A Framework for Limiting the Negative Consequences of Surplus U.S. Arms Production and Trading

Lora Lumpe
Director, Arms Sales Monitoring Project, Federation of American Scientists
for the Council on Foreign Relations Defense Industry Globalization Study Group(1)
8 November 1996

Summary. The paper highlights several negative trends arising from today's extremely competitive arms market, as governments seek to sustain surplus production capacity through exports. Without new policies, it is expected that each of these trends will grow more pronounced.

The paper then argues that, given these trends and the changed international environment, conventional weapons trading should now be viewed as a central security concern, rather than principally as a tool in the service of diplomatic, military, or economic policies.

It suggests a framework for limiting dangerous arms transfers that places human rights, democratic governance and non-aggression at the center of arms export decision-making, rather than on the periphery. These criteria, which can reasonably be assumed to correlate with stability and peace, would be applied universally--to current allies, friends, and foes alike. This forward-looking framework seeks to predict where a change in regime may be anticipated and helps minimize future harm to U.S. and global peace and security. In addition, the paper proposes that the export of certain weapons which pose unacceptable risks either on humanitarian grounds or with regard to regional military stability should be barred to any end user.

These policies serve the fundamental security interests of the American people and should be pursued unilaterally. As it has done on several other occasions, the administration should also seek through bilateral relationships and multilateral fora to build these criteria into widely-accepted norms and to multilateralize them through formal agreements and obligations in order to keep others from endangering the peace.

The Market Today: Dangerous Competition, Diminishing Returns

The global trade in conventional weaponry has declined dramatically over the past decade, from nearly $80 billion in 1987 (in inflation adjusted dollars) to $32 billion in 1995.(2) This steep decline is largely attributable to the end of subsidized arms transfers from Russia after the collapse of the Soviet Union, and to sharp cuts in procurement by East European governments.(3)

Nevertheless, the massive arms industrial capacity built up in North America, Europe and Russia during the Cold War is resistant to both closure and conversion, and arms manufacturers are aggressively seeking export markets to offset their own governments' reduced procurement.

Boosted by the powerful advertising of the Gulf War, as well as active government support, American weaponry now overwhelmingly dominates the market (see table 1). In 1995 the United States exported $16 billion of newly-manufactured arms, more than all other countries of the world combined.(4) The arms industries of western Europe--in particular, Britain, France, and Germany--are competing fiercely with U.S. industry for sales to the developing world, which accounts for the vast majority of the market (75 percent in 1995, in terms of dollar volume). And in 1995 Russia also re-emerged as a major player in the arms bazaar, reportedly edging out the United States in terms of the value of new sales contracts signed.(5)

The residual surplus of production capacity and the diminishing market mean that the arms bazaar is more competitive and commercially driven than ever. This is resulting in several dangerous trends as suppliers vie for market share.

First, arms manufacturers and governments are putting top-of-the-line systems previously not for sale--such as American F-15E Strike Eagle and Russian Tu-22M Backfire bombers, modern European diesel attack submarines, supersonic, anti-ship missiles, advanced air-to-air missiles--on the market.

Table 1: Value of Worldwide Arms Shipments, 1991-1995
1991 1992 1993 1994 1995 Total
United States
gov't negotiated
$9,360 $10,713 $10,685 $9,842 $12,549 $53,149
United States
industry negotiated
$5,166 $2,667 $3,808 $2,099 $3,620 $17,360
Russia $6,200 $2,500 $3,100 $1,500 $3,100 $16,400
France $2,200 $1,800 $1,100 $1,400 $2,200 $8,700
U.K. $4,700 $4,700 $4,600 $5,200 $4,900 $24,100
China $1,400 $1,000 $1,200 $700 $600 $4,900
Germany $2,400 $1,100 $1,700 $1,400 $1,200 $7,800
Italy $300 $400 $400 $100 $0 $1,200
All other Europe $1,800 $3,000 $1,500 $1,300 $1,000 $8,600
All others $1,900 $1,700 $2,000 $2,400 $2,700 $10,700
Total $34,426 $29,580 $30,093 $25,941 $31,869 $152,909

Note: in millions of current year dollars. All data based on calendar year except for U.S. industry-negotiated sales, which is on a U.S. fiscal year basis. Sources: CRS 1988-1995; DSAA 1995.

