GLOBAL DEFENSE MARKET
International Arms Sales, for Now, Remain Business-As-Usual
“We are watching” closely events unfolding in various countries, said Rear Admiral Joseph W. Rixey, director of the Navy International Programs Office.
The Navy currently administers 4,500 military-to-military cooperative programs with 147 nations, also known as “foreign military sales.” Last year, sales of Navy weapon systems — including training and logistics support — reached about $6.7 billion, Rixey said in an interview.
Items sold range from night-vision goggles to advanced jet fighters and ships.
Rixey, a career Navy pilot who flew P-3 antisubmarine aircraft, also is a weapons acquisition expert, and recently became director of the IPO. “It’s an exciting job,” he said. The Navy’s top leadership places great value on foreign military sales as a vehicle of international cooperation. Global partnerships are a “significant priority of the chief of naval operations,” Rixey said. “He holds it in high regard.”
It is too early to forecast whether and how the fast-moving events in the Middle East and Africa will affect future technology transfers, he said. “It’s tough to predict, when you see what’s going on in that region.”
With foreign military sales come long-standing relationships with other militaries and civilian leaders. Whether today’s friend may be tomorrow’s enemy is the question that may prompt a reevaluation of U.S. arms sales, although that is not yet happening, Rixey said.
If a particular government “changes significantly,” he said, the implications are broader than just sales. The Navy has to also worry about protecting U.S. citizens who may be servicing equipment in a given country. There are also foreign nationals who may be attending Navy schools or training at Navy ranges. Their situation also has to be considered, said Rixey. “We are looking at each area. … We have to be keenly aware of what the implications are if a government-to-government relationship changes,” he said. “We’re watching this thing very closely.”
The long-term outlook for military-to-military weapon sales, however, is bright, Rixey said. “I think the demand will be for more of what we’re already providing.” For the Navy, that means, most likely, more aircraft sales. There is growing interest in naval aircraft, mostly notably the Super Hornet fighter, the P8 maritime surveillance plane and the MH-60R utility helicopter, Rixey said.
Besides foreign policy motivations, economic factors play a major role in weapons sales. The Obama administration has been an enthusiastic advocate of arms exports as a generator of well-paid jobs in the United States. Aerospace and defense are among the few sectors of the U.S. economy that generate a healthy trade surplus. For the U.S. military, foreign sales help keep domestic manufacturing lines open even in the absence of Pentagon orders, although Rixey said industrial considerations are not the primary rationale for offering specific weapons to foreign partners. “We care about the industrial base when we’re dealing with a partner that wants a capability,” he said.
The Obama administration and the Navy have provided “good support” to the Super Hornet program in various countries where it is competing for potential orders, said Mark Gammon, Boeing program manager for Super Hornet international roadmap. “They’re out there with us and ahead of us” working with partner nations, Gammon said in an interview.
The Super Hornet’s latest “international roadmap,” which offers various options to potential customers to co-produce or co-develop subsystems such as engines, weapons and sensors, has not yet been officially endorsed by the Navy. “It’s an internal Boeing campaign,” Rixey said. “Boeing is pretty smart about how to do business.”
Although only relatively wealthy countries can afford fighter jets such as the Super Hornet, which cost at least $50 million to $60 million each, the latest wave of uprisings in the Middle East has stirred worries that oil-rich governments that have been planning to spend on big-ticket hardware as a foil against a rising Iran may have to shift resources to domestic and social programs.
Saudi Arabia has been a major purchaser of U.S. aircraft, with a new agreement in the works to acquire F-15 fighters, Apache and Black Hawk helicopters, said Daniel Gouré, vice president of the Lexington Institute, a defense industry think tank. Similarly, the United Arab Emirates is acquiring F-16 Block 60 fighters as well as ballistic missile interceptors.
Future U.S. export opportunities include the F-35 fighter to Israel and the Littoral Combat Ship to Saudi Arabia, Gouré noted. According to Lexington’s Loren Thompson, a potential problem for U.S. weapon makers is that popular uprisings are occurring in some of the world’s biggest arms purchasers.
“When such uncertainties loom, Washington’s usual reaction is to delay rather than rushing ahead with new arms transfers,” he wrote. “The last thing policymakers want is to deliver the latest generation of U.S. military technology into the hands of autocratic states just in time for anti-western regimes to take over and claim the weapons as their own,” said Thompson. “This is a tough balancing act.”
Defense Secretary Robert Gates and Chairman of the Joint Chiefs of Staff Adm. Michael Mullen downplayed concerns that the current instability will negatively affect U.S. military ties to foreign partners.
“All of this clearly has to play out,” Gates told reporters earlier this month. “And it could take months and probably years before these situations stabilize and we know if we have durable, democratic governments in some of these countries.”
Mullen cautioned about making sweeping generalizations for entire regions as each nation presents unique circumstances. “I think it’s very important to discriminate between countries,” he said. “I would not put, for instance, Bahrain and Libya in the same category at all.” In the long run, he added, “All of us are going to have to adjust to what these relationships mean.”
U.S. allies in the Middle East, he said, “want us to stay with them mil-to-mil. They don’t want to see the assistance immediately cut off.”
While the administration continues to back foreign arms sales, officials also are working behind the scenes at the United Nations trying to negotiate terms for a conventional arms control treaty that would deter weapons transfers that support terrorists or human-rights abusers. State Department officials have said the goal is to negotiate a legally binding Arms Trade Treaty between now and the U.N. Conference in 2012.
What is happening in the world today may influence the terms of this treaty and possibly have adverse consequences for U.S. weapon makers, said Jeff Abramson, deputy director of the Arms Control Association. “I believe there may be policy changes in the near term as a result of the current events,” he said. “My hope is that this crisis will lead to the realization that there are other ways to achieve regional security.”