Commission to Assess the Ballistic Missile Threat to the United States
Appendix III: Unclassified Working Papers
David J. Smith 1 : "Friendly Countries and Missile Proliferation: Dealing
With Different Perceptions"
In the future, any policies that address the problems posed by missile
proliferation will have to recognize the extent to which proliferation
is already deeply rooted in international politics.
Janne E. Nolan, Trappings of Power: Ballistic Missiles in the Third
In what remains the best book on the subject, Janne Nolan points out that
though the Cold War COCOM regime may have been shakier than we would like
to remember, it "at least had the benefit of being directed at a coherent
geographic area and a definable political philosophy, as well as the
benefit of straightforward objectives. In contrast, efforts to manage North
- South military trade have been impeded by the geopolitical complexity of
the third world and by the absence of any common agreement about the
objectives of technology controls." 2
And a kaleidoscope world of burgeoning geopolitical complexity is one with
which the United States is intellectually ill equipped to deal. In a
prescient 1968 article, Stanley Hoffmann made three observations which, in
large measure, explain our frustration in dealing with missile and WMD
proliferation today. Americans, writes Hoffmann:
* "tend to believe that the values that arise from their experience are
of universal application;"
* are given to "solutionism" whereby "foreign policy is seen not as a
fluid interplay of kaleidoscopic forces and individuals, a continuum
of conflicts and crises, but an activity designed to deter and avert
occasional nuisances;" and
* have been deprived by their history "of the experience of a coalition
of equals," causing "difficulty in cooperating with other nations as
Thus, America often stands like King Canute trying to control the tides of
proliferation, terrorism and whatever else offends us. Speaking of the Iran
- Libya Sanctions Act (ILSA), Secretary of State Madeleine Albright once
remarked that "our friends and allies just don't get it." 4 Perhaps they
don't. Nevertheless, we must, to borrow a phrase from Marion Barry, "deal
with it!" This is a big challenge for America, but not an impossible one.
Our friends generally share our desire for world stability, our sense of
right and wrong and our belief in the rule of law. Non proliferation
regimes are possible--NPT, CWC, MTCR, IAEA, Nuclear Suppliers Group, etc.
Our disagreements are very important, but they are less than fundamental.
Indeed, this paper would have been easier to write if our disagreements
were fundamental. All our friends have the technical and financial
resources to build missiles for themselves and others. The Italian Vega-K
and the Spanish Capricornio SLVs are sometimes mentioned as systems which
might easily be spun off to military applications. Some believe that
Japanese SLVs are already engineered to be dual capable. 5 But there is
precious little worry that variants of these systems will turn up in
countries outside the MTCR. A search of press reports undertaken for this
paper, as well as such conversations as time permitted, simply did not turn
up the 20/20 horror story of a U.S. ally surreptitiously shoveling missiles
or comprehensive missile technology to some pariah state.
What turned up is well known, for example, Germany's
Messerschmidt-Boelkow-Blohm (MBB) and Italy's SNIA-BPD (now FIAT Avio) were
apparently involved in the Argentina-Egypt-Iraq Condor / Badr-2000 Missile
program during the 1980s. The involvement predated the MTCR but may well
have persisted for some time after it should have stopped. On wider issues
of proliferation, our friends have surely been guilty of lax enforcement,
narrowly defining "military use" or "dual use," and even of disguising
crass commercial purposes as matters of high principle. "We don't find
there's a lot of sympathy for taking some hard line position we've taken,"
said Commerce Undersecretary William Reinsch. 6 The kind of thing to which
he was no doubt referring was repeated reports that as many as 60 German
companies were working on Libya's underground military complex at Tarhuna
while their government turned a blind eye. 7 Finally, countries such as
Germany and Italy have not acted against their companies which have
violated American law by, for example, trading with Libya, but not German
or Italian law (although it is unclear what we would have them do in such
All this said, our allies tend to abide by their commitments--to be sure,
bickering over details, "pushing the envelope," chafing at American demands
to do more than has been agreed and trading charges of hypocrisy. The
challenge is to forge some meeting of the minds, set reasonable goals and
strengthen counter- not just non-proliferation cooperation. To meet this
challenge, the U.S. must:
* exercise leadership to prevent unraveling of current cooperation;
* recognize differing world views among friends; and
* accept consequent patterns of behavior which differ from our
The brief discussion which follows draws examples from a number of
countries but focuses on Italy. Italy is the country I know best, others
have focused elsewhere and this paper is, well, pretty short.
