[Date Prev][Date Next][Thread Prev][Thread Next][Date Index ][Thread Index ]

Euro-Burmanet: Wall Street Journal,



Subject: Euro-Burmanet: Wall Street Journal, on TOTAL, EU, US Sanctions

<hr>
Headline: The Wall Street Journal (August 8,1996) : Continental Drift - San=
ctions Put U.S. On Collision Course With European Union, by Brian Coleman
Keyword: National League for Democracy (NLD), Aung San Suu Kyi, political p=
risoners, human rights, Slorc abuses, Wall Street Journal (August 8,1996), =
European Union, US Sanctions (Iran), =

Date: August 8, 1996
Source: Euro-Burmanet, Wall Street Journal (by Brian Coleman)
Section: ebn
Rubrique:main

Dear Free Burma readers and activists : the following is the front page lea=
d story from today's WALL STREET JOURNAL (European edition) featuring Europ=
ean reaction to the U.S. sanctions against Iran and Libya. =


As this story reminds us, " the EU depends on Iran and Libya for about 20 %=
 of its energy supplies - and EU imports from those two states are likely t=
o grow in the coming years ... . TOTAL is currently the only Western oil co=
mpany operating in Iran - having  taken over a $600 million project abandon=
ed by a U.S. company - and is looking for partners to join it there. "


This ought to give you a good idea what we are facing when it comes to talk=
ing sanctions here over Burma and human rights violations. That is, if the =
Europeans hesitate to protect their own citizens over direct acts and threa=
ts of terrorism, likewise demonstrating their hesitancy and cowardice  with=
olding sanctions against Slorc and  support for Daw Aung San Suu Kyi and th=
e NLD democratic elements -while stilll at this time prisoners continue to =
languish and die in prisons under brutal conditions - only goes to show tha=
t the Free Burma movement has a long way to go before winning European supp=
ort for sanctions against Burma. But the debate is now fully public and int=
ernational, so lets not lose sight of the sanctions issue as it is related =
here, to Burma. Now more than ever, we need to lobby for international and =
european support for sanctions against blatant acts of terrorism and blatan=
t violation of human rights by outlaw nations - and another stark example o=
f the failure of " constructive dialogue " with dictatorships. =


President Clinton has told France, Italy, Germany, Austria and other europe=
an countries to put their money where their mouth is. We need coordination =
and support now more than ever if we are to get TOTAL out of Burma, and to =
convince Clinton that it is consistent with his overall foreign policy - ir=
regardless of all the trade and nuclear dealings going on in diplomatic sec=
urity arrangements in Asia and the South Pacific region. =


We need President Clinton on Burma, and despite the failure of the Roth-Bro=
wn mission and Christopher's appeasement of Asean states, chances of his su=
pport may not be so bleak.

And EuroBurmanet would like to say to all Free Burma activists and their su=
pporters, as we have said all along, that if you want to get really serious=
 about mounting a front here on the oil issue, its going to take a lot more=
 than just words.


Euro-BurmaNet (Dawn Star)

begin story

Sanctions Put U.S. On Collision Course With European  Union ; Law Aimed at =
Iran and Libya Threatens to Undo 'New Era' Of Trans-Atlantic Relations ; Ec=
onomic Risk is Huge for EU
by Brian Coleman (Wall Street Journal, staff reporter)

BRUSSELS - Just last December, U.S. President Bill Clinton and European Uni=
on leaders stood on a platform in Madrid, smiled for the cameras and promis=
ed a new, more cooperative era in trans-Atlantic relations - especially in =
business relations.

The opposite is happening.

The U.S. and the Europeans have clashed bitterly ever since on trade and te=
rrorism. The two sides are especially at odds over Europe's ties to Cuba, L=
ibya and Iran, which the U.S. views as outlaw nations.  And experts say tha=
t strains in the troubled trans-Atlantic partnership look doomed to grow wo=
rse in the coming months, as each side seeks to force the other to abandon =
its position.

With a presidential election looming in November, U.S. politicians are crac=
king down on countries that many Americans love to hate. That hard line is =
putting the U.S. on a collision course with Europeans, many of whom have cr=
ucial economic and business links with these states.

STRIKING HARD

The most significant U.S. action came this week, when Mr. Clinton signed a =
law that will punish European companies that invest in the energy sector in=
 Iran or Libya. Both states are blamed for sponsoring terrorists, who in tu=
rn are increasingly suspected of causing the explosion last month of TWA Fl=
ight 800, killling all 230 people abroad. A similiar anti-Cuba law went int=
o effect early this month.

In signing the latest bill, Mr. Clinton said it shows the U.S. will " strik=
e hard where it counts, against those who target innocent lives and our ver=
y way of life ".

