, "We need to begin a new policy of engagement with Iran . . . . Why follow a policy that for 20 years has not worked?"
Experts all along the political spectrum share his view. Zbigniew Brzezinski, national security advisor to President Carter, and Brent Scowcroft, who held the same position in the Bush administration, have both urged the U.S. to end its policy of containment.
Bringing Iran back into the community of nations makes sense for international economic and political stability, peace and security. Right now our stalemate with Iran stands in the way of the efficient movement of Caspian Sea oil to Asia, a large and important market (ARCO is part of a multinational consortium trying to build an oil pipeline leading out of the Caspian region). An economically viable Iran is less likely to be a disruptive influence in the region. And Iran is poised for economic development and growth. The most populous country in the Middle East, Iran has substantial oil resources and the largest natural gas reserves outside the former Soviet Union. To build a 21st century economy, Iran needs to build a modern industrial infrastructure. It must develop its energy resources, both for internal use and for export to bring in hard currency.
But rapprochement with Iran is a hard sell on Capitol Hill, where a vocal legislative contingent favors continued sanctions. Despite its failure to achieve results, the Iran-Libyan Sanctions Act, which prohibits investment by domestic and foreign firms in the oil and gas sector of Iran, retains solid support.
Yet the president's decision to grant waivers simply throws the flaws of the act into stark relief. The United States is now in the process of ceding the enormous energy resources of much of the Persian Gulf and Caspian basin to foreign companies, effectively opting out of one of the world's most plentiful energy supply sources.
Hamilton has offered a sensible alternative approach, a cautious and considered step-by-step "road map" to improved relations between the U.S. and Iran that would lead to eventual government-to-government talks. Hamilton proposes an immediate easing of economic sanctions on Iran to allow U.S. oil companies to discuss--if not yet conclude--deals with Tehran. These companies, Hamilton suggests, should also be permitted to take advantage of Iranian pipelines for exporting the massive gas and oil reserves of Central Asia.
Rather than perpetuating a failed strategy of containing and isolating Iran, the United States should seek diplomatic solutions to the very real and very serious problems of terrorism and weapons proliferation. We should embrace a policy of engagement that seeks to safeguard America's long-term strategic, energy and economic interests in the region. Let's hope that the Clinton administration's decision to waive sanctions is a first step on the road to opening a dialogue with Iran, and giving U.S. companies a role in developing the region's oil and gas resources.