by Tamar Gabelnick and Anna Rich
Social Justice magazine, Vol. 27, No. 4 (2000)
During the Cold War the U.S. government exempted the conventional
weapons trade from its general advocacy of free trade. U.S. arms
exports were restricted to preserve national security, and the
U.S. worked closely with allies to limit conventional arms proliferation.
But the Clinton administration took advantage of the change in
the global security environment to reverse many self-imposed barriers
on arms exports. Financial gain and competition-not national or
global security-are now the dominant values governing arms exports
in today's global marketplace.
National security concerns still receive some lip service,
but the proliferation of arms-transfers tells an entirely different
story. At least 154 out of 190 independent countries will get
contracts for, or deliveries of, American arms in fiscal year
2000, according to the U.S. government. From 1995 to 1997, U.S.-based
firms profited from a 55% share of the global arms market (up
from roughly a third during the Cold War), exporting four times
more than its closest competitor (Britain). U.S. arms deliveries
have also increased in absolute terms-from $23 billion in 1987
to almost $32 billion in 1997. Like McDonald's and Coca-Cola,
American arms have penetrated the world market.
Declining global demand for weapons since the end of the Cold
War makes U.S. dominance of the arms trade all the more remarkable.
Three factors explain American defense manufacturers' ability
to grab a larger piece of a shrinking pie: (1) a sophisticated
technological base (thanks to high U.S. defense procurement and
government investment in R&D); (2) governmental promotion
of and financial support for arms exports; and (3) industry willingness
to provide extra incentives to make a sale. Consequently, the
U.S. arms industry has neither cut production significantly nor
converted to civilian products despite lower U.S. arms purchases.
In a 1995 Presidential Decision Directive, the Clinton administration
expressly stated for the first time that supporting U.S. economic
interests was an important policy consideration when making arms
transfer decisions. The government's rationale is that foreign
sales maintain defense-related skills and infrastructure in the
U.S. at a time of reduced U.S. government arms procurement, thereby
creating lower per-unit costs for U.S. weapons procurement while
also promoting "interoperability" with allies for joint
operations. This conventional wisdom, however, is rarely supported
by hard analysis. The General Accounting Office, for instance,
has questioned the per-unit cost savings supposedly derived from
arms exports, and allies can achieve interoperability without
purchasing only U.S. equipment.
In today's global economy, the U.S. government (in particular
the Pentagon) has become an advocate for U.S. companies interested
in exporting arms. During the 1990s the Defense Technology Security
Administration (DTSA), the agency responsible for strategic evaluation
of arms exports, was moved from its traditional position in the
Pentagon's policy division to Acquisition, Technology and Logistics,
the directorate devoted to reducing costs for U.S. arms procurement.
The overarching goal has shifted from control for national security
reasons to export promotion. In addition, the Arms Transfer Policy
Review Group, a new committee responsible for rendering decisions
about controversial arms sales, is also supposed to "champion"
arms industry concerns. The Secretary of Defense himself serves
as an unofficial sales representative for U.S. industry, routinely
promoting U.S. arms sales on foreign visits.
As a result of this new market orientation for decisions about
arms transfers, the U.S. government has proved willing to export
increasingly sophisticated weaponry to an ever-widening group
of countries. The U.S. has introduced new arms technology into
highly charged regions like the Middle East and the Aegean, and
is helping Taiwan further its arms race with China. U.S. weapons
manufacturers can now count on a large export market (regardless
of the sensitivity of the technology)-sometimes before the weapons
are produced for American use. For example, the United Arab Emirates
(UAE) just finalized a deal to buy 80 F- 16s that will have better
range, radar, and targeting accuracy than those used by the U.S.
To seal arms sales agreements, exporters must often provide
importing countries with a share of production, thereby further
contributing to global arms proliferation by increasing the number
of producers. These production-sharing, or offset, arrangements
can include local assembly work, subcontracting agreements, joint
weapons development, and technology transfers. In today's buyers'
market, offsets may exceed 100% of the value of the weapons, and
may include greater access to U.S. technology and demands for
blanket re-export rights. U.S. firms-though not their employees-have
embraced this globalization of arms production. Turkey and South
Korea now produce F-16 fighter jets for their own use, and Turkey
has so far produced 46 jets for export to Egypt, over the protests
of Lockheed-Martin workers. The prevalence of offsets, which send
jobs and production overseas, undercuts the argument that arms
sales significantly benefit the U.S. economy.
The U. S. government intends to take advantage of the global
economy to carve out an even larger market share for U.S. arms.
