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Toni Schönfelder
A lifetime of innovation

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Toni Schönfelder
A lifetime of innovation

Oil and trade play part in U.N. debate on Iraq
By Bill Nichols and Ellen Hale, USA TODAY

U.S. and British diplomats continue to work this week at the United Nations to overcome opposition from China, Russia and France to a tough new resolution that would threaten the use of force if Iraq does not give full access to arms inspectors.

The public rhetoric is all about high-minded matters of principle — mainly the now-familiar complaint from overseas that the Bush administration does whatever it wants, with no regard for international law or principle.

But a closer look shows the real horse-trading in the U.N. Security Council is about oil, domestic politics and future economic ties with a postwar Iraq. Iraqs estimated 100 billion-barrel oil reserves could be the largest in the world — a huge economic prize for whoever has access to them after the war.

From the outside, the U.N. debate may look like a clash of foreign policy philosophies. But on the inside, U.S. officials say, its more often like a group of state legislators haggling over pork.

"Some of the stated reasons for opposing the United States are sincere," says Ted Galen Carpenter, a foreign policy analyst at the Cato Institute in Washington. "But theyre not complete. ... These countries have many other reasons for taking this stand."

Some of the real motives behind the opposition of China, France and Russia, all of whom wield veto power in the Security Council:

Russia: In public, Russian diplomats cite Moscows long friendship with Iraq and its historic concern about any use of force by Washington that does not have the backing of the Security Council.
But in private, U.S. and Russian officials frankly admit that Moscows opposition to a U.S. military operation to remove Saddam Hussein largely revolves around oil, future economic ties with Baghdad and a hands-off stance toward Russias controversial war against Islamic separatists in Chechnya.

Russia wants Washington to minimize public condemnation of the often brutal Russian campaign against the Chechens. The counter-insurgency has drawn international criticism, but Moscow says it is part of the war on terrorism.

Officials from both countries say Russia also wants assurances that $8 billion in Soviet-era loans Iraq owes Russia will get paid, and that tens of billions of dollars in oil development deals, most frozen by U.N. sanctions on Iraq, will eventually be honored.

What Russian President Vladimir Putin is demanding, U.S. officials say, is some kind of guarantee that Russian interests will be looked after by whatever Iraqi regime might follow Saddam.

Russia has emerged in recent years as Iraqs largest trading partner. The two countries do about $4 billion in business a year under a U.N. program that allows Baghdad to export some crude oil as long as the proceeds are used for food, medicine and rebuilding parts of the country destroyed during the Gulf War in 1991.

Russia wants to be an equal partner in any privatization of Iraqs oil sector if Saddam is overthrown, a key Russian legislator told a U.S.-Russia business conference in Washington this month.

"We have interests in the oil sector of the Iraqi economy," said Mikhal Margelov, chairman of the international affairs committee of Russias Federation Council, its upper house of legislators.

Russias other major bargaining point — that Moscow be given a green light to stage military raids against alleged Chechen terrorists in neighboring Georgia.

China: Beijing remains cool to the prospect of the use of force against Iraq.
But U.S. officials say Chinas rhetoric on Iraq has been much more muted than in past confrontations with the United States over Washingtons use of force against another nation.

For example, Chinese President Jiang Zemin told visiting U.N. Secretary-General Kofi Annan in Beijing Monday, "China has always held the Iraqi issue should be solved peacefully by political means."

Diplomats say thats a stark contrast with Chinas much more vehement opposition to the U.S.-led war in Yugoslavia in 1999.

Officials from both countries say that although China will criticize Washington at the United Nations, Beijing wants to avoid a major dispute with the United States for domestic political reasons.

What does China really want? Jiang is stepping down as president this year and will make a farewell U.S. visit this month. He wants solid relations with Washington to be a major part of his legacy, and has no interest in a last-minute U.S.-China brawl that would detract from his carefully choreographed exit.

Another factor: Jiang has signaled he might want to retain some power, though Vice President Hu Jintao is still expected to become Chinas central leader. Jiangs chances of holding some kind of emeritus role in the new government would be damaged if he were criticized internally for endangering Chinas multibillion-dollar trade relationship with the United States.

France: France also has a substantial interest in Iraqs oil, though most European political experts insist that will have little influence in how French President Jacques Chiracs government votes in the Security Council. What France wants, in the view of U.S. officials, is to be recognized as a country whose views must be taken into account on all major world issues.
A French oil company holds exclusive negotiating rights, currently on hold, to develop two rich oil fields in southern Iraq, according to Fadhil Chalabi, a former deputy petroleum minister in Iraq who is a consultant with the Center for Global Energy Studies in London.

But because of U.N. sanctions, the deal has not been completed. The risk, Chalabi says, is that "any new government might tell the French, Sorry, theres no signed agreement. "

In addition, some French politicians fear a new regime would turn away from the market ties Paris has established with Baghdad. France was once an important arms supplier to Iraq.

"One must remember that economic interests are always behind political interests," Chalabi says. "Its not a matter of French people making these decisions, but the businessmen who have access to the decisionmakers."

French officials disagree and maintain that Paris primary concern is that all options be exhausted before force is used in Iraq. They say the final decision on waging war should be made by the United Nations, not the United States.

Former French foreign minister Hubert Vedrine dubbed Washington a "hyperpower" because of the unparalleled U.S. might and influence in the world today. French politicians long have scored points with their constituents by demanding that U.S. presidents take European concerns into account before taking action.

French political analyst Dominique Moisi says, "The French position is not motivated by oil. Of course, there is an element of that involved, but it is about diplomatic clout."

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