In the past, for security and arms control reasons, the United States generally exported older, less capable systems, a generation removed from those fielded with U.S. forces. Now, domestic economic and political considerations increasingly drive modern weapons onto the market. The dangers of such exports--stimulation of arms races and possible use in regional or internal conflict--are overlooked to maintain jobs and excess arms-industrial capacity and to maximize corporate profits. In some cases, policymakers use exports to maintain production lines of sophisticated weapons systems which the Pentagon is finished buying.(6) In other cases, policymakers allow contemporaneous sales of new weapons systems abroad to lower per unit procurement costs for U.S. forces. The existence of a comparable weapon system in another country, whether or not it has been exported, is also now used as justification for marketing high-end weapons.

Recent sales to the Middle East demonstrate America's increased willingness to export higher technology weapons in order to maintain now-surplus production lines. In September 1992, the Bush Administration and Congress approved the export of 48 McDonnell Douglas (MD) F-15E Strike Eagle bombers to Saudi Arabia largely on the basis of an aggressive "jobs now" campaign waged by the manufacturer. The Air Force was finished procuring the jet, and so MD devised a national campaign to promote the controversial sale explicitly on the number of jobs that it would sustain.(7) The sale got caught up in presidential politics, with then-candidate Bill Clinton endorsing the deal while on a campaign stop in St. Louis, where the jet is manufactured. Shortly thereafter President Bush announced his support for the sale while at a campaign-style rally at the McDonnell Douglas factory.

This was the first time the jet--which can deliver twelve tons of bombs 1,000 miles--had been exported to any nation. Only two years previously, the plane was rushed into service with the U.S.A.F. for the Gulf War, where it was used on hundreds of deep-strike bombing raids. The Saudi planes will be less capable than U.S. F-15E jets: they will carry less ordnance and are not currently slated to carry AMRAAM or HARM missiles, and the radar will have a lower resolution. Nevertheless, this was the most sophisticated combat aircraft the United States had ever exported...until a year and a half later, when the Clinton Administration and Congress agreed to give Israel 21 F-15E bombers with greater capabilities, in order to maintain Israel's qualitative military edge over Saudi Arabia.

Having gained U.S. government approval for two sales of its most advanced fighter-bomber, MD is eagerly anticipating more: It recently competed (unsuccessfully) for a sale of 20 to 80 long-range attack planes to the United Arab Emirates. Currently still contending for that potentially $9 billion sale is Lockheed Martin, which developed an "enhanced strategic" version of its popular F-16 fighter in the competition for the Israeli fighter sale. The F-16"ES" would have several improved features over the F-16s flown by the U.S. Air Force: a reduced radar signature, conformal fuel tanks, internal navigation and targeting gear and a un-refueled combat range of 1,000 miles. In addition, as a condition of the sale, the U.A.E. has demanded that the jets be equipped with the Air Force's most advanced medium-range air-to-air missile (AMRAAM), which the Clinton Administration has agreed to. Previously the U.S. had declined to export this missile to countries in the region. Whether Lockheed ultimately wins the sale to the UAE or not, further sales of AMRAAM missiles to U.S. allies in the Persian Gulf and Israel can now be expected.

Through these sales, the U.S. government has dramatically raised the standard of combat aircraft and munitions of U.S. allies in the region, many of whom are engaged in a "cold peace" with each other. Large-scale sales of advanced conventional weapons to our Middle Eastern allies play into the threat perceptions of "unfriendly" governments as well, in this case Iran and Iraq, spurring them to seek countervailing weapons. Such sales by the United States also give the green light to other arms exporters to introduce new levels of military technology into this and other tense regions. A 1995 report by the CIA's non-proliferation center noted that "as countries' reliance on exports to maintain their defense industrial base grows, pressures will increase to export advanced conventional weapons and technologies to remain competitive with the United States in the world arms market" (emphasis added).(8) By making multi-billion dollar sales of extremely advanced weaponry to the Middle East, the United States government has diminished credibility in pressing other governments to refrain from making sales that it views as dangerous.(9)

At the same time, defense and intelligence officials now routinely cite the spread of advanced and, on occasion, low end conventional weapons as a threat to U.S. security.(10) And, completing the circle, the military services and industry justify development and production of next-generation weapons on the basis of arms being acquired by Third World nations, including previously-exported U.S. systems. In lobbying Congress for production funds for its F-22 fighter, Lockheed cites the widespread proliferation of very capable combat aircraft, like the Russian MiG-29 and the American-made F-15 and F-16.(11)

A second dangerous feature of today's market is that buyers are increasingly demanding the technology to produce weapons, instead of simply buying the weapons off the shelf. Manufacturers frequently grant licenses to recipient countries to produce components or to conduct final assembly of the weapons system.

