U.S. Farm Lobby Scores Big with End of Iran Ban

WASHINGTON,(Reuters) - U.S. farmers won a chance to sell hundreds of millions of dollars in wheat, soybeans and other commodities to Iran with the Clinton administration's decision on Wednesday to ease economic sanctions. The change in policy toward Iran, Libya and Sudan was hailed as a benefit to American farmers, who face a second year of slumping commodity prices and growing international competition from other grain-producing nations. U.S. farm income was forecast to drop by 6 percent this year, despite Congress' record $6 billion in emergency aid last winter to offset the price slump. Agriculture Secretary Dan Glickman said the policy change could boost U.S. wheat and corn exports by up to 1 million metric tons each annually. Of the three nations, Iran has the potential to be the biggest buyer of U.S. farm goods, he said. Analysts said the administration's desire to aid U.S. farmers, as well as canny political calculation to help the farm-state Democrats, favoured the change. Republicans must hold on to rural districts to stay in power in the U.S. House of Representatives or to win the White House in 2000. "This administration...doesn't make a move without thinking politics first," said a Republican-leaning analyst, who asked not to be named. "It just seems to permeate the process." Niki Trading Co., formed by a Washington lawyer and an Iranian-American architect last year, initiated the change when it proposed to act as an agent to sell $500 million in wheat and other farm goods to Iran. The company must first obtain a license from the U.S. Treasury Department before proceeding with any sales. Niki officials said they expected swift approval. President Richard Bliss said the first of some 2 million tonnes of wheat shipments would be under sail to Iran within 30 to 60 days of approval. "This is a great day for American agriculture," Bliss said. "The quicker we get formal approval, the faster the grain moves and the faster the cash goes into the bank for farmers." A sizable number of U.S. farm products -- wheat, corn, soybeans and meat -- will be eligible for sale. Processed foods and baby food and formula also can be exported, and fertilisers and farm equipment may be added to the list. The U.S. government will not provide subsidies or financing for the sales, said Undersecretary of State Stuart Eizenstat. The prospect of reining in sanctions and opening up a large export market like Iran gained widespread support from both Republican and Democratic farm state lawmakers. "Trade sanctions aim for the dictators and generals, but hurt American farmers and ranchers, who work all season to sell food to starving people," said House Agriculture Committee Chairman Larry Combest, a Texas Republican. U.S. sanctions against a variety of countries -- including Cuba, Iraq and North Korea -- have shut U.S. wheat growers out of 10 percent of the world wheat market, according to the National Association of Wheat Growers. "As we continue to face record low prices, farmers need to know that their government is working with them to open new markets," said Jim Stonebrink, president of the wheat group. Iran imports about 6.5 million metric tons of wheat and feed grains annually, as well as large amounts of soybean meal and soybean oil. The country spends about $3 billion on its annual food import bill. Democratic Sen. Byron Dorgan of North Dakota said broad bipartisan support prompted the review and change in policy. "I think, obviously, the pressure from Congress, at the same time grain prices have collapsed, forced the administration to take a look," Dorgan said. The action also is likely to ignite a fresh debate over easing U.S. sanctions against Cuba's Communist-ruled government for the past three decades, Dorgan said. American business leaders have joined farm groups in the past couple of years to complain of slapdash, unilateral U.S. sanctions that did not change the behaviour of target nations but did shut off U.S. access to lucrative markets.

