Clinton steals Saudi plane deal from Europe: Secret diplomacy wins pounds 4bn order for US

EUROPEAN governments are enraged by last week's White House announcement that Saudi Arabia has decided to replace the entire fleet of its national airline, Saudia, exclusively with American-made aircraft. They believe that Washington may have used its super-power status to twist Riyadh's arm over the deal.

British ministers are said to feel especially betrayed by the dollars 6bn ( pounds 4bn) agreement, which shuts out Airbus and the aero- engine division of Rolls-Royce. The sense has been growing in London that since the Gulf war, in spite of Britain's contribution to Desert Storm, Saudi Arabia has become virtually an extension of American territory.

'There is great disappointment and considerable irritation,' one official said. 'Although no one believed that we were going to split the deal fifty-fifty, the Saudis did lead us to believe that at least Airbus would get a look-in.'

European officials said the French government and the European Commission in Brussels were studying an apparent link between the agreement, expected to involve 50 new jets, and a separate understanding reached between Riyadh and Washington last month to reschedule Saudi payments on US arms shipments worth dollars 9bn. Any such connection could mean that the US has violated an agreement on aircraft sales reached with the EU in 1992.

The announcement of Saudi Arabia's plans by President Clinton in an unusual White House ceremony on Wednesday marked the successful culmination of 12 months of high- level lobbying of Riyadh by the US administration. Mr Clinton himself telephoned King Fahd twice and wrote several letters. No fewer than three cabinet secretaries, including the Secretary of State, Warren Christopher, were dispatched to Riyadh to discuss the sale with the king. The final visit was paid last month by the Commerce Secretary, Ron Brown.

Ironically, the battle for the contract, which also saw pilgrimages to Riyadh last year by John Major and President Francois Mitterrand, may always have been a lost cause for Airbus, in which Britain, France, Germany and Spain are partners, because of fury in Riyadh over European policy towards the Muslims in Bosnia. King Fahd is said also to have been annoyed by French overtures to Iraq. 'More than you might think, they have been very angered by European policy,' a source close to the Saudi royal family said.

The political dividends for Mr Clinton promise to be considerable. He can claim that he has made good a commitment to American workers generally and to the troubled aircraft sector in particular that he would campaign personally for increased exports.

As part of Washington's strategy, a special task force has been created to co-ordinate US export promotion efforts. US embassies around the world have been instructed to concentrate more intently on opportunities for American firms. Reflecting the general applause given to the President for securing the Saudi deal, the Los Angeles Times ran an editorial on Friday headlined 'Hail to the Chief (Salesman)]'.

The Europeans were also irritated by the presence of the Saudi Ambassador to the US, Prince Bandar bin Sultan, at the ceremony. 'That just added insult to injury,' one diplomat complained. 'It made it obvious that Bandar himself had stitched up the deal with the President.' Speaking after the President, the prince made no attempt to disguise the political nature of the agreement, implying that his country wanted to become a strategic asset to the United States by supporting its aerospace industry.

The agreement to ease the debt-payment schedule on the arms purchases was orchestrated directly by the prince, who invited the chief executives of all the relevant American manufacturers to a decisive meeting in his Aspen mansion just before Christmas.

The US administration defends the President's right to intervene on behalf of American industry. 'Major, Mitterrand and Kohl have always been willing to get on a plane to represent their commercial interests abroad,' a spokesman for the Commerce Department said. 'Call it catching up if you like, but that is what this administration is now also determined to do.'

Next week Mr Major travels to Washington to meet President Clinton. High on his agenda will be the task of dispelling the widely held impression that relations with the US are on a downward spiral.

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