No. 24 (15 March 1994)
Now it appears that the results~anxiously anticipated by concerned members of Congress, peace and arms control activists, and weapons exporters alike~will probably not be made public until mid-Summer at the earliest. That is when a Congressionally- mandated panel of (still unnamed) experts is to have completed its study of conventional arms proliferation and the means to control it (see ASM No. 23 p. 9).
But time stands still for no one. While the Administration drags along in its review, much policy is being made~mostly by the Pentagon, but also by Congress. Some recent initiatives are highlighted in this ASM.
Clinton Admin. Watch
Selling Weapons Elevated to National Security Interest
In a 5 January memo, Defense Secretary Les Aspin announced that Pentagon assistance to the U.S. arms industry at the Asian Aerospace '94 arms bazaar (held in Singapore, 22-27 February) is "in the national security interests of the United States."
U.S. arms manufacturers used to pay for the leasing, transport and insurance of Pentagon-owned weapons for display to foreign customers, but since the 1991 Paris Air Show, the military services have delivered U.S. military equipment to shows at no cost to industry. The General Accounting Office reported in March 1993 that Pentagon participation at six arms bazaars since 1991 has cost taxpayers over $3.5 million. Taxpayers also picked up the $18.9 million tab when the Marines crashed an AV-8B aircraft returning from the 1992 Singapore air show.
Opposed to the use of taxpayer funds for arms marketing, Rep. Howard Berman and Sen. Joseph Biden sponsored a provision in the FY 93 DOD authorization bill requiring a "national security" certification before direct DOD participation at arms bazaars is permitted (see ASM No. 18 p. 3). Industry has been lobbying for such a certification since the law was enacted (see ASM No. 23 p. 6).
Secretary Aspin contended that an "impressive display of U.S. defense technology at Asian Aerospace `94...will provide significant foreign policy dividends for a relatively modest cost." Pentagon participation at the show will demonstrate the United States's unflagging commitment to Pacific security, he said, in case the hundreds of thousands of U.S. troops tasked to the region do not suffice.
Perhaps more to the point, the Secretary cited a need to match the presence of other arms vendors at the show. "[E]conomic competitiveness is an integral part of our national security....U.S. industry faces formidable competition from other nations who are actively marketing their equipment globally," Aspin said. Russian, European and American firms are all competing fiercely for the lucrative East Asian market, the only area in the world where military budgets are on the rise.
In fact, American government and industry dominated the show; some 75 U.S. military personnel and scores of contractors attended. The Pentagon flew in 20 planes and helicopters, many of them front- line systems. In addition, industry displays showcased precision- guided munitions such as Paveway laser-guided bombs, Javelin and Hellfire II anti-tank missiles, Patriot and Hawk surface-to-air missiles and Sidewinder and Sparrow air-to-air missiles.
The cost to taxpayers for the show was estimated by the Pentagon at $575,000.
Sales of Non-Standard Weapons
A controversy continues to brew over the export of the Advanced Self-Protection Jammer (ASPJ). Manufactured by Westinghouse and ITT, the electronic radar jamming system was terminated by the Pentagon in 1992 after failing its operational testing.
In September 1993, Undersecretary of Defense John Deutch reaffirmed Pentagon policy that no unproven weapons systems would be exported by the U.S. government through the Foreign Military Sales (FMS) program (see ASM No. 21 p. 3). Apparently, however, an FMS agreement for the jammer had already been signed with Korea, as part of the 1991 Korean Fighter Program sale of 120 F-16 fighters. William Perry, then Deputy Secretary of Defense, informed the Korean Minister of National Defense in December (1993) that although the Pentagon could not sell the ASPJ through FMS channels (rather Korea must buy it directly from the manufacturer), integration of the system into the fighter jets would be assured through the FMS program.
In a 22 February letter to Secretary of Defense Perry, Sen. David Pryor (D-AR), a dogged opponent of the ASPJ, wrote: "By offering full integration of the ASPJ, you have provided U.S. government support for an unproven jammer. Even worse, your actions could expose our government to costly liabilities, such as the cost of maintaining and fixing these systems after they are sold over-seas. Given the problems ASPJ encountered during development and operational testing, the cost could be substantial."
Other countries are apparently lining up for the failed system: In
addition to South Korea, the State Department has approved export
of the ASPJ to Finland, Egypt, Kuwait, Switzerland, Greece and
Turkey
The GAO is studying the marketing of the weapon and, more
importantly, the implications of permitting the export of non-
standard (and sub-standard) goods to allies (Inside the Navy 21 Feb.
