Clinton's Conventional Arms Export Policy:
So Little Change

Arms Control Today, May 1995


More than two years after presidential candidate Bill Clinton called for negotiated limits on conventional arms transfers-approximately $50 billion worth of U.S. arms sales later-his administration completed its long-awaited review of U.S. arms export policy. Although Clinton criticized the Bush administration during the campaign for failing to initiate a conventional arms control process (see ACT, March 1992), as president he has now decided that the United States should, in fact, maintain its role as the predominant weapons merchant in the world.

In some respects, the new policy embodied in Presidential Decision Directive (PDD) 34-actually surpasses the Bush administration's strong commitment to gaining an even larger slice of the global arms market. It appears the United States is now prepared to sell more-sophisticated weaponry to more countries than ever before justifying such sales when necessary by expressing concern for the economic well-being of the U.S. arms industry.

On February 17, without much fanfare, the White House released a six-page fact sheet outlining the classified policy. It essentially reiterates previous administrations' views, saying "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 sum, it is difficult to find anything new except an explicit statement that the government will consider the impact on the U.S. arms industry when deciding whether to approve an export. Not surprisingly, the country's weapons manufacturers have welcomed the new policy with open arms. Joel Johnson, one of the arms industry's chief lobbyists, has called the new policy "the most positive statement on defense trade that has been enunciated by any administration.

A Pro-Export Arms Policy

At first, the U.S. arms industry feared the incoming Clinton administration would attempt to rein in the country's dominant role in the global arms trade, as the Carter administration had done. These fears quickly proved unfounded. Key Clinton administration officials who had participated in Carter's principled but failed effort (including Defense Secretary William Perry, Secretary of State Warren Christopher and Under Secretary of State for International Security and Arms Control Lynn Davis) made clear in appearances before Congress that they were now pessimistic about the feasibility, and dismissive of the utility, of conventional arms export control-especially if it meant limiting U.S. arms transfers. Having failed during Carter's tenure, these officials were now reluctant to move the new administration particularly in light of its public commitment to maintain U.S. jobs-down a similar path.

Thus, while going through the policy review process, the Clinton team continued-and in many ways exceeded-the pro-export practices of the Reagan and Bush administrations during the Cold War. In fiscal years (FY) 1993 and 1994, the executive branch (and Congress) signed off on record levels of government- and industry-negotiated arms deals (see Table 1). Moreover, the administration actively assisted industry by subsidizing marketing activities, lobbying foreign officials to "buy American" and financing several billions of dollars worth of arms sales. Through it all, the arms lobby maintained its frequent, high-level access to arms transfer policy makers through the State Department' s Defense Trade Advisory Group and the Pentagon's Defense Policy Advisory Committee on Trade.

Meanwhile, the administration stalled on setting up a consultative body, man- dated by Congress in late 1993, which might have provided more circumspect and certainly less self-interested views on arms trade policy. The FY94 defense authorization act (Public Law 103-160) required President Clinton to empanel a com- mission of independent experts to study "the factors that contribute to the proliferation of strategic and advanced conventional military weapons . . . and the policy options that are available to the United States to inhibit such proliferation." The board was to be up and running by December 15, 1993, and a report was due six months later to facilitate the administration's review. On January 23, 1995 only three weeks before the new conventional arms transfer policy was completed President Clinton finally signed an executive order creating the advisory board.

The U.S. arms industry did suffer one partial defeat in the policy when the government rejected the idea of establishing a new loan guarantee program to finance arms sales. Exporters have long sought such a program, claiming that U.S. firms face unfair competition from European arms merchants who have access to government-backed loans. The various agencies involved in the policy review (the departments of State, Defense and Commerce; the Arms Control and Disarmament Agency; and the Office of Management and Budget) disagreed over the need for, and desirability of, additional U.S. financing. The United States already provides over $3 billion in grant aid annually to finance the purchase of new U.S. arms, and an additional $1 billion to aid payment of past military debts Israel owes the United States. The issue of new loan guarantees was pushed all the way up to President Clinton for resolution. He decided not to address it at all. While arms control advocates welcomed the lack of overt support for loan guarantees, the fact that the policy does not oppose a new financing program leaves the door open for Congress to add such a program to future Pentagon budget bills. Members of Congress from districts with major weapons contractors are expected to introduce such legislation shortly.

