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CNN Live Saturday

Iraq and Russia to Ink Trade Pact

Aired August 17, 2002 - 18:23   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL LIN, CNN ANCHOR: Well, Russia and Iraq are close to signing a $40 billion economic pact. The deal could put Moscow at odds with the U.S., as it considers military options against Baghdad.
CNN White House correspondent, Suzanne Malveaux, joins us from Crawford, Texas with more on this. Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Carol.

Well, President Bush calls them the axis of evil - North Korea, Iraq and Iran - for allegedly sponsoring terrorism. But it's a distinction that is making little difference to America's allies.

(BEGIN VIDEO)

MALVEAUX (voice-over): Saddam Hussein met with his ministers to discuss military technology, as news broke of a possible new deal between Iraq and Russia - two countries who are preparing to sign a five-year economic cooperation plan worth $40 billion.

Iraq's ambassador to Russia tells CNN the agreement envisions developing new projects involving oil, electricity, irrigation and transportation.

But under United Nations resolutions, Iraq can only sell a limited amount of oil to buy food and medicine, until it proves it's no longer seeking weapons of mass destruction. Until sanctions are lifted, Russia's ability to develop Iraqi oil - while the White House downplayed any concern about the proposed deal, saying, we're confident that Russia understands its obligations under the United Nations Security Council resolutions, and that they will continue to abide by them.

The State Department wants Russia to clarify what the agreement means. But the announcement comes at a time when President Bush is pushing to win domestic and international support for isolating Iraq and ousting Saddam.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This man is thumbing his nose at the world.

MALVEAUX: But Mr. Bush is now facing public opposition from his own party, and former top military commanders, taking the administration on in the nation's newspapers.

From Bush Senior's former National Security Advisor, Brent Scowcroft, who built the international coalition for the Gulf War.

"An attack on Iraq at this time would seriously jeopardize, if not destroy, the global counter-terrorist campaign we have undertaken."

And from former NATO commander, Wesley Clark, who's also concerned.

"The longer the war goes on, the more we're going to need cooperation and support from other nations. Instead, we seem to be getting less as time goes on."

While countries like Jordan, Syria and China have strong economic relationships with Iraq, word of a possible deal with Russia means one of Mr. Bush's most important allies is keeping ties to all three members of what he calls the axis of evil.

JOSEPH CIRINCIONE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: It shows that there are grave doubts and big obstacles out there in the rest of the world to any U.S. plans to invade Iraq. The President keeps raising the flag of war, but very few countries are saluting it.

(END VIDEO)

MALVEAUX: Now, this week, National Security Advisor, Condoleezza Rice and Secretary of Defense Donald Rumsfeld will be joining President Bush at his Crawford ranch to discuss, among other things, U.S. options in Iraq - Carol.

LIN: All right. Thank you very much, Suzanne Malveaux, reporting live from Crawford, Texas.

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