Bush snub fuels contracts row

US President George Bush has poured fuel on the flames of the Iraq contracts row with a sneering dismissal of a suggestion by Chancellor Gerhard Schroder that the decision to bar Germany, France, Russia and Canada from bidding might violate international law.

"International law? I'd better call my lawyer," Bush joked in response to a reporter's question at the White House yesterday. Schroder had spoken after a meeting in Berlin with Kofi Annan, the UN Secretary General.

Annan called the Pentagon decision unfortunate and likely to damage attempts to rebuild trans-Atlantic ties bruised by disagreement over the Iraq war.

In Brussels Chris Patten, the European commissioner for external relations, commented tartly that "returning to old arguments doesn't seem particularly constructive. We should be seeking to bring people together, not divide them." The EU, too, is examining the legality of the US moves.

Reports were circulating in Washington of White House annoyance at the timing of the memo issued by Paul Wolfowitz, the deputy Secretary of Defence, barring countries which had not participated in the war from bidding for the US$18.6 billion ($28.7 billion) of contracts, on vague "national security" grounds.

It comes at the very moment Bush is dispatching James Baker, the former Secretary of State, as his personal envoy to try to persuade Iraq's main creditors - among them France and Russia - to forgive its foreign debt, and the US is seeking more foreign troops for Iraqi duties.

But if he was angry, Bush gave no sign of it. To the victor the spoils, he argued. US and "friendly coalition folks" had risked their lives in the war. "Therefore the contracting is going to reflect that, and that's what US taxpayers expect."

And, he added for good measure, even if France, Russia and others contributed to a write-off of the estimated US$120 billion of Saddam-era debt, they would still not be able to bid for the reconstruction contracts.

Democrats seized on the episode as further evidence of Bush's diplomatic blundering, and of a renewal of the feuding between the State Department and the Pentagon over Iraq.

"Diplomatically they have to get their act together," Marty Meehan, a Democratic member of the House Armed Services Committee, said.

"How do we get a coalition together when we're putting it out on a Government website that a country like Canada is a national security risk to the United States?"

Companies to benefit from the contracts are likely to come from countries which participated in the war and the immediate aftermath - notably Britain, Australia, Italy, Spain, the Netherlands and Poland.

The Pentagon said tenders would probably be issued in the next few days and played down a delay in advertising them. The contracts had been due to be announced last Friday, but the Pentagon-run Programme Management Office, which handles Iraq contracts, said they had been "temporarily delayed".

Officials said the delay was because of questions raised about the draft proposals by prospective bidders and had nothing to do with the row over the restriction of competition to countries that had supported the US-led war.

Karsten Voigt, co-ordinator of US-German relations at the Foreign Ministry in Berlin, said the US move was astonishing and made it hard to explain to Parliament why Germany wanted to do more to help rebuild Iraq and possibly train Iraqi policemen.

In Canberra, Prime Minister John Howard encouraged Australian companies to bid for work to help rebuild Iraq.

Australia is one of 44 countries that have been cleared to bid for the contracts.

Howard said it was up to individual companies to bid for the work, but he encouraged firms to make an offer.

"I think Australia, particularly in the area of construction and perhaps the resource sector, there may be some real opportunities," he told radio 3AW.

"If there is anything in the nature of those two areas in particular, I think we have very strong prospects."

- INDEPENDENT, REUTERS

Herald Feature: Iraq