EUROPEANS AND ARABS FORGING NEW LINKS: In a dramatic, but quiet, manner, a "special relationship" is developing between major oil producers in the Middle East and the industrial oil-importing powers of Western Europe. The United States, at the same time, is being shut out of the new arrangement.
Led by France and Kuwait, the nine members of the European Community (Common Market) and six of the oil producers on the Persian Gulf have one major objective in mind: long-term, guaranteed oil supplies for the Europeans and access to Europe's markets, technology — and possibly military assistance — for the Arabs.
Since the revolution in Iran and the worsened oil crisis, French diplomatic activity in the OPEC countries has been intense. Both the Prime Minister, M. Raymond Barre, and his minister for Foreign Trade, PI. Jean-Francois Deniau, have been to Iraq.
The Defense Minister, M. Bourges, has been to Saudi Arabia, and President Giscard de 'Estaing himself stopped off in the United Arab Emirates on his way to tour French islands in the Pacific in July. (Top West German officials, such as Foreign Minister Genscher have also been journeying to the Mideast capitals.)
The immediate result has been that France has been reassured about its oil supplies. Iraq has promised to supply one-third of French needs. Three-quarters of these will now be met by three countries, the other two being Saudi Arabia and the United Emirates.
But the French seem to have a far more encompassing scheme in mind. According to the Daily Telegraph of August 1, 1979: "It is even suggested that French leaders want a collective security pact in the Middle East under European guarantees. Strengthened by shared European and Arab disapproval of America's wasteful oil policies, and by reticence about the American-sponsored separate Middle East peace, the diplomatic Quid pro quo would be French — preferably European — sponsorship for an overall settlement."
President Giscard has sold the rest of the EC on the idea of attending a meeting with Persian Gulf producers, probably next month. The Arabs are already talking about the concept of a 20-year energy co-operation agreement. And, reports the August 20 Business Week, United Arab Emirates Oil Minister Mana Saeed al-Otaiba, (who is also OPEC's president) said that the talks "should not be limited to energy problems alone but should include political and economic areas of common interest. The number one political issue is, of course, Palestine. Says a West German official: "It would be highly unlikely that the two groups would sit down and the Palestinian issue did not come up."
If the Arabs and Europeans can strike a deal, it will further undercut American influence in the Middle East. First of all, the scheme would involve direct government-to-government supply contracts. This means that both the Arabs and the Europeans will lessen their dependence on the big U.S. oil companies.
The Arabs also feel the European connection could provide a way out Of their dilemma over the sinking value of the U.S. dollar. Reports the Business Week article: "Another strong bargaining chip for Europe is that under the European Monetary System (EMS), dominated by the German mark, more and more European currencies have become attractive alternative investments for Arabs anxious to diversify out of the dollar. The dollar's sharp decline has shaken Arab confidence in the U.S. economy as much as the fall of the Shah of Iran and the Israeli-Egyptian peace treaty has shaken their confidence in U.S. political and military leadership. 'The Arabs have frequently talked of tying oil prices to a basket of currencies, and I would imagine that they would want to discuss what role the EMS could play if they should decide to cut loose from the dollar,' says an EC official."
Arab interest in developing closer military ties with Europe is very logical as well. The United States did nothing to prevent the Shah from toppling from power in Iran. And it stood by while the Russians put a Communist regime into power in Ethiopia. The idea of some sort of a "collective security" arrangement between the Arab producers and their most important European customers would keep the Russians at bay in the world's most sensitive area.
No wonder leading Israeli officials are disillusioned both with American pressure on the Palestine issue and with what they perceive to be a growing European — especially German — slant toward the Arab side.
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