What is Missing?

The most striking feature of the new policy is what is missing: Nowhere does it state-or even imply-that conventional arms control in general would serve U.S. security interests; nowhere does it acknowledge any connection between the global spread of conventional arms and the regional warfare and instability that has be- come a central organizing principle of post-Cold War U.S. security strategy.

Instead, the administration's policy imbues weapons exports with several unsubstantiated and near-mythical qualities. According to the fact sheet, in addition to deterring aggression, promoting stability and increasing interoperability, the arms export policy will 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."

The influence of the arms industry was clearly an important factor, but the assumptions and trade-offs evidenced by several of these goals are key to understanding why the United States is not working to curtail the global production and trade in conventional weapons.

Sales Equals Restraint

In its opening paragraph, the conventional arms transfer fact sheet states that U.S. policy "promotes restraint, both by the U.S. and other suppliers, in transfers of weapons systems that may be destabilizing or dangerous to international peace" [emphasis added]. Government-supplied data on arms transfers do not bear out this assertion, however. In a report issued last July, the Congressional Research Service (CRS) estimated that governments of the world sold $31.8 billion worth of weaponry in 1993. Of this, U.S. foreign military sales (FMS) agreements accounted for $22.5 billion, or 70 percent of the market. (The CRS report actually understates the magnitude of U.S. arms sales agreements because it excludes sales negotiated directly by U.S. industry but licensed by the government.) More than two-thirds of the U.S. arms sales agreements were with developing countries. It strains the bounds of credulity, however, to believe that the tens of billions of dollars in arms exported around the world by the major suppliers serve the cause of international stability and peace.

Proponents of U.S. arms transfers often claim that the increase in U.S. market share is not due to an increase in sales, but rather to a shrinking market. In truth, U.S. dominance is attributable both to bullish U.S. marketing during and since the 1991 Gulf War and to the sharp fall in Moscow's exports since the collapse of the Soviet Union. In 1991 and 1993, U.S. sales spiked precipitously. Meanwhile, suppliers often cited in the U.S. media as irresponsible merchants of death-namely Russia, China, France and South Africa-had marginal sales by comparison in terms of dollar volume (see Table 2).

Given the overwhelming U.S. dominance of the market and its global political- military influence, U.S. leadership is vital to the success of any arms export control initiatives. The sole concrete-if somewhat anemic-proposal for multilateral restraint put forward in the Clinton policy statement is the establishment of a new arms transfer regime built on the infrastructure of the Cold War-era Coordinating Committee for Multilateral Export Controls (COCOM). The post-COCOM regime will reportedly seek to block all arms and military technology to "rogue" states like Iran, Iraq, Libya and North Korea.

Twenty-three counties have been negotiating the elusive regime since November 1993. It was intended to be up and running by April 1, 1994, when the old COCOM was disbanded. A year later, Russian participation in the regime is said to be the sticking point; the European members will not go forward with the regime until Russia is a member, and Russia cannot join the regime until it renounces arms sales to Iran, one of its chief customers. While President Boris Yeltsin announced in September 1994 that Russia would make no new arms sales to Iran, he would not agree to break existing contracts.

Meanwhile, the U.S. government considers most of the rest of the world fair game (with the exception of a handful of countries facing UN-sanctioned arms embargoes). In 1993, the Clinton administration approved arms exports to over 140 countries. Now, the administration is seeking to expand its sales to Eastern European and Latin American countries-states that cannot really afford high-technology weaponry and may thus require U.S. financial assistance.

The Clinton policy emphasizes "transparency"-openness in exporting-over restraint. In this context, it reiterates U.S. support for the UN Register of Conventional Arms and for the creation of regional transparency measures and registers. The UN register was established in the aftermath of the 1991 Gulf War to guard against further "excessive and destabilizing arms build-ups." Last year, nearly 90 UN members supplied information on imports and exports of seven categories of weapons during 1993, but several of the United States' largest buyers-including Saudi Arabia, Egypt, Kuwait and Thailand-did not participate. The administration resisted suggestions that the United States should condition its arms transfers on participation in the register.

