For years, U.S. arms manufacturers have complained that excessively burdensome U.S. export controls and a lengthy licensing process damage their competitiveness on the global arms market. But a recent report by the Congressional Research Service shows that U.S. weapons makers are doing just fine.

According to the report, "Conventional Arms Transfers to Developing Nations 1994-2001," released on August 8th, the United States has had the largest share of both new contracts and deliveries to the world for at least 8 years in a row. In calendar year 2001, U.S. arms manufacturers made new agreements worth $12.1 billion and delivered $9.7 billion worth of arms, capturing 45% of both markets.

The United States' closest competitor, Russia, came in a distant second with $5.8 billion in new contracts and $3.6 billion in arms deliveries. But Russia is not a real rival for U.S. arms makers. Its main clients are China and Iran, off limits to U.S. firms, and former Soviet bloc states in Asia and Africa that cannot afford expensive U.S. weapons systems. India, on the other hand, may be one place where Russian and American firms go to battle over a large market. In September 2001, the U.S. government dropped a ban on arms sales to both India and Pakistan, permitting transfers even during the height of the crisis between these nuclear-armed states. India is a longtime major Russian client.

When making a case to loosen export controls, U.S. weapons makers usually cite intense competition from Western European firms. But this claim is also belied by the CRS figures. New contracts signed by the top four European exporters combined (France, the United Kingdom, Germany, and Italy) only totaled $4.5 billion, and deliveries were only worth $5.1 billion.

While the report already shows the United States dominating the world arms market, its statistics for the United States are actually on the low side. Data on new U.S. sales agreements only include government-to-government sales, leaving out potentially large commercial sales numbers because the State Department does not currently know which of the licenses it grants actually turn into signed contracts. Statistics on commercial sales deliveries are included, but these numbers are notoriously low because they are not systematically recorded.

U.S. arms producers may also proclaim that the relatively low global arms sales numbers in 2001 (down $12 billion from 2000) indicate a need for additional U.S. government support for their exports. (They already receive between $7-8 billion in annual subsidies for exports alone.) Unfortunately, the low figures in the global arms trade for 2001 is not necessarily indicative of a trend. It would be nice to believe the numbers show growing recognition of the dangers and wastefulness of the arms trade. Instead, it was probably caused by the global economic downturn in 2001. A similar dip in 1997 caused by Asia's financial crisis was followed by a steep climb in sales over the next three years, climaxing in $40 billion of sales in 2000 (in constant 2001 dollars).

The low numbers for 1997 and 2001 do show, however, that arms purchases are generally treated as a luxury good and are therefore quickly dropped when financial times are tough. Indeed, weapons sales that governments call essential to "modernization" are often little more than expensive toys for generals seeking a boost in national or regional stature.

If countries really felt a pressing need to rearm for their security, they would find a way to finance weapons purchases. Witness Israel, the number one arms importer in 2001 despite a declining economy and the United States, which has significantly raised its procurement budget even in the face of sharply reduced revenues and a recession.

Weapons sales may increase again in 2002 due to the U.S. effort to arm its partners in the war on terrorism. U.S. sales and military aid is already on the rise to Colombia, the Philippines, Georgia, and Indonesia, which have redefined their long-standing insurgencies as "counter-terrorism" activities. The U.S. government has also bought into Israel's argument that it needs sophisticated weaponry to fight Palestinian terrorists, selling them 52 F-16 fighter jets and six Apache attack helicopters in 2001 despite the fact that the disproportionate use of force that goes along with the use of these weapons has led to violations of humanitarian law.

All in all, the CRS report shows that U.S. weapons makers cannot in good faith claim that export laws damage their competitiveness on the global market. If anything, the U.S. share of world arms sales has risen over the past couple of years and is likely to increase further as the U.S. emphasizes arms sales in its global war on terrorism. Instead of buying into the arms industry's misrepresentation of export controls as unnecessarily restrictive, U.S. policymakers should think about how to strengthen them further to ensure that U.S. arms do not end up in the wrong hands.

Tamar Gabelnick( tamarg@fas.org )directs the Arms Sales Monitoring Project at the Federation of American Scientists. She is the author of several articles on U.S. arms exports and export policy, edits the project's newsletter, the Arms Sales Monitor, and served for two years as chair of the Arms Transfers Working Group, an alliance of 30-plus NGOs in DC working for more responsible arms export policy.

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