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The following appeared in this week's edition of Middle East Economic Survey : VOL. XLII No 49 6 December 1999 IRAQ Diplomatic Poker At UNSC In New York Keeps Oil Market Guessing Once again, diplomatic poker games over Iraq policy at the UN Security Council in New York have been playing havoc with world oil markets. So far, apart from byzantine maneuvers in the background, nothing concrete has really happened during the past week except for the negative probability, at MEES press time on Friday, 3 December, of the passage of US-sponsored resolution providing for a further one-week extension of the UN At the heart of the confusion lies an apparent distinction between two types of resolution, sometimes combined with a conflation of the two. One track involves a simple rollover of the present structure of the oil-for-food program for a specified period of time, be it six months or one week or whatever. Meanwhile, on the second track (and essentially unrelated to the oil-for-food program), the five permanent members of the Security Council have been holding intensive high-level negotiations on a new Iraq policy, with a targeted resumption of arms inspection and monitoring at its core. The main basis for discussion has been a much modified British "omnibus" resolution that would lift the ceiling on Iraqi oil exports as soon as a new arms commission is set up. According to the latest available version of the proposed resolution, the new body would have 60 days to draw up an arms program for Iraq to follow. Import and export sanctions would be suspended after Iraq answers key questions on its weapons of mass destruction posed by the new chief arms inspector, whom the Secretary General would have to appoint within 30 days of the resolution being adopted. This procedure would take about eight months, after which the sanctions could be suspended. The suspension would then lapse every 100 days, unless renewed by the Council. The Secretary General would also be requested to appoint a committee of experts to determine the future needs of the Iraqi oil industry, with the understanding that this would lead to the opening of the upstream sector to international oil investments. Over the past week, the main contending resolutions for voting precedence were a French proposal for a six-month rollover of the oil-for-food program, and a US-sponsored one-week extension. By Thursday, the French initiative had been abandoned, due largely to rejection by the US; and, as indicated earlier, the US-backed one-week extension looks pretty certain to gain UNSC approval on 3 December. But what will come after that? MEES understands that the US strategy behind the one-week extension is to bring the whole matter to conclusion during the coming week with the passage of two complementary resolutions: one for a six-month rollover of the oil-for-food program; and the other encompassing the reimposition of arms inspection and control in Iraq and the eventual easing of sanctions. But the central problem here will be Russia, which supports Iraq in opposing the US and British proposals for an omnibus resolution with its onerous, slow and cumbersome procedures for arriving at any significant relief of sanctions. Here the key question is of course: Can the US offer the Russians sufficient political and/or economic rewards in other sectors to induce them to moderate their backing for Iraq to the point where they would agree to drop the threat of veto and opt instead for abstention or perhaps even approval in the vote on the omnibus resolution? A number of scenarios thus present themselves regarding the outcome of this week six-month rollover of oil-for-food program or the omnibus Neither of the two draft resolutions gain UNSC approval, in which case the Iraqi oil export program would be in even deeper limbo than it is already. Both the two resolutions are passed by the UNSC. This would look better on paper, and presumably Iraqi oil exports could be resumed in short order. But, although the omnibus resolution would pose a legal obligation on Iraq, its practical application could be rendered unworkable in the event of Iraqi rejection and non-compliance. The six-month rollover is passed, but the omnibus resolution falls foul of a Russian (and possibly Chinese) veto. In that case, Iraqi oil exports could presumably (with Iraqi approval), resume, but the US and western strategic goal of reimposing strict arms control on Iraq would be further than ever from realization. Copyright ) 1999 Middle East Economic Survey -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email email@example.com Full archive and list instructions are available from the CASI website: http://welcome.to/casi