Changes in the Arms Market

The arms market is more commercially driven than ever. Surplus arms production here and abroad has created a buyers' market, allowing customers to demand-and receive sweeter and sweeter deals. A frequent request is for technology to produce weapons. Manufacturers are increasingly granting licenses to recipient countries to produce subcomponents, components or entire weapons systems. A prime example is the $5.2 billion Korean fighter deal of 1991 South Korea contracted to purchase 12 off-the-shelf F-16C- and D-model fighters and 36 aircraft kits for assembly in Korea. In addition, Seoul-which is seeking to develop an indigenous fighter aircraft production capability-purchased the right to manufacture 72 F-16s under license. Fifteen other countries also produce F-16 parts or assemble the F-16 fighter; Egypt's M-lA1 tank production line provides another example of this trend. To win the sale, U.S. industry is willing not only to send manufacturing jobs overseas, but also to risk the creation of new competition in the near term. 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. The Clinton policy did not address this critical issue.

The sale of even higher-tech weaponry is another feature of today's commercially driven market. In the past few years, top-of-the-line systems that were previously off limits-such as the U.S. F-15E "Strike Eagle" and Russia's Tu-22M "Backfire" bomber; modern European diesel sub- marines; and, supersonic, sea-skimming anti-ship missiles-have been placed on the auctioning block. This, too, is not without obvious risk to the sellers.

U.S. military and intelligence officials have repeatedly said the increasing avail- ability and sophistication of conventional arms on the market is a prime threat to U.S. security. The director of naval intelligence, Rear Admiral Edward Shaefer, testified last summer that "the overall technical threat and lethality of arms . . . being exported have never been higher." And then-CIA Director James Woolsey testified before Congress on January 10 that advanced conventional weapons "have the potential to significantly alter military balances, and disrupt U.S. military operations and cause significant U.S. casualties." Yet Clinton's new policy did not propose any sort of multilateral qualitative export limits.

Light, portable weapons such as machine guns, mortars and landmines are also a menace. They fuel many of the regional conflicts and humanitarian crises in the Third World in which U.S. troops are increasingly being called upon to intervene, and where often, ironically, they are directly threatened by these low-tech weapons. While the administration has embraced a congressionally initiated export moratorium on anti-personnel landmines, it made no proposals to shed light on or to regulate the traffic in these other vexing small arms.

Weapons of Mass Destruction Link

Ballistic and cruise missiles are the only conventional weapons the Clinton administration appears to believe pose a serious potential threat to U.S. security interests. This concern, codified in the export prohibitions of the Missile Technology Control Regime, is usually attributed to the utility of missiles for the delivery of nuclear, chemical or biological weapons.

However, U.S. officials ignore the spread of many other means of delivery for weapons of mass destruction (WMD) payloads, such as attack helicopters, advanced aircraft and long-range artillery. Besides fueling regional conventional arms races, the accelerating proliferation of these advanced delivery systems are often the driving force behind decisions to pursue WMD programs.

Insofar as administration policy makers will acknowledge that conventional and WMD proliferation are related, they seem to think (selectively) that a good shipment of modern conventional arms will curb efforts to acquire WMD. Joseph Nye, 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 Pakistan in 1990 (in particular, 28 F-16s for which Pakistan had already paid) because of Islamabad's nuclear weapons program. Nye criticized the U.S. conventional arms embargo and suggested that it might actually strengthen Pakistani resolve to pursue nuclear weapons.

Prior to the embargo, however, Washington had already delivered to Islamabad 35 sophisticated F-16 fighter-bombers and a multitude of other conventional arms in a failed effort to dissuade Pakistan from continuing its nuclear weapons program. The F-16s now provide Pakistan's most likely means to deliver nuclear weapons, according to CIA testimony.

Deconstructing 'Interoperability'

The pursuit of "interoperability" of weaponry is fast becoming the Clinton administration's most prevalent rationale for continuing widespread arms exports. Interoperability-commonality of arms-is a hallmark of coalition warfare, which the United States built up during the Cold War.

Both the "National Security Strategy of Engagement and Enlargement" and the Pentagon's "Bottom-Up Review" require that U.S. forces be prepared quickly to fight or intervene anywhere in the world, 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.