Apparently, the plan is not merely to maintain existing levels
of commercialism, but to further weaken the arms export control
The Pentagon and U.S. defense industry claim that far-reaching
reforms are needed to keep pace with a globalized economy, to
increase Europe's defense capabilities, to ensure continued U.S.
access to the European arms market, and to increase the likelihood
of trans-Atlantic industrial mergers. The U.S. arms industry complains
that the cumbersome U.S. export-licensing process hinders exports
to-and joint projects with-European allies. The Clinton administration-eager
to be receptive to industry interests-approved a series of reforms
to revamp the export process, announced at the May 2000 NATO ministerial.
They exempted certain allies from arms export licensing requirements,
allowed a single "program license" to cover an entire
major weapons system sale, sped up the licensing process for NATO
members, and loosened restrictions on the resale of U.S. weapons
to third parties. The underlying objective? To sell more weapons,
This rush to globalize arms production and sales ignores the
grave humanitarian and strategic consequences of global weapons
proliferation. Already, profit motives in the military industry
have resulted in arms export decisions that contravene such U.S.
foreign policy goals as preserving stability and promoting human
rights and democracy. In this "profit-over-pragmatism"
logic, Israel may receive up to $17 billion worth of free U.S.
weapons for signing a peace accord with Syria; Colombia is about
to receive almost one billion dollars worth of arms to fight leftist
insurgents in the name of reducing drug consumption in the U.S.;
and Turkey's failure to reduce human rights abuses or to negotiate
an end to its 15 year-old conflict with Kurdish rebels may soon
be rewarded with a four billion dollar attack helicopter sale.
Recent reforms weakening export controls will further this trend
by focusing on the supposed economic benefits of increased arms
sales instead of the associated human costs.
Changes that reduce the government's oversight of weapons
sales-such as export license exemptions and program licenses-open
the door for unscrupulous exporters and recipients to increase
their exploitation of export laws. The U.S. weapons industry does
not have a good record of self-policing; Lockheed Martin, Boeing,
and other major exporters have recently been indicted for violation
of export controls in connection with sales to China.
Thus far the only country that has been granted a blanket
exemption from export licensing has been Canada. Yet the U.S.
government suspended this exemption in 1999 because Canadian firms
transferred U.S. military technology to Iran and China. The U.K.
and Australia, next in line for blanket exemptions, pose even
greater risks for diversion or unauthorized re-exports. Small
arms exports to the U.K. already had to be suspended in 1999 because
of suspected diversion, and the lack of physical controls over
trade among states of the European Union makes it difficult to
develop an export policy for the U.K. in isolation from other
The U.S. claims it will require recipient countries to improve
their own export controls in exchange for special licensing privileges.
Yet current U.S. market dominance may cause other states to view
the reform process as a rigged game and refuse to participate.
Moreover, without strong voices in the administration calling
for restraint, and with the Pentagon impatient to implement the
new reforms, initially stringent requirements may get watered
down over time. The United States has already demonstrated an
alarming lack of influence over the export policies of even our
close allies. For example, only two NATO members officially recognize
the U.S. government's prerogative to authorize re-exports of U.S.-origin
arms, and official Australian policy explicitly notes that U.S.
regulations on re-exports of U.S. arms are "not recognized
in Australian law."
Proponents of reforms to facilitate arms exports have also
failed to address the political implications of granting privileged
status to close allies and NATO members. By opening the door to
special exemptions for certain states or accelerated service for
NATO members, the U.S. government subjects itself to intense political
pressure to extend favors to as many purchasers as possible. Moreover,
not all NATO members have proved worthy of this privileged status,
either because they have no proven track record on re-exports
(the new Central European NATO members), or because they have
a history of using U.S. weaponry to repress minorities and threaten
Decisions made today about loosening controls on arms exports
and offset arms production will shape the military industry of
tomorrow. The current proposed export reforms will usher in an
era of transnational mergers of defense corporations. Indeed,
the Pentagon's Defense Science Board (DSB) Task Force on Globalization
and Security called upon the Pentagon to "facilitate"
such consolidation in its December 1999 final report. Numerous
joint projects and proposals for increased cooperation with European
and Asian defense companies are already in the works.
These trends could create a transnational defense industry
accountable to none but its shareholders. Recent consolidation
of the U.S. military industry created a few giant companies whose
agendas and interests carry enormous sway in debates about military
spending and export control, while doing little to lower costs
or reduce production capacity. Transnational mega-mergers could
further increase the power of defense companies, again shifting
control away from governments toward private industry. Transnational
defense companies would be eager to market their arms to many
different countries, and could take advantage of the current lack
of consensus about export controls by encouraging the lowest common
standards among exporting nations.
