One aspect of the ongoing crisis around the alleged attempts by the Iranian government to develop nuclear weapons that usually goes unexamined is the attitude of Arab states, especially those in Iran’s immediate neighborhood. (Well, it’s true that the vagaries of the Iraq-Iran relationship have certainly received their fair share of attention – but let’s treat that as a special case.) Sami Al Faraj, President of the Kuwait Centre for Strategic Studies (all I could find on the Net was this), gives an enlightening interview to Der Tagesspiegel about the Gulf state perspective on Iran (specifically, that of the Gulf Cooperation Council, which includes Saudi Arabia) in the article “Against Iran Much Harder Economic Sanctions Are Necessary”.

To be sure, the Gulf states also recoil in horror at the prospect of Iran acquiring nuclear weapons, al Faraj makes it clear. There is a fundamental Sunni-vs.-Shia divide operating there that does not want to see Iran able to expand its sphere of inluence anymore. It just seems like no one is really doing anything about stopping them. Not the Europeans: they don’t understand how Iran is simply talking to draw things out and gain more time; and not the UN, that up to now has imposed meaningless sanctions (in his view) and otherwise just talks on the issue to hear itself talk. Anyway, whenever any tougher sanctions seem to be in the offing, it is Russia and China that block them. It’s time for the Gulf states to act together in a more unified way and approach new Russian President Dimitri Medvedev to make it clear that future sales of nuclear technology to the Arab Middle East (including to Egypt or Jordan, since its the Arab oil producers who will ultimately be paying the bills for that as well) will depend on Russian cooperation versus Iran. Dealings with the Chinese might be more difficult, considering their culture’s preoccuptation with not “losing face,” but the Arabs operate themselves within a “bazaar culture” and should be able to bring them around.

Gotta Cover Our Arab Tracks . . .

Those who do seem willing to do something about Iran – at least occasionally – are of course the US and Israel, from whom periodic warnings arise about a possible military strike against Iran. Al Faraj advances the quite striking view that the Gulf states would be willing to accept such a military strike, if there turns out to be no other way to dissuade the Iranians from their (alleged) course towards nuclear weapons. Naturally, that would unlease a grave crisis, and the GCC nations would unfortunately have front-row seats from their location right across the Persian Gulf (which they refer to as the “Arabian Gulf,” BTW). But if that has to happen, fine: in his view things are already too close to getting out of hand witht he Iranians. Now get this: If there has to be such a military strike, Al Faraj argues that the Gulf states would prefer that it be carried out by Israel. Why? Because then Teheran will assume that the GCC was in no way involved, so that maybe Iran would think twice before doing any retaliation against them, and maybe also Iran-GCC relations would have that much better a chance of being resuscitates when the dust finally cleared.

That’s certainly an interesting perspective. Frankly, Al Faraj’s anti-Teheran rhetoric in this interview is what is striking. (One can assume he is a Kuwaiti.) Not only is his view of the sanctions that should be imposed on Iran somewhat extreme – “There should be absolutely no more trade with Iran. No technology transfer, no financial transactions, no trade, nichts” – but he also expresses alarm over the trade and financial links already existing across the Persian/Arabian Gulf: “We Gulf states don’t need Iran for our economy. We only manage their money, we don’t need it. We have even created thousands of Jobs for the Iranians!” In normal times, it’s that sort of economic intercourse between countries that generally acts to make all parties well off – it’s called the “gains of trade.” Sami Al Faraj seems unable to imagine a world, in the past or in the future, where the countries around the Persian/Arabian Gulf can peacefully work together towards the prosperity of all.

                          

“Let’s not go backward, but let’s capitalize on 85% of what was accomplished,” was the appeal from WTO Director Pascal Lamy. But one problem is that there is no further time-period in prospect in which negotiations could be resumed that could reasonably stand a chance of succeeding. This is partly because Lamy’s own term at the head of the WTO is set to expire next year, and meanwhile the current presidential campaign in the US and similar elections scheduled within the EU in 2009 (including federal elections in Germany) can be counted on to choke off any remaining political will in those countries to make the concessions necessary to make the Doha round succeed.

On the other hand, as Le Bussy points out, it’s also not as if the WTO can simply set up another meeting in the near future to call all the trade representatives back to try again, for the nine-days-straight negotiations leading up to the announcement of failure on 29 July produced some heavy bad feelings. The US and India are angry at each other because of the safeguards the latter wanted to keep to allow developing nations to re-erect tariff barriers in agricultural products. (From this account in the NYT, it seems that China joined India on that issue at the eleventh hour and so definitively killed the talks. Maybe George W. Bush can discuss this when he goes to Peking for the Olympic opening ceremony.) But the Chinese were already angry at the Americans, joined in that by the Africans, because of the USA’s refusal to discuss cotton tariffs. And the old Banana War (EU edition) came back from the past to mess up the negotiations: the European Union has run afoul of international trade rules in the past over its inclination to favor banana imports from Latin American countries over others, and this apparently is still unresolved. But then the EU Commissioner for Trade, the UK’s Peter Mandelson, had less-than-complete backing from his political masters, following recent attacks on his negotiating stance from the French government (current EU president).

Regression Is All That’s Left?

Of course, international trade will simply go on, and the WTO will remain the one recognized world forum for resolving trade disputes in anything like a proper judicial manner. But this seeming crashing-out of the Doha round also means that there remain too many tariffs and trade restrictions in place throughout the world. Pure economic trade theory preaches getting rid of your national trade barriers entirely, unilaterally, to gain for country the maximum benefits from trade (namely access to a wider range of goods that your country could not produce itself or could never produce so cheaply). Of course in the real world that means unemployment and bankruptcies and so is a non-starter, so that traditional trade-regime negotiations have involved quid pro quo trade barrier dismantlement between states.

This is done most effectively if it involves the whole world, but now that that approach has gone nowhere the only alternative would seem to be regressing to the way it was generally done prior to World War II: bilateral agreements. Brazil has already announced that it will be seeking those with the world’s major trading blocs. But Brazil can do that: as this recent NYT points out, that country is itself becoming an economic giant. As always, it’s the small and weak among the developing countries that suffer when a multilateral process like the Doha round collapses. In bilateral negotiations they will inevitably hold the weaker hand; and they cannot afford the sort of industry and price subsidies commonly employed in the US and the EU (for agriculture, in particular; but also found elsewhere) to manipulate trade flows their way.