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U.S. Secretly Vows to Bar Jet Sales to Iran : Mideast: The pledge is part of a $6-billion deal with Saudi Arabia for 61 passenger and cargo aircraft.

October 25, 1995|RALPH VARTABEDIAN and ROBIN WRIGHT | TIMES STAFF WRITERS

WASHINGTON — As part of a long-delayed $6-billion Saudi Arabian order for U.S. jetliners that is due to be signed this week, the United States has secretly pledged not to sell any civilian aircraft to Iran, U.S. officials disclosed Tuesday.

Saudi Defense Minister Prince Sultan ibn Abdulaziz was to arrive here today and is expected to finalize an agreement for about 61 jets, including 29 MD-90 passenger jets and four MD-11 cargo planes made in Long Beach. Boeing will produce the other 28 planes, but that share of the order is worth about $4 billion.

Saudi officials sought the secret pledge out of concern that any future U.S. sales to Iran might in turn pave the way for a diplomatic opening as well, a senior U.S. official said.

"Part of the deal from the beginning has been that if Saudi Arabia buys these planes, then the United States feels no need to compete for the Iran market," the official said. "The Saudis didn't want to see U.S. commercial relations with Iran improving because of their concern that it might lead elsewhere."

Since Iran's 1979 revolution, Sunni-dominated Saudi Arabia has looked at Shiite-dominated Iran as its primary long-term security and economic threat.

Iran has made initial steps to sound out Washington on a jet deal, much as it attempted to strike an oil field development deal with Conoco just last March.

U.S. policy on Iran has become tougher, with new sanctions imposed last spring after the Conoco deal fell through at a cost of thousands of jobs and hundreds of millions in income to U.S. companies, Clinton Administration officials have conceded.

Tehran is looking to upgrade its largely U.S. civilian fleet, but the United States has put Iran on an export control list that requires U.S. firms to obtain a license for any transactions. As a result, Iran has turned to European aircraft makers.

A McDonnell Douglas spokesman said he could not confirm that Saudi Arabia was finally going to sign the agreement, but the company is aware of the prince's trip and is hopeful the deal will be completed this week.

The spokesman said he had not heard about the secret pledge. A Boeing spokesman also said he was not aware of the pledge.

Aerospace experts said the pledge may be largely symbolic, because the United States is unlikely to approve any big commercial deals with Iran. But they added that the size of the Saudi order played a major role in the agreement.

"For all the work that the U.S. had to go through to get this deal, they are not going to do anything to jeopardize it," said C. Donald Scales, an aerospace expert for A.T. Kearney, a management consulting firm. "The commitment the Saudis are making probably far exceeds anything that Iran would make."

The Saudi deal, one of the earliest business initiatives by the Administration, was originally struck between Commerce Secretary Ronald H. Brown and Saudi King Fahd two years ago.

But it has been delayed in part because of Saudi financial problems resulting from the $65-billion expense of the 1991 Persian Gulf War, much of which was absorbed by the Saudis.

McDonnell has been counting on the orders to help fatten its thin order backlog and help stabilize employment at its Douglas Aircraft Co. plant in Long Beach.

The prince, the highest ranking Saudi to make an official visit to the United States in almost a decade, is scheduled to meet President Clinton later this week.

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