That position puts the U.S. at odds with Europe on both political and econo=
mic grounds. Germany, France, and the 13 other EU member states believe tha=
t the U.S. approach of isolating countries is counterproductive. They favor=
 what they call " constructive dialogue " , and are offended by America's s=
trong-arm tactics.

More important, the EU depends on Iran and Libya for about 20 % of its ener=
gy supplies - and EU imports from those two states are likely to grow in th=
e coming years.  Throw in EU exports of machine tools, food and other produ=
cts and the total trade between the union and those two countries swells to=
 $21.2 billion a year.  And the economic links go beyond trade : European o=
il companies have invested millions of dollars in facilities in Iran and Li=
bya.

" WAR TALK " AND TRADE

" There is a feeling among the Europeans that some accepted rules of the ga=
me have been violated, " says Dominique Moisi of the French Institute for I=
nternational Relations in Paris. " The U.S. seem to use war talk and apply =
it to trade issues. "

Of course, the Clinton administation has blown hot and cold in its relation=
s with the EU  -- alternately asserting the need for closer business ties a=
nd threatening trade sanctions.  And Mr. Moisi and many EU diplomats stress=
 that the trans-Atlantic relationship is simply too important to risk an ir=
reparable shift. Total trade between the EU =

and the U.S. is $239 bilion a year - more than 10 times the EU's trade with=
 Libya and Iran. A solution will inevitably be found, diplomats and observe=
rs say - especially as it's far from clear how much damage the new law migh=
t do to existing European interests in Libya and Iran.

Even so, European officials are making it clear that they are prepared to c=
ounterattack. The paperwork is already in place for EU foreign ministers to=
 do everything from ordering European companies to disobey the anti-Cuba la=
w to taking the matter before the World Trade Organization. As for the law =
aimed at Iran and Libya, EU trade chief Sir Leon Brittan says the EU " will=
 act to defend its rights and interests if they are jeopardized by this leg=
islation. "

Those interests are considerable. The list of foreign companies doing busin=
ess in Libya and Iran include some of the biggest names in Europe's oil ind=
ustry. TOTAL SA of France, Germany energy, chemicals and oil giant Veba AG,=
 state-owned Agip SpA of Italy and OMW of Austria are all entrenched in Lib=
ya or Iran. Under the terms of the U.S. law, they face sanctions for any ne=
w investments of more than $40 million in either country.

The sanctions could bite. The law requires the U.S. president to hit offend=
ing companies with two out of a list of six possible punishments. The presi=
dent could, for example, block the export of goods or technology to sanctio=
ned companies. He could prohibit U.S. banks from lending $10 million to any=
 one of those companies. Or he could prevent a blacklisted company from exp=
orting goods to the U.S..

Such sanctions are already making European companies think twice about goin=
g after some lucrative business. Iran is working hard to attract internatio=
nal oil companies, particularly to develop its offshore areas. It has 11 oi=
l and gas projects on offer, with investment needs estimated at some $11 bi=
llion. PetroFina SA of Belgium - which operates two refineries in the U.S. =
- already holds an exploration licence in Libya.

One of the biggest losers could be Elf Aquitaine. The French oil giant has =
no activities in Iran and only a small presence in Libya. But Elf has been =
in discussions with Libya since last year to participate in a large offshor=
e oil project in Iran. Those talks are still at a technical feasibility sta=
ge, says an Elf official, but he admits that " when it comes to signing a c=
ontract, this (legislation) will make us think hard. "

" The American stand is an element that we can't ignore, even if we contest=
 its legitimacy, " says the official, who requested anonymity. " We cannot =
dismiss something that risks affecting our activities in the U.S.. If we di=
dn't have interests in the U.S., we wouldn't care. "  Elf is chiefly active=
 in the U.S. in the chemicals and pharmaceuticals fields.

TOTAL SA IS UNFAZED

The other French oil giant, TOTAL SA, also appears to be among the companie=
s with the most to lose from the new law since it is one of the most active=
 players in Iran and Libya. TOTAL is currently the only Western oil company=
 operating in Iran - having  taken over a $600 million project abandoned by=
 a U.S. company - and is looking for partners to join it there.

TOTAL is also heavily involved in two oil projects in Libya : it has a 75% =
stake in the Mabruk field, which produces 10,000 barrels a day, and is part=
ner - with Repsol SA of Spain and OeMV of Austria - in the Murzuk field, a =
$1.4 billion project that is set to begin production next year.

 TOTAL officials say they aren't woried by the U.S. law, which was sponsore=
d by U.S. Senator Alonse D'Amato. That's because the D'Amato bill concerns =
only future investments. " What counts is the date of the signature of the =
contracts, "  a TOTAL spokesman says. " Our Libya contracts were signed in =
1993 and 1994 and our Iran contract was signed in 1995, so the D'Amato bill=
 won't apply to us. "

But the French government and others aren't so sure. For example, while TOT=
AL's Iranian contract was signed last year, production is still a year away=
=2E Some European officials worry that the Americans will view the continui=
ng buildup as " new investment ".

