By Lewis Crofts - 11th December 2003
Brussels has lashed out at Washington plans to bar countries that opposed the war in Iraq from lucrative reconstruction contracts.
The European Commission on Thursday said it "deeply regrets" the "ill thought-out action" by the US government, and hinted that Europe would be ready to resort to World Trade Organisation action if Washington only handed out tenders to 'friends' of America.
The decision, the commission statement continued, "sends an unhelpful signal at a time whent he international community should be working to make Iraq an open, transparent, democratic and prosperous country."
"This is not the time to reopen old wounds. We don't need any new WTO disputes at this time."
Nevertheless the commission said it would "examine" the fine print of the US decision to exclude countries like France, Germany and Belgium from €15.2 million in contracts to see if it complieS with WTO rules.
“We are asking the US to provide us with information so we can see whether or not their commitments with regard to the WTO have been respected,” said an EU spokesman.
The Pentagon has insisted that the list of 26 contracts posted on its website – covering oil, communications, housing and power – are open to all comers and are not reserved for countries which backed the US-led war such as Spain, Poland and the UK.
The US may seek refuge in special WTO provisions which allow discrimination on government tendering if a country can prove it is on the basis of national security.
Canada, which has given €156m to the reconstruction of Iraq, joined other donors in saying it would be difficult to stump up more cash in the light of this decision.
Russia also signalled that it may not sign off the €6.5bn that Baghdad still owes Moscow.
A US spokesman indicated that the list was not designed to punish opponents to the war. Washington would like to see more countries join the coalition which would in effect expand the list of capitals eligible to bid for the contracts.
Have your say...
Please enter your comments below.