MARCH 20, 2003

WAR IN IRAQ

High Stakes
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• International Relations. In the messy runup to war, just about everything that could go wrong in the Administration's star-crossed drive to build support for "regime change" did go wrong. The Bush team's unilateralism left a trail of wreckage at the U.N. and within NATO. As France, Germany, and Russia blocked Bush's and British Prime Minister Tony Blair's plans to win Security Council approval for war, a U.N. that has tried to keep the peace for a generation seemed to come unglued. One GOP foreign-policy guru says that Bush's ham-handed diplomacy has "left fissures that won't heal easily."


Now, Bush officials are weighing ways to undo the damage. Overtures are being made to France, Germany, and Russia as U.S. diplomats look for areas of agreement. One way to smooth differences will be to offer trade concessions and a stake in Iraqi reconstruction for some of the war holdouts. Administration officials "clearly don't want to make [rebuilding] a unilateral effort," says Richard H. Solomon, president of the U.S. Institute of Peace.

What's still unclear, though, is how accommodating Vice-President Dick Cheney, Defense Secretary Donald H. Rumsfeld, and other hawks will be to such a warmup. Hard-liners have repeatedly warned of "consequences" for the refusenik countries when it comes to doling out postwar rebuilding contracts.

A punitive approach could worsen trade relations between the U.S. and European trading partners. And that, in turn, might set back a U.S.-led drive for a major market liberalization, with potentially huge costs for the global economy.

That's why U.S. companies with overseas interests will be at the forefront of reconciliation. "I'm very hopeful that nations will get together and stop acting childish," says James D. Sinegal, CEO of Costco Wholesale (COST ) in Issaquah, Wash. "Costco sells a lot of goods to foreign countries."

If the war is neither quick nor easy, inter-Alliance tensions will boil. Blair could face further rebellion in Labour Party ranks, vilification of America could intensify, and U.S. moral leadership on other looming crises-- such as North Korea's nuclear weapons push -- could be strained. The danger is that current global resentment of American "hyper-power" could isolate the U.S.

• Political Fallout. White House strategists concede that, despite a wave of war support at the moment, Bush will need to turn quickly to the economy. If he can oust Saddam on his terms, the Texan will acquire some muscle for his stalled domestic priorities. Says Republican consultant Scott W. Reed: "If he wins a swift victory, he'll be able to pave the streets with whatever policies he desires." For the White House, that means brushing aside deficit qualms to win a hefty tax cut from Congress.

Convinced that Democrats have been stridently antiwar and have let liberals such as Senator Edward M. Kennedy (D-Mass.) and Senate Minority Leader Tom Daschle (D-S.D.) define the opposition, GOP strategists dream of a replay of the 2002 midterm elections. "The theme of the next election is: 'It's national security, stupid,"' says GOP pollster William D. McInturff.

Indeed, a Mar. 3-8 bipartisan poll by McInturff and Democrat Stanley B. Greenberg found that Republicans had opened huge leads over Democrats on a wide array of defense-related issues. White House strategist Karl Rove hopes he can fashion that advantage into an issue that trumps concerns about Bush's handling of the economy.

But if history is any guide, a President can coast only so far on his war record. And in an age of unconventional wars and terror threats, clear victories are hard to come by. True, Bush has an opening to transform the political landscape in his favor if America's Iraqi adventure goes well. But more likely, his future will be decided by a battle closer to home. That means reviving an economy mired in a post-boom funk and meeting America's mountain of new commitments with a budget that's awash in red ink.

Doable? For sure. But it could be tougher than consigning Saddam to the ash heap of history.

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By Lee Walczak, Richard S. Dunham, Stan Crock, and Howard Gleckman in Washington, with Michael Arndt in Chicago, William C. Symonds in Boston, Stephanie Anderson Forest in Dallas, and bureau reports

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