1994). In addition to liability issues, security concerns are raised.
One of the main rationales for U.S. arms exports is increased
"interoperability." Selling non-standard equipment obviates that
rationale. Further, it may require the development of
countermeasures to the system sold. And, in this case, Senators
Pryor and Roth fear that exports are a trojan horse for a domestic
resurrection of the ASPJ program.
Counterproliferation: Bombing as Arms Control?
At a 9 December speech at the National Academy of Sciences,
then Defense Secretary Les Aspin unveiled the Pentagon's "Defense
Counterproliferation Initiative." The plan is predicated on the
assumption that export controls and diplomatic suasion will not
stop the proliferation of weapons of mass destruction (WMD).
Counterproliferation emphasizes the development and procurement
of hardware~sensors, defenses, and new offensive weapons~to deal
with undesirable proliferation. Military strikes with "improved non-
nuclear penetrating munitions" would be undertaken preemptively to
disable WMD programs.
The plan also calls for increased international cooperation, in
particular, seeking to spread R&D costs for new weapons and
defenses among our allies. U.S. allies, however, were reportedly not
enthusiastic about the plan when it was presented to them at the
NATO summit in January. Some questioned whether ballistic missile
defenses are feasible, effective, affordable or even desirable. Others
were concerned about using preemptive strikes. Critics pointed to
the ineffectiveness of the Gulf War bombing campaign in destroying
Iraq's WMD programs and mobile ballistic missiles.
Pentagon officials have said that the counterproliferation effort
will have no effect on the sale of conventional weapons. Press
reports quote a Pentagon official as saying that U.S. military exports
are "denuded" of their ability to deliver nuclear arms or other
unconventional weapons, although he acknowledged that some
nations, such as Israel, "tend to put them back in"
The Drug War Comes Full Circle: Fighting Production at the
Source
Following a government-wide, six-month policy review
(Presidential Decision Directive 14 on U.S. Counternarcotics Policy
in the Western Hemisphere), the Pentagon's counternarcotics office
determined that its interdiction policy was a failure. Instead of
using U.S. military assets to detect and monitor drug transshipment,
the Pentagon will work (again) to combat cocaine and other drug
production at the source. The policy shift is likely to result in
increased training, communications and surveillance assistance,
along with continued transfers of Excess Defense Articles to drug
producing countries.
Meanwhile, the State Department is seeking to give aircraft to
Andean countries, but with little success. In the mid 1980s Congress
became concerned that aircraft donated to fight drug production in
South and Central America were being used to counter insurgencies.
In 1986, Congress legislated that the State Department retain title
to all drug war-related aircraft provided to foreign countries. The
result is the "Bureau of International Narcotics Matters (INM)
Airwing" a State Department fleet of 46 aircraft (with 10 currently
on lease to Bolivia).
In 1992, Congress retreated and allowed the President to
transfer title of these aircraft if doing so was in the national
security interests of the United States. Since then, the State
Department has attempted to give these aircraft away to the
governments of Bolivia, Colombia and Peru. However, the three
governments face financial and technical hurdles to absorbing the
aircraft at the present time. The INM estimates that it will be 3-5
years before Bolivia and Peru "can assume primary responsibility for
their counternarcotics aviation units."
New Export Admin. Act: Proliferation vs. Export Promotion
On 24 February, the Administration sent Congress a
comprehensive revision of the 1979 Export Administration Act
(EAA). This law governs the export of items with significant
military as well as commercial uses, such as computers, precision
machining equipment, etc. (See ASM No. 23 p. 5.)
The Administration has attempted to strike a balance between
the need to restrict potentially dangerous dual-use exports, which
could contribute to chemical, biological and nuclear weapons and
delivery systems, and to promote legitimate trade in these same
high technology exports, which the Administration views as key to
American economic strength.
The Administration's compromise is to place much greater
emphasis on multilateral export controls. Exporters have been
arguing successfully for "a level playing field" vis-a-vis their
competitors. Deconstructed, this means industry does not want to be
unilaterally restricted in any way that other countries' industries
are not, and they want as much government subsidies and assistance
as other countries' industries receive. The result is that the least
restrictive export policies dictate the world norm.
The business community opposes the Administration's draft law,
believing it still relies too heavily on unilateral export controls.
Industry and exporters favor their draft version of the EAA
(S.1846/H.R.3412), sponsored by Sen. Patty Murray (D-WA) and Rep.
Toby Roth (R-WI).
