The bottom line
Assessing a bilateral relationship requires that we take into account not only politics but economics as well; US-Iranian ties are a case in point, writes Mustafa El-Labbad
US President George Bush's statements in support of student demonstrations in Iran and UN demands that Iran sign the supplementary protocol to the nuclear non-proliferation treaty have left little doubt among observers in this region that Iran will follow Iraq in the anticipated resumption of the US military campaign. Bush's verbal attacks against Iranian conservatives and his declaration that his country is "the natural ally of a modern, liberated Iran" have also dealt a blow to the Iranian reform movement that Bush claims to champion. Regardless of what reformers say or do, such statements cast them as puppets of Washington, and therefore pull the rug out from under the local and regional grassroots support upon which they base their appeal.
Beyond the recent US escalation against Iran and the ebb and flow that has characterised US-Iranian relations since the victory of the reform trend in Iran in the 1997 elections, US- Iranian relations remain unique in the lore of international relations over the past half century.
In the quarter of a century between the counter-revolution against Mohamed Mosaddeq in 1953 to the Iranian revolution in 1979, observers regarded the ties between Washington and Tehran as a perfect model of a bilateral relationship between a global power and a regional one. So closely did their respective interests coincide that they seemed to be living in each other's pockets. With the Iranian revolution, relations took an abrupt turn towards mutual antagonism of an intensity rarely seen in modern international relations. Virtually overnight, the US became the "great Satan" and Iran a "sponsor of terrorism". The Iraq-Iran war (1980-1988) entrenched the rupture as Washington threw its weight behind the camp opposed to Iran. In Washington's view, Iran was looking towards Arab nations in the Gulf and thereby threatening US vital interests in the region. Tensions intensified further as Washington placed Iran on its list of nations that sponsor terrorism. Congress then passed the Damato Law, prohibiting foreign companies from investing more than $20 million annually in Iran, and Washington froze Iranian assets in US banks and halted the bilateral supply agreements in force since the era of the deposed shah.
Nevertheless, the steadily escalating confrontation experienced a brief respite following the election reformist leader Al-Sayyid Mohamed Khatami in 1997. From the outset of Khatami's term a marked toning-down in Iranian rhetoric about Washington was evident. Parallel to that development there were other conciliatory gestures like the interview Khatami gave CNN's Christiane Amanpour, then there was Tehran's announcement that it would facilitate the release of Western hostages in Lebanon, followed by Khatami's call for a dialogue between civilisations. The Democratic administration that was in power at the time had no difficulty in deciphering the code and responding in kind. Most notably, Secretary of State Madeleine Albright issued an apology -- albeit 47 years late -- for the part the US played in engineering the coup against Mosaddeq. For his part, President Bill Clinton described Iran as one of mankind's oldest civilisations.
The easing of tensions between the two countries from 1997 to 2000 was, in large measure, a response to the economic interests of both sides. Khatami, since becoming president, has succeeded in turning the international welcome his reformist tide received to the advantage of the Iranian economy. Over the past seven years, Iran has been dangling the carrot of lucrative oil deals before the noses of US companies, particularly Conoco and Amaco, which, two years ago, had in their sights contracts worth more than $3 billion, but then the Damato Law intervened. Iran, apparently, was not destined to receive from the US a positive response to its gestures. US Congress has renewed the trade ban against Iran for another five years, Iran is still on the State Department's terrorist blacklist and, increasingly, it appears that Iran is the next target for the American military machine.
In response, Iran has played its European card deftly, with the aim of breaking the American-imposed blockade against it and, simultaneously, sending the US the message that in extending its trade ban it is only harming its own interests, since European firms stand next in line to win the precious contracts US foreign policy is withholding from their American counterparts. Iranian-European relations have warmed up considerably since the early 1990s, having passed from the critical dialogue phase to the formalisation of EU-Iranian relations through the creation of specific institutional mechanisms. The most significant of such mechanisms is the quarterly meetings between Iranian and EU officials, the latter being represented by a delegation consisting of representatives of the so-called troika: the former EU chair, the current chair and the forthcoming chair. This mechanism, in addition to a number of permanent committees formed by the European Commission to discuss such issues as energy, trade and investment in Iran, has been instrumental in furnishing sustained impetus to bilateral Iranian-European relations.
