FAS Public Interest Report
The Journal of the Federation of American Scientists
January/February 2001
Volume 54, Number 1
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Front Page
Low-Yield Earth-Penetrating Nuclear Weapons
A Faith-Based Science Policy?
FAS Welcomes Sherman to Staff
R&D A Priority For FAS Newest Project
Defense Export "Reforms" Revisited
FAS Obtains First Bush Presidential Directive

Defense Export "Reforms" Revisited

By Tamar Gabelnick

As part of the US arms industry's never-ending quest to reduce barriers on overseas sales, they have come up with the ultimate in specious rationalizations. They claim that the current US export system _ originally designed to enhance US national security and advance foreign policy goals _ is now actually weakening US defenses.

The Pentagon's Defense Acquisition and Technology last year endorsed this argument and pushed through a series of far-reaching "reforms" to the US export system, called the Defense Trade Security Initiative (see http://www.fas.org/asmp/campaigns/control.html for more information). But those changes are minor compared to the proposals being put forth in a report by the Center for Strategic and International Studies (CSIS) due out at the end of March. "Effective Export Controls for the 21st Century" makes the counter-intuitive argument that US national security would be enhanced by eliminating most of the current controls on arms exports. They propose not only cutting all but the most sensitive items from the controlled US Munitions List, but also eliminating the need for most export licenses. Their solution would be to replace the current transaction licensing system _ where items for export are approved individually by the State and Defense Departments to a "process" system where companies would be granted advance approval for most exports. The companies would then be trusted to comply with whatever export rules are left on the books.

The gist of the CSIS argument goes something like this. The US arms export and technology transfer licensing system is so long, burdensome, and over-restrictive that US allies are starting to get fed up and shop elsewhere. In the CSIS' view, inflexible US controls have instigated development of an industry consolidation process in Europe that threatens to cut the US industry out of the market and leave the US hopelessly behind on technology development. This is bad for US security because interoperability with the Allies requires Europeans to rely on the US for arms and technology, not the opposite.

The report rests on inaccurate facts and less logic. Under the current system, the US arms industry maintains a large market share in Europe, making $9.5 billion worth of new government to government sales deals to Europe and receiving $56.8 billion worth of licenses for commercial arms exports in fiscal years 1996-99. The idea of European weapons technology surging past US systems is ludicrous given the amount of relative spending on research and development. Indeed, the US government blasted Europeans for a technology gap in the other direction during the Kosovo conflict. The GAO already criticized DoD last year for putting forward reforms based on "very little data or analysis" and on examples filled with "factual errors." The CSIS report shows the same weaknesses, relying on the using the smoke and mirrors of "a national security risk" to throw everyone off the real point: promoting the agenda of the weapons industry.

Although the CSIS report was not commissioned by the government, the ideas it puts forth are gaining a worrisome level of support among pro-industry forces in the administration and Congress. Fortunately key congressional aides in the House International Relations and Senate Foreign Relations Committees, who would have to review any changes to arms export laws, have shown reluctance to further reduce controls for security reasons. But developments, especially regulatory changes that can circumvent Congress, bear close watching.