U.S. Moves to Permit Food Sales to Iran, Libya

WASHINGTON,(Reuters) - The United States, in a major shift, will ease its sanctions policy to permit food and medicine sales to Iran, Libya and Sudan so these items are not used as a foreign policy "weapon," officials said Wednesday. The decision -- long sought by farm state members of Congress and businesses -- would permit case-by-case consideration of food and medicine sales to Iran, Libya and Sudan rather than banning them outright, officials said. The easing of sanctions does not apply to the long-standing economic embargo of Cuba, or restrictions on exports to North Korea and Iraq. Limited humanitarian sales to those countries are controlled by separate rules. Energy products also are not covered by the easing of sanctions policy, U.S. officials said. Undersecretary of State Stuart Eizenstat said the decision was the preliminary result of a two-year review of overall U.S. sanctions policy which concluded that allowing food and medicine sales to problem states "doesn't enhance a nation's military capability or ability to support terrorism." In fact, banning such sales can backfire by eroding support for U.S. policies and resulting in lost business for its economically hard-hit agricultural sector, he told reporters. Eizenstat insisted the decision was not meant as a gesture to Iran, Libya and Sudan, who like Cuba, North Korea, Iraq and Syria are on the U.S. list of states sponsoring terrorism. But analysts say the change could encourage improved ties. Eizenstat said President Bill Clinton decided on "a change in our sanctions policy which would allow the sale of foods, medicine and medical equipment and therefore exempt them from future unilateral sanctions regimes." "We would also extend this policy to currently embargoed countries," specifically Iran, Libya and Sudan, he said. The change does not allow the sales to proceed outright. Companies still must apply to the U.S. Treasury Department for a license and these will be granted on a "case-by-case" basis, officials said. But unlike in the past, when such sales were prohibited, the presumption is now that as long as they meet certain criteria, the sales will be approved, officials said. The aim is to "rationalize" the U.S. approach "so food is not used as a weapon" of foreign policy," one official said. One effect of the change is to permit consideration of the deal under which Niki Trading Co. is seeking a license to sell 3.55 million tonnes of farm goods to Iran worth about $500 million, most of it wheat. "There is an application by Niki for the sale of wheat to Iran ... but this policy (change) does not necessarily mean that that license will be granted," Eizenstat said. But Niki President Richard Bliss said he expects the first in a series of U.S. grain shipments to sail to Tehran within 30 to 60 days after the administration formally eases sanctions. "I would expect shipments could be on the high seas in about 30 to 60 days," Bliss said. Eizenstat said that to be approved, food and medicine sales must comply with certain general principles. Licenses will only be granted for "fully negotiated contracts as opposed to open-ended proposals" and deals must reflect prevailing market prices. Also, deals cannot involve U.S. government financial guarantees, he said. Permitted sales cover wheat, corn, feed, soybeans, edible oils, meat, fish, baby food and formula. No decision has been made on whether fertiliser, pesticides and agricultural equipment can also be sold, he said. From now on, Washington would expect to disallow sales only in "extraordinary circumstances," such as to countries involved in an armed conflict with the United States and its allies, when commodities likely would be diverted to the armed forces or when the regime would derive "unjust" benefit, he said. Trade between the United States and Iran has been banned since 1995, when Clinton tightened existing sanctions to protest Tehran's support of international terrorism. U.S. officials repeatedly have said no change in sanctions policy would occur until Tehran made significant changes in its policies on terrorism, weapons of mass destruction and the Mideast peace process. U.S. ties with Iran have improved since moderate President Mohammad Khatami took power two years ago. Tensions with Libya eased some when Tripoli recently handed over to international prosecution two suspects accused of bombing Pan Am Flight 103 in 1988 and killing 270 people. Eizenstat said Washington sees no change in Iran's terrorism policy. "What has changed is our calculation of the impact of sanctions on our policy ... Money spent on agricultural products would not be spent for other less desirable uses" such as weapons of mass destruction, he said.. "We apply sanctions to influence the behaviour of a regime not to deny people their basic human needs," he said. Farm state lawmakers like Indiana Republican Richard Lugar, chairman of the Senate Agriculture Committee, have pressed the administration for months to lift sanctions to open up new markets for U.S. farmers, who are facing low commodity prices and stiff international competition. Iran, Libya and Sudan buy upward of $6.3 billion annually in commodities and American sellers could expect to reap about $500 million a year from that market, officials say. Iran alone represents an annual market of about 5 million tonnes of wheat for exporters, Niki's Bliss said. The country also imports about 2 million tonnes of coarse grains each year plus 500,000 tonnes of soy meal and 400,000 tonnes of soy oil. The White House denied the administration had caved in to congressional pressure. "This was done solely on the basis of national security and foreign policy grounds," National Security Council spokesman David Leavy said.

