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Washington Escalates Assault On Iran

By Pat Smith, The Militant, Vol.59, no.19, 15 May 1995

In a move aimed against the sovereignty of Iran, and hoping to deal blows to both Russia and imperialist rivals, particularly Japan, U.S. president Bill Clinton announced a trade ban against Tehran April 30. Under the guise of combating international terrorism the White House is pressing other governments to stop doing business with the Persian Gulf country.

The Clinton administration claims Iran is a rogue state that sponsors international terrorism and is trying to build an arsenal of weapons of mass destruction. Washington, the biggest producer and holder of nuclear bombs, and the only government that has ever used them, accuses Tehran of having a nuclear arms program.

I am convinced that instituting a trade embargo with Iran is the most effective way our nation can help curb Iran’s drive to acquire devastating weapons and support for terrorist activities, said Clinton at a meeting of the World Jewish Congress, where he announced the action.

Calling Iran a nation that ranks at the top of the world’s `10 Most Wanted’ list, the president announced sanctions barring the purchase of all Iranian goods by U.S. companies, their overseas branches, and, in some cases, foreign subsidiaries. The order also blocks U.S. exports to Iran. The embargo would permit only those foreign subsidiaries of U.S. companies deemed to operate independently of their U.S. parent to purchase Iranian oil.

The Iranian Foreign Ministry issued a statement calling Clinton’s decision disgraceful, adding that, Today’s economic system is that of competition and Iran has various alternatives for its trade.

Imperialist allies in no hurry to follow Washington’s call for worldwide sanctions against Iran has so far met with a tepid response from its imperialist allies. The trade embargo coincides with the efforts of many capitalist powers to increase trade with Iran. The State Department’s yearly report on terrorism issued last week singled out Iran as the most active sponsor, but with a conspicuous lack of conclusive evidence, noted the London Financial Times in a May 2 editorial titled Iran sanctions won’t work. Meanwhile, the International Atomic Energy Agency has inspected Iran’s atomic energy facilities and found nothing amiss.

Tokyo is particularly reluctant to accede to U.S. embargo demands. Nearly 10 percent of Japan’s crude oil imports came from Iran last year. Japanese capitalists also shipped $641 million worth of goods to Iran during that time. If trade is curtailed Tokyo would have substantial difficulty in obtaining secure oil supplies.

German economics minister Gunter Rexrodt said, We do not believe that a trade embargo is the appropriate instrument for influencing opinion in Iran. Germany is Iran’s largest single trading partner, exporting nearly $2 billion worth of goods there last year.

A spokesperson for the European Union said in Brussels May 2, We are not going to respond to this initiative.

The White House is pushing Moscow particularly hard to cancel the sale of two nuclear reactors and other equipment to Iran. The Russian government, seeking to strengthen its hand in Central Asia and hard up for the cash, is not inclined to back down from the $1 billion deal.

Russian officials point out the light-water reactor technology they plan to provide to Iran cannot be diverted for military purposes and is similar to the one being sold to North Korea.

Washington plans to press forward While Washington has not received an endorsement of its request for a trade embargo, the U.S. government has made clear that it expects its allies to join the action and will attempt to coerce the desired response.

Even before the announcement of the trade embargo, fierce U.S. pressure had tightened the screws on the Iranian economy.

In March, Clinton forced Conoco Inc. to scrap a $1 billion deal with Tehran to develop two offshore oil fields in the Persian Gulf. Conoco’s agreement was the first time a major U.S. company was ready to invest a large sum of money into a business venture with Tehran since the 1979 revolution that overthrew the U.S.-backed Shah. Washington pressured the government of Azerbaijan to exclude Tehran from a $7.4 billion Caspian Sea oil deal in April. And Tokyo has held up a $450 million installment on a $1.4 billion loan to finance a hydroelectric power dam in Iran because of threats from Washington.

If the Americans are very, very firm in their pressure, it will create real difficulties for Iran in dealing with third parties, the president of a major oil trading company based in Monte Carlo told the New York Times. No one wants to defy America today.

One small indication of the obstacles Washington will face in its attempts to isolate Tehran was the elaborate state welcome accorded Iranian president Hashemi Rafsanjani during a visit to India April 16-18. The Clinton administration’s extremely strong concern did not prevent the two nations from strengthening business and political ties. No one told [U.S. Treasury Secretary Robert Rubin] he would have to stay one limousine behind the state visitor whom India is really out to impress: President Hashemi Rafsanjani of Iran, a country the Clinton Administration calls an `outlaw nation’ that must be economically isolated, the New York Times reported.

U.S. companies, mostly through subsidiaries, purchase $4 billion of oil yearly from Iran, or 30 percent of that country’s annual output. In addition to the billions of dollars in oil procurements, U.S. capitalists ship more than $300 million a year worth of goods to Iran, ranging from frozen poultry to oilfield equipment.

A spokesman for Exxon Corp., one of the largest purchasers of Iranian oil, said, Should the government change the laws regarding trade with Iran, we will comply. The oil companies contend they will easily find ways to acquire their product.

Tehran book fair

Clinton’s trade embargo was announced on the eve of the Tehran Bookfair. Hundreds of foreign publishers plan to display and sell books at the event, scheduled for May. Several U.S. publishers are among those who have been planning to attend, including McGraw-Hill, John Wiley & Sons, and Pathfinder Press. It had not been made clear at press time whether publishing would be covered by the embargo.

It is the policy of the McGraw-Hill companies to comply with applicable U.S. government export control restrictions on transactions with certain foreign countries, said Mark Harrop, director of public relations. We are ascertaining whether, in fact, we will be permitted to exhibit our educational and professional materials at the Tehran Book Fair in light of the Clinton Administration’s recent weekend announcement.

As a publishing house, we look forward to a large book fair in which publishers from all over the world, including the United States, are part of the exchange of books and views, said David Prince, business manager of Pathfinder Press. Pathfinder has participated in the Tehran Book Fair for the past several years and looks forward to being able to do so this year. We stand opposed to any and all restrictions imposed by the U.S. government that would hinder or limit trade in any way.