The rapid growth in the international arms trade during the past several years has focused renewed attention on the need to encourage restraint in arms transfers. The Congress has taken steps to exercise a stronger influence in U.S. arms sales policies and has also enacted legislation requiring that arms control judgments be explicitly applied to decisions on arms transfers. This new legislative attention is welcome. Curbing the flow of conventional arms is a U.S. policy objective, particularly in areas of tension, because they pose a threat to regional stability and conflict with economic development in several areas of the world.

Effective control of arms transfers will require international cooperation. Strong political and economic motives cause arms producers to furnish military equipment, and prompt nations which feel threatened to acquire it. The United States has taken steps to assure that arms transfer decisions take into account arms control consideration, and is exploring means of encouraging international cooperation to restrain the arms traffic.

International Dimensions

Trade in conventional arms is flourishing. In

1974 the latest year for which complete data are available world arms transfers were valued at the equivalent of nearly $9 billion. This is about three percent of total estimated world military expenditures.

The United States publishes detailed information on the value of its arms exports, but few other countries release such data. This lack of official information reflects the secrecy with which arms transfers are generally treated. As a result, comparative information on the value of national arms exports and imports can be developed only through the use of a variety of estimating techniques, and the value figures resulting should be regarded as reasonable approximations rather than precise

measures.

Virtually all countries import some conventional arms-how much of their armaments they obtain from imports depends, of course, on the extent of indigenous production. Hence the annual arms imports by developed countries as a group are equivalent to only about one percent of their total military expenditures. But for developing countries, annual aggregate arms imports are equal to about 11 percent of their combined military expenditures.

World arms transfers have increased substantially since 1965. Statistics on the value of arms exports and imports of 136 countries have recently been published by the Agency.1 As shown in Figure 4, the value of world arms trade as measured in constant 1973 dollars rose from about $5.3 billion in 1965 to almost $9.6 billion in 1973 before declining to about $8.4 billion in 1974. The developed countries accounted for about 95 percent of arms exports. Imports by the developed countries remained at a level of $2 billion in constant 1973 dollars over the 10-year period. In contrast, imports by developing countries rose from $3 billion in 1965 to a peak of $8 billion in 1973, declining to about $6 billion in 1974.

1 World Military Expenditures and Arms Transfers 1965-1974. ACDA Publication #84, March 1976, GPO #002-000-00054-7. Information on conventional arms is also produced on a regular basis by the Stockholm International Peace Research Institute (SIPRI) and the International Institute of Strategic Studies (IISS) in London. The arms transfer value figures contained in the SIPRI annual World Armaments and Disarmament Yearbook differ from ACDA figures in both the pricing methodology used and in coverage. (SIPRI provides data on the estimated value of exports only of selected major weapons systems to developing countries, in contrast to the comprehensive estimates for all supplier and recipient countries and all types of military equipment that are produced by ACDA). The IISS annual Military Balance contains information on arms inventories rather than the value of transfers. Both SIPRI and IISS also list major arms transfer agreements in a particular year.

contrast, East Asia accounted for a much smaller

share of world imports in 1974 than it had over the decade, and NATO, South Asia, Oceania, and the nonallied European countries imported somewhat smaller fractions of the total.

The leading arms importing countries in 1974, listed in descending order of value of receipts, were Iran, South Viet-Nam, Israel, West Germany, Syria, East Germany, North Viet-Nam, Saudi Arabia, Iraq, and Cambodia.

Recently contracted arms sales to Near Eastern countries indicate that the largest fraction of world arms deliveries will continue to be concentrated in that region over the next several years, barring the outbreak of a major conflict elsewhere. Conversely, the end of hostilities in Southeast Asia has brought about a sharp decline in deliveries to that area, but has left it a potentially troublesome source of surplus weapons.

