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U.S. faces backlash over contracts

U.S. officials say foes of the Iraq war will need to be more complimentary.
U.S. officials say foes of the Iraq war will need to be more complimentary.

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Anger after the U.S. bans some countries from bidding for Iraq reconstruction work. CNN's Jim Bittermann (December 10)
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Should countries that opposed the war in Iraq be allowed to compete for reconstruction contracts?
Gerhard Schroeder
Paul D. Wolfowitz
White House

BERLIN, Germany (CNN) -- The United States is facing an international backlash over its decision to bar some of its major trading partners from bidding for Iraqi reconstruction, including possible legal action.

Countries that did not back the U.S.-led coalition that toppled Saddam Hussein will not be eligible to compete for $18.6 billion worth of contracts, according to U.S. Deputy Defense Secretary Paul Wolfowitz.

U.S. President George W. Bush spoke by phone with the leaders of Germany, France and Russia about the new policy, with each leader raising objections to the new policy, officials said Wednesday.

In the conversations, Bush promised to "keep the lines of communication open," a National Security Council spokesman said, but other U.S. officials said the policy would change only if those bitter Iraq war foes became more complimentary of U.S. efforts in postwar Iraq and offered financial and diplomatic support.

In Ottawa, incoming Canadian Prime Minister Paul Martin said the decision was difficult to understand because Canada had already spent $300 million to support Iraq and also has troops in Afghanistan.

"I find it really very difficult to fathom," said Martin, who will take the helm of Canada's government Friday from outgoing Prime Minister Jean Chretien.

"There's a huge amount of suffering going on there, and I think it is the responsibility of every country to participate in developing [Iraq.]"

According to a memo posted on a Pentagon Web site, those countries that either participated in the Coalition effort in the war or supported it -- including Britain, Australia, Spain, Italy, Poland, Turkey and Japan -- were on the list of nations that could be awarded primary rebuilding contracts.

White House spokesman Scott McClellan said decision to limit the list was "totally appropriate."

"The United States and the coalition countries, as well as others that are contributing forces to the efforts there and the Iraqi people themselves, are the ones that have been helping and sacrificing to build a free and prosperous nation," he said.

"I think it is totally appropriate for U.S. taxpayers' dollars to go to the entities I just mentioned."

U.S. State Department spokesman Richard Boucher added that while the prime contracts would go to coalition members, those companies could choose their own subcontractors.

"Subcontracting is open to companies from virtually all nations in the world," he said.

The restriction on who is eligible to bid on these prime contracts applies only to direct U.S. assistance, Boucher said.

For example, the restriction does not apply to the trusts created by the international community at the Madrid donor's conference in October.

The United States has been urging countries to take part in the reconstruction of Iraq, either with money or troops. Boucher said the decision to award prime contracts should not dissuade countries from joining the reconstruction effort.

Russia's Foreign Minister Igor Ivanov said Russia was categorically against attempts to bar countries from the process of rebuilding Iraq.

Chirac was against the war on Iraq.

Ivanov, visiting Berlin, said that "the rehabilitation of Iraq is the world community's common cause."

"Those countries which are prepared to assist in Iraq's post-war rehabilitation must have all opportunities to do so," he said.

Russia is still owed $8 billion by Iraq and Russian Defense Minister Sergei Ivanov indicated it would expect that money to be repaid, adding that Iraq "was not a poor country".

France -- along with the European Commission -- said it was studying the legality of the decision.

"We're studying the compatibility of these decisions with the international laws of competition, together with our concerned partners, especially the European Union and the European Commission," a Foreign Ministry spokesman said.

Wolfowitz said in the memo that the list was restricted due to security concerns. He said while "international support and cooperation are necessary for progress in Iraq," it is "in the public interest" to limit the countries that could compete for the contracts.

"It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force contributing nations," the memo said.

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