Before it could implement a stringent economic policy toward Libya the Reagan administration had to make several tough decisions. It would have to cut off the importation of Libyan oil, shouldering the economic consequences of that action, and it would have to order all Americans out of Libya. At the same time the United States would seek the cooperation of its European allies. With their support the sanctions would have had a greater chance of success. The Europeans, however, were not ready to take drastic economic steps against Libya. They were more concerned with protecting their economic interests in Libya than with confronting Qaddafi over the issue of terrorism. A number of European countries, particularly Italy, France, and Germany, were dependent on Libyan oil, and several European companies benefited greatly from Libya’s multibillion dollar development programs. The Europeans argued that until American rhetoric toward Qaddafi was matched by concrete actions, they would be unwilling to risk their economic relationship with Libya for what they considered a symbolic expression of disapproval of Libya’s involvement in international terrorism. Furthermore, several European governments had their doubts about the effectiveness of economic sanctions, citing the failure of past British sanctions against Rhodesia and U.S.-led sanctions against the Soviet Union, Poland, Iran, and Nicaragua. Ultimately the decision to ban Libyan oil was not made for another year and only then when it was prompted by a series of extraordinary events: a dogfight between U.S. and Libyan aircraft over the Gulf of Sidra, the murder of Anwar as-Sadat by Muslim extremists, and reports of a Libyan plot to assassinate Reagan.
Fundamental policy decisions regarding the Libya strategy were made by political appointees and approved by Reagan. In the ensuing policy discussions several career diplomats, intelligence officers, and Pentagon officials objected to many of the steps advocated by the appointees. Briefly stated, the political appointees were more hard-line in their approach toward Libya and in their desire to take assertive, immediate, and, if necessary, unilateral actions to contain and embarrass Qaddafi and undermine his authority in the country. At a minimum they wanted to respond publicly to his support for terrorism and his efforts to destabilize friendly governments in the Middle East and Africa. On the other hand, the career bureaucrats believed that Qaddafi was not as big a threat as the administration was portraying him. They worried that confronting Qaddafi in public might turn him into an Arab hero standing up to the United States. The careerists also emphasized that the Europeans did not regard Qaddafi as an international outlaw and that a poorly crafted Libya policy might undermine America’s fragile standing among moderate Arab leaders. They argued that the best way to handle Qaddafi was to ignore him, that is, not give him attention for his actions.
In the long run the careerists won most of the battles over the details of the Libya strategy. The individual components of the strategy were designed to produce a noticeable effect on Libya, but they were limited in scope. Each component was meant to heap considerable pressure on Qaddafi and induce a change in his behavior regarding terrorism, but none would directly assail his regime. Furthermore, many of the elements were to be carried out only after careful consultation with America’s allies in Europe and the Middle East. On the other hand, although the political appointees compromised on specific details of the strategy, they nevertheless achieved their objective of altering U.S. policy toward Qaddafi. Henceforth the Reagan administration regarded Qaddafi as an enemy of the United States.61
Planning the Gulf of Sidra Operation
At the Pentagon the planning for the FON exercise in the Gulf of Sidra made steady progress. Ostensibly the purpose of the exercise was to demonstrate the right of the United States to navigate the international waters of the Gulf of Sidra and to train Sixth Fleet ships and aircrews in the employment of modern guided missiles. The real intent, however, was to make a powerful impression on Qaddafi with a tremendous demonstration of U.S. military power.
In light of Libya’s track record of attacking U.S. aircraft in international airspace, Pentagon officials were gravely concerned about the risks associated with a major naval exercise inside the gulf. Coincidentally, the exercise was the first test of a new set of naval rules of engagement (ROE), formally titled the Worldwide Peacetime Rules of Engagement for Sea Borne Forces. The new ROE were the product of a thorough review of the existing ROE as ordered by Admiral Hayward in 1979.62 Navy regulations already gave on-scene commanders the authority “to counter either the use of force or an immediate threat of the use of force” with military action.63 The new ROE were appropriately nicknamed the “Reagan ROE” in military circles.64 They described in uncomplicated language the circumstances under which a commander could take appropriate action without approval from higher authority to defend his ships, aircraft, and personnel against an opposing force committing a hostile act, demonstrating an imminent use of force, or exhibiting a continuing threat to use force.65
While the Pentagon was finalizing the exercise plan a multiagency national security working group was studying Qaddafi’s likely reaction to a large-scale naval exercise in Libyan-claimed waters. The participants concluded that the chance of Libyan reaction was low for a number of reasons. First, Qaddafi understood that ordering a major attack on the battle force would be tantamount to sending his air force and navy on a suicide mission. Second, the Soviets would not come to Qaddafi’s assistance in defending a territorial claim that they did not recognize.66 Earlier in the year, during a conversation with Haig, the Soviet ambassador to the United States, Anatoly Dobrynin, made it clear that “Libya was an American problem.”67 Administration officials quickly determined that the Soviets did not think Qaddafi was worth the risk of fomenting a major confrontation with the United States. Finally, it was presumed that Libya would not harm Americans living in the country because of their crucial role in Libya’s oil industry. In July the NSC reviewed the exercise plan and recommended its approval. The plan was forwarded to Reagan, who on 1 August gave the Pentagon the official go-ahead.68
The exercise plan contained several operational contingencies for dealing with escalating levels of Libyan aggression. Aside from action taken in self-defense, any military response under this program of graduated measures required Reagan’s approval. Although the new ROE gave a great deal of discretion to the on-scene commander, a number of senior Pentagon officers accustomed to seeking permission first and shooting later still sought assurance from the White House that the new ROE were genuine.
At a cabinet meeting in early August Reagan received a thorough briefing on the details of the FON exercise, which carried the innocuous name Open Ocean Missile Exercise (OOMEX). Each year the Navy conducted several OOMEXs to maintain the efficiency of missile-firing ships and fighter squadrons. This particular missile exercise was to be performed in conjunction with the high-profile naval maneuvers in the Gulf of Sidra, and it incorporated the new ROE. According to the ROE the carrier-based fighters were to intercept all approaching aircraft and escort them until they were clear of the exercise area, opening fire only if fired upon first (a significant change from the ROE that had been in effect during the Carter administration). Under former rules American pilots were required to request permission from the task force commander before firing back. Furthermore, according to the old ROE a pilot had to hold fire if the enemy pilot disengaged and returned to his base.69 At the meeting Reagan made it absolutely clear that his naval forces had the authority to take appropriate action to protect themselves. “Any time we send an American anywhere in the world where he or she can be shot at, they have the right to shoot back,” he said. Enemy fighters would no longer get free shots at American aircraft. When asked by a cabinet officer how far a U.S. pilot could go in pursuit of Libyan planes that had fired on him,