Sanctions Change Seen as U.S. Gesture to Iran

WASHINGTON,(Reuters) - To hear Undersecretary of State Stuart Eizenstat tell it, the change in U.S. sanctions policy announced this week is not meant to send a signal to long-time adversaries Iran, Libya and Sudan. But many U.S. officials and independent analysts say that is exactly what it is -- a concrete manifestation that America's hostile approach is dissipating in response to changing international circumstances, especially in Iran. "It's a step in the direction of normalisation with Libya and Iran and hopefully with Sudan," said Judith Kipper, a Middle East expert with the Brookings Institution. It is the kind of concrete move that she and other analysts say will have an impact, particularly in Tehran, where gestures and accommodations by Washington are important. "It is a very important step and long overdue," Kipper told Reuters. As announced on Wednesday, the United States is easing its policy to permit food and medicine sales to Iran, Libya and Sudan so these items are not used as a foreign policy "tool." Practically speaking, experts say in the short term it will apply almost exclusively to Iran. Tehran and Washington, after two decades of hostility, have been inching toward improved ties since new moderate President Mohammed Khatami came to office in 1997. Iran's economy is in trouble and some analysts say Khatami, in a power struggle with hardliners, needs to make good on campaign promises to improve the life of his people. Sudan, in the midst of civil war, does not have much money to buy American goods. Plus, the United States fanned enmity against Americans by bombing a pharmaceutical factory near Khartoum that allegedly was linked to a deadly attack last August on two U.S. embassies. Libya is not seen as much of a U.S. commodities market. The sanctions change -- long sought by economically ailing American farmers and their advocates in Congress -- would permit case-by-case consideration of food and medicine sales rather than banning them outright. This major shift follows a period in which U.S. sanctions policy had been called increasingly into question. Congress and the administration are negotiating comprehensive sanctions reform legislation that would go far beyond the narrow issues of food and medicine. But this week's decision is a big win for farmers and agribusinesses that could reap millions of dollars in new sales. The decision also was a victory for American foreign policy pragmatists who argue the United States must begin to forge new ties with Tehran and Tripoli, major countries in their regions. They say an inflexible sanctions policy is self-defeating. Until recently, some U.S. officials were insisting the United States was unlikely to approve the one pending food sale to Iran -- a $500 million deal proffered by Niki Trading Co. -- because Tehran had failed to make sufficient changes in its policies regarding terrorism. Eizenstat acknowledged the administration sees little change in that country's support of terrorism. "What has changed is our calculation of the impact of sanctions on our policy...Money spent on agricultural products would not be spent for other less desirable uses" such as weapons of mass destruction and terrorism, he said. "We apply sanctions to influence the behaviour of a regime not to deny people their basic human needs," he added. To Congressman Ben Gilman, a New York Republican and chairman of the House International Relations Committee, the decision was a "mistaken attempt to gain favour with regimes that do not deserve it." He said the administration "is lurching from one concession to another while Iran continues to pursue policies that undermine our national security interests." Some critics are sceptical of Eizenstat's pledge the U.S. government would not underwrite food and medicine sales to the three countries. They worry some dual use items, like chemicals in medicine, might be diverted to Iran's chemical or biological weapons programmes. Iran, Libya and Sudan are among seven countries on the U.S. list of states sponsoring terrorism. The United States and Iran have not had formal diplomatic ties since the 1979 Iranian revolution when fundamentalist Islamic students seized the U.S. Embassy in Tehran and held 52 Americans hostages for 444 days. Bilateral trade between the United States and Iran has been banned since 1995, when Clinton tightened existing sanctions to protest against Tehran's support of international terrorism. U.S. economic sanctions on Libya were imposed in 1986 after terrorist attacks against the Rome and Vienna airports. Tensions eased recently when Libya gave prosecutors two suspects in the bombing of Pan Am Flight 103, which killed 270 people in 1988. While Washington backed an end to multilateral sanctions, it retained its own sanctions on Tripoli.