A prime example is the $5.2 billion Korean Fighter Program deal of 1991. South Korea contracted to purchase twelve completed F-16C/D fighters and thirty-six aircraft kits for assembly in Korea. In addition, Korea--which is seeking to develop an indigenous fighter aircraft production capability--purchased the right to manufacture seventy-two F-16s under license in Seoul. As an offset to the deal, Lockheed is helping South Korea develop an indigenous combat training aircraft.

In order to make the sale, U.S. industry and policymakers are willing not only to send manufacturing jobs overseas, but also to risk the creation of new competition in the near term. Such deals contribute to an even greater global surplus of weapons production capacity and, eventually, to more exports, but the security risk of helping to establish new weapons industries in countries around the world takes a back seat to pressures to make the sale now.(12)

A third negative consequence of today's hyper-competitive arms bazaar is the increasing level of public money being expended to help drum up business. Despite their dominance of the market, American arms corporations often claim that European competitors receive a higher level of government support.(13) Citing an "unlevel playing field," U.S. industry has sought--and received--many new forms of public assistance to promote and finance weapons exports in the past five years.(14) At the same time, European arms industries seek increased assistance to overcome what they see as unfair competition from American industry. The resulting spiral of initiatives--which make weapons cheaper and easier for customers to finance--calls into question the alleged economic benefits of arms exports. According to one study, the American public paid out an estimated $7.6 billion to underwrite weapons exports in 1995,(15) while new sales contracts signed that year were valued at $8.2 billion.(16)

Fourth and perhaps most dangerous, the competitive market results in indiscriminate exporting. The vast majority of U.S. weapons (in terms of dollar volume) are going to non-democratic,(17) repressive, or aggressive governments, often in apparent violation of U.S. law. Diplomatic rationales have long been used to justify arms trading, with proponents claiming that arms sales allow suppliers to gain and maintain "influence" with recipients. Over the years Congress has attempted to exert this leverage by placing conditions on U.S. weapons exports.(18) However, these requirements have often been tepidly enforced or blatantly ignored, as U.S. clients have acted in opposition to American laws or policies, largely with impunity.(19)

Today, suppliers are shying away from even attempting to influence buyers' behavior. The arms bazaar is increasingly run as a free market, and the global oversupply of arms means that buyers call the shots. They threaten to turn elsewhere if they dislike conditions attached to a sale. Thus, sales proponents pressure their governments to renounce all conditions which might offend customers.(20)

Elevating Conventional Arms Proliferation to A Core Security Concern

A largely unregulated and highly competitive commerce in conventional weaponry also exacerbates the principal post-Cold War threats to U.S. and global security. According to the Pentagon and White House, the greatest dangers today are instability in the developing world (usually engendered by or leading to internal warfare, but also including major regional conflicts) and the proliferation of nuclear, chemical and biological weapons (weapons of mass destruction) and ballistic missiles.(21) These threats are said to justify the continuation of Cold War level military spending--$260 billion this year.

It can reasonably be stated that the arms trade contributes to all of these threats. From this perspective, the arms trade itself should be addressed as a core security concern.

The proliferation of weapons of mass destruction is closely connected with the spread of conventional arms. Conventional weapons platforms--bombers, attack helicopters, long range artillery rockets--can be used to deliver chemical, biological or nuclear payloads. More fundamentally, conventional arms are part of a weapons continuum that expands naturally into weapons of mass destruction. Regimes do not decide to "go nuclear" (or "chemical") in a vacuum. They do so in the context of conventional arms races, and usually because they face an imbalance of conventional military force.