It is in this context that one should consider Khatami's visits to France, Germany and Italy, which have not only worked to enhance economic cooperation between those countries and Iran, but have also succeeded in turning America's boycott weapon, embodied in the Damato Law, against US firms. Indeed, it was precisely for this reason that the former Democratic administration began to explore a more flexible approach to Iran, an attitude reflected in the many roundtables held by the US State Department and influential research centres in 2000 and 2001 and which produced any number of recommendations that converged on the need to restore relations with Iran in the interests of those US oil companies which have such a powerful sway in the corridors of power in Washington.
But then 11 September 2001 struck, unleashing forces adverse to the interests of those on both sides who had hoped for reconciliation. Against the backdrop of the militaristic zeal that has prevailed in the US since those events, the fortunes of the hawks in the US administration have skyrocketed. Gone is the spirit embodied in the catchphrase "support change through trade". Formerly advocated by European moderates as the policy to be adopted towards the Soviet bloc in the 1970s and 1980s, its thrust is that strengthening the bonds of economic cooperation with a target country creates channels of influence that make it possible to promote change in that society's political order starting from the bottom up.
Such subtlety appears beyond the grasp of certain US administration hard-liners who prefer, instead, to further US interests by force and, in the bargain, field test America's new military hardware in one of the world's most volatile hotspots. Not least of those hawks is Deputy Secretary of Defence Paul Wolfowitz -- a primary ally of the military industry's lobby with his own personal connections to US arms manufacturing firms -- whose denunciation of the "Iranian threat to the US" clearly aims not merely to deepen the political rupture but to prepare the ground for an imminent military strike.
If history suggests that economic factors can subdue tensions and bend politics to their service, a quarter of a century of animosity greatly reduces this possibility in the case of the US and Iran. The problem is further aggravated by sharply divergent views over a range of regional issues concerning Iraq and the Gulf, the Caspian Sea and Afghanistan, and the Arab- Israeli conflict. Nor should we forget that Iranian assets, which Tehran desperately needs in order to advance its industrial modernisation programme and to allay the country's growing unemployment problem, are still frozen in American banks.
However, the hawks in the US have pushed this possibility even further out of reach. Exploiting the post-11 September panic, they have succeeded in portraying the former Clinton administration as too soft on Iran, and they have managed to shelve the interests of the American-Iranian oil lobby and with them the concerns of the more level-headed members of the US administration.
As a result, the White House is now gung-ho to fix a military grip on Iran, but without first conceptualising the strategic and democratic map of the country and the means needed to re-establish order in the post-war phase -- something it also failed to do before going into Afghanistan and Iraq. Clearly, it is now US arms manufacturers that are being championed as the dynamo that will foster an American economic recovery. But, for this to happen, that industry and its supporters need wars, not to achieve clearly thought out objectives, but merely to sustain a perpetual state of tension across a huge geographic arch extending from China in the east to the Balkans in the west and passing through Pakistan, India, Iran, Iraq and Central Asia.
Needless to say, it is in this way that they hope to guarantee their continued hold on the American decision-making process. It's ironic that while the economic dimension lured Clinton's Democratic administration towards greater flexibility towards Iran the same dimension has produced precisely the opposite effect under Clinton's Republican successor. Not that we can extend America's Democratic-Republican divide to explain other periods of heightened or relaxed tensions between Washington and Tehran. After all, it was Democrat Jimmy Carter who launched the abortive commando mission to rescue the hostages in the US embassy in Tehran in 1980, after which, the revolutionary government of Tehran deliberately dragged its feet over returning them in order to swing the US presidential elections that year in favour of the Republicans.
However, despite the seriousness of the US-Iranian conflict, the American Iranian Council is still operating from its Washington headquarters. The council, which is a conduit for dialogue between the two states, is comprised mainly of Democratic politicians and former politicians who are connected to the US oil interests' lobby.
Although US-Iranian relations may be unique in terms of their dramatic highs and lows and the ferocity of the vitriol each side has directed against the other, rhetoric is not merely an indicator of the relative health of political ties, but also of economic ones and the capacity of economic considerations to influence the other side.