Khatami Celebrates Iran's Democratic Experiment

TEHRAN,(Reuters) - Iran's President Mohammad Khatami inaugurated Tehran's first elected local council on Thursday, fulfilling a major campaign promise and completing a grassroots democratic experiment first proposed 20 years ago. The 15 members of the Tehran council, predominantly reformers and Khatami loyalists, took the oath of office in a small wood-panelled hall next to the main city office building. Similar ceremonies were scheduled across Iran in thousands of cities, towns and villages after polls in February designed to help extinguish a legacy of 2,500 years of centralised rule and expand popular participation in government. Election officials say about 280,000 candidates competed for 130,000 council seats, in races first outlined in the 1979 constitution but never before implemented. In addition, 60,000 people were elected as reservists. "We are witnessing one of the most evident manifestations of people's control over their own destiny," Khatami told the council members and a small assembly of ministers, leading MPs and senior clerics. "The people have taken a decisive step towards freedom and national pride." But the festive atmosphere was coloured by news reports that Tehran's suspended mayor, a key ally in Khatami's election and subsequent reform efforts, has been ordered to begin a two-year jail term on charges of graft. Khatami, a Shi'ite Moslem cleric, was elected in 1997 on a populist platform of expanded social and political liberty within Iran's Islamic system. He used Thursday's swearing-in to push back existing barriers to freedom and to challenge what he said was an Iranian tradition of unity based on authoritarian rule. "Lets recognise that we have an historic disease, that we have been subjected to this type of unity. The revolution freed people from the chains of this unity but the after effects of the disease still linger on," Khatami said. In a direct challenge to the conservative establishment that has put up obstacles to his reform programme, Khatami said his own landslide over a hardline rival and the subsequent victory of fellow reformers in the council polls were true expressions of popular will. His reforms, he promised, would prevail. "This government also emanates from the popular vote," he said. "In the last presidential election each side said what it really meant. The peoples vote was not accidental." The polls in Tehran, Iran's most politicised city, were marred by a row over the qualifications of five reformist candidates, all of whom went on to win seats. Conservatives sought to bar the candidates from running, and then attempted to ban them from the councils after the results were in. But Khatami and his interior minister, in charge of such elections, side-stepped the challenge and all five were present on Thursday to take their oaths of office. A letter read out from supreme leader Ayatollah Ali Khamenei apparently signalled final approval of the results. Among the first duties of the council is the appointment of mayors, a process in Tehran that takes on special importance with the arrest order for Gholamhossein Karbaschi, the capital's mayor convicted of graft in a trial his supporters say was politically motivated. The official IRNA news agency said Karbaschi has been given one week to report to Evin prison to begin his sentence. His imprisonment will be a blow to Khatami, who has backed Karbaschi against the charges raised by the conservative-led judiciary. Moderates say the case was an attempt to undermine Khatami's liberal political and social reforms. The judiciary has repeatedly denied the charge.

Iranians Blame 'Secret' Group

DUBAI, United Arab Emirates (AP) -- An assassination attempt on a senior Iranian judge was the work of secretive group that tries to kill people it believes are preventing the coming of a Shiite Muslim messiah, an Iranian general said Saturday. Brig. Gen. Mohammad Ali Jaafari, a senior military commander, said a group called Mahdaviyat was behind the assassination attempt on Ali Razini, a senior hard-line judge, the Iranian news agency reported. Some of the group's 30 members had military training, Jaafari was quoted as saying. Razini was wounded in the leg, chest and abdomen in January when a man on a motorcycle fastened explosives to Razini's car, according to the agency's report, monitored in Dubai. Several arrests have been made, the agency quoted Jaafari as saying at a news conference in Tehran, the Iranian capital. Jaafari said that Mahdaviyat believed in hastening the reappearance of the Mahdi, a messiah that Shiite Muslims believe will appear briefly to restore righteousness before the end of the world.