For example, consideration should be given to the impact that tens of billions of dollars worth of high end combat equipment, recently sold to the Persian Gulf sheikdoms, might be having on Iranian calculations about potential nuclear weapons plans. Currently, in so far as U.S. administration policymakers will acknowledge that conventional and weapons of mass destruction proliferation are related, they seem to believe (in select cases) that a shipment of modern conventional arms can effectively dissuade governments from seeking to acquire nuclear weapons.(22)

Conventional arms trading is integral to ongoing global warfare. This was the case in Iraq, Somalia, Bosnia, Rwanda, and Liberia. In the more than thirty conflicts currently raging, few combatants produce any let alone all of their own munitions. The international arms trade--in both its licit and illicit dimensions--directly enables and sustains fighting.

Throughout the Cold War, conventional arms transfers were used to build and maintain military alliances against the spread of Soviet influence. Arms exports were also employed to serve a mix of domestic and foreign policy goals: gaining access to overseas military facilities... attempting to dissuade the proliferation of weapons of mass destruction...maintaining the arms industrial base... promoting "interoperability" of U.S. and foreign military forces...helping friends and allies deter aggression. In its February 1995 policy on conventional arms, the Clinton Administration reiterated the legitimacy of using arms exports in all of these ways.(23)

With conflict and weapons proliferation as the central organizing principles of U.S. (and global) military planning today, conventional arms export policies must be fundamentally reassessed. Conventional arms proliferation itself should be viewed as a central security concern, rather than as an instrument that can be used to advance other goals.(24) The rationales for arms exporting must be carefully weighed against the negative consequences of a competitive and largely unregulated market place, and against the potential for playing into today's central security threats.

For example, the pursuit of "interoperability" of weaponry is fast becoming the administration's most prevalent rationale for widespread arms exports. Interoperability-- commonality of arms--is considered to be important for coalition warfare, which the U.S. built up during the Cold War in order to contain the spread of communism. Both the "National Security Strategy of Engagement and Enlargement" and the Pentagon's "Bottom Up Review" now require that U.S. forces be prepared to fight or intervene anywhere in the world, quickly, thus necessitating forward deployed forces. Arms transfers and joint military training exercises are used to gain access to overseas bases and to establish the infrastructure necessary for U.S. intervention.

However, in the absence of discernable enemies, such as the Soviet bloc during the Cold War, U.S. led coalitions are arming against such abstract targets as "regional instability" and "uncertainty," according to Pentagon planning documents. What is to prevent the liberal transfers of arms used to cement these alliances from contributing to the regional instability and uncertainty? As a case in point, in February of this year President Clinton personally intervened to head off a military confrontation between NATO partners Greece and Turkey over a disputed Aegean island. Airspace violations are commonplace between the two, and Turkey said last year it would consider it an act of war if Greece ratified the Law of the Sea Treaty, which would legally extend Greece's territorial waters. The head of U.S. Naval Intelligence called Turkish-Greek animosity "Among the most worrisome situations developing in Europe, and one of the most dangerous to NATO as an institution."(25) According to the U.N. Register of Conventional Arms, the two countries have been the leading arms importers for the past three years, taking delivery of massive quantities of weaponry (see table 2).

Table 2: Arms Flow to Greece and Turkey, 1992-1995
Battle Tanks
Armored Combat Vehicles
Large Caliber Artillery
Combat Aircraft
Attack Helos.
Missiles/ Launchers

Note: 1995 data includes only U.S. and British arms transfers. Source: UN General Assembly documents A/50/547, A/49/352, A/48/344; 1995 information from U.S., U.K. governments

Rather than presume that arms transfers will advance general foreign and domestic policy goals, security interests would seem to dictate that the burden of proof be shifted, with the presumption toward denial. New policies are needed which ensure, to the greatest extent possible, that only "safe sales" go forward.

Determine Customer Eligibility on a Standard of Conduct

One important screen for determining arms exports should be the character of the recipient government. The Clinton Administration's preferred approach has been to isolate a handful of regimes considered to be "rogues" acting outside of acceptable norms of behavior. The administration has sought to build consensus around cutting off the flow of conventional weaponry and military-related technologies to Iran, Iraq, Libya and North Korea through the newly-established Wasennar Arrangement,(26) while considering most of the rest of the world fair game for weapons sales. In fact, a frequent justification for many arms sales is the need to deter these governments.

