Tracking Number:  135109

Title:  "House Panel Raises Concerns About Korean Fighter Deal." Members of the House Armed Services Investigations Subcommittee expressed concern that Korea might sell to Iran aircraft parts that will be made under a planned coproduction deal with the US. (900406)

Date:  19900406


04/06/90 * HOUSE PANEL RAISES CONCERNS ABOUT KOREAN FIGHTER DEAL (Article based on House Armed Services news release) (670) By Jane A. Morse USIA Staff Writer

Washington -- Members of the House Armed Services Investigations Subcommittee expressed concern that Korea might sell to Iran aircraft parts that will be made under a planned coproduction deal with the United States.

The subcommittee held a closed-door hearing April 5 to discuss the proposal -- called the Korean Fighter Program (KFP) -- which will allow the Republic of Korea (ROK) to assemble McDonnell Douglas F/A-18 jets and produce some of its components. A draft Memorandum of Understanding (MOU), which is classified, was sent to Korea last month.

Witnesses at the closed hearing included: Glenn A. Rudd, director of the Defense Security Assistance Agency at the Department of Defense, John Richards, deputy assistant secretary of Commerce for the Office of Industrial Research Administration, William Rope, principal deputy assistant secretary of State for the Bureau of Political-Military Affairs, and a panel of officials from the Government Accounting Office who conducted investigations regarding Korean weapons sales.

In a House Armed Services Committee news release produced after the hearing, Rep. Nicholas Mavroules (Democrat of Massachusetts), chairman of the Investigations Subcommittee, was reported to be supportive of the effort to conclude the MOU with Korea, but also concerned about illegal sales of components to unfriendly countries. Mavroules cited subcommittee hearings last year that revealed Korean firms sold M-16 rifles made under a coproduction deal with the United States to unfriendly countries despite a ban on such sales in the coproduction pact.

According to Mavroules, Korean firms have been caught violating other coproduction contracts. He also said Korea has denied American officials access to the M-16 plant ever since the subcommittee hearing aired the problem.

The subcommittee did not identify the unfriendly countries or the military products sold to them, apart from the M-16 rifles. But it did release a page from the 1988 Daewoo Corporation annual report showing that the firm has sales offices in Libya, Iran and Iraq. Daewoo, which violated the M-16 coporduction agreement, would be involved in the coproduction of the F/A-18, according to the news

se. Mavroules was reported to have said that Libya, Iran, and Iraq were the principal buyers of Korea's military exports -- from all firms, not just Daewoo -- in recent years.

Under the current coproduction plan for the KFP, the South Korean air force would acquire 120 F/A-18 jets. The

GE 2 epf508 first 12 would be bought directly from the U.S. manufacturer McDonnell-Douglas. The next 36 would be assembled in Korea from kits supplied by McDonnell-Douglas. The final 72 planes would be assembled in Korea with many of the components manufactured in Korea.

The U.S. and Korean governments are now in the process of negotiating the MOU that will determine exactly what components will be made in Korea and how much technical data will be transferred to Korean firms.

Another issue in the MOU is the provisions to be made to assure that Korea abides by the contract requirement that no sales be made to third countries without prior approval from the U.S. government.

Mavroules and the ranking Republican on the subcommittee, Larry J. Hopkins of Kentucky, both expressed concern that the current draft of the MOU had inadequate controls. Hopkins ordered the Defense Department witness to find out and report to him if any of the F/A-18 components Korea might manufacture under the coproduction arrangement were compatible with F-4s, F-5s or F-14s -- planes which Iran possesses and is having difficulty maintaining.

Mavroules, according to the news release, was annoyed that Korea refused to buy all the F/A-18s as completed units, especially in light of its trade surplus with the United States. The news release noted Navy estimates that show the coproduction program, valued at 3,000 million dollars to the United States, is 400 million dollars less than if all 120 aircraft were built in the United States. NNNN

File Identification:  04/06/90, EP-508
Product Name:  Wireless File
Product Code:  WF
Thematic Codes:  140; 160; 5TT
Target Areas:  EA
PDQ Text Link:  135109