The United States has provoked a new transatlantic rift by excluding Iraq war opponents including France, Germany and Russia from bidding on lucrative contracts to rebuild the country.  

Paris, Berlin and Moscow reacted angrily on Wednesday to the decision, which rattled efforts to rebuild ties damaged by the war, and the European Commission said it was investigating whether the US move complies with global trade rules.

Washington also faced the risk of a row with its neighbor Canada as well as China, which were also excluded from bidding for 26 contracts worth US$18.6 billion.

While the door was shut on old allies such as France and Germany, more than 60 countries were deemed eligible, including Japan, Britain, Australia, Poland, Italy, Spain, Turkey, Saudi Arabia, Jordan, Egypt, South Korea, the Philippines and Romania.

UN Secretary-General Kofi Annan suggested the US move was divisive and unhelpful in stabilizing post-war Iraq.

"The stability of Iraq is in everyone's interest, and we should pool our efforts and avoid steps and decisions that are divisive," he told reporters.

Russian Foreign Minister Igor Ivanov said rebuilding Iraq was "best served by uniting the efforts of the international community, and not splitting it."

The White House stood by the decision announced on Tuesday.

It said it was "appropriate and reasonable" to limit those who opposed the war to bidding for sub-contracts while countries that backed the war had a chance to reap the benefits.

"The United States and coalition countries, as well as others that are contributing forces to the efforts there...are the ones that have been helping and sacrificing to build a free and prosperous nation for the Iraqi people," said White House spokesman Scott McClellan.

US President Bush appeared in no mood to forgive allies who opposed the war. McClellan noted Bush was "well aware of the decision, fully supportive of the decision."

US could open contracts to others

McClellan said the United States could be willing to open the contracts to countries that did not join the war if they assisted "coalition efforts" in other ways.

"If there are additional countries that want to participate in our efforts ... the circumstances can change," he said.

He also said the United States believed its view on prime contracts were consistent with the World Trade Organization.

The Pentagon, having already put off issuing the US$18.6 billion in US tenders last week, announced a further temporary delay on Wednesday that officials said would only be a few days.

Officials said they still hoped to meet a target of the first week in February set by the Iraq Program Management Office as the award date for work.

The United States cited security reasons for limiting the contracts covering electricity, communications, public buildings, transport, public works, security and justice.

Its move poses a major threat to efforts to rebuild trust between Washington and its European partners that had gradually been bearing fruit in recent months.

France, which like Russia was owed billions of dollars from contracts during Saddam Hussein 's rule, declined direct comment. But a Foreign Ministry spokesman said Paris would study whether the US decision was legal.

Germany called the US move unacceptable. "And it wouldn't be in line with the spirit of looking to the future together and not into the past," a spokesman for German Chancellor Gerhard Schroeder said in Berlin.

Canada's incoming prime minister, Paul Martin, said the US move was "difficult to fathom."

In Geneva, headquarters of the WTO, trade experts said they doubted that any case brought to the 146-member body by the EU or any other country excluded by the United States from bidding for contracts in Iraq would get very far.

"The US would certainly use the security argument here as it has done in presenting the decision. And that effectively stops any action in its tracks," said a specialist on WTO rules.

In the General Agreement on Tariffs and Trade, the WTO's basic rulebook, Articles 20 and 21 let a country break the rules if it argues its security or sanitary interests are at stake. Although that can be challenged, it never has been.

(China Daily December 11, 2003)