When asked about the criteria for inclusion on the U.S. administration's rogue list, Under Secretary of State Lynn Davis said that United Nations arms embargoes were key in the cases of Iraq, Libya and North Korea. (Indeed, all U.N. members are committed to follow U.N. Security Council mandated arms embargoes. However, several other countries or groups under U.N. embargoes have not been singled out for rogue status.) Iran is included, according to Davis, because of its nuclear weapons aspirations, support for terrorist groups, and opposition to the Middle East peace process.(27)

The main flaw of such an approach is that it is backward-looking, selectively targeting for restraint only those governments which are already considered to be outside of the pale. Part of what makes them so menacing is weaponry they have already accumulated. Iran and Iraq, of course, used to be American allies, and as such received billions of dollars of American weaponry and advanced military technology, respectively.

Moreover, such an approach ignores signs of instability--repression or even aggression-- among governments currently considered to be friends or allies. For instance, in the process of arming Persian Gulf allies against Iran and Iraq, the U.S. administration is apparently willing to overlook many troubling signs. Massive levels of arms sales to Saudi Arabia have contributed to anti-western (in particular anti-American) sentiment, as these sales undermine the Saudi economy and the regime's ability to maintain subsidies that Saudi citizens have become accustomed to.(28) Similarly, while professing to support movement toward democracy in Bahrain, the U.S. administration has supplied weaponry useful for putting down pro-democracy demonstrations in Manama.

And, according to the 12 February issue of U.S. News & World Report, a classified report by the CIA's "State Failure Task Force" has identified Turkey as a state at risk of collapsing. The anti-western Islamic party won a plurality in parliamentary elections last December. Prime Minister Tansu Ciller's party lost just weeks after the sale of 120 Army Tactical Missiles, which showed the strong backing of the United States for her government. Human rights and political abuses continue in Turkey's prosecution of its war on Kurdish militants (PKK) and civilians. The PKK initiated a unilateral cease-fire in mid-December 1995. To date, the Turkish government has not responded.

A forward-looking framework should seek to ensure that American-supplied weapons don't again outlast American alliances and end up in the hands of tomorrow's pariah. It should establish some criteria to help determine which governments are responsible and stable allies, and therefore should be eligible to import U.S. weaponry. These criteria should be applied universally, to current friends and foes alike, and they should seek to identify the types of governments that, because they lack popular support or persecute segments of their population, might lose power. Of course this can never be perfectly predicted, but some guidelines can help determine more or less risky transfers.

One effort to do this is embodied in legislation introduced into the last two Congresses. The "Code of Conduct on Arms Transfers Act" would condition U.S. exports on recipients' adherence to internationally-recognized norms of human rights, their participation in the U.N. Register of Conventional Arms, and their embrace of democracy and non-aggression. The Code's central premise is that governments which meet these criteria are more likely to be stable allies, better ensuring that U.S. arms do not again outlast U.S. alliances. The law would force heightened scrutiny, public debate and--most importantly--a vote on the very important policy decisions to supply weaponry to a particular regime.(29)

As Rep. Cynthia McKinney said in introducing the bill, "For years we sold weapons to dictators and provided military training for their officers. We armed the Shah of Iran, we armed Iraq, we armed Panama, we armed Somalia and we armed Haiti. We continue to pay for these sales with American tax dollars and American lives. There are presently some restraints on the arms trade. But the failures of the present regimen are all too apparent. In Haiti, the military that has overturned the elected government of President Aristide and scorned the Governor's Island accord is comprised of an officer corps trained in America. At the very least, American arms should not be sold and U.S. military training should not be provided to governments that oppose American principles."(30)

The Executive Branch should view favorably a law which would cause Congress to go on record in support of arms supply to more controversial countries. Congressional consensus, and presumably public support, would have to exist before the administration takes the very significant step of supporting a country through military sales. Indeed, the administration says it supports each of the four criteria, but it does not support the legislation. Its preferred method is to restrict arms only to today's known enemies, while selectively ignoring signs of instability--repression and even aggression on occasion--in U.S. friends and allies. At the same time, the Clinton Administration has repeatedly cited democracy and human rights as pillars of its foreign policy.

Arms supply decisions affect the entire citizenry--through taxes to support the Pentagon and to underwrite occasional wars required to "demilitarize" imported arsenals, and through the lives of soldiers called on to fight. A policy that places human rights, non-aggression and democracy at the center of arms export decisionmaking, rather than on the periphery as is currently the case, would appear to better serve the interests of the American people than current policies. Analogous "codes of conduct" are under development in the United Nations, the European Union and in national capitols of several arms exporting states.

