AFTER months of combative negotiations with the United Nations, Iraq yesterday won its first relief from the international trade embargo that was imposed upon it following President Saddam Hussein's invasion of Kuwait nearly six years ago.
Under a preliminary agreement signed at UN headquarters, Iraq is to be allowed to export limited volumes of its crude oil onto the world market, the proceeds of which are to be used exclusively for the purchase of desperately needed foods and medicine for the country's impoverished population.
The return of Iraqi crude to the oil markets after so many years was expected to accelerate a cooling off of prices, which have been soaring to unexpected highs in recent weeks, possibly leading to lower petrol pump prices. Iraq's pipelines could be back in action in as little as a month.
The foundation for the agreement was provided by Resolution 986, adopted by the Security Council more than a year ago with strong support from Britain and the United States. Until yesterday, however, Iraq was objecting to the resolution's many conditions that it believed violated its sovereignty.
Under the deal, the UN will have the last word on the sale of oil, on the handling of the cash it generates and, most particularly, on how the food and medicine will be distributed inside Iraq. In the northern areas populated by Iraq's Kurdish minority, the UN will take direct charge of distribution.
UN diplomats emphasised that the deal be seen in isolation as a measure aimed only at alleviating the worst of the suffering in Iraq, whose economy remains in tatters in the wards aftermath. "This a humanitarian exception, it is not a lifting of the sanctions. The sanctions regime remains fully in place," the UN ambassador, Ms Madeleine Albright, insisted.
The signing of the memorandum of understanding yesterday by Iraq's main negotiator, Mr Abdul Amir al Anbari, and the UN Secretary General, Dr Boutros Boutros Ghali, followed several days of suspense. The green light was finally given by President Hussein only yesterday.
Subject to the drawing up of a detailed implementation plan by UN and Iraqi officials, the deal will allow Iraq to sell up to $2 billion of crude oil every six months on a renewable basis. Outside of the country's northern provinces, distribution will be carried out by the Iraqi government, but under strict UN supervision.
World prices of crude oil have been declining in recent days, partly in anticipation of the deal. Yesterday, oil was selling at just over $20 a barrel, down from a high of over $26 six weeks ago. There had been speculation that the US was encouraging the agreement, in part in the hope of reversing a recent surge of petrol prices at American pumps.