Courtesy Reuters

Germany's New Ostpolitik: Changing Iran

TRADING WITH THE ENEMY

German-American friendship has been a pillar of the Western alliance in the post--Cold War era, even when that alliance has been strained over issues ranging from Bosnia to trade liberalization. The U.S. and German governments have worked together on aid to Russia, NATO expansion, nuclear nonproliferation, and Middle East peace. German Chancellor Helmut Kohl and U.S. President Bill Clinton enjoy a natural rapport. But when it comes to dealing with Iran, Germany and America have consistently been at odds. Although the two governments have assured each other that their objectives in southwest Asia are the same--to keep Iran from developing nuclear weapons, supporting terrorism, and disrupting the Arab-Israeli peace process--they differ radically on which means to use. The United States has tried to isolate Iran diplomatically and strangle its economy. Germany--and Europe--favor engagement (what Bonn calls a "critical dialogue") built around a multibillion-dollar trade and investment relationship.

When President Clinton banned U.S. trade with, and investment in, the Islamic Republic in May, he was trying not only to punish the mullahs, but also to undercut the European policy, especially that of Germany. Only three months before, at a joint press conference at the White House, Chancellor Kohl had pointedly claimed that American oil companies did more business with Iran than German ones, and the charge of hypocrisy, leveled frequently by European officials, bothered the Clinton administration. (Until the Clinton embargo was announced, U.S. oil companies and other firms did do a substantial amount of business with Iran, as Kohl charged: in 1994, U.S. companies bought $4.3 billion worth of Iranian oil, all of it for sale in Europe since imports to the United States were banned, and sold the Iranians $300 million worth of other goods.) But even after Clinton's imposition of the embargo, Western Europe and Japan stood pat. "We do not believe that a trade embargo is the appropriate instrument for influencing opinion in Iran and bringing about changes there that are in

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