Since the fall of the Berlin Wall and the 1991 Gulf War, the United States has established military ties with more countries around the world. Most notable are recent military training exercises with, and arms transfers to, Eastern European countries and former Soviet re- publics under NATO's "Partnership for Peace" program. The same day the White House released its conventional arms transfer policy, it announced that it would consider on a case-by-case basis exports of major combat equipment to Eastern Europe.

The need to standardize their equipment with that of NATO forces is the justification cited for arms transfers to these already heavily militarized, economically depressed states.

The paradox in today's U.S. security policy is striking. Now, instead of arming allies against a discernable enemy-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. The liberal transfers of sophisticated and small arms, as a way of cementing these alliances, are likely to contribu te to the regional instability and uncertainty they are ostensibly combating.

Arms As Stabilizers

According to its new conventional arms transfer policy, the administration believes U.S. arms exports promote regional stability by creating balances of power and building up the deterrent capabilities of U.S. friends and allies. Undoubtedly, the ability to create regional balances is facilitated by the fact that the United States is arming both sides in many cases: for instance, Greece and Turkey; Persian Gulf sheikdoms and Israel; and China (to a limited degree) and Taiwan. The administration also appears ready to supply arms to both India and Pakistan (if the Pressler Amendment were repealed).

Whether weapons maintain peace and security or undermine them will never be proven. However, given the high degree of geopolitical flux today, predicting regime stability and the steadfastness of alliances is speculation at best. U.S. forces have been deployed several times recently to combat former U.S. allies or recipients of U.S. weapons and military training in Panama, Iraq, Somalia and Haiti.

A bill pending in Congress would attempt to keep the United States from making potentially disastrous exports by identifying characteristics of less stable governments. Under the so-called "Code of Conduct" legislation, the four conditions a country must meet to be eligible for U.S. weapons are: a democratic form of government; respect for the basic human rights of its citizens; non-aggression (against other states); and, full participation in the UN Register of Conventional Arms. The president may exempt a country which fails to meet these criteria, but Congress must pass a law affirming that exemption before weapons could be exported to the country in question during that fiscal year. While this legislation might not block all dangerous sales, it would increase scrutiny on weapons supplied to those governments that may be less stable because of their repressive or aggressive practices.

Protecting the Industrial Base

Perhaps underlying all of the administration's other rationales for continued conventional arms proliferation is the perceived need to keep existing production lines open to maintain a sufficient defense-industrial base.

The administration has not adequately addressed the question of how much industrial capacity is required, given the end of the Cold War. The answer, by default thus far, has been that levels near those amassed during the Cold War are still needed to ensure against the emergence of some unforseen major military threat.

The recent spate of mergers and acquisitions in the U.S. arms industry has not resulted in much shrinkage of capacity at the prime contractor level, even though the arms industry has laid off several hundreds of thousands of workers since 1990. Production lines for many front-line U.S. weapons-F-15 and F-16 aircraft, Apache attack helicopters and M-1 A2 tanks to name a few-remain open now only for sales abroad.

The administration recognizes that surplus arms production by other countries results in dangerous pressures to export. Last October Defense Secretary Perry traveled to Beijing to attend the first meeting of the U.S.-Chinese Joint Defense Conversion Commission. The commission is intended to facilitate the conversion of Chinese arms manufacturers to the production of commercial goods; the U.S. government is promoting technology transfer from U.S. firms to aid this transition. Asked by a reporter why it is in the interest of the United States to aid the conversion of China's defense industry, Perry said "it is to our benefit . . . to help these countries [China, Belarus, Russia and Ukraine] resist the pressure to make weapons even beyond their needs .... And secondly, to resist the pressure for foreign arms sales. One very obvious way . . . of using the excess capacity in the arms industry in each of these countries is to continue to produce the same amount but then to sell the excess to other countries. And that creates . . . its own set of policy and security issues. So to the extent [the United States] can be useful and constructive in diverting this pressure into the production of commercial goods, then I believe it is a security benefit."

The Clinton administration apparently does not consider this advice valid for the United States. (According to CRS, China sold $300 million worth of arms to developing countries in 1993; the United States sold S15 billion.) The administration's new arms transfer policy makes no reference to conversion and downsizing of the U.S. arms industry. Instead, it states that decisions to sell arms would take into account how such decisions would affect the need to preserve the U.S. industry-including the surplus capacity.

