Commission to Assess the Ballistic Missile Threat to the United States
Appendix III: Unclassified Working Papers


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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 World, 1991 Introduction 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 equals." 3 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 cases). 8 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 expectations. 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 roles. 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. 15. Ibid. 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, 1995


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