TAKING ON THE WORLD

By Bruce W. Nelan

Turkey's Islamist Prime Minister Necmettin Erbakan knew he would pique the U.S. when for his first official trip abroad he chose Iran. Acting Secretary of State Peter Tarnoff telephoned Ankara to warn him that he was defying Washington's campaign to isolate Tehran for its sponsorship of international terrorism. Just a week before, President Clinton had signed with great fanfare a new sanctions bill to curb major investments in Iran and its fellow rogue state Libya. But Erbakan went to Tehran, and last week he upped the affront by endorsing a contract to buy $23 billion worth of Iranian gas.

The question now is whether Turkey will become the first offender to be penalized under the brand-new Iran and Libya Sanctions Act of 1996. The legislation, Clinton insists, will hit hard at terrorism, "the enemy of our generation." In fact, the law inflicts its punishment on America's allies, doing virtually nothing to prevent states from supporting terrorists but imposing sanctions against companies in Turkey as well as Italy, France, Germany or any other nation that makes a major investment in the Iranian or Libyan petroleum business.

Turkish officials say they are not investing in Iran but simply buying its gas, just as Japan purchases Iranian oil. The Turks are probably right, revealing how little practical impact on its prime targets the controversial new law is likely to have. Even so, Iran counterattacked last week, filing a complaint against the sanctions at an international tribunal in the Hague.

European states also oppose the law and threaten to retaliate in kind. While no one disputes the need to fight terrorism, this latest piece of lex Americana, a sample of Washington's father-knows-best attitude, outrages allies who do dispute U.S. methods. Just last March, Clinton approved a similar bill threatening foreign companies active in Cuba. What this is really about, argues French Foreign Ministry spokesman Yves Doutriaux, "is one nation telling the rest on earth what they can and can't do. Is that right?" The European Union, Canada and Mexico definitely do not think so, and their officials are looking at ways to hit back at the U.S.

Why all the uproar? Isn't it business as usual for countries to enforce their views on the world, and doesn't the U.S. regularly throw its superpower weight around? Yes, Washington often berates other countries, promises benefits or denies privileges to get its way. But the Helms-Burton law, which permits Cuban Americans to go to court in the U.S. to sue foreign companies "trafficking" in their property seized by the Castro regime, and Iran-Libya sanctions, which bar U.S. financing and export rights to foreign firms making new investments in Libyan or Iranian oil and gas, are something different. They threaten to punish private individuals outside the U.S. who do not obey laws passed by Congress.

Using laws rather than friendly persuasion to alter Europe's approach, says Sir Leon Brittan, trade commissioner at the E.U. in Brussels, "establishes the unwelcome principle that one country can dictate the foreign policy of others." U.S. allies believe that neither of the new laws is likely to inflict any significant pain on Cuba, Iran or Libya, much less improve their objectionable behavior. The Turkish gas deal is a case in point. "These laws have nothing to do with fighting terrorism," says French Foreign Minister Herve de Charette. Of course, the Europeans do have an economic interest in retaining links to the outcasts: they import nearly 20% of their oil from Iran and Libya.

Europeans, Canadians and Mexicans blame a lot of the new posture on American election-year politicking. The President opposed both bills when they first popped up in Congress on the grounds that they would cause exactly the difficulties in foreign affairs they are now causing. Helms-Burton began to sound better only in February, after the Cuban air force shot down two private planes flown by an exile group based in Miami and Clinton came under heavy domestic pressure to respond militarily. He apparently decided that signing a flawed sanctions bill was better than doing nothing--and definitely better than giving Bob Dole a free hot-button issue.

The second sanctions bill also looked unpalatable when Republican Senator Alfonse d'Amato proposed it last year. The bill languished until the bomb attacks on U.S. forces in Saudi Arabia and the suspicious explosion of TWA Flight 800 last month. After that a version affecting only new investment of more than $40 million in petroleum development sailed through Congress unopposed. Senator Orrin Hatch reflects the mood of many Republicans when he says, "I don't find it acceptable that our key allies don't agree with us about dealing with terrorism. As long as our allies invest in terrorist states, that's an act of war against us." It was no surprise that Clinton embraced the measure to put meat on his "antiterrorism" pledges.

For America's friends a far more serious principle--their sovereignty--is involved, and they are not going to roll over. In Washington the European Union delivered a formal protest to the State Department. In Brussels the European Commission proposed making it illegal for companies to comply with Helms-Burton and easing the way for firms to countersue in European courts. The commission is preparing a blacklist of U.S. companies and citizens that file suits against European firms, and threatens to refuse them visas. The E.U. insists that both U.S. actions are against international law and is challenging them as a violation of the new U.S.-supported World Trade Organization rules.

The allies are determined to act if necessary. But they don't want to leap into battle if the threat is going to blow away after the November elections. European officials have taken in the fact that Clinton has suspended much of the effect of Helms-Burton until next year and promises to waive or apply the D'Amato provisions on a careful, case-by-case basis. "Clinton wants to show he is doing something concrete," says a French diplomat. "We are hearing that things may change by the end of November." Even so, declares French spokesman Doutriaux, "what we want is the abandonment of these unacceptable laws. We will not be muscled on this issue."

In fact, America is in a muscle-flexing mood, and similar issues are erupting elsewhere. Two weeks ago, Singapore Airlines leveled charges of illegal "extraterritoriality" against an American law that prohibits gambling on any airline's flights to or from the U.S. Several foreign carriers, including Singapore, say the U.S. ban will cost them millions a year.

In another attempt to impose American standards, Commerce Secretary Mickey Kantor has decided that because the U.S. punishes its nationals for paying bribes to obtain contracts, American firms unfairly lose billions in global business deals. In Europe such bribes are not only legal but usually tax deductible. So Kantor is pressing other countries hard to adopt U.S. corrupt-practices law. He is warning that if foreign competitors do not, he may go to Congress for stronger laws, and sanctions might be in the offing.

Why does Washington believe it can set legal and moral standards for the world? In part because Americans have always felt themselves uniquely the standard-bearers of democracy and Western ideals and in part because they like the role of sole remaining superpower. "We have historically thought of American values as being universal," says Harvard University political scientist Samuel Huntington, "and ones we have the responsibility and obligation to induce other societies to accept." Or as Kantor puts it, "The U.S., as the most powerful economic and military entity on earth, needs to provide leadership. I would hope and expect our partners to review their policies and go along."

That is well and good as long as it avoids blunt coercion: If you won't follow us, we'll punish you. A heavy hand can galvanize reluctant countries to adopt tougher measures, but when the efficacy and price of the policy are so suspect, it may also produce deep resentment from vitally important friends. At a recent conference in Europe two nato ambassadors smarting from the pressure accused the U.S. of "political gangsterism." What American officials call leadership, many of America's friends around the world call bullying.

--Reported by Jay Branegan/Brussels, Bruce Crumley/Paris and Lewis M. Simons/Washington

With reporting by JAY BRANEGAN/BRUSSELS, BRUCE CRUMLEY/PARIS AND LEWIS M. SIMONS/WASHINGTON