Issues That Could Unravel Cooperation
Sanctions fatigue. To be blunt, our friends are growing tired of America's
unilateral sanctions. The sanctions are not all aimed at proliferation, but
Europeans lump the ILSA, Helms-Burton, what they see as petulant U.S.
behavior over Iraqi inspections, and more into one issue which they see at
a higher level of generality. Differences we have over missile
proliferation are wrapped in differing approaches to the destination
countries of concern.
Reports from this month's IAEA Board of Governors and Nuclear Suppliers
Group meetings indicate that the U.S. was diplomatically mugged for its
hypocrisy with regard to China. 9 Even as President Clinton certified that
"China has met the nuclear nonproliferation requirements and conditions
necessary under U.S. law to engage in peaceful nuclear cooperation with
U.S. industry," his investigators and diplomats were chasing after just the
latest report of a Chinese nuclear deal with Iran 10 --investment of $40
million in which will earn a European company American sanctions under the
ILSA. A measure of European resentment is the frequency with which usually
mild mannered Italians cite as a precedent Enrico Mattei's challenge forty
years ago to the Seven Sisters of the oil business. Indeed, Franco Bernabč,
Mattei's successor as ENI president, has become the point man on American
sanctions. "Since the Second World War," he says, "the U.S. has applied 104
sanctions. Of these, 61 have been applied between 1993 and 1996. Consider
what happened in Italy in the 1930s. In 1935, Italy was sanctioned by the
League of Nations. As a consequence, Mussolini was strengthened and built a
stronger alliance with Hitler leading to the Second World War." 11 We do
not have to agree with Bernabč's analysis to recognize that these are
fighting words which are, by the way, almost certainly coordinated with the
Prodi Government. The Europeans are fighting back, trading with Iran and
Libya, and proliferation cooperation is going to be the next victim.
Apache. Knowing that Dr. Laird will have done so, I shall not dwell on the
details of Apache. But I must underscore that French arguments that this
cruise missile should somehow elude the MTCR are a fundamental challenge to
the regime. If France succeeds, we should expect each country to seek
commercial advantage with whatever it has to offer--a sure route to the
unraveling of non proliferation cooperation, the route by which Vega-K,
Capricornio and others could become commercial military systems.
Differing World Views
If we can tie up the loose ends of non proliferation cooperation today, we
can build upon it--if we recognize that we and our friends do not always
see the world in the same way. Sometimes agreement is precluded by a
genuine post Cold War confusion of objects, objectives and means. When
these get sorted out, we will take a step forward. But just as often, there
is a genuine difference in world views between us and our friends.
Americans tend to label certain countries as "rogues" or "pariahs" and then
have naught to do with them, awaiting fundamental change. In defending the
ILSA, President Clinton said, "I can only hope that someday soon, all
countries will come to realize that you simply can't do business with
people by day who are killing your people by night." 12 And Senator Alfonse
D'Amato recently reminded a hearing of the Senate Banking Committee that
"the connection between oil contracts and Iranian aggression is clear." 13
In contrast, Europeans tend to deal with one issue at a time, accepting
small signs of improvement. The European Union's diplomatic embargo on Iran
following the finding of a German court that Iran had been responsible for
the 1992 Berlin murder of Kurdish dissidents lasted barely a year. When it
was lifted, Italian Foreign Minister Lamberto Dini rushed to Tehran to say
that it has been "over a year since any terrorist attack has been
attributable to either Iran or Libya." 14
Europeans and Americans tend to have different views of the threat posed by
certain countries, preferred responses, commercial interests and world
Threat. "Per Grazia di Dio--for God's sake, don't come in here talking
about the threat from North Africa!" That was the advice I received from
the president of a leading Italian defense college as we prepared for a
conference on, yes, missile defense. It was good advice because it
illustrates an important point. Many Italians believe in Italy's
"Mediterranean vocation," a sort of special intermediary relationship with
the Middle East. Another Italian general scoffed at the notion, pointing
out that Rome is caput mundi, the center of everything radical Islam hates.
