Why the U.S. Is Shaping Up to Ease Iraq Sanctions

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Guns and a grin: Iraquis celebrate the birthday of President Saddam Hussein

One indication that Washington may be onto a good thing with its "smart sanctions" proposal against Iraq is the fact that it's got Baghdad rattling its saber. Iraq's Deputy Prime Minister Tariq Aziz on Wednesday warned Jordan and Turkey that they'd lose access to cheap oil from Baghdad if they go along with Washington's proposals, many of which are contained in a U.N. Security Council resolution that Britain plans to introduce next week.

The "smart sanctions" proposals have emerged from a Bush administration policy review, based on the recognition that the existing sanctions package is on the verge of collapse as a result of waning support in the Arab world and beyond. To be sure, the primary purpose of the revisions being proposed is to make continued sanctions more palatable to governments that question whether they serve any positive purpose. Essentially, the proposals reverse the current sanctions formula by lifting blanket restrictions on Iraqi imports, except for a list of specified items to prevent Baghdad refurbishing its military or developing weapons of mass destruction. The current formula forces Baghdad to apply to a U.N. committee on a case-by-case basis for all of its imports, a bureaucratic process that causes hardship for ordinary Iraqis and has allowed Saddam Hussein to portray U.N. sanctions as the cause of tremendous human suffering in his country.

The current setup also encourages most of the international community to look the other way as Iraq violates sanctions, particularly through exporting oil to Syria and Turkey (who pay Baghdad directly rather than through a U.N.-managed escrow account). The new proposals would require these countries and Jordan to pay for oil through the escrow account, giving the U.N. tighter control over Baghdad's funds. But a decade of sanctions has spawned an elaborate smuggling economy in the states surrounding Iraq, and implementing new curbs may be difficult.

Although Washington hawks grumbled when Colin Powell went out canvassing for the proposals during a tour of the Middle East in February, the Secretary of State was always going to prevail on the question of lightening the load on Baghdad because the U.S. and Britain had become isolated on Iraq policy and the sanctions regime was in a state of collapse. Rather than a new U.N. resolution on Iraq — which would be impossible to pass given the level of division in the Security Council over Iraq — the proposals are designed to streamline and alter the requirements of the existing sanctions package to ease the way for Baghdad to import a wider range of civilian goods — the details have not yet been made available, and much will depend on how far a concept called "dual use" is applied on the list of prohibited items. Iraq has previously been blocked, for example, from importing simple painkillers and pencils on the grounds that some of their ingredients could have military uses.

The fate of the latest proposals at the U.N. will depend in substantial part on the attitude of Russia and France, which have been critical of the existing sanctions package but are also sympathetic to U.S. concerns over preventing Iraq acquiring weapons of mass destruction. Given that both countries have a measure of self-interest in reviving commercial ties with Iraq — both are substantial Iraqi creditors — Washington is hoping that proposals to allow Baghdad to pay off some of its debt with oil revenues will tempt Moscow and Paris to buy in.

Although Secretary Powell in February reported substantial enthusiasm in the Arab world for the revisions, most Arab regimes will be constrained from openly supporting Washington's proposals for continued sanctions by the ongoing Israeli-Palestinian violence and the tendency on the Arab street to equate the U.S. with Israel. And Iraq may look for ways to more actively play the Israel card in the coming weeks in the hope of rallying support against the U.S.-British plan.

Outside of the U.N.-mandated sanctions, the Bush administration is also under pressure to come up with some new ideas on two other aspects of Iraq policy: the "no-fly" zone and overthrowing Saddam. The Pentagon is increasingly concerned that the "no-fly" zone is an accident waiting to happen, because Iraqi air defense personnel are growing bolder and the law of averages suggests that the U.S. and Britain — the only two members of the original Gulf War alliance that still patrol the zone — will sooner or later lose a pilot. That against a backdrop of concern that the "no-fly" zone no longer forms part of any comprehensive military-political strategy against Baghdad. Because despite congressional enthusiasm for the Iraqi National Congress, there's a great degree of skepticism in Washington — particularly in the Pentagon — over whether they're even a serious irritant to Saddam's regime, let alone its nemesis. And while Washington's hawks will want to see more action on the "regime change" front, most of his Arab neighbors are opposed to the very principle of the U.S. trying to overthrow the Iraqi dictator. Thus the three-dimensional chess game of Washington's Iraq policy.

With reporting by William Dowell/New York and Jay Branegan/Washington