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One Policy on Iran Would Do Just Fine

March 15, 1995

The biggest weakness in American policy toward Iran is its inconsistency. Commercial ties were banned in 1979, after Islamic revolutionaries seized the U.S. Embassy in Tehran and held 52 of its employees hostage for 444 days. Yet while Iranian products are barred from the United States, certain American goods can be sold to Iran. In the last three years such sales totaled about $1.7 billion. At the same time, U.S. companies have become the biggest customers for Iranian oil, currently buying crude at a rate of 613,000 barrels a day for resale overseas. It is against this backdrop that Conoco, through its Dutch subsidiary, signed a $1-billion oil and gas contract with Iran, setting off an explosion of criticism from the White House and Congress and prompting President Clinton's decision Tuesday to sign an executive order outlawing such deals.

What most angered Washington is that the Conoco deal threatened to further undercut U.S. efforts to maintain economic pressure on Iran to halt its support for international terrorism and other subversion. Secretary of State Warren Christopher's voice has been the strongest in the Clinton Administration in promoting a firm stance. Christopher, who honorably recused himself from policy decisions on Iran after learning that Conoco had recently retained his former Los Angeles law firm, O'Melveny & Myers, has been blistering in his criticism of the Tehran regime: "Wherever you look, you will find the evil hand of Iran in (the Middle East)." Conoco's action, he said, is "inconsistent with the containment policy that we have carried forward."

The problem with trying to implement a consistent commercial policy toward Iran is a familiar one: The void left by a U.S. boycott can in most cases be filled by one or another supplier, leaving Iran no weaker but denying sales to U.S. firms. So in application the policy seeks to be pragmatic rather than absolute. Sales of non-strategic goods--foodstuffs, some machinery, auto parts--that Iran could easily find elsewhere are allowed, but not financial dealings or technology transfers that could strengthen Iran's military capabilities or its ability to do mischief abroad. Russia's recent deal to sell Iran nuclear reactor technology, over strong U.S. protests, exemplifies the kind of trade that emphatically should not be taking place, given Iran's interest in acquiring nuclear weapons.

It's a fine line, reflecting the habitual interest conflicts between the Commerce and State departments, and up until the Conoco deal the implicit inconsistencies didn't draw a lot of attention. All that has now changed. Basic U.S. policy, as the State Department describes it, is to "maximize pressure . . . both economically and politically" to try to achieve changes in Iran's external behavior. What is clearly needed now is a policy reassessment to determine whether the United States is in fact exerting all the pressure it is capable of on a rogue regime that remains its sworn enemy.

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