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Restoration of diplomatic relations with Libya ends more than three decades of hostility. It sends a strong signal to Iran and other countries that abandoning terrorism and weapons of mass destruction can lead to similar benefits. In Afghanistan and Iraq, the US has shown how we would respond to governments we perceived as uncooperative in the war on terrorism. Absent a clear example how a country with a bad past could change course and stand with the US, some governments might have concluded that the best strategy was to follow the North Korean example of covertly developing a weapon to gain concessions at the negotiating table. Not the lesson we want to send.

Removing Libya from the State Department terrorism list is overdue. Libya has long met the requirements to be removed from the terrorism list. Its cooperation on weapons of mass destruction has been a model of compliance and a huge intelligence bonanza for us.

When Muammar Qadhafi renounced terrorism and abandoned his WMD program, he recognized that Libya’s security is best assured by peaceful relations with the US and other major governments. Britain, France, Germany, and Italy renewed relations after the United Nations sanctions were lifted in 1999. They have even had summit meetings with Qadhafi. Once a target for retaliations, Libya is reintegrating itself into the global community.

The Bush administration moved very cautiously. President Bush and some of his advisors saw renewing relations as a tricky political decision, given the Libyan leader’s history of reckless words and unpredictable actions that could embarrass the White House. The administration’s rhetoric about democracy as the standard for relations with other countries of the world also made it difficult to embrace the Qadhafi regime.

Slow resolution of a medical tragedy involving Libyan children who were victims of HIV and sentences of death against a Palestinian doctor and Bulgarian nurses were additional complications. Bulgaria had sent forces as part of the coalition in Iraq, a factor that Secretary Rice had to bear in mind. The death sentences have now been quashed and procedures to compensate the children’s families and release the medical personnel are well advanced.

The lack of personal contact between Libyans and Americans for several decades has fostered animosity and mutual stereotyping. Getting Libya off the terrorism list will open the door to better trade and economic relations by easing visa restrictions and export procedures. Libya’s oil and gas reserves are increasingly important for our European allies. By participating in their redevelopment, US companies help diversify the world’s energy sources.

US companies will never dominate the Libyan petroleum sector as they once did. But other countries must now face American competition, a matter of great potential benefit to Libya. Other areas of US-Libyan commercial activity are also opening up to our mutual benefits.

The strategic gains as well as the benefits for business are self-evident. Less obvious, but important in the longer term is the potential for ordinary Libyans to achieve economic and political reforms as a result of the country’s new openness to the global community. The number of Libyan students seeking educational opportunities in the US and Libyan trainees seeking positions in US companies should soar. This will give our society an opportunity to interact with a new generation of Libyans anxious to introduce political and economic reforms at home.

All this did not happen overnight. The normalization of relations is the result of a steady build-up of positive developments, reflecting change in Libya’s policy toward the world. UN sanctions were very important. They helped change Libya’s behavior because they were well crafted and truly multilateral.

The record also shows that diplomacy works. It helps to have a stick in the closet, but brandishing the stick while refusing to talk with a potential adversary is unproductive. There are lessons here for governments like that in Tehran about how to come in from the cold and become a respectable member of the international community. Equally, there are lessons for Washington in how to assure that potential adversaries learn through negotiations how to chose a wiser course.

The ancient Chinese strategist Sun Tzu taught that military power is most impressive when you achieve your objective without using it. The purpose of sanctions and great military power should be to achieve positive results that endure. For this to happen, a sound diplomatic strategy is essential.