Lift on Azeri Aid Ban Tied to Progress in Talks

WASHINGTON, DC (CQ Weekly)-When Sen. Sam Brownback (R-KS) tried in 1999 to lift restrictions on US aid to Azerbaijan, the Senate agreed to debate the measure but then narrowly defeated it. In the House that year, Peter King (R-NY), could not find enough allies to even bring such a bill to the floor.

Azerbaijan and Armenia have been locked in a bitter dispute for more than a decade over Nagorno Karabagh, and Armenian-Americans have considerable influence on Capitol Hill.

Rep. King hopes that because of rising oil prices he will have better luck this year when he again introduces legislation to repeal Section 907 of the Freedom Support Act, which bars direct US government assistance to Azerbaijan until that nation lifts its war-related embargo on trade with Armenia. "With the energy crunch, it would be insane to keep these restrictions in place," King said.

Indeed, an energy task force headed by Vice President Dick Cheney pointed to Azerbaijan and Kazakhstan as key sources for oil and gas. The task force wrote that the two countries together have proven oil reserves of 20 billion barrels. Both countries also have natural gas fields under development, and Cheney's report encourages efforts to develop their energy industries, particularly construction of oil and gas pipelines that would avoid Russia and Iran.

So far, however, neither King's draft legislation nor legislation by Brownback and Rep. Joseph R. Pitts (R-PA) to grant Kazakhstan permanent normal trade relations have attracted much support. Though neither measure would directly affect energy exports from Azerbaijan and Kazakhstan, oil companies and other business interests say they would improve the climate for investment in both countries and strengthen ties with the US.

Azerbaijani Foreign Minister Vilayat Guliyev said people in his country don't understand the restrictions. "It creates very negative emotions here," he said. Guliyev said Iran can exploit the restrictions to influence Azeri opinion of the US. Investors in Azerbaijan say the restrictions have stymied US efforts to improve Azerbaijan's commercial codes and business practices.

Congress, however, has taken some steps that make it easier for energy companies and others to do business in Azerbaijan. In 1998, lawmakers ended restrictions on loans and loan guarantees from US export credit agencies, such as the Export-Import Bank and the Overseas Private Investment Corporation.

Armenian-American groups, which have a strong presence in states such as New Jersey and California, remain a major influence. They echo politicians in Yerevan, who argue that Congress should continue to pressure Azerbaijan to end its embargo on Armenia.

"People are not doing well. If we give them a solution to the Karabagh conflict, they are not prepared to accept it," said Armenian Parliamentary Speaker Armen Khachatrian. "If people were living better, they might be prepared to accept concessions they are not now prepared to make."

Secretary of State Collin Powell told the Senate Foreign Operations Appropriations Subcommittee on May 16 that ending the Karabagh dispute was one of his priorities.

Subcommittee Chairman Mitch McConnell (R-KY) welcomed Powell's involvement but continued his vehement opposition to most aid to Azerbaijan. Even supporters of lifting the restrictions, such as Senate Foreign Relations Subcommittee on European Affairs Chair Gordon H. Smith (R-OR) say any such move must await progress in the peace talks.

The Foreign Minister of Kazakhstan talked with administration officials and members of Congress about permanent normal trade relations. Some lawmakers expressed concern about Kazakhstan's record on religious freedom and democratic elections.