Bar Transfers of Most Dangerous Weapons

A second pillar of a responsible arms export policy would isolate weapons systems that are particularly destabilizing, or that pose an unacceptable humanitarian risk.

Only two categories of conventional weaponry are currently subject to multilateral export control: ballistic/cruise missiles (above a certain range) and anti-personnel landmines. Both cases demonstrate that multilateral export controls are possible to achieve once a category of weaponry has been singled out, and its export effectively stigmatized through government, media and public pressure. In both cases the United States first withdrew itself from the market, and then worked--successfully--to convince other exporting governments to follow suit. A weapon-specific approach also has the distinct advantage of not taking on the entire arms industry, and its allies in the armed forces, but rather discrete segments.

Because of the tragic toll they are taking on non-combatants around the world, over 40 governments have now endorsed the near-term goal of a global ban on the export and use of anti-personnel landmines. The export of several other weapons systems which are by nature indiscriminate, or otherwise violate humanitarian laws of war, should be barred. Cluster bombs and other fragmentation weapons are wide-area coverage munitions, which are inherently indiscriminate. In addition, problems of unexploded ordnance left over mirror those associated with anti-personnel landmines. Fuel air explosives, used by the allies during the Gulf War, and napalm--used extensively by America in Vietnam--are two other candidates for outlawing on humanitarian grounds. (The United States already has a policy banning exports of napalm.)

Western governments decided in the mid-1980s that the spread of ballistic and cruise missiles directly threatened their own security and that of their allies, and that these weapons were particularly destabilizing. For these reasons, the "Group of 7" leading economic powers agreed in 1987 to block such trade through the creation of the Missile Technology Control Regime (MTCR). Now, nearly 30 governments have joined the effort, including practically all missile-producing states.

Other advanced weapon systems that should be considered for export control due to their destabilizing/threatening nature are modern diesel attack submarines, advanced bombers, other stealthy aircraft, and modern anti-ship missiles/naval mines.(31)


1To be published in a book by the Council Foreign Relations, forthcoming 1997.

2Richard F. Grimmett, "Conventional Arms Transfers to the Third World, 1986-1993," dated 29 July 1994 and "Conventional Arms Transfers to Developing Nations, 1988-1995" (hereafter referred to as CRS 1988-1995), dated 15 August 1996, both published by the Congressional Research Service, Library of Congress; Defense Security Assistance Agency (DSAA), Foreign Military Sales, Foreign Military Construction Sales and Military Assistance Facts as of 30 Sept. 1995 (hereafter referred to as DSAA 1995), p. 55.

3U.S. Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers, 1995, table II.

4CRS 1988-1995, p. 81; DSAA 1995, p. 55. According to the CRS report, the United States government exported $12.5 billion of arms in 1995, but the study omits industry-direct sales from U.S. export totals. The DSAA report shows that in fiscal year 1995 U.S. arms manufacturers exported an additional $3.6 billion of weaponry in deals they negotiated directly with foreign governments. Combined, the U.S. exported $16.1 billion of arms, out of an estimated world total of $31.8 billion.

5CRS 1988-1995, p. 5 estimates that Russia made $9.1 billion in new sales agreements and the United States $8.2 billion in new sales in 1995. It is highly likely that U.S. industry contracted for over $1 billion of new sales during 1995, which would mean that the United States remained the leading arms merchant. However, such information is not included in the report, as it is not made public.

6The following weapons systems now or will soon be produced solely for export, as no further U.S. military procurement is anticipated: F-15E "Strike Eagle" fighter/ground attack jet, F-16 "Falcon" fighter jet, M-1A2 "Abrams" main battle tank, AH-64 "Apache" attack helicopter, MIM-107 "Patriot" air defense missile, MIM-23 "Hawk" air defense missile, M-113 armored vehicles, and Type-209 diesel attack submarines (under license from HDW). See Arms Sales Monitor No. 28, p. 2.

7See Arms Sales Monitor No. 16, p. 1; Arms Sales Monitor No. 17 (Washington: Federation of American Scientists, 1992).

8Nonproliferation Center [of the Central Intelligence Agency], "The Weapons Proliferation Threat," March 1995, p. 6.