Tehran Reformers Barred after Council Vote Win

TEHRAN, (Reuters) - Five leading reformers elected in February to seats on Tehran's new city council have been disqualified by a conservative-dominated body, the official IRNA news agency said on Tuesday. Their rejection is likely to provoke a new round of tension between the supervision body and President Mohammad Khatami's Interior Ministry, which has already endorsed the results of the vote for Tehran, where reformers won all but two of 15 seats. Elected council members across Iran are set to hold their first meetings on Thursday. Abdollah Nouri, a close Khatami ally, is among those rejected. The others are reformist newspaper directors Saeed Hajarian and Mohammad Atrianfar and pro-Khatami political activists Ebrahim Asgharzadeh and Ahmad Hakimipour. IRNA said the five had been disqualified on the grounds that they had never been approved to run. They were replaced by two reformers, two conservatives and one independent -- all runners-up behind the disqualified five. The supervision body, dominated by three hardline members of parliament, tried to bar several pro-Khatami candidates in advance of the Tehran election, but was forced to budge after last minute intervention by the president. Soon after the results were out, the body again threatened to disqualify them, although Interior Ministry officials had already said the supervision body had no mandate to disqualify candidates after the elections. In an implicit approval of the electoral results, the president attended an informal meeting of the Tehran council last week. The elections were Iran's first local polls and a major step by Khatami to build a democratic power base against conservative opponents.

Iran Hard-Liners Take on Moderate

By Anwar Faruqi Associated Press Writer DUBAI, United Arab Emirates (AP) -- Iran's parliament has begun impeachment proceedings against the country's culture minister, a promoter of greater media freedom. In trying to impeach Ataollah Mohajerani, hard-liners claim his ministry has granted excessive media freedom since August 1997, when moderate Mohammad Khatami became president. The ministry allowed newspapers to ``insult Islamic sanctities'' and ``challenge religion,'' the hard-liners say. The parliament began the impeachment proceedings against Mohajerani on Wednesday. More than half the lawmakers must vote to allow the impeachment, a likely possibility given that hard-liners have a slight majority. Mohajerani was scheduled to defend himself in parliament next Wednesday but has already spoken out against his detractors. ``I consider the motion to impeach me to be a totally political move,'' Mohajerani said in an interview published Thursday in the English-language Iran News daily. ``Experience has shown that such moves will backfire and only add to the popularity of the person put under pressure.'' Khatami has been quick to defend his minister. In a speech Wednesday, the president said Mohajerani's services to the ministry had been ``valuable and extensive.'' The impeachment is the latest power struggle between the president and Iran's hard-liners. The conservative clerical establishment wants to rule with the same iron hand that has gripped Iran since the 1979 Islamic Revolution ousted the U.S.-backed shah and installed the clergy's rule. Khatami has sought to change that by allowing a relatively free press, which has been overwhelmingly against hard-liners. The media and the public have begun to question the clergy's claim to have the divine right to rule. The hugely popular Khatami also has relaxed restrictions imposed by Islamic laws that dictate everything from how women should dress in public to what kind of music is permissible.

Iran wants more than ``diplomatic smile'' from U.S.

