The United States, Britain, Russia, France and China dominate today's  $32 billion global arms trade. But the United States has pulled out in front.  According to the U.S. government's own estimates, Washington's share of the  business jumped from 16 percent in 1988 to 50 percent between 1992 and 1994. The  sky seems to be the limit. According to a 1995 Pentagon forecast, the United  States accounts for 63 percent of worldwide arms deals already signed for the  period between 1994 and 2000.
 The Clinton administration has accelerated arms exports despite the global  downturn in military production and defense budgets since the end of the Cold  War. After peaking in 1987, world military spending dropped 40 percent to $811  billion in 1996, the lowest since 1966, according to the International Institute  for Strategic Studies.
 The overall U.S. military budget is one-third smaller than at its peak in  the mid-'80s. In real terms, however, U.S. defense spending is still higher than  during the Carter administration. Rather than embark on a serious program of  defense cuts and economic conversion-the illusory "peace dividend" promised with  the end of the Cold War- the Clinton administration is phasing out its  conversion programs, opting instead to help boost the profits of military  manufacturers through overseas sales.
 The foreign policy risks of escalating arms exports are enormous. Most U.S.  weaponry is sold to the Middle East and other strife-torn regions, helping to  fan the flames of war instead of promoting stability. More than 40 percent of  the international sales of major conventional weapons between 1984 and 1994 went  to nations at war such as Iraq, Somalia and Sudan, according to the United  Nations Development Program's 1994 Human Development Report. 
  
