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U.S. to Let Iraq Trade Oil for Food

Mideast: White House had objected to U.N. deal. Administration now seems satisfied Hussein will not be able to skim profits.

August 08, 1996|NORMAN KEMPSTER | TIMES STAFF WRITER

WASHINGTON — After blocking action for almost three months, the United States removed the last obstacle Wednesday to a U.N.-approved plan that lets Iraq sell up to $2 billion worth of oil in the next six months so it can buy food and medicine for its beleaguered people.

Talking to reporters at U.N. headquarters, U.S. Ambassador Madeleine Albright said the United States is finally satisfied with safeguards to ensure that Iraqi President Saddam Hussein does not skim any oil sale proceeds for his government or his army.

She said the oil-for-food deal will not be allowed to erode the economic sanctions imposed on Iraq after its 1990 invasion of Kuwait. The sanctions have stayed in place since the Persian Gulf War ended because the U.N. Security Council has not yet determined that Iraq has dismantled its nuclear and chemical weapons programs.

"We will make sure [conditions governing the sale] are carried out very rigorously, because the point here is to get the assistance to the right people and not in any way to abrogate the sanctions regime," Albright said. "The important point here is to try to get humanitarian assistance to the people within Iraq."

In Washington, State Department spokesman Nicholas Burns applauded the final agreement, which strengthens U.N. procedures for monitoring Iraqi oil sales. Besides alleviating hunger in Iraq, he said, the plan will provide needed economic relief for Turkey, which controls the pipeline that Iraq will use to ship its oil; that line has been closed since the Gulf War.

Turkey has appealed to the Security Council for permission to increase trade with Iraq, its southeastern neighbor, to ease the effect of Iraqi sanctions on the Turkish economy. Burns said the Turkish request will be carefully considered, but he suggested that Washington is unwilling to approve anything that would ease the embargo against Baghdad.

Albright said minor details have not been worked out in the oil-for-food plan but indicated they will not block final approval of the deal. She predicted that oil will begin to flow in about a month--too late to have much effect on U.S. gasoline prices for the rest of the summer driving season.

Petroleum experts have said that one explanation for the spike in U.S. fuel prices is that oil companies drew down stocks of crude in anticipation of lower prices resulting from a resumption in Iraqi operations. When the Iraqi oil did not begin to flow, companies were caught short.

Iraq and the U.N. signed the oil-for-food deal on May 20 after months of talks. If they are satisfied with the arrangement, they later can renew it at a rate of $2 billion in sales every six months.

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