The arms control community is dissatisfied with the bill in that
it greatly weakens the United States's credibility in pushing for
global nonproliferation norms.
Powerful members of Congress reside in both the
nonproliferation and high-tech trade promotion camps, determined in
large part by whether the member represents a high-tech
manufacturing area.
The House is marking up the administration's draft bill (H.R.3937)
on 10 March. The bill has not been formally introduced in the Senate
yet. Congress is hoping to pass the new EAA by 30 June, when the old
bill expires, but given the contentious nature of the debate, this
deadline is probably not realistic.
Features of the New EAA Draft
The bill prohibits unilateral controls unless: --an embargoed
item is unavailable outside of the United States; --the item cannot
be controlled by means other than unilateral control; --the control
will be effective in preventing, or establishing multilateral controls
to prevent, a country's access to an item; --national security
interests of restricting the export outweigh economic benefits of
exporting, and; --such controls are enforceable.
A commitment to streamline the export licensing process and
make all licensing decisions in 90 days or less.
A "presumption of approval...absent sound reason for denial based
on national security, nonproliferation and foreign policy grounds."
An appeal process that would allow industry to challenge export
controls that have an "unfair impact." Grounds for appeal would be:
COCOM To Be Disbanded; Regime on Conventional Arms Being
Cobbled Together
On the first of April (no kidding), the 17-nation Coordinating
Committee for Multilateral Strategic Export Controls (COCOM) will
close up shop. The regime~in many ways a multilateral version of
America's EAA~was founded 44 years ago to stop the export of
militarily useful items to Warsaw Pact member countries, and later
expanded to include Mongolia, China and Laos.
Meeting in The Hague on 16 November 1993, COCOM member
states (all NATO members except Iceland, plus Australia and Japan)
decided to terminate COCOM and to create an as yet unnamed
successor regime, which will focus on exports of conventional
weapons and sensitive dual-use items to Third World countries of
concern.
It was hoped that the new regime would be up and running by the
time COCOM was disbanded. As of the end of February, however,
working groups continued to meet to hammer out the structure and
procedures of the forum and an export control list. That list will
undoubtedly be much smaller than the munitions list, international
atomic energy list, and industrial list (dual-use items) maintained
by COCOM.
In addition, unlike COCOM, the new regime will have no veto
mechanism; decisions to export, or not, will be left to the member
states' discretion. According to a COCOM press release in November,
the new body will serve as "a forum for discussion."
Membership will be expanded to include the former targets of
COCOM controls. Russia, and East European countries with export
control policies and a commitment to nonproliferation, will be
invited to join as founding members. In addition, the COCOM
"cooperating countries" will likely be members. These countries are:
Austria, Finland, Hong Kong, Ireland, New Zealand, Sweden and
Switzerland.
According to a communique from the November COCOM meeting,
the new regime will not formally target any countries, but the
United States is seeking to have the group focus on Iran, Iraq, Libya
and North Korea. Since Iraq and Libya are currently subject to a UN
arms embargo, and North Korea has no money, convincing European
and other allies to choke off exports to Iran seems to be the central
purpose of the exercise.
At a 24 February hearing before the Senate Banking Committee,
Undersecretary of State for International Security Affairs Lynn
Davis outlined problems in establishing the new forum: "Despite the
very substantial progress, there are a number of outstanding issues.
For one, how far will our European allies and Russia go in joining
with us to keep dangerous technologies away from dangerous
states?
"Second, will the new regime have real teeth~particularly when
it comes to conventional weapons? We have proposed a regime which
involves a serious information exchange and scope for consultation
and concerted action where the risks are acute.
"There is also the further issue of Russia's acceptance of the
obligations entailed by membership in the new arrangement~in
particular, its commitment to responsible export control policy~a
question we are continuing to discuss carefully and in detail with
Russian authorities."
U.S.-Russian Statement on Conventional Arms
In a January 1994 "Joint Statement on Issues of Export Controls
and Policy in the Area of Transfers of Conventional Weapons and
Dual- Use Technologies," U.S. Secretary of State Christopher and
Russian Minister of Foreign Affairs Kozyrev "welcomed the decision
to establish a new multilateral regime for enhancing responsibility
and transparency in the transfers of armaments and sensitive dual-
use technologies." The communique continues:
The United States and Russia, as leading exporters of
conventional weapons, military equipment and dual-use
technologies, are convinced that additional measures are needed on
an international basis to increase responsibility, transparency and,
where appropriate, restraint in this area. They expressed their
willingness to work with other countries in bringing about the early
establishment of a new multilateral regime in order to achieve
these objectives, which would supplement existing non-
proliferation regimes, in particular through arrangements to
exchange information for the purpose of meaningful consultations.
