September 7, 2000

Eric D. Newsom

Assistant Secretary of State for Political Military Affairs

U.S. Department of State

2201 C St. NW, Room 6212

Washington, DC 20520

Dear Secretary Newsom,

We are writing as participants of the Arms Transfer Working Group – an alliance of more than 30 arms control, human rights, peace and religious organizations working for the non-proliferation of conventional weapons – to express our concern about the “Framework Agreement Concerning Measures to Facilitate the Restructuring and Operation of the European Defense Industry” signed in July by the defense ministers of France, Germany, Italy, Sweden, Spain and the United Kingdom. We are especially concerned about the link between the U.S. Defense Trade Security Initiative (DTSI) and the Framework Agreement. We believe that these new arrangements, especially taken together, could result in a lower level of control over the transfer of weapons and sensitive technology.

Although the Framework Agreement is aimed at restructuring the European defense industry, its implementation may also impact the way U.S. arms and technology are handled by European governments and firms. For example, the goal of the Agreement is to eliminate existing obstacles to intra-European joint ventures and mergers, thereby facilitating the movement of technology and subsystems among participating European states. This may mean that the DTSI’s favoritism to certain states as a reward for adopting strict control procedures – like the planned license exemption for the United Kingdom – becomes meaningless in the end since there will be fewer and fewer “national” companies and single country weapons production. The lack of transparency surrounding transfers among firms involved in joint production or within multinational firms makes it all the more difficult for the United States to exercise control over its exports once they arrive in Europe.

In addition, by encouraging parties to the Agreement to reduce barriers to trade in military goods, parts, and technology – even those not traded in the context of joint production – the new European arrangement will further reduce the level of control over the movement of arms across Europe. Indeed, the Framework Agreement has the potential to move European states down a slippery slope toward the lowest common denominator of export controls.

Further, the Framework Agreement is designed to make the European defense industry more competitive in the global defense market by facilitating the joint decision-making process on third-party exports. If the Europeans are successful in capturing a greater global market share, U.S. firms could respond by demanding further weakening of U.S. arms export controls. This could conceivably develop into a race to the bottom as the American and European defense industries struggle to secure lucrative third-party contracts.

When your office presented the U.S. government’s reform initiative to non-governmental organizations in May, we were informed that your goal was to elicit tighter levels of export control by close allies. Instead, the European Framework Agreement represents a considerable step in the opposite direction. Clearly, the DTSI has not had its desired impact. We therefore urge Departments of State and Defense to engage the responsible European governments at the highest possible level to seek a mutually agreeable way to implement this agreement without decreasing the effectiveness of current U.S. and European export controls.

Finally, we would like to have the opportunity to meet with you or someone in your office to discuss these concerns, and to be given an update on negotiations with the United Kingdom and Australia on license exemptions. Please contact Arms Transfer Working Group co-chairs Tamar Gabelnick (202-675-1018) or Erik Floden (202-546-0975) at your earliest convenience to set up such a meeting.

Thank you for your time and consideration.

Theresa Hitchens, Research Director

British American Security Information Council

Rachel Stohl, Senior Analyst
Center for Defense Information

John Isaacs, President

Council for a Livable World

Jordana Friedman

Director, International Security Program

Council on Economic Priorities

Tamar Gabelnick

Director, Arms Sales Monitoring Project

Federation of American Scientists

Joe Volk, Executive Secretary

Friends Committee on National Legislation

Maurice Paprin, Co-Chairman

Fund for New Priorities in America

Loretta Bondi

Advocacy Director, Arms and Conflict Program

The Fund for Peace

Lyn B. Neylon, President

Human Rights Access

Martha Honey

Director, Peace and Security Program

Institute for Policy Studies

Peter Davies, U.S. Representative

Saferworld

Hari Scordo, Executive Director

Veterans for Peace

Mike Amitay, Director

Washington Kurdish Institute