This defense-industrial base rationale is driven in part by concerns about the loss of high-paying, high-tech jobs. But more importantly, it is driven by the inexorable development of next-generation U.S. military technology, for which the present industrial base is considered necessary. Thus, in the name of running a technological race against no obvious competitor, the United States is encouraging the commercialization of the arms industry through cross-border "teaming" arrangements and allowing the export of top-of-the-line weapons. At the same time, these practices provide the most obvious way to ensure that new military threats will emerge.

Even more paradoxical, the development and production of next-generation U.S. weapons are justified now on the basis of a need to counter weapons being acquired by Third World countries, including those the United States has sold. Lockheed's lobbying campaign for the F-22 fighter is based on the global proliferation of very capable fighters, such as the F-15E, F-16 and the F/A-18.

Options Not Explored

The United States and its European allies (including Russia) accounted for 95 percent of all arms export agreements in 1993. This global monopoly on transfers makes supply-side export control initiatives particularly feasible. While demand-side action is vital to the long-term success of any restraint regime, agreement among the handful of major weapons suppliers is probably more achievable than is regional peace. Indeed, supplier restraint is most likely a prerequisite for regional peace.

There was no shortage of multilateral arms export control initiatives that could have found their way into the Clinton conventional arms transfer policy, but did not. First, the administration could seek limits on government support for arms exports, including agreed limits on government financing of sales-a long-standing U.S. industry complaint against its European competitors. Rather than continually "leveling the playing field" upward, exporters could agree to cap such support.

Second, the United States could take the lead in negotiating restrictions on licensed production or co-production of military equipment. This is one of the most important initiatives imaginable because such manufacturing arrangements increase the global surplus in production capacity and create further pressure for more permissive sales. Once these new producers fulfill their own military needs, they too will seek export markets in order to keep their manufacturing lines open. A ban or limits on such sales would be very feasible politically; organized labor dislikes licensed production, whereby manufacturing jobs are exported overseas. Diplomatically, ending this practice would prove more difficult, but achievable. Limits on licensed production deals would force weapons-hungry countries either to purchase weapons "off the shelf" from exporting countries or to make the massive capital investment necessary to develop an indigenous arms industry.

Third, the administration could explore weapon-specific export controls. Currently, the only types of arms which the United States seeks to limit are cruise and ballistic missiles and anti-personnel landmines. Mines are controlled because they pose widespread humanitarian risk, but they are hardly the only weapon which widely impacts non-combatants. The United States could seek restrictions on exports of other inhumane and indiscriminate weapons, such as cluster bombs, fragmentation weapons, fuel-air explosives, napalm and blinding laser weapons.

The United States has controlled the export of missiles since 1987 because they are thought to be especially destabilizing regionally, and because they pose a potential direct military challenge to U.S. interests. Building on this, the Clinton administration could seek controls on the spread of other systems that might be regionally destabilizing and potentially threatening to its interests, such as ground attack aircraft and "stealth" technology, diesel-powered attack submarines, modern anti-ship missiles and naval mines.

Finally, the administration could offer an initiative on small arms-the weapons that continue to fuel most of the world's civil and ethnic conflicts. Although control in this area is more difficult to envision because there are many more producers and black market activity is so prevalent, a U.S. initiative could help promote transparency and international cooperation on monitoring and controlling illicit arms trafficking by sharing expertise in export and border control.

Weapons and War

More than 30 wars are currently raging around the world today, almost all of them fought with imported weapons. Given its market dominance, it is not surprising that U.S. weaponry is finding its way into combat in, for example, Afghanistan, Angola, Cambodia, Kashmir, Somalia and Turkey, to name a few.

Lacking courage to take on weapons corporations, the Commerce Department and the Pentagon, and lacking the vision to devise new security paradigms, the Clinton administration has failed to seize the opportunity afforded by the end of the Cold War. Rather than seeking to reduce reliance on the use of force-and building up reliance on the rule of law-the White House is risking not only much more warfare to come, but killing and destruction at much higher levels.

In the final analysis, the long-awaited official policy of the administration made plain that any change in U.S. arms export policy must be wrought from the bottom up. No progress will be made on the issue of limiting the global arms trade without significant pressure from the public.


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