On the glass-topped desk of H. M. Cuniali, chairman of Libyan Arab Airlines, is a blue folder entitled, "Airbus A300. Economic Study. Libyan Arab Airlines."
The Libyans don't really want the Franco-German Airbus as the plane with which they will expand the airline's fleet. They want U.S.-built Boeings, of which they have ordered two and are prepared to order at least three more.
But the Airbus, Cuniall said in an interview, is the obvious alternative if the U.S. State Department persists in its refusal to license the Boeings for export to Libya. It will not be the Libyans, he said, who will pay the price for the State Department's decision, it will be the workers on the Boeing assembly line in Seattle whose jobs depend on the flow of orders.
Much more is at stake in the U.S. refusal to authorize the export of airplanes to Libya than the question of which competing plane the Libyans will buy instead.
The U.S. embargo, and possible subsequent embargoes on sales to Iraq and Algeria, raise the question of the wisdom and efficacy, of using commercial arrangements as a tool of foreign policy, a practice generally condemned by the U.S. business community.
Here in Libya, the State Department's action is criticized by Americans and Libyans alike as a belated response to Libyan policies of the early 1970s, not to Libyan policies of today. It appears to have eliminated any prospect of improved U.S.-Libyan relations or reduction in the U.S. trade deficit with Libya. If it has chastened the Libyans, they do not show it.
"We and Boeing have been very happy together," said Cuniali, whose current international fleet of nine planes is all Boeing. "We had detailed discussions with Boeing about the expansion of the fleet. But I have to move, to expand, to serve the public. We can't just wait."
Whatever Libya decides to do, commercially or politically, he said, it will not be because of State Department pressure.
That summarize the Libyan response to the State Department's move to cut off exports of material and equipment that might have military uses to Libya on the ground that this country encourages international terrorism and harbours hijackers. Over the objections of the Department of Commerce, the State Department has vetoed delivery of two Boeing 727s for which Libya has already paid $30 million, at least three 747 Jumbos worth $65 million, and 400 heavy-duty trucks that Libya ordered from the Oshkosh Truck Co. for $72 million.
It seems to be the unanimous opinion of Libyan officials, foreign diplomats and American businessmen here that the embargo was a mistake and will not work.
These sources argue that it can only contribute to the enormous U.S. trade deficit with Libya, which last year sold about $3.8 billion worth of oil to the United States and imported only $314 million in U.S. products. They also say that the Libyans have taken steps to purge themselves of their reputation for supporting terrorism, can buy trucks and planes elsewhere, and are cetainly not going to change their international policies to please the State Department.
Abdul Ati Obeidi, chairman of Libya's General People Committee, or prime minister, said the Libyans were "surprised that a free-trading capitalist nation like the U.S. would take such a decision and just against Libya, on strictly civilian goods."
He said Libya "wanted 747s, but now the U.S. wants to blackmail us and tell us what to do in our policy. We won't let our desire for U.S. equipment make us submit to any demand that conflicts with our principles. If things are normal, we are happy to deal with the U.S. but we won't get down on our knees. You have to respect our point of view."
The ban on aircraft sales to Libya was not without precedent. In 1970, the Libyans paid about $100 million for 16 propeller-driven C130 Hercules transport planes, but only got eight of them before delivery of the others was blocked in 1976. The Libyans have refused to take back their money and have continued to demand delivery of the others. They are apparently going to follow the same policy with the two 727s for which they have already paid.
At least half a dozen countries could supply the trucks the Libyans want, but the airline has a much smaller range of choices for an expansion program that Cuniali described as "big in numbers and big in money."
Aside from the Airbus and the Boeings, the only other planes that might be available are made in the Soviet Union, with which Libya has close political and military relations. Cuniali said that "if we have to we will" consider Soviet aircraft, but other sources here say that is not a serious possibility.
The Libyans prefer, sources here said, to wait a while and allow supporters of the planes sale in Washington to try to persuade the State Department to reverse its decision.
With delivery of the two 727s scheduled for this month, Cuniali said he was hopeful that Boeing lobbyists and members of the Washington state congressional delegation would succeed in having the ban lifted.
Beyond any specific items in the plane and truck deals, diplomatic and commercial sources here say, the State Department move took the Libyans by surprise and injected a new irritant into U.S. Libyan relations that had been at least stable, if not cordial, after years of turbulence.
Libyan officials from Col. Muammar Qadaffi on down lost no opportunity to disavow international terrorism and express their opposition to the very tactics the State Department is holding them responsible for.
"We are against and we do not believe in it," Qaddafi's righthand man, Maj. Abdel Salam Jalloud, said recently. "our way of thinking and attitude do not go along with terrorism and our laws are against it."
Libya does continue active support for the Palestine Liberation Organization, and for guerrilla movements in Africa and Asia, and for subversive elements in some Arab countries, but the Libyans argue that this is legitimate political support for righteous causes, not terrorism. In any case, the Libyans argue with some justification, the United States has not cut off exports of sensitive equipment to some other Arab countries whose record on terrorism in recent years is worse than Libya's.
The government's real concern, informed sources here say, is less over the planes and trucks than over the possible impact of legislation pending in Congress that would impose strict trade restrictions on countries suspected of encouraging terrorism.
About one-third of Libya's daily crude oil production of 2 million barrels is exported to the United States. According to oil industry sources, loss of the U.S. market would be a serious economic blow to Libya, whose traditional markets in northern Europe have largely been cut off by the flow of oil from the North Sea.