9See U.S. Nonproliferation Policy, hearing of the House Foreign Affairs Committee (Washington: U.S. GPO, 1994), pp. 27-29 on the difficulty the United States faces in persuading Russia to forgo arms exports to Iran, given high level U.S. arms transfers to Persian Gulf countries.

10The Director of U.S. Naval Intelligence testified to Congress in 1994 that "the overall technical threat and lethality of arms...being exported have never been higher." (Rear Adm. Edward Shaefer, Director of Naval Intelligence Posture Statement, 1994, p. 3.)

Then Director of Central Intelligence James Woolsey testified in January 1995 of the CIA's concern about conventional arms proliferation, which he cited as "a growing military threat, as unprecedented numbers of sophisticated weapons systems are offered for sale on the world market." Especially troubling, he said, "is the proliferation of technologies and expertise in areas such as sensors, materials, and propulsion in supporting the development and modernization of weapons systems. Apart from the capability of some advanced conventional weapons to deliver weapons of mass destruction, such weapons have the potential to significantly alter military balances, and disrupt U.S. military operations and cause significant U.S. casualties." (R. James Woolsey, Director of Central Intelligence, prepared testimony before the Senate Select Intelligence Committee, 10 January 1995.)

11"The F-22 Air Superiority Fighter: Peace Through Conventional Deterrence," March 1994, promotional material prepared by Lockheed, Boeing, and Pratt & Whitney.

12On the prevalence of co-production and licensed production of weapons system, see Office of Technology Assessment, Global Arms Trade (Washington: U.S. GPO, 1991).

On this, see General Accounting Office, "Military Exports: A Comparison of Government Support in the United States and Three Major Competitors," GAO/NSIAD-95-86, May 1995.

These subsidies have included: U.S. taxpayer guarantees for up to $15 billion of commercial loans for weapons purchases (in addition to annual grant military aid appropriations); the waiver of a fee previously included in the price of arms sales to recover some portion of taxpayer-financed research and development costs for the weapon system being exported; and appearances by U.S. military personnel and equipment at overseas air shows and arms bazaars. On the latter point, since 1994, the Department of Defense has certified on nearly 10 occasions that Pentagon assistance to the U.S. arms industry at various arms bazaars is "in the national security interests of the United States." The key justification is that "U.S. industry faces formidable competition from other nations which are actively marketing their equipment globally." (For reportage on these and other subsidy issues, see various issues of the Arms Sales Monitor (Washington: Federation of American Scientists, 1991-1996).

William D. Hartung, Welfare for Weapons Dealers: the Hidden Costs of the Arms Trade (New York: World Policy Institute, 1996).

CRS 1988-1995, p. 78. This figure excludes arms sales agreements negotiated directly by U.S. arms industry, as such information is not made public.

16Dictators or Democracies? Annual Analysis of U.S. Arms Transfers to Developing Countries, 1991-1994 (Washington: Project on Demilitarization and Democracy, August 1995) shows that 85 percent of U.S. arms exports to developing countries during 1991-1994 went to unelected governments.

18U.S. weapons exports are currently subject to the following stipulations of law--

No Retransfer Section 3(a)(2) of the Arms Export Control Act (AECA) requires that countries obtain approval from the U.S. government before re-transferring U.S.-supplied weapons to another country.

No Aggression Section 4 of the AECA authorizes provision of military equipment and services only for internal security, "legitimate self-defense," participation in U.N. operations or operations consistent with the U.N. Charter.

Respect Human Rights Section 502B of the Foreign Assistance Act (FAA) requires that "no security assistance may be provided to any country the government of which engages in a consistent pattern of gross violations of internationally recognized human rights."

No Nukes Section 620E(e) of the FAA mandates that "no military equipment or technology shall be sold or transferred to Pakistan" unless the President certifies that Pakistan does not have a nuclear weapon.

Witness, for example, on-going widespread human rights abuses by the Turkish military and police, Israel's 1982 invasion of Lebanon and recent use of U.S.-supplied arms in attacks on civilian population centers, and Saudi Arabia's retransfer of American-supplied arms to Iraq in the 1980s.

Human Rights and U.S. Security Assistance (Washington: Amnesty International USA, 1996) reports that for fiscal year 1997 the U.S. administration is seeking military aid for 19 governments that are widespread violators of human rights.

20Recent events illustrate reverse conditionality in the arms market.