The Defense Science Board's final report predicts a dire scenario
for the future: "with few exceptions, advanced conventional
weapons will be available to anyone who can afford them."
The DSB's conclusion is to give up, telling the Pentagon to stop
worrying about protecting American technological capabilities,
because "clinging to a failing policy of export controls"
could "limit the special influence the U.S. might otherwise
accrue as a global provider and supporter of military equipment
and services." Yet with concerted effort, the assumption
of a highly militarized future in which the U.S. must sell arms
to buy influence can be altered.
The first step would be to increase the U.S. government's
own standards for arms exports. No export reforms should be adopted
unless they can be guaranteed to strengthen U.S. control over
arms proliferation. In addition, the U.S. should adopt a policy
of broad and consistent export restraints to reduce the political
costs of denying a particular arms sale and to give the U.S. government
the moral authority to encourage restraint by other states. Rep.
Cynthia McKinney (D-GA) has proposed a U.S. "code of conduct"
for arms transfers, which would restrict arms sales to countries
that are nondemocratic, aggressors, human rights abusers, or not
open about their military spending. Such a code would effectively
address the real security threats that conventional arms proliferation
pose by preventing arms sales to those countries most likely to
misuse them. If applied fairly and consistently, a code of conduct
would be a more neutral and just export control system than the
current case-by-case decision-making process.
Second, U.S. export controls must not only be strong, but
shared. The Cold War consensus on limiting conventional arms exports
to common enemies has been lost, and an effective new regime has
yet to take its place. Transnational weapons development and production
will require states to make more joint decisions on exports of
these co-developed arms. To avoid the temptation to adopt the
weakest criteria, the international community urgently needs to
adopt strict common standards for arms transfers. The U.S. government
was given a congressional mandate in fall 1999 to develop a multilateral
code of conduct on arms transfers, using criteria similar to McKinney's
Valuable precedents already exist on which to build a future
international consensus. In May 1998, the European Union agreed
to a common set of principles for arms transfers, including human
rights and regional stability. Member states promised to inform
each other of sales denials based on these criteria and to consult
each other if planning to undercut such denials. Several Eastern
European states, Canada, and the U.S. have endorsed the E.U. Code
principles. Other major exporters will need additional incentives
to practice restraint: Russia's conventional arms industry needs
some of the same attention the U.S. government is giving to address
the risk of nuclear proliferation, and China needs to see conventional
arms control as the international norm that must be adopted for
More broadly, America needs to get its priorities straight
with regard to arms exports. Alleged economic benefits of arms
exports should never be allowed to outweigh the risk that those
weapons might be used in human rights abuses or
accelerate a destabilizing arms race. The next administration
can take the first step by developing a new presidential directive
on arms exports that excludes Clinton's reference to "the
impact on U.S. industry and the defense industrial base."
It should also reduce the financial and marketing support for
U.S. weapons sales, shifting these funds into more constructive
Exporting more arms is the easy way to deal with the arms
industry's overcapacity. The U.S. government is creating serious
problems by promoting exports as the solution. A better approach
is to create a responsible arms export policy, and to cut back
U.S. arms production where necessary. With some encouragement
from its constituents, the next administration may muster the
political will to get this done.
Sources for More information
Bonn International Center for Conversion An der Elisabethkirche
25 53113 Bonn, GERMANY Voice: 49-228-911 96-0; Fax: 49-228-24
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American Security Information Council 1900 L St. NW, Ste. 401
Washington, DC 20036 Voice: (202) 785-1266; Fax: (202) 387-6298
E-mail: email@example.com Website: http://www.basicint.org/
Contact: Theresa Hitchens
Federation of American Scientists Arms Sales Monitoring Project
307 Massachusetts Ave. NE Washington, DC 20002 Voice: (202) 675-1018;
Fax: (202) 675-1010 E-mail: firstname.lastname@example.org Website: http://www.fas.org/asmp/
Contact: Tamar Gabelnick
Institute for Policy Studies Economic Conversion Project 733
15th St. NW, Suite 1020 Washington, DC 20005 Voice: (202) 234-9382
x214; Fax: (202) 319-3558 E-mail: email@example.com Contact: Miriam
World Policy Institute 65 Fifth Ave., Suite 413 New York,
NY 10003 Voice: (212)229-5808; Fax: (212)229-5579 E-mail: firstname.lastname@example.org
Contact: Bill Hartung
Tamar Gabelnick is Director of the Arms Sales Monitoring Project
of the Federation of American Scientists (307 Massachusetts Ave.
NE, Washington, DC 20002; e-mail: email@example.com). The project
promotes restraint in U.S. and global conventional arms production