EU warns Iran over
boycott of Danish goods
Iran should "think twice"
about imposing a boycott on Danish goods or canceling contracts with European
countries, EU trade chief Peter Mandelson warned Tuesday after the EU said the
move would further chill already icy relations.
Iranian officials announced a suspension of all
trade and economic ties with Denmark Tuesday to protest provocative caricatures
of the Prophet Muhammad that first appeared in a Danish newspaper and have been
republished in other newspapers around Europe.
"I would make it clear to
the government of Iran that any boycott of Danish goods is a boycott of the
European Union as a whole," Mandelson told The Associated Press during a
retail conference in Prague. "I hope that the government
(of Iran) will think twice."
The dispute over the cartoons adds to already
tense ties amid growing concerns in the EU and in the United States that Iran is
aiming to develop nuclear weapons.
A European Union official, speaking on
condition of anonymity due to the sensitivity of the issue, said Brussels had
not been able to confirm the Iranian action and was awaiting word from Danish
authorities and companies, which would be notified first of Iran's moves.
The European Union is Iran's main trade
partner. The 25 EU members had combined exports to Iran worth euro11.8 billion
(US$14.1 billion) in 2004, while their combined imports were valued at euro9.2
billion (US$11 billion), according to the EU statistics agency Eurostat.
Only euro171 million (US$204.8 million) of that
trade was with Denmark. The bulk of Danish exports are machinery and
pharmaceutical and medical products.
Saudi Arabian businesses began a boycott of
Danish goods on January 26, when supermarkets put up signs urging shoppers to
stop buying Danish goods or removed products from the shelves.
"There are Danish
companies that are affected by the boycott but it is too early to say whether it
will have consequences for (the) Danish economy, which is sound," Danish
Prime Minister Anders Fogh Rasmussen said at a news conference on Tuesday.
Mandelson said a boycott would do little to
solve the crisis around the cartoons, one of which depicted the prophet wearing
a turban shaped as a bomb with a burning fuse.
"I don't believe that a
boycott is a legitimate response to public concern," said Mandelson.
"I also think that a boycott hurts both sides and damages
Iran's interests as much as it would European interests."
He added that the EU was working "to resolve
this issue peacefully, quickly and with the minimum disruption to trade."
EU spokesman Johannes Laitenberger warned that
even though Iran is not a member of the World Trade Organization, the EU would
take measures against Tehran if it sought to boycott European goods.
It was unclear what action the European
Commission, which is responsible for the EU's trade policy, could take in
response to a boycott since it has already suspended EU-Iran free trade
negotiations in wake of concerns over Iran's nuclear program. The EU could apply
its own economic sanctions, however, officials said such a move was not being
considered at this time.
"We can only take action
if it is state-sponsored. Chambers of commerce are not governments," said
Mandelson's spokesman Peter Power.
The EU has made similar threats of trade and
political action against Saudi Arabia and other Middle Eastern governments
either at the WTO or elsewhere, if they are found to be behind boycotts of
Danish goods over the cartoon controversy.
WTO chief Pascal Lamy said in Geneva that no
member state has broken its commitments under global trade rules regarding the
publishing of newspaper cartoons of the Prophet Muhammad.
Iranian Commerce Minister Masoud Mirkazemi told
state-run radio that beginning Tuesday all contracts and negotiations with
Danish companies would be suspended. He had said a day earlier that Iran would
not allow any new permits for Danish goods, but his announcement Tuesday
appeared to go a step further, suspending all existing contracts.
Iran's Health Ministry said Monday it was
canceling previously approved business deals for medical equipment with Danish
companies.
Mirkazemi said Iran would not be put off.
"The EU can respond any way it wants," the commerce
minister said.
Before the falling out over Iran's nuclear
program _ which Tehran says is only for the production of energy _ the EU and
Iran were negotiating a free trade pact as part of forging closer political and
economic ties. Those talks were frozen last year.
The EU and Washington pushed through a
resolution last weekend at the U.N.'s nuclear monitoring agency in Vienna,
Austria, forwarding concerns over Iran's nuclear program to the U.N. Security
Council. The council has the power to impose economic and political sanctions.
2006-02-08
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