Global Policy Forum

By Alexander G. Higgins

Key European Union foreign ministers sought anew Wednesday to persuade Iran to curb its nuclear ambitions, as Iran's president said his country was prepared to compromise. As Iranian negotiators sat down with the foreign ministers from France, Britain and Germany and EU foreign policy chief Javier Solana, Iran's President Mohammad Khatami signaled there was room to maneuver regarding its threat to resume uranium enrichment. "We are ready to compromise, and we hope Europe makes its decision independently and not based on U.S. pressures," Khatami told reporters in Tehran. Resuming activity in Iran's uranium conversion facility "does not mean resumption of enrichment," he said.

Following months of fruitless talks, the EU has warned it is moving toward the U.S. position that Tehran should be hauled before the U.N. Security Council for suspect nuclear activities in violation of the Nuclear Nonproliferation Treaty. To avert a showdown that could lead to U.N. sanctions, Tehran agreed to meet the three European ministers and Solana for last-ditch talks in Geneva. The EU push followed Iran's announcement last week that it was considering restarting its uranium-enrichment program, which Iran insists is only aimed at generating electricity as permitted under the nonproliferation treaty. The EU and the United States fear the program is being used to develop nuclear weapons.

It is unclear if a tougher European strategy of economic sanctions would work. Any strong sanctions against Tehran would likely cause oil prices, already around US$50 (euro40) a barrel, to rise. "The most severe sanctions that would affect Iran would be sanctions against their oil industry," said Gary Sick, a researcher at Columbia University. "That would mean basically taking 3 million barrels a day off the market which would probably cause the price to spike." Sick said it was far from certain that the Security Council would impose sanctions, with veto-wielding China and Russia among countries that have expressed opposition.

The United States has been demanding since last year that Iran face sanctions for its nuclear program - but up to now the EU has offered incentives instead. If Iran agrees to keep its program within bounds, the EU says it can expect economic and technical cooperation as well as support for joining the World Trade Organization. The 25-member EU has offered a free trade pact and more economic aid, and European officials have said they would improve the offer. It was the talks with the Europeans that persuaded Iran to suspend its uranium enrichment program in November. Iran has long had strong trade links with Europe, and there have been calls on the Europeans to use this as leverage.

But Tehran has warned that if the talks fail, it would cost the Europeans more than it would Iran. "The case will turn into a crisis they cannot manage any longer and the Islamic Republic will act unilaterally," said Iranian Foreign Ministry spokesman Hamid Reza Asefi, but he didn't elaborate. British Foreign Secretary Jack Straw said he hoped the talks would succeed, but conceded, "the Iranians are tough to negotiate with."

The Iranians hosted the meeting in a Geneva compound that serves as their ambassador's residence. Joining Straw on one side of a long wooden table were French Foreign Minister Michel Barnier and German Foreign Minister Joschka Fischer. Heading the Iranian delegation is the country's top nuclear negotiator, Hasan Rowhani, who arrived Tuesday to prepare for the talks. Reflecting a growing pessimism on the issue, the London-based think tank International Institute of Strategic Studies said Tuesday that the diplomatic talks appear doomed to failure.

So far, U.S. President George W. Bush has gone along with the European efforts for dialogue with Tehran. In March, the Bush administration agreed to drop long-standing U.S. opposition to Iranian membership in the WTO. A WTO meeting coincidentally being held across Geneva later this week could give Iran the go-ahead to start its membership negotiations, trade officials said. But pressure has been building in the U.S. Congress for independent American action against Iran. A bill in the House of Representatives would tighten long-standing U.S. sanctions against Iran, bar U.S. companies' subsidiaries from doing business in Iran and cut foreign aid to countries that have businesses investing there. A more limited measure is pending in the Senate.