China Won't Meet On UNSC Move.

Reuters on Nov. 16 quoted European diplomats as saying a meeting of Western officials scheduled for Nov. 19 to discuss tougher UNSC sanctions on Iran had been cancelled because China had pulled out. Political directors from Britain, China, France, Germany, Russia and the US were to assess the IAEA and EU reports about Tehran's nuclear programme. Reuters quoted a European diplomat as saying: "There's no meeting scheduled now because the Chinese are saying that they can't make the date. I think it's partly related to genuine travel difficulties, but also linked to resistance on the broader question of sanctions from that quarter".

The FT on Nov. 17 quoted a French official as saying if the IAEA report and one by EU foreign policy chief Javier Solana "show that there is no progress or political outcome then we are going for a further resolution". The official added: "We prefer action at the UN but we are also ready to pursue measures at the European Union". Germany described the IAEA's report as "on the whole...not encouraging". However, China and Russia have consistently been reluctant to impose additional sanctions on Tehran, and have instead encouraged IAEA chief Muhammad ElBarade'i in his efforts to broker a deal with Iran on disclosing more about its nuclear past. The FT quoted "diplomats" as saying that, without further progress, the US and the EU could seek to take a new resolution to the UNSC before securing the backing of Moscow and Beijing - a high risk approach. Britain and France also face difficulties in persuading the EU to agree sanctions, because of reservations among Germany, Spain and Italy about proceeding with unilateral steps which go beyond UN sanctions.

British PM Gordon Brown on Nov. 12 raised the threat of tougher sanctions on Iran, targeting the country's petroleum and financial services sectors, if Tehran refused to bow to international pressure over its nuclear and regional ambitions. Brown cited the threat as evidence of his "hard-headed internationalism" in a set-piece foreign policy speech which differed more in tone than substance from the approach of Tony Blair, his predecessor, to international affairs. Brown has not ruled out the use of force against Iran but, like Washington, he is threatening enhanced sanctions if Tehran refuses to back down.

On Nov. 12 Brown said: "Iran has a choice: confrontation with the international community leading to a tightening of sanctions or, if it changes its approach and ends support for terrorism, a transformed relationship with the world". He said if Iran failed to respond positively, Britain would "lead in seeking tougher sanctions both at the UN and in the European Union, including on oil and gas investment and the financial sector".

Although Britain has relatively few economic interests in Iran, there are fears in Europe that Russia and China might refuse to tighten UNSC sanctions and would fill the gaps left by any US and EU-led trade embargo. Brown talked of an international "nuclear fuel bank" to help non-nuclear states develop new sources of nuclear energy, billed by Downing St as a "carrot" for Iran.

Despite the apparent coolness between the new British PM and President Bush in their public meetings, Brown on Nov. 12 said: "I have no truck with anti-Americanism in Britain or elsewhere in Europe and I believe that our ties with America, founded on values we share, constitute our most important bilateral relationship". He said it was "good for Britain, for Europe and for the wider world" that French President Nicolas Sarkozy and German Chancellor Angela Merkel were building stronger relationships with the US. However, the FT on Nov. 13 said, "some British diplomats fear Mr Brown is far less engaged in foreign policy than Mr Blair, opening the possibility of France and Germany increasingly taking the lead in promoting European interests in Washington and the world". Brown devoted little attention in his speech to the EU - another break in style from the Blair era.

After a meeting with President Bush at his Texas ranch, German Chancellor Angela Merkel on Nov. 10 called for a diplomatic solution to the stand-off over Iran's uranium enrichment and said the UNSC had to be prepared to impose strong sanctions if Tehran failed to declare all its nuclear activities. The 20-hour visit to Bush's residence in Crawford was the first by a German leader to the private home of a US president in more than 40 years and showed the extent to which relations had improved between Washington and Berlin after reaching a low under Chancellor Gerhard Schroder. (Schroder had opposed the US invasion of Iraq and, with France and Russia, had established a European alliance against the US-led war). With President Sarkozy supporting closer ties between Paris and Washington and Merkel's warm relations with the White House, the relationship between the three capitals has improved markedly.

Despite the better relations between Berlin and Washington, however, Merkel made it clear to Bush that Europe and the US, along with Russia and China, should pursue a diplomatic path with Iran. Bush has not ruled out a military attack against Iran. On Oct 17 he warned that if Tehran obtained the ability to produce nuclear weapons, it could lead to World War III. Merkel said the UN had to remain the legitimate multilateral forum for resolving the dispute. She said: "If European diplomacy and working with the International Atomic Energy Agency does not succeed" then the UNSC would have to consider more sanctions.

In an unexpected comment, Merkel said German firms could do much more in reducing ties to Iran, stating: "Germany needs to look somewhat closer at the existing business ties with Iran. There are certain firms which have business with Iran. And we need to look, as the situation unfolds, whether we have to have a closer look, again". German officials have insisted that companies doing business with Iran have scaled back their activities over the past few months. Total trade between Germany and Iran is estimated to have reached $5.6 bn in 2006, with France and Italy the other two European powers heavily involved in Iran - mostly in the energy and machinery sectors. But any further cut of trade between Iran and Germany is opposed by German firms.

Many German corporate executives fear that China would fill any gap if Europe were forced to withdraw from Iran. Josef Braml, a US expert at the German Council for Foreign Relations, on Nov. 11 was quoted as saying of the German firms: "This is what they are really concerned about". In the first quarter of 2007, German and Iranian trade statistics show, Chinese exports to Iran rose 44% as EU firms reduced their Iranian business.

Bush supported Merkel's call for a diplomatic solution, saying: "What the Iranian regime must understand is that we will continue to work together to solve this problem diplomatically, which means they will be continued to be isolated". On Oct. 25, the Bush administration imposed sanctions against Iran's Islamic Revolutionary Guard Corps (IRGC) which could freeze its bank accounts. Other sanctions would curb the activity of several of Iran's banks based abroad.