Foreign Assistance Act Rewrite
The Administration sent Congress a final version of its proposed
reform of the 1961 Foreign Assistance Act (FAA), which governs the
provision of military, as well as development aid (see ASM No. 23 p.
6). The bill, called the "Peace, Prosperity and Democracy Act of
1994," has been formally introduced as H.R.3765.
On 22 February, Caleb Rossiter, the Director of the Project on
Democracy and Demilitarization, gave a very detailed analysis of the
military aid provisions of the bill in testimony to the Senate Foreign
Relations Subcommittee on International Economic Policy.
He asserted that, while the development aid title of the bill
indicates real reform, the military aid titles represent a
continuation of Reagan and Bush Administration policies "pushed
past Congress during the Cold War frenzy of the 1980s and the arms
sale frenzy in the aftermath of the Gulf War." If it is indeed to be a
"reform" bill, nothing should be carried over from the 1961 FAA
without a new justification, Rossiter argued.
In particular, Rossiter opposed the bill's support for training
national police forces in furtherance of democracy:
"The guiding assumption of the military and police provisions of
the bill appears to be that our security interests are best served by
equipping and training the military and police forces of unstable,
undemocratic regimes so that they can maintain internal order more
professionally and deter aggression more convincingly. That was the
theme of our security aid programs throughout the Cold War. I would
like to see that tired rationale for continued security aid examined,
country by country....Our goal in the 1990s should be to make the
armed forces irrelevant in politics, not `influential'."
He also challenged the bill's provisions on U.S. arms sales, human
rights and democracy:
"...[T]his bill perfectly reflects President Clinton's policy toward
the developing world: a lot of talk about how democracy and
economic growth are essential to our own security and prosperity,
but no action to restrain record levels of U.S. arms transfers to
dictators, which block the transition to democracy and wreak havoc
on the world economy. During fiscal year 1993, our government
approved the sale of $25 billion of weapons to governments
described as undemocratic in the State Department's most recent
Country Reports on Human Rights Practices."
"The primary law that says what kinds of governments can and
can't get our weapons is known as 502B, the human rights provision
of the Foreign Assistance Act....It is clear that 502B is
outdated....[T]his reform bill is the perfect opportunity to adopt a
new standard, one that uses a positive certification and a more
specific definition of the kinds of governments we should even
consider propping up by strengthening their armed forces....[S]uch a
standard has been developed in the Code of Conduct on Arms
Transfers Act of 1993.... This Code of Conduct bill should be
incorporated directly into the administration's foreign aid bill in
place of 502B, which is renumbered 2303(e). That is the most
important single step this Committee could take to make the foreign
aid proposal truly a reform bill."
Rossiter made three further policy recommendations:
-- End cash flow financing for arms exports to Israel and Egypt.
This practice allows the two countries to order weapons from the
United States based on assumed steady levels of future military aid.
Without an end to this financing scheme, reducing the annual $5
billion outlay in security aid to these countries in the futurewill be
impossible, he said.
-- Reinstate the "section 657" reports. This report, required
under section 657 of the FAA, required a listing of every weapon
that went to every country from all of the U.S. government and
private industry export programs. It was ended by President Reagan
in 1981. "The most important technical reform that this Committee
could make in the security aid area would be to bring back section
657, and add a requirement for best estimates of possible sales in
the year to come. All these data exist in the U.S. government already:
they are the building blocks that are used to come up with the
country dollar totals for the previous fiscal year and the dollar
estimates for the coming one...."
-- Prohibit covert arms supply and training. "[C]overt aid
programs corrupt the recipients precisely because they are covert
and have no leverage....If we are to engage in aiding foreign forces,
we should do so openly."
Pentagon to Use Arms Sales Proceeds to Fund Procurement
At a 28 January meeting, officials from industry, the Defense
Security Assistance Agency and the Air Force discussed a plan for
funding new procurement through exports of older weapons. At the
heart of the plan lie between 300-400 older model U.S. Air Force F-
16A/B fighters, but the other services are also considering using
foreign sales as a way to fund new purchases.
Air Force Vice Chief of Staff Gen. Michael Carns, reportedly one
of the chief architects of the plan, said the proposed sales do not
involve obsolete weapons. Quite the contrary, "it's some of our best
stuff," Carns said in a recent Wall Street Journal interview (14 Feb.