" There is a lot of ambiguity about this law, " says a spokesman at the Fre=
nch Foreign Ministry.

Nestle Hesitates

Although the oil sector dominates Europe's trading relationship with Libya =
and Iran, other industries also do a brisk business in those countries. Swi=
ss food giant Nestle SA, like many European consumer goods companies, sells=
 its products in Iran. " Our brands are well known there and you can say we=
've always been there, " one Nestle official says.

Nestle also sees Iran as a market with great potential. The company recentl=
y sought to build a dairy-products plant in Iran with a local partner befor=
e currency problems forced it to pull out. The Nestle official noted that w=
hile the project was relatively modest, it would have been given the compan=
y a manufacturing foothold in a country with a rapidly growing population t=
hat already totals some 6 million.

 But it is Germany tht has the strongest European links to Iran - and which=
 most annoys the Americans.  With business relationships dataing back to th=
e early 20th century, Germany is Iran's largest trading partner, exporting =
2.35billion marks ($1.58) in goods last year, and making new investments wo=
rth 31 million marks in 1994.  Germany also has outstanding loans of 4.3 bi=
llion marks to Iran.

GERMAN ARRANGEMENTS

That buys them unrivaled access to top Iranian officials - and helps explai=
n German advocacy of a "constructive dialogue " with the country.Indeed, Ge=
rmans say this approach has wielded significant results. Officials in Bonn =
say it was Germany who convinced Tehran to sign the non-proliferation treat=
y  on chemical weapons early this year ; to dissuade it from sending comman=
dos to assassinate author Salmon Rusdie ; and to convnce its clients in Leb=
andon to hand over a number of other non-German hostages during the late 19=
80s.

In fact, Bernd Schmidbauer, Chancellor Helmut Kohl's intelligence czar, has=
 become renowned for pulling off a number of high-profile diplomatic deals =
thanks to his contact with leaders of the Islamic fundamentalist group Hezb=
olla, or Party of God.  Most recently, last May, he helped Israel officials=
 obtain the remains of two Israeli soldiers in exchange for the release of =
several Shiite prisoners and the remains of other Muslims.

For the moment, the strong economic, political and cultural links between E=
urope and Mideast countries is overshadowing the equally explosive clash be=
tween the EU and the U.S. over Cuba. The new anti -Cuban law in the United =
States would allow American citizens or companies to sue foreign companies =
trafficking in property confiscated by the Cuban government - although Mr. =
Clinton suspended that clause from taking effect until next year. The law a=
lso allows the U.S. government to ban executives from those companies visit=
ing America.

Although the EU's trade with Cuba is just $813 million a year --  a fractio=
n of that with Iran or Libya - one company that is under the spotlinght is =
Italy's state-owned telecommunicatins giant Stet.Stet, or Societa Finanziar=
ia Telfonica per Azioni, reportedly high on the U.S. government's hit list,=
 because of its holding in Cuban phone company Etecsa. =


But like their counterparts at TOTAL, officials at Stet believe they have a=
n escape clause that will prevent them from feeling any pain. A spokesman f=
or Stet notes that the company's holding in Cuba is indirect, the result of=
 a 25% stake in Mexican telecommunications company Citel that in turns owns=
 49% of Etesca...

DIPLOMATIC BRINKMANSHIP

In the end, preventing the current diplomatic clash from turning into a tra=
de war probably depends on such quiet negotiations and a bit of diplomatic =
brinkmanship. Indeed, the U.S. sprinkles its tough talk with conciliatory t=
ones.

US.State Department spokesman Nicholas Burns told reporters in Washington t=
hat " we are in a war against terrorism...and we've got to take extraordina=
ry measures...to fight and win that war. "  Yet Mr. Burns also said the law=
 could allow Mr. Clinton to waive the sanctions on companies if their natio=
nal government moves against terrorism. Mr. Burns explained that if Germany=
 abandons its " constructive dialogue " with Iran, the U.S. could waive any=
 sanctions against German companies. There's flexibility, " he said ;

That flexibility is what gives the Europeans hope that a trade war can be a=
verted. EU officials arae united in their opposition to the new U.S. laws, =
but they acknowledge that much of the American bluster is fueld by the curr=
ent U.S. election campaign.  After the vote, European officials say, the tw=
o sides will probably find a compromise.

" Ultimately, we know we are in the same boat ", says Mr. Moisi from the Pa=
ris think tank.  " We will prevent the worst from happening. I think "

(Staff reporters Bhushan Bahree, Thomas Kamm and Matt Marshall contributed =
to this report. - WSJ)