 Civilians are increasingly the major victims of war. They accounted for  half of all war deaths during the first half of this century, 64 percent in the  '60s and 74 percent in the '80s. The share of civilian casualties appears to be  higher still in the '90s. The United States has been a major arms supplier to  nations at war. Since 1985, participants in 45 ongoing conflicts received over  $42 billion worth of U.S. weapons, according to a 1995 World Policy Institute  report. Among the major conflicts in 1993 and 1994 90 percent involved one or  more parties that had received U.S. weapons or military technology prior to the  out break of fighting.
 International arms sales also put U.S. troops based around the world at  growing risk. In discussing this so-called "boomerang effect," the CIA's  Nonproliferation Center noted in 1995 that "the acquisition of advanced  convention al weapons and technologies by hostile countries could result in  significant casualties being inflicted on U.S. forces or regional allies." In  fact, the last five times that the United States has sent troops into  conflict-in Panama, Iraq Kuwait, Somalia, Haiti and Bosnia-American forces faced  adversaries that had previously received U.S. weapons, military technology or  training.
 The Pentagon and defense contractors then turn around and use the presence  of advanced U.S. weapons in foreign arsenals to justify increased spending on  new leading-edge weapons back home so that the United States can maintain its  military superiority. For instance, the export of F-15 and F-16 tactical  fighters to U.S. allies in Europe, Asia and the Middle East is being used to  justify the development of the F-22, the "next generation" fighter that has  already cost taxpayers $16 billion. Air Force officials are already proposing  F-22 production costs be offset through overseas sales of the plane, which will  undoubtedly provoke calls for yet another new fighter.
 But it's NATO expansion, the foreign policy centerpiece of Clinton's second  term, that offers the biggest potential bonanza for U.S. weapons exporters. U.S.  arms dealers are salivating at the prospect of the new states upgrading and  retrofitting their militaries with Western weapons and equipment.
 "The stakes are high," Joel Johnson of the Aerospace Industries Association  told the New York Times. "Whoever gets in first will have a lock for the next  quarter-century." It's no coincidence that the globe-trotting president of the  U.S. Committee to Expand NATO is Bruce Jackson, whose other hat is director of  strategic planning at Lockheed Mar tin, which wants its F-16 fighters to replace  Central Europe's Soviet MIG-21s.
 A bipartisan group of 20 senators, including Jesse Helms (R-NC) and Patrick  Leahy (D-VT), took issue with President Clinton's contention that "NATO  expansion is in our national interests." In a joint letter, the senators  expressed doubts about forcing these relatively poor, fledgling democracies "to  spend money on arms, when expenditures for the infrastructure critical to  economic growth are more pressing." The letter promises "intense" debate about  NATO expansion in the Senate, which must ratify new NATO members by a two-thirds  vote.
 Arms merchants and their Pentagon flacks are leaving no stone unturned in  their export drive. The United States is contemplating the removal of a 20 year  U.S. ban on sales of advanced fighter aircraft to Latin America. Imposed during  the Carter administration when military dictators ruled most of the region,  proponents of lifting the ban argue that with the end of the Cold War and the  revival of democracy in most of Latin America, countries like Chile or Brazil  should be allowed to buy F-16s if they want them.
 In a declaration issued at a Carter Center meeting in - April, former Costa  Rican president Oscar Arias warned that lifting the ban would suck up money  better spent on human development programs and derail international efforts to  ratchet down military spending in volatile regions. Arguing that the removal of  the ban "could undermine regional military balances or stimulate an arms race,"  Sens. Joseph Biden (D-DE) and Christopher Dodd (D-CT) introduced a bill in July  to extend the export moratorium for another two years. Clinton is expected to  make a decision after he visits Latin America in October.
 Given that international arms sales exacerbate conflicts and drain scarce  resources from developing countries, why does the Clinton administration push  them so vigorously? The official answer is, most often, jobs. But the  government's own studies reveal that this rationale doesn't hold much water. The  Office of Management and Budget estimates that for every 100 jobs created by  weapons exports, 41 are lost in non-military U.S. firms that must compete with  foreign companies that were granted access to the U.S. market in indirect  payment for weapons purchases. U.S. arms exporters are also increasingly  negotiating "offset" agreements, which sweeten the pot for foreign buyers by  sending production (technologies and jobs) overseas along with American weapons.  Even as U.S. arms exports soar, some 2.2 million defense industry workers lost  their jobs between 1988 and 1996.
 Political contributions by arms manufacturers reinforce this cozy  relationship. During last year's election campaign, the top 25 weapons exporters  contributed $10.8 mil lion, according to a study by the World Policy Institute.  This marks a 56 percent increase in political action committee (PAC) and soft  money contributions over the previous peak of $6.9 million during the 1991-92  election cycle. The "leader of the PACs"-contributing more than $2.3 million to  last year's campaign-was Lockheed Martin, the world's largest arms  manufacturer.
 Unlike in any other industry, U.S. taxpayers fully under write the research  and development costs for weapons systems. In 1995, the arms industry  successfully lobbied for the abolition of "recoupment fees," a small government  tax on foreign weapons sales that brought in about $500 million each year to  help offset R&D costs. Arguing that recoupment fees made U.S. weapons  uncompetitive, the industry convinced Congress to allow the president to waive  them.
 U.S. dominance of the global arms market has been accomplished as much  through subsidies as sales: In 1995, more than half of the $15 billion in U.S.  arms exports was paid with government grants, subsidized loans, tax breaks and  promotional activities. The result is a net transfer of dollars from the U.S.  Treasury to weapons manufacturers. Arms export subsidies are the second largest  category of corporate welfare, surpassed only by agricultural  subsidies.
 Currently, 6,500 full-time government employees in the Defense, Commerce  and State departments are engaged in promoting and financing weapons exports  through a maze of programs. The Pentagon's Foreign Military Financing program  provided $3.2 billion in grants in 1995 to foreign countries-chiefly Israel and  Egypt-to buy American military equipment. U.S. AID Economic Support Fund grants  totaling $2.1 billion in 1995 went to help offset the costs of arms purchases.  The Commerce Department subsidized outstanding military-related loans given by  the Export Import Bank to the tune of $2.1 billion in 1995. The Defense  Department writes off another $1 billion each year for bad or forgiven  weapons-purchase loans to foreign countries. Thirty-four countries, including  Zaire, Turkey, Liberia and Sudan, owe the United States $14 billion in military  loans, according to a 1996 Pentagon report; most of these loans will likely be  written off.
 In 1995, Lockheed Martin and other defense industry giants won  congressional approval for the newest and potentially largest subsidy package.  The $15 billion Defense Export Loan Guarantee Fund covers military contractor  losses when foreign customers cannot afford to honor weapons sales agreements.  East European NATO aspirants are now tapping this fund. In May, Romania became  the first country to use the fund to underwrite the purchase of $23 million in  unmanned reconnaissance planes.
 