1994).
These sales would not go through the Excess Defense Articles
(EDA) program. EDA given away or sold cheaply must first be
declared "excess" and by law cannot be replaced. The F-16s are a
newly developed category: "non-excess, to be replaced," according to
Carns. Sales of some 360 F-16A/Bs would reportedly finance 88 new
F-16C/D (Defense Daily 9 March 1994).
Countries under consideration to receive the planes include
Egypt, Malaysia, Morocco, New Zealand, Singapore, South Korea,
Thailand, Tunisia and East European countries.
Holum on "The Challenge of Conventional Weapons"
The following is taken from a speech by John Holum, the newly-
confirmed Director of the Arms Control and Disarmament Agency,
before the United Nations Conference on Disarmament (CD), 25
January 1994.
The devastating destructive power of nuclear weapons and the
dangers posed by other weapons of mass destruction demand that
they remain high on our arms control agenda, but they cannot be the
only items. Another crucial element of the arms control equation is
conventional arms.
We are reminded daily that the end of the Cold War has not by any
means removed all conflict and danger from the world. Regional
arms races and destabilizing accumulations of arms well beyond
those realistically needed for defense are all too common. Reversing
these trends is a global responsibility. We can help reduce the
sources of tension that generate such accumulations. We must
continue working to discourage the use of arms in resolving
disputes.
...The immediate challenge to this forum is to promote greater
transparency about security matters. Transparency in turn fosters
the greater confidence and trust upon which stable political
relationships can rest.
Last year the CD created the Ad Hoc Committee on Transparency
in Armaments (TIA)....I strongly encourage you to build on the very
useful work begun in the TIA Ad Hoc Committee last year....Some
object that we should instead pay even more attention to weapons of
mass destruction and the missiles used to deliver them. Let us
discuss those concerns seriously, but let us not create yet another
setting where we repeat ourselves endlessly to the point where
other important business is neglected. If we slacken in our
willingness to address the conventional weapons problems that first
gave rise to the TIA Initiative, we will not make much progress, and
we will begin to slide away from our global conventional arms
control objectives.
Just as in the nuclear area, the work done here in Geneva on
conventional arms will have a significant impact on related efforts
elsewhere. We share your pride in the successful initiation of the UN
Register of Conventional Arms. The first year's experience with the
register was good~but not good enough. Eighty-two responses
represent answers from less than half the UN's membership. We
must do better; our goal should be universal participation, which
your work here at the CD can encourage.
The United States also looks forward to the expert's meeting on
these issues in New York next month. We will play an active part in
moving their efforts to a successful conclusion.
Another conventional arms issue on which we have taken a first
step relates to land mines. These weapons continue to wreak havoc
on civilian populations whether or not they are any longer in an
active war zone. The UN has supported by consensus the US-initiated
resolution calling for a moratorium on the export of anti-personnel
land mines. We must now take the next step and make the global
moratorium a reality. In doing so, we not only protect the futures of
many innocent civilians, but we also draw attention to a range of
problems long thought too difficult for arms control to solve.
This process will also be fortified by this year's experts'
deliberations leading to a review conference on the convention on
weapons that may be deemed to be excessively injurious or have
indiscriminate effects [aka: Inhumane Weapons Convention]. Although
not presently a party to this convention, the United States will
closely follow the progress of the conference as an observer, and the
President intends to submit the convention to the United States
Senate this year for advice and consent to ratification.
These positive developments can mutually reinforce one another,
forming a tide that can break down resistance to progress on the
conventional arms control agenda.
The UN Register of Conventional Arms
On 22 October the UN made public the data it had received from
some 80 countries on arms imports and exports during 1992. The
Register, established by a UN General Assembly vote in 1991,
provides a count of seven categories of major weapons systems:
tanks and armored vehicles, aircraft, ships, attack helicopters,
missiles and large caliber artillery. The 1992 data confirmed U.S.
dominance in global arms exports, with Germany number two; it also
showed that Turkey and Greece were the leading importers of
weapons in the categories covered.
All of the major supplying nations participated, but several
major arms importers did not. Afghanistan, Indonesia, Iran, North
Korea, Kuwait, Saudi Arabia, Syria, Taiwan (not a member of the UN),
Thailand and the UAE are among the countries that did not provide
data. Bills pending in Congress~the Code of Conduct on Arms
Transfers Act (H.R.3538) and the Foreign Relations Authorization
Act (H.R.2333) would condition U.S. arms sales on the recipient's
participation in the Register. (The House version of H.R.2333
contains non-binding `Sense of Congress' language only (see ASM No.