"We have," he said, "no better idea how to handle it than you do." The
latter may have been closer to reality but the former represented what is
at least a major point of view in Italy. On his recent visit to Tehran,
Dini said "the Iranian arms buildup had to be `followed closely,' but
Tehran's arsenal was limited to its `own defense needs.'" 15
Preferred response. During a 1997 visit to Rome, Albright expressed concern
over Italy's perspective on dealing with countries such as Libya and Iran.
But Dini retorted: "we would like to see the obstacles which prevent
normalization of relations, especially regarding Libya, be gradually
overcome. This would be seen favorably, not only by us but by the United
States." 16 Americans and their European friends have been, at times, so
far apart on preferred responses that the Europeans have sided with Moscow.
Commenting on efforts to forge a regime to replace COCOM, Izvestia writes
that "our delegation often enjoyed the support of France, Italy, Germany
and Japan." 17
Commercial interests. Just as the U.S. has commercial interests in China
which must weigh in every decision we make with regard to that country,
Europeans have heavy interests in the Middle East. These cannot all be
detailed here, so a sketch of Italian economic interests in Libya will have
to suffice. Oil, of course, is the big attraction and Italy's ENI is
involved in a big way--Italy gets 27% of its oil from Libya. But there is
also heavy involvement of Spain's Repsol, Canadian Occidental, Ireland's
Bula, the U.K.'s LASMO and the Korea Petroleum Development Corporation.
Italy's AGIP has just concluded a deal for a $3 billion natural gas
pipeline from Libya to Sicily which will provide 8 billion m3/year for
twenty years. A 7,000 Km. coaxial cable network is being laid by four
Italian companies: SIRTI, Telettra, Pirelli and CEAT, supported by a
subsidiary of British Telecom. FIAT appears to be interested in a joint
Libya - Morocco car assembly plant. 18
There are a few points to be made here: Italy-Libya trade predates the Cold
War by about 2,000 years, the financial stakes are high, Italy is dependent
on Libya for oil, the trade is complex and long lasting, a certain amount
of technology is transferred every day and there is a vast network of
Italians and Libyans involved.
World roles. Finally, it should not need repeating, but frequently does:
the U.S. is the world's only superpower. We worry about power projection
forces, forced entry, missile blackmail and the like. By and large, our
friends don't. And that makes a difference in levels of concern about
missile proliferation and, hence, in behavior.
Differing Patterns of Behavior
What are the implications of all this for friendly country missile
proliferation? The issue with friendly country missile proliferation is
continuing and strengthening counter proliferation cooperation which is
wrapped in the greater issue of how to deal with destination countries of
concern, many of which the U.S. labels as "rogues." And on that issue, the
U.S. and its friends often hold different views of the world. Therefore,
continuing and strengthening cooperation will depend first on understanding
our differences and then on finding some common ground between them.
Absent some overriding interest or clear emergency such as the Iraqi
invasion of Kuwait, our friends will tend to favor their own economic
interests. For example, Italy, Germany and Spain successfully resisted U.S.
attempts to include oil in the U.N. Lockerbie sanctions imposed on Libya.
19 In our friends' eyes, the relative weight of U.S. leadership and
international validation has shifted in favor of the latter in the post
Cold War period. However, they will draw the line on their own economic
interest at the point at which they believe they have an international
legal obligation. For example, in 1995, the Italian Guardia di Finanza
seized 10 tons of military aircraft parts shipped to Libya in contravention
to the U.N. arms embargo by British, American and Canadian companies. 20
But attempts to get them to do more are problematic, not to mention
unilateral attempts to impose by the extraterritorial reach of U.S. law
what the U.S. failed to achieve in an international forum.
Consequently, the behavior pattern of our friends may often differ from our
expectation (although perhaps not too different from our behavior in cases
in which our interests are at stake). In short, our friends are going to
trade with countries of proliferation concern. And while they most likely
will not transfer missiles or comprehensive missile technology, expanding
trade will bring those countries three things which are relevant to missile
proliferation: money, technology and networks.
