/ 27 July 2007

US looks to improved ties with Libya

Washington is seeking closer ties with Libya now that the Bulgarian medics case is resolved and the first tangible sign is a likely visit this year by top diplomat Condoleezza Rice, United States officials said on Thursday.

There are also other expected plans to boost cultural and educational exchanges between the two countries while increasing business links with the oil exporter, which was on the United States list of state sponsors of terrorism until just over a year ago.

”Relations are on a fundamentally different trajectory now,” said State Department spokesperson Sean McCormack.

But several experts said the road ahead could be bumpy, pointing to the unpredictable nature of Libyan leader Moammar Gadaffi and reluctance by some in the US Congress to commit to closer ties until final compensation issues are resolved involving US victims of Libyan attacks in the 1980s.

”The erratic nature of the Libyan regime is a fundamental problem. If he [Gadaffi] gets up on the wrong side of the bed that will be detrimental to the relationship,” said Ned Walker, a former US ambassador to Egypt and Israel.

The move to improve ties comes as Washington is trying to boost relations with major oil producers because of high oil prices. Libya has substantial oil reserves.

Business leaders have also lobbied the Bush administration, pointing to deals that have gone to French and other firms whose governments have closer relations.

While ties have improved dramatically since 2003 when Libya gave up weapons of mass destruction, the case of six foreign medics convicted of infecting Libyan children with HIV had put a dampener on closer relations.

With their release this week under an accord with the European Union, senior US officials said there was now a drive to cement this improved relationship.

”What Libya wants is to be recognised. Gadaffi, in particular, expects to be treated like a leader. He has been very open about that,” said a senior US official, who spoke on condition he not be named.

New era

A trip by Rice to Libya would be a strong sign that a new era had begun, said the official, who expected the visit would happen before the end of the year, probably in October or November. McCormack said a date had not been set yet.

Any visit by Rice would likely be ”memorialised” by a statement professing increased cultural and educational exchanges as well as business and tourism opportunities, said the senior official.

”We are basically trying to make normal what is taking place in most other countries in the region,” said the official.

David Goldwyn, executive director of the US-Libya Business Association, said the lack of high diplomatic contact had impeded business between the two countries and both sides had held up visas.

”Libya has made clear that when the government makes investment decisions, it favours countries with which it has close diplomatic relations,” said Goldwyn, whose organisation plans a trade conference later this year.

Goldwyn said business opportunities were substantial, particularly in the oil and gas industries as well as in infrastructure, telecommunications and construction.

But there are still outstanding issues between the former foes that could derail plans for closer ties, particularly over final compensation for victims of the Pan Am 103 bombing over Lockerbie, Scotland, in 1988, as well as a 1986 attack on a disco in West Berlin that was used by US servicemen.

Congress is holding up funding for US diplomatic activities in Libya because of the compensation dispute and the Senate confirmation process of the first US ambassador in decades is expected to be tough.

McCormack said the disputes would not hold back a visit by Rice to Libya and she would likely bring up these issues during any meetings. – Reuters