21 p. 5).)
Legislation
On 2 February, the Senate passed its version of the Foreign
Relations Authorization Act for Fiscal Years 1994 and 1995
(H.R.2333). The House passed the bill last June (see ASM No. 21 p. 3).
A conference committee to reconcile differences between the two
bills will commence shortly, possibly as soon as mid-March.
The Senate Foreign Relations Committee's mark-up of the bill
was reported in ASM No. 22 p. 3. Arms sales-relevant amendments to
the bill, passed from the Senate floor, are summarized below.
No arms sales to participants in the boycott. Section 703
modifies Section 322 of P.L. 102-138 (the Foreign Relations
Authorization Act for FY 1992-93), so that the President should take
steps to ensure that any Middle Eastern state which receives U.S.
defense articles and services "does not participate in the Arab
League primary or secondary boycott of Israel." The Secretary of
State is required to submit a report to the Speaker of the House and
the Chairman of the Senate Foreign Relations Committee on steps
taken to ensure the end of the boycott.
Section 903 prohibits the sale or lease of defense articles to
countries or organizations that have sought American firms'
compliance with the boycott of Israel. The President may waive this
requirement for one year if he determines that it is in the national
interest to do so.
Reporting of offset agreements required. Section 715 requires
that Congressional notification of a proposed arms sale include a
description of any offsets agreement entered or proposed to be
entered into in connection with the sale. Further, quarterly listings
of arms sales are to include all offset agreements in connection
with the sales of any weapons or related services. Section 716
prohibits arms manufacturers from making "third-party incentive
payments for the purpose of satisfying, in whole or in part, any
offset agreement."
ROK stockpile. Section 722 permits the Secretary of Defense to
authorize, over the next two years, the transfer of "obsolete" or
"surplus" Department of Defense equipment to the Republic of Korea.
Equipment located in Korea may be transferred in return for
compensation at least equal to the items' fair market value.
Compensation may include cash, services, waiver of charges
otherwise payable by the United States or other "items of value."
Senate urges lifting of arms embargo on Bosnia. Section 725
states the sense of the Senate that the President "should terminate
the United States arms embargo of the Government of Bosnia and
Herzegovina upon receipt from that government of a request for
assistance in exercising its right of self-defense under article 51 of
the United Nations Charter." Furthermore, the President should
furnish the Bosnian government with "appropriate military
assistance" if so asked.
Selective membership in MTCR. Section 730 requires the
President to notify Congress 30 days before the United States takes
the position within the Missile Technology Control Regime (MTCR) to
support the admission of a country into the regime. The President
must report to Congress the rationale for the country's admission.
In addition, the President must notify Congress 30 days prior to
licensing for export technology intended for space launch vehicles,
but controlled under the MTCR.
Section 757 states that "it shall be a rebuttable presumption"
that when MTCR-controlled technology is exported to countries
designated by the State Department to be state sponsors of terror
(see ASM No. 22 p. 7), that technology is intended for use in a
ballistic missile. Such exports would then result in the
implementation of sanctions under U.S. law.
Partnership for Peace report. Section 753 requires the President
to submit a report every six months on implementation of his
"Partnership for Peace" initiative. The program is intended to
increase cooperation between NATO and states of the former
Warsaw Treaty Organization (WTO). The report is to include an
assessment of the progress made by former WTO members in
meeting the criteria for full membership articulated in Article 10 of
the North Atlantic Treaty. The first report is due six months after
enactment into law of H.R.2333.
Industry touchy about EDA. Section 756 requires the President to
"consider the effects of the transfer of the excess defense articles
[EDA] on the national technology and industrial base, particularly the
extent, if any, to which the transfer reduces the opportunities" of
American arms manufacturers "to sell new equipment" to that
country. The measure applies to countries on the Southern and
Southeastern flank of NATO, countries participating in antinarcotics
programs, transfers to countries eligible to participate in the
Foreign Military Financing program, and sales from stock and leases
under the Arms Export Control Act.
Arms Control and Nonproliferation Act of 1994. Out with
"Disarmament" and in with "Nonproliferation." Section 802 directs
the revitalization of the Arms Control and Disarmament Agency
(ACDA). $57 million in funding is authorized to run ACDA in FY 1994
and $59 million for FY 1995. The bill requires annual reports from
ACDA on: arms control, disarmament and nonproliferation activities;
the status of ongoing arms control, disarmament or nonproliferation
negotiations; U.S. and other nations' adherence to arms control
agreements.