Italy and Libya for instance, trade oil, gas, oil and gas equipment,
telecommunications, construction, cars and hundreds of items ancillary to
those industries. Money is fungible, so any profits can be turned to
military acquisition, including missiles. The technology transfer is more
indirect, but Libya is gradually acquiring expertise in a variety of
related fields. It can turn some of this to some military applications. To
fill the gaps, it can draw upon a vast network of people, companies and
countries which exponentially expand its ability to buy, swap or steal
whatever it wants. The attached diagram--already hopelessly complex--only
begins to portray the web of contacts developed with extensive trade.
There is a risk here, but there may not be a choice--it is really doubtful
that the U.S. is going to be able to isolate every country it decides is a
bit nasty. The question is whether a more flexible approach can gain us
better cooperation from our friends on the missile proliferation and other
matters which are really important, including planning for the near
certainty that some countries of concern are going to acquire ballistic
missiles and better ones after that. To conclude with another Italian
example, the day may come when we want Rome's help on Apache, when we want
to deny Libya something truly important, when we seek to thwart a restart
of construction at Tarhuna, when we want Italian bases for some military
mission or we want Italy to assume the role of Southern outpost of a
European missile defense system. We should deal with Italy today in a
manner most likely to evoke its cooperation tomorrow.
Figure 2-1. Tranfers of Missiles and Related Technical Assistance from
Industrialized Countries to the Middle Easy, 1960-89
1. Ambassador David Smith is President of Global Horizons, Inc., consulting
on defense, international affairs and overseas business development. Senior
Associate, Center for Strategic and International Studies.
2. Nolan, Janne, E., Trappings of Power: Ballistic Missiles in the Third
World, Washington: Brookings, 1991, p. 26.
3. Hoffmann, Stanley, "The American Style: Our Past and Our Principles,"
Foreign Affairs, January, 1968, pp. 362-376.
4. Lippmann, Thomas W., "U.S. Defers Sanctions on Iran Gas Deal," The
Washington Post, October 4, 1997, p.1.
5. Conversations with friendly country defense journalists and officials.
6. Bonner, Raymond, "Libya is said to Evade Sanctions by Buying U.S. Goods
in Europe," The New York Times, October 4, 1997, p.1.
7. Bajak, Frank, "Libya Building Huge Underground Weapons Plant," AP
Worldstream, March 2, 1994.
8. Gillette, Robert, "Third World Missiles Linked to German, Italian
Firms," Los Angeles Times, February 8, 1989, p.1; Bonner, Raymond, "Libya
is Said to Evade U.S. Sanctions by Buying U.S. Goods in Europe," The New
York Times, October 4, 1997, p.1.
9. Conversation with a member of the U.S. Delegation.
10. Gertz, Bill, "China in New Nuclear Sales Effort," The Washington Times,
March 13, 1998.
11. Betts, Paul, "Italian Oil Chief Defiant on Sanctions," Financial Times,
March 18, 1998, p. 36.
12. Nelan, Bruce W., "Taking on the World," Time, August 19, 1996, p. 36.
13. Prepared Statement of Chairman D'Amato, United States Senator Alfonse
D'Amato, New York, Press Release, October 30, 1997.
14. Owen, Richard, "Italy declares Tehran Free of Terror Links," The Times,
March 3, 1998.
16. Secretary of State Madeleine K. Albright, Press Briefing with Italian
Foreign Minister Lamberto Dini, U.S. Department of State, Office of the
Spokesperson, February 16, 1997.
17. Guseinov, Elmar, "New COCOM Being Born Amid Disputes Between Moscow and
Washington," Izvestia, April 16, 1996, p. 3.
18. Mian, Yawar, "Libya: MEED Special Report," Middle East Economic Digest,
(44)41, October 31, 1997, p. 31; Nicholson, Mark, "Much of Europe and Libya
Look Set for Business as Usual," Financial Times, April 3, 1992, p.3;
"Libyan and Moroccan Governments Sign Agreement to Manufacture FIAT Cars,"
Reuter Textline, April 14, 1997; "Libya: Upcoming Invitation to Bid,"
Export Sales Prospector, (3)6, March 1, 1997; "An $800 Million Telephone
Trunk Network in Libya," Reuter Textline, January 31, 1987.
19. Lewis, Paul, "Sanctions on Libya Begin to Take Hold as Deadline
Passes," The New York Times, April 15, 1992, p.1.
20. "Italy Seizes Warplane Parts Bound for Libya," Reuters, November 30,