The Embargo Against Iran: America Slams A Window Shut

At first glance, President Bill Clinton's decision to slap a total trade embargo on Iran sounds reasonable, even admirable. After all, why not push one of the world's most unpalatable regimes up against the wall? Many suspect an Iranian hand in the bloody 1994 bombing of a Jewish cultural center in Argentina. And there is mounting evidence that Tehran has been secretly working on a nuclear weapons program, which it aims to bolster by purchasing Russian nuclear technology.

But the U.S. government's tough actions may not be the most effective way of dealing with Iran--they could even backfire dangerously. Indeed, the U.S. could wind up looking silly trying to lead an initiative no one follows.

Clinton argues that ending the $4 billion a year in purchases of Iranian oil by such U.S. companies as Exxon Corp. and Mobil Oil Corp. and stopping $300 million in U.S. exports will help convince European and Asian allies that Washington means business. But getting key nations such as Japan, Germany, and France to sign on is going to be next to impossible. Germany, which sold Iran almost $2 billion in goods last year, is expressing doubts--as are Canada, France, and Britain. "We don't believe that a trade embargo is the appropriate instrument for influencing Iran," says German Economy Minister Gunther Rexrodt.

SHUTOUT. The Europeans, and even some within the Clinton Administration, argue that constructively engaging the Iranians would have a better shot at changing Iranian behavior than an uncompromising shutout. They point out that North Korea, whose regime is at least as erratic and vicious as Iran's, has agreed to moderate its nuclear program thanks to creative American diplomacy. And Washington has kept dealing with the Chinese communist regime on trade and human rights issues, even after the international outcry over the Tiananmen Square massacre. With Iran, though, the Clinton policy is all stick and no carrot. And that could well exacerbate Iranian paranoia and belligerence.

Moreover, by isolating Iran instead of engaging it, the U.S. may be discrediting members of Iran's governing elite who have been arguing behind the scenes for normalization of relations with Washington. Iran's recent willingness to choose Conoco, rather than a French competitor, to develop a major oil field probably demonstrated a political consensus in Iran to start dealing with Americans for the first time since the 1979 hostage crisis. Such a deal might have given the U.S. a potentially valuable window into Iran's murky workings. Trade, as former Assistant Secretary of State Richard W. Murphy notes, "is one way of getting a better feel for what a country is up to and where it is going. I don't feel we have a good fix on what's going on in Iran."

And the Iranian economy will hardly be affected by Clinton's order, which is expected to end most American trade with Iran, including that of foreign subsidiaries. Within a few months, according to oil industry experts, Iran will be able to find new buyers of its crude. And Iran will also be able to switch over to new suppliers of oil field equipment, which now accounts for most U.S. exports. "The U.S. isn't unique anymore," says John H. Lichtblau, chairman of the New York-based Petroleum Industry Research Foundation. "We have good equipment, but so do others."

Clinton's order is likely to head off even harsher legislation proposed by Senator Alfonse M. D'Amato (R-N.Y.). But that's only a small benefit. The likelihood is that Clinton is going to ratchet up tension with Iran, hobble American companies, and get far out of step with America's allies for no achievable purpose.

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