http://www.cnn.com/2008/WORLD/europe/11/20/sbm.overview/index.html<snip>
1980s: Iraq CNN found that intervention is often weighed against political and economic costs.
Declassified U.S. government documents show that while Saddam Hussein was gassing Iraqi Kurds, the U.S. opposed punishing Iraq with a trade embargo because it was cultivating Iraq as an ally against Iran and as a market for U.S. farm exports.
According to Peter Galbraith, then an idealistic Senate staffer determined to stop Hussein from committing genocide, the Reagan administration "got carried away with their own propaganda. They began to believe that Saddam Hussein could be a reliable partner."
http://www.cnn.com/2008/WORLD/meast/11/20/sbm.documents/index.html(CNN) -- The U.S. diplomatic courtship with Iraq in the 1980s continued despite Saddam Hussein's use of chemical weapons. Click on the links to read once-classified documents from the Reagan administration.
Date: December 5, 1986
Subject: U.S.-Iraqi Relations: Picking Up the Pieces
Summary: After disclosures that the United States was secretly providing weapons to Iraq's enemy, Iran, Assistant Secretary of State Richard Murphy recommends strengthening commercial ties with Saddam Hussein because "U.S.-Iraqi relations are in crisis." Read the document (pdf)
Date: March 3, 1988
Subject: Iraq's Foreign Policy: Deeper into the Mainstream
Summary: Anticipating an end to the Iran-Iraq war, a State Department official is optimistic that continued ties between the United States and Iraq will lead Saddam Hussein "deeper into the mainstream." The author concludes that "fears of Iraq's aggression seem exaggerated." Two weeks later, Iraqi forces attack Kurdish civilians in Halabja with poisonous gas. Read the document (pdf)
Date: December 29, 1988
Subject: Export-Import Financing for Iraq
Summary: In the closing days of the Reagan administration, the State Department's top human rights official argues that continued financial aid to Iraq "can simply not be squared with our worldwide human rights policy." However, Assistant Secretary of State Richard Murphy counters that U.S. financial ties with Iraq have "far greater use with Baghdad as a carrot than as a stick." A year and a half later, Iraq invades Kuwait. Read the document (pdf)