--When several European governments criticized Turkey for human rights abuses in its war against Kurdish militants, the Ankara government announced it would no longer buy arms from those countries. Turkey placed vocal critics Austria, Finland, Sweden and Switzerland on a prohibited or "red" list; less critical Norway and the Benelux countries were placed on a "yellow" list, meaning that arms purchases from these countries would be reviewed on a case-by-case basis. (See Jane's Defence Weekly 17 April 1993, 29 May 1993, 11 December 1993)

--In 1990, when President Bush was no longer able to certify that Pakistan did not have a nuclear bomb, the United States cut off most arms sales, as required by law. Now, many in the United States are working to end this prohibition, claiming that it is ineffective and simply diverting business from U.S. industry. (The close U.S. military relationship with Pakistan prior to 1990 was also supposed to, and failed to, dissuade Pakistan from building nuclear weapons)

21See the Report on the Bottom Up Review, October 1993; A National Security Strategy of Engagement and Enlargement, July 1994 and February 1995; Annual Report by the Secretary of Defense to the President and the Congress, March 1996.

22Joseph Nye, then Assistant Secretary of Defense for International Security Affairs, recently made this case before the Senate Foreign Relations Committee. As required by a law known as the "Pressler Amendment," the United States suspended most arms transfers to Islamabad in 1990 because of Pakistan's nuclear weapons program. Nye criticized the United States' conventional arms embargo and suggested that it might actually strengthen Pakistani resolve to pursue nuclear weapons. Prior to the embargo, the United States had supplied Pakistan with very sophisticated fighter/bombers and a multitude of other conventional arms--in an effort to dissuade Pakistan from going nuclear. These aircraft now provide Pakistan' most likely means of delivery for a nuclear weapon, according to CIA testimony to Congress in 1991.

According to the policy statement, "Transfers of conventional arms [are] a legitimate instrument of U.S. foreign policy--deserving U.S. government support--when they enable us to help friends and allies deter aggression, promote regional stability, and increase interoperability of U.S. forces and allied forces." In addition, the administration policy imbues weapons exports with several unsubstantiated and near mythical qualities. U.S. arms exports allegedly serve the following goals:

--Prevent the proliferation of weapons of mass destruction and missiles;

--"Promote peaceful conflict resolution and arms control, human rights, democratization"; and

--"Enhance the ability of the U.S. defense industrial base to meet U.S. defense requirements and maintain long-term military technological superiority at lower costs."

White House, Office of the Press Secretary, "Fact Sheet: Criteria for Decisionmaking on U.S. Arms Exports," 17 February 1995.

Reporting in June 1996, the Presidential Advisory Board on Arms Proliferation Policy said that it was "strongly convinced that control of conventional arms and technology transfers must become a significantly more important and integral element of United States foreign and defense policy if the overall goals of non-proliferation are to succeed." Janne Nolan et al., Report of the Presidential Advisory Board on Arms Proliferation Policy, undated (released in June 1996), p. 2.

Rear Adm. Edward Shaefer, Director of Naval Intelligence Posture Statement, 1994, p. 7

Meeting in Wasenaar, Netherlands in December 1995, the U.S. and 27 other governments agreed to the formation of a new regime on exports of weapons and dual-use military technologies called "the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies."

According to a State Department fact sheet, the arrangement will primarily be a forum for consultation and transparency, and "where appropriate, multilateral restraint" on weapons and dual-use technology transfers. The regime relies on each participating nation's own laws and policies to monitor and control export of items to be included on the forum's munitions and dual-use technologies lists. The fact sheet says, "A central part of the regime is the commitment by its members to prevent the acquisition of armaments ... whose behavior today is, or becomes, a cause for serious concern, such as Iran, Iraq, Libya and North Korea."

27Unpublished. Stated on the record at a seminar hosted by the Carnegie Endowment for International Peace.

For an overview of political instability in Saudi Arabia, see Milton Viorst, "The Storm and the Citadel," Foreign Affairs, January/ February 1996.

Currently, the law calls for a vote on arms transfers only if Congress wants to block a sale. Then, an extraordinary two-thirds majority must be mustered in both houses within the 30-day notification period.

Congressional Record, 19 November 1993, pp. E2939-40.

See John Sislin and David Mussington, "Destabilizing Arms Acquisitions," Jane's Intelligence Review, vol. 7 no. 2, pp. 88-90.

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