Code of Conduct on Arms Transfers Act Gaining Support
Co-sponsorship of H.R.3538, the "Code of Conduct on Arms
Transfers Act of 1993," is growing daily. The bill, introduced by Rep.
Cynthia McKinney last November (see ASM No. 23 p. 1), would raise
the level of scrutiny on arms exports to countries which: are non-
democratic or abuse their citizens' human rights, are engaged in acts
of aggression, or do not participate in the U.N. Register of
Conventional Arms. The cosponsors as of early March:
Neil Abercrombie (D-HI) Lucien Blackwell (D-PA) Corrine Brown
(D-FL) Maria Cantwell (D-WA) William Clay (D-MO) James Clyburn
(D-SC) Barbara Collins (D-MI) Peter DeFazio (D-OR) Ronald Dellums
(D-CA) Richard Durbin (D-IL) Lane Evans (D-IL) Eni Faleomaveaga (D-
AS) Sam Farr (D-CA) Harold Ford (D-TN) Elizabeth Furse (D-OR) Henry
Gonzalez (D-TX) Dan Hamburg (D-CA) Maurice Hinchey (D-NY) Andrew
Jacobs (D-IN) Eddie Johnson (D-TX) Tim Johnson (D-SD) Mike
Kopetsky (D-OR) Mike Kreidler (D-WA) John Lewis (D-GA) Carolyn
Maloney (D-NY) Edward Markey (D-MA) Frank McCloskey (D-IN) Jim
McDermott (D-WA) Martin Meehan (D-MA) Carrie Meek (D-FL) George
Miller (D-CA) David Minge (DFL-MN) Patsy Mink (D-HI) Eleanor Norton
(D-DC) James Oberstar (DFL-MN) John Olver (D-MA) Major Owens (D-
NY) Donald Payne (D-NJ) Nancy Pelosi (D-CA) Timothy Penny (DFL-
MN) Nick Rahall (D-WV) Charles Rangel (D-NY) Bernard Sanders (I-
VT) Jose Serrano (D-NY) Karen Shepherd (D-UT) Pete Stark (D-CA)
Bennie Thompson (D-MS) Robert Underwood (D-GU) Jolene Unsoeld
(D-WA) Nydia Velasquez (D-NY) Melvin Watt (D-NC) Henry Waxman
(D-CA) Lynn Woolsey (D-CA) Ron Wyden (D-OR) Albert Wynn (D-MD)
Industry Update
Despite much fretting and whining about decreased U.S. defense
procurement, many of America's largest arms manufacturers scored
record profits in 1993. According to the Aerospace Industries
Association, 1993 saw total sales, sales to the Pentagon, civil
sales, exports, new orders and employment all drop. But profits, as a
percentage of sales and equity ratios, rose to levels not seen in over
a decade~not even during the boom years of the Reagan build up.
While total aerospace sales fell 10 percent, from $138 billion in
1992 to $124 billion in 1993, profits in 1993 were an astounding
$5.463 billion, compared with a $1.836 billion loss in 1992.
This was accomplished by retaining core programs, dumping
others and, of course, by `trimming the fat' off the workforce. Nearly
900,000 aerospace workers have been given pink slips since 1989.
Aerospace industries fired nearly 3,200 people in November alone.
Meanwhile, the large arms makers are buying each other up.
William Anders, CEO of General Dynamics, is pursuing a policy of
"monetization" paying shareholders handsomely even at the cost of
dismembering the firm. Loral, Lockheed and Martin Marietta have all
made very large acquisitions recently (mostly of General Dynamics
divi sions). Lockheed purchased the GD Tactical Military Aircraft
division in 1993 for $1.52 billion. Loral has spent $1.65 billion
buying LTV missiles, the aerospace arms of Ford and Goodyear, and
the electronics divisions of Xerox and Honeywell. Martin Marietta,
now the largest military electronics firm in the country, just
purchased Grumman for $1.9 billion and GD Space Systems for $208.5
million. And Hughes bought GD Missile Systems in 1992 for $484
million.
Deals in the Works
Notice of the following government-brokered Foreign Military
Sales (FMS), leases, grant excess defense article (EDA) transfers,
and State Department export licenses for direct commercial sales
(DCS) from industry was sent to Congress for approval during
December- February.