The Defense Department also gives away, leases, sells at a deep  discount or lends surplus weapons stocks. "While other, more visible forms of  military aid have been cut since the end of the Cold War, shipments of surplus  arms through a variety of programs have increased dramatically," says Lora  Lumpe, director of the Federation of American Scientists' Arms Sales Monitoring  Project. These giveaways-which include tanks, attack helicopters, bombers and  pistols-have been used to fan regional arms rivalries (between Greece and  Turkey, for instance) and to commit human rights violations in countries such as  Bahrain, Colombia and Morocco.
 
"Recycled Weapons," a 1996 study co-authored by Lumpe, found that the  U.S. military is giving away still useful equipment in order to justify the  procurement of new weapons. The Air Force "Boneyard," a four square-mile stretch  of Arizona desert outside Tucson, provides rust-free storage for 5,200 planes,  75 percent of which are still in operating condition. "We could have air  superiority with what we have in the Boneyard," Rossiter of Demilitarization for  Democracy told the New York Times.
 
Rather than trekking out to the Boneyard, potential buyers more often  show up at overseas air shows and expos, which are also financed by taxpayers at  an annual cost of about $125 million. Once offering stripped-down export models,  U.S. arms dealers at today's arms marts display top-of-the-line diesel  submarines, portable surface-to-air missiles, jet fighters, missile systems and  other high-tech weaponry. If the price is right, any type of weapon (except for  nuclear, biological, chemical or long-range missiles) is available.
 
In this era of balanced budgets and belt tightening at home, the  multibillion dollar bevy of subsidies for arms exporters needs to be weighed  against cuts in other government programs. The 1996 welfare reform law will cut  federal support for poor families by about $7 billion annually over the next  five years, an amount almost equal to the yearly subsidies given to U.S. weapons  manufacturers. There are parallels as well between some of the specific welfare  and warfare programs. The welfare law cuts child nutrition programs by $500  million and food stamps by $2.1 billion a year. On the other side of the ledger,  arms export subsidies include recoupment fee waivers of $500 million and $2.1  billion in U.S. AID Economic Support Fund grants each year.
 
It is, in essence, the poor at home and abroad who pay the price for  escalating arms exports. In a joint statement issued recently in New York, eight  Nobel Peace Prize recipients-including Oscar Arias, Elie Wiesel, Jose Ramos  Horta of East Timor and the Dalai Lama-who support an international Arms  Transfer Code of Conduct declared, "Millions of civilians have been killed in  conflict this century, and many more have lost their loved ones, their homes,  their spirit. In a world where 1.3 billion people earn less than $1 a day, the  sale of weapons simply perpetuates poverty. Our children urgently need schools  and health care centers, not machine guns and fighter planes. Our children also  need to be protected from violence. The dictators of this world, not the poor,  clamor for arms."
 
But flanked against such eloquent, straightforward logic is the mighty  U.S. arms industry and its government allies. "The brakes are off the system,"  says Lawrence Kolb, a Brookings Institute fellow and former assistant secretary  of defense under Ronald Reagan. "It has become a money game: an absurd spiral in  which we export arms only to have to develop more sophisticated ones to counter  those spread out all over the world.... It is very hard for us to tell other  people the Russians, the Chinese, the French -- not to sell arms, when we are  out there peddling and fighting to control the market."
Martha Honey is  director of the Institute for Policy Studies' Peace and Security Program.
 
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