TEHRAN,(Reuters) - Iranian Foreign Minister Kamal Kharrazi urged the United States to change its behaviour towards the Islamic republic, saying recent conciliatory remarks by President Bill Clinton were no more than a "diplomatic smile." "If there are no changes in behaviour, such (conciliatory) remarks can only be interpreted as a diplomatic smile. We have seen many such smiles in our diplomatic life. The standard for us is a change of policies and behaviour," Kharrazi said in an interview with Iran's foreign television, quoted by newspapers on Thursday. In the latest sign the United States was moving towards ending two decades of animosity with the Islamic republic, Clinton said last week that Iran had been subject to "quite a lot of abuse from various Western countries" in the past, and should be told it had a right to be angry. His remarks sparked a heated debate in Iran, with moderates hailing them as a positive step toward better ties, but hardliners rejecting them as a ruse to sow division among Iran's political factions. Kharrazi conditionally welcomed the comments: "Admission of guilt is a good thing. It takes courage. But it is important to be sincere, and to show it is sincere, it has to be followed by appropriate behaviour." "We have to wait and see what changes America wants to make in its behaviour, and there is a whole lot they can do." Iran-U.S. relations, broken after Iran's 1979 Islamic revolution, have somewhat thawed under President Mohammad Khatami. Washington has repeatedly called for direct negotiations with Tehran to address what it calls its three concerns: Iran's alleged support for international terrorism and search for weapons of mass destruction as well as its opposition to the Middle East peace process. Iran refuses to talk to the Americans, saying they must first cease hostilities. Kharrazi insisted that Iran was a "victim" but not perpetrator of terrorism. "One of the charges America has levelled against us is support of terrorism. But Iran is itself a victim of terrorism. And our government has enough courage that when some of its agents participate in acts of terror, it exposes and removes them from its body like a cancerous tumour," he said. The minister was referring to the recent admission by Iran's intelligence service that some of its own agents were involved in a string of dissidents' murders last year.

Iran shuts mobiles of 18,000 officials

TEHRAN, (Reuters) - Cash-starved Iran is about to shut off the mobile phones of up to 18,000 state officials to save money, Iranian television reported on Wednesday. It said the measure, stipulated in the country's state budget for the Iranian year which began on March 21, covered 95 percent of mobile phones supplied to senior state officials. An official of the state telecommunications company told the television the move would save the government up to 1.4 billion rials ($480,000) per month. The telephones would be sold to the public as required by the budget item, he said. The Iranian government said last year it faced a deficit of six trillion rials because of a slump in oil prices. Iran, the world's third largest oil exporter, depends on petrodollars for 80 percent of its hard currency earnings.

U.S. School Shooting on Iran TV

TEHRAN (Reuters) - Iran's state television allotted 10 minutes to the "tragic" U.S. school shooting at the top of its main news program Wednesday, blaming it on the widespread depiction of violence in American movies. "A shocking and deadly tragedy in American society," said a reporter, referring to the killing of at least 15 people at a Colorado high school Tuesday. "Our fellow citizens keep calling to express their repugnance over this tragedy and ask for more details." The television ran a special program to denounce the abundant use of violence in U.S. films, which it blamed for the "wave of crime" in Western societies. Iran's government is sharply critical of the sexual and violent overtones in Western entertainment, seeing them as anathema to Islamic values which it seeks to promote. But despite strict official bans, Western music and films are popular in Iran and widely available on the black market.

Iran Conservatives Want Liberal Minister Impeached

TEHRAN,(Reuters) - A group of conservative Iranian deputies called on Wednesday for the impeachment of Iran's moderate culture minster, in the latest assault on President Mohammad Khatami's reforms. The 31 deputies presented a petition to the 270-seat parliament, summoning Culture and Islamic Guidance Minister Ataollah Mohajerani to be grilled on his moderate policies, Iran's official news agency IRNA reported. Mohajerani, a liberal thinker and close Khatami ally, will have to appear within 10 days in the conservative-dominated parliament to answer deputies' questions. The process could lead to his removal through a vote of no confidence. The petition accused Mohajerani of failing to uphold Islamic and revolutionary values by following a liberal policy towards the press, book publishing and the arts. It also suggested he might have embezzled public funds. Mohajerani has borne the brunt of the conservatives' attacks since the parliament ousted liberal former Interior Minister Abdollah Nouri in June. The culture minister recently came under fire for granting awards to a number of secular-minded writers in an effort to bring to end a bitter cultural war between Islamists and liberals since the 1979 Islamic revolution. He has also been heavily criticised for allowing the reactivation of a banned union of prominent secular writers. The parliament has been a main stumbling block to Khatami's political and cultural reform policies. It is one of the major seats of power still held by the president's conservative opponents since his landslide election in 1997.