Congressional Notification of Israeli Fighters Imminent
In late January, Israel announced it would purchase 20 McDonnell
Douglas F-15E fighter-bombers, the most advanced warplane ever
sold (see ASM No. 23 p. 5). The $2.05 billion order has been
anticipated since the sale of 72 somewhat pared-back F-15E
aircraft to Saudi Arabia in 1992. A larger production run of F-15E
will reduce unit costs for both Israel and Saudi Arabia. Symbiosis.
Recent Government Publications
"Afghanistan: U.S. Policy Options," CRS Issue Brief [IB91111],
Kenneth Katzman, 29 November 1993, 16 pp.
Agricultural Loan Guarantees: National Advisory Council's
Critical Views on Loans to Iraq Withheld [GAO/GGD-94-24], October
1993, 36 pp.
Ballistic Missile Defense: Information on Theater High Altitude
Area Defense (THAAD) System [GAO/NSIAD-94-107BR], January
1994.
"Chinese Missile and Nuclear Proliferation: Issues for Congress,"
CRS Issue Brief [IB92056], Shirley A. Kan, 18 November 1993, 15 pp.
Conventional Arms Control: Former Warsaw Pact Nations' Treaty
Compliance and U.S. Cost Control [GAO/NSIAD-94-33], December
1993, 39 pp.
Country Reports on Human Rights Practices for 1993, Report
Submitted to the Senate Foreign Relations Committee and the House
Foreign Affairs Committee, prepared by the U.S. State Department,
USGPO: February 1994.
Defense Conversion: Slow Start Limits Spending [GAO/NSIAD-94-
72], January 1994.
Developments in the Middle East (hearing before the House
Foreign Affairs Committee, 21 October 1993), USGPO: 1994.
Export Control Reform in High Technology (hearing before the
House Science, Space, and Technology Committee, 13 August 1993),
USGPO: 1993, 178 pp.
Export Controls: Actions Needed to Improve Enforcement
[GAO/NSIAD- 94-28], December 1993, 74 pp.
Foreign Aid Reform (hearing before the House Foreign Affairs
Committee, 26 July 1993), USGPO: 1993, 72 pp.
Foreign Assistance: Clearer Guidance Needed on When to Use Cash
Grants [GAO/NSIAD-94-30], December 1993, 47 pp.
Foreign Assistance Legislation for Fiscal Year 1994: Part 3
(hearings before the Economic Policy, Trade and Environment
Subcommittee of the House Foreign Affairs Committee, 4, 12 May
1993), USGPO: 1993, 275 pp.
Iraq: U.S. Military Items Exported or Transferred to Iraq in the
1980s [GAO/NSIAD-94-98], February 1994.
Need to Reform U.S. Export Controls (hearing before the Economic
Policy, Trade and Environment Subcommittee, House Foreign Affairs
Committee, 9 and 23 June 1993), USGPO: 1993, 217 pp.
1994 Annual Report to the Congress on Foreign Policy Export
Controls, U.S. Department of Commerce, 1994.
Nomination of R. James Woolsey (hearing before the Select
Committee on Intelligence, 2-3 February 1993), USGPO: 1993, 122
pp.
Report of the Secretary of Defense to the President and Congress,
January 1994, 327 pp.
Security Assistance: Need for Improved Reporting on Excess
Defense Article Transfers [GAO/NSIAD-94-27], January 1994, 57 pp.
Small Arms Parts: Poor Controls Invite Widespread Theft
[GAO/NSIAD- 94-21], November 1993, 40 pp.
"State Department Authorization, FY 1994-1995," CRS Issue Brief
[IB93040], Robert G. Sutter, 7 December 1993, 12 pp.
"Taiwan: Recent Developments and U.S. Policy Choices," CRS Issue
Brief [IB92038], Robert G. Sutter, 3 January 1994.
U.S. Policy on Conventional Arms Transfers (joint hearing before
the Subcommittees on International Security and International
Operations of the House Foreign Affairs Committee, 9 November
1993), USGPO: 1994, 121 pp.
Congressional reports and hearings can be obtained for free
through the Congressional Committee or Subcommittee which issued
them, or for a small charge through the Government Printing Office
[(202) 783-3238]. GAO reports can be ordered by phoning (202) 512-
6000. They are free. CRS reports are free and can be requested
through your Congressional Representative's office.
--the item is currently or will soon be available from another
country; --the controls are ineffective; and --differences between
U.S. and foreign controls "will place the United States exporter at a
near-term commercial disadvantage vis- a-vis its competitors
abroad."
Senate Passes State Dept Authorization Bill; Conference
Soon
Profits Up, Employment Down
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