Obama Balancing Act: U.S. Export Reforms, International Arms Controls

By Sandra I. Erwin

The Obama administration walks a fine line when it comes to U.S. arms exports. While it is seeking to boost the U.S. economy by easing regulatory burdens on aerospace and defense industry exporters, it is also lending support to a global arms-control treaty that could put tighter controls on international sales of conventional weapons.
U.S. negotiators are gearing up for a crucial round of Arms Trade Treaty talks in July at United Nations headquarters, in New York City. The world’s top arms sellers will be seeking agreement on the framework of a future multilateral treaty to regulate the estimated $1.5 trillion international market for conventional weapons.
As the world’s top arms exporter, the United States will be under pressure to support tighter regulations that would aim to prevent illegal transfers and to keep oppressive Third World regimes from obtaining advanced weaponry.
ATT talks began in 2006, but initially the United States did not participate as the George W. Bush administration opposed the treaty on grounds that U.S. export controls were sufficient. In October 2009 the Obama administration reversed the U.S. position.
“The United States is committed to pursuing a robust treaty,” said Bill Malzhan, deputy director of the State Department’s office of conventional arms threat reduction.
A U.S. negotiator in the ATT talks, Malzhan said the Obama administration does not see the treaty conflicting with its efforts to streamline U.S. export controls for weapons manufacturers.
Reforms to ease restrictions on U.S. exports are not intended to expand the arms trade, Malzhan said March 23 during a panel discussion hosted by the Stockholm International Peace Research Institute.
"What I hope is going to come out of the [U.S. export controls] reforms is a more streamlined, efficient, less burdensome regulatory regime,” said Malzhan. “The effect on international arms trade remains to be seen.” The administration is not looking to deregulate the arms-exports business but rather to “make the process more effective,” he added.
Following a decades-long crusade led by the Pentagon and U.S. defense and aerospace industry to reform export controls, the Obama administration launched in 2010 a comprehensive program to expedite export-license reviews and to remove non-military technologies from the State Department’s “Munitions List” of restricted items.
Malzhan said that arms suppliers, like most industries, tend to overstate  the impact of regulations on international sales. The ATT treaty should not be seen as a hindrance to business but rather as a boost, as it would put more restrictions on non-U.S. suppliers whose countries have looser export controls than the United States.
Complaints by U.S. industry need to be put in perspective, said Malzhan. “With this incredibly burdensome system of regulations, we still are the largest arms exporter in the world,” he said. “I take industry concerns very seriously. But keep in mind that industry never likes regulations, never likes controls. They are at some level interfering with their ability to maximize profits.”
It is the role of governments to regulate and control, he said. “In international arms trades we need controls.”
Malzhan said he is optimistic that “common ground can be reflected in a treaty.” The most likely opponents will not be arms exporters but purchasers, he said. “The exporters want a treaty that will level the playing field. They say that the playing field is not regulated now.” The ATT should set a higher standard that could benefit suppliers from countries such as the United States that have strict export controls, said Malzhan. “Resistance will come from importers who might not be enthusiastic about restrictions” on sales to regimes that commit human rights violations, for example.
Malzhan also pushed back on criticism that the ATT conflicts with Americans’ Second Amendment rights to own firearms. A group of 58 U.S. senators signed a letter last year opposing the ATT, which would require ratification by two-thirds of the Senate.
“ATT does not conflict with the Second Amendment,” he asserted.
The upcoming ATT talks in New York will unfold as many of the world’s developing countries step up their acquisitions of high-tech weapons and look to boost their own manufacturing base by licensing foreign weaponry.
Over the past year, the world has seen a 24 percent increase in international arms sales, said Paul Holtom, director of SIPRI arms transfers program. According to the think tank’s latest research, the world’s top suppliers of military hardware and combat support services scored sales of $411.1 billion in 2010, and 60 percent of that business went to U.S. companies.
The same dominant players — the United States, Russia, Germany, France and the United Kingdom — continue to rule the arms trade, but Holtom noted that the top five’s market share is declining.
“Outside the top 10, some non-European suppliers are emerging as major competitors to the established players, such as South Korea, South Africa and Brazil,” Holtom said.
China, which for decades had been a net importer of weapons, increased its exports by 95 percent from a year ago, and is closing in on the United Kingdom, he said. Pakistan accounted for two-thirds of the volume of Chinese exports between 2007 and 2011.

Topics: Business Trends, International

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