The Role of U.S. Arms Transfers

Conventional arms transfers have been a mainstay of U.S. foreign policy since World War II. Such transfers played an essential role in the development of the network of collective security arrangements and continue to contribute to the defense of those countries whose security is important to the

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The Near East, East Asia, NATO, and the Warsaw Pact continued to be the largest importing areas in 1974, as they were during the decade 19651974. However, as shown in Figure 6, the relative regional shares of world imports in 1974 varied significantly from the aggregate 10-year pattern. In particular, 1974 transfers of arms to the Near East region primarily to members there of the Organization of Petroleum Exporting Countries (OPEC)— accounted for a much larger proportion of the world trade compared with the 10-year period 1965-1974. The Warsaw Pact and Africa also represented increased portions of the world market in 1974. In

Fig. 6 Deviation of Share of 1974 Arms Market from Ten-Year Aggregate (1965-1974) by Recipient Region (Change in % of World Market)

United States. They reinforce other U.S. security interests such as the maintenance of regional stability by assisting in the defense of countries threatened by external aggression. They help to assure U.S. access to overseas military facilities that are useful in verifying arms control agreements.

There are also domestic economic benefits derived from U.S. exports of conventional arms. In some cases the increased production for export reduces the unit cost of weapons supplied to U.S. forces, contributes to employment of manpower and capital in defense industries, and helps keep critical production lines open. More broadly, arms exports contribute to a favorable U.S. balance of payments position and may help open foreign markets for U.S. civilian exports.

A growing number of Third World countries who once relied almost exclusively on grant military aid recently have begun to acquire the financial resources to purchase weapons. As a result, the demand for U.S. conventional arms has increased substantially. Especially in newly wealthy oil-producing countries, the temptation has been strong to seek a rapid infusion of modern weaponry. The demand for U.S. arms reflects not only appreciation of the superior quality of American technology, but also the quality of U.S. training, maintenance, and logistics support.

The Need for U.S. Arms Export Controls

The export of arms also brings disadvantages and risks:

-There is no guarantee that forces equipped by the United States will always be used in ways favorable to U.S. interests and objectives. Regimes friendly today may become hostile in the future.

-The supply of arms to Third World countries may increase the likelihood of conflict between neighboring countries and lead to confrontation between supplier states.

-Arms may be retransferred from a friendly recipient to a country with policies inimical to U.S. interests, or they may fall into the hands of terrorist groups. Third country transfer of arms supplied are, however, subject to U.S. government approval.

-Pressures from recipient countries for rapid deliveries could lower U.S. military preparedness if arms are supplied from current inventories, or if foreign recipients are given priority over U.S. forces for short supply items.

-Some transfers could involve sensitive technologies which the recipient may exploit for industrial

gain or which may fall into the hands of hostile states. This risk arises particularly when the recipient country obtains an indigenous repair and manufacturing capability as a part of the overall supply package.

A primary concern is the degree to which weapons transfers will increase regional tensions and the likelihood of open conflict. In considering prospective arms exports, the U.S. takes into account the potential effects of the transfers on the recipient's neighbors, especially the risk that introducing additional arms or new technology into a region might induce other countries to acquire a similar capability, or might intensify competition among regional rivals. Obviously, increasing the quality or quantity of weapons in a region could increase the chance or affect the magnitude and character of potential hostilities. Decisions also weigh the effects of sending large numbers of American training personnel to areas of potential conflict. Of course, transfers must be carefully assessed in terms of existing or prospective arms control agreements.

Because of the qualitative advances in arms transferred over the past decade, the risk that exported arms or technology may contribute to the development of an independent nuclear weapons delivery capability has assumed crucial importance. Moreover, modern weapons can pose a highly dangerous threat in the hands of terrorists, and this risk requires special restrictions on exports.

Prospects for International Controls

Little control is currently exercised over international arms transfers beyond that applied unilaterally by individual suppliers or recipients in support of their perceived political, military, or economic interests. Some supplier nations, including the United States, have made efforts to induce cooperative international restraints, but with little effect. Efforts with narrowly focused objectives have had some success. For example, since 1950 the industrial countries of Western Europe, Japan, the United States, and Canada have cooperated in agreements not to sell strategic materials to Communist countries. Similarly, while the U.N. embargo on arms to South Africa has not completely prevented the arms traffic to that country, it has raised the political cost for suppliers and has undoubtedly limited South Africa's options for the acquisition of advanced weapons.

Little progress has been made in broader international approaches to the control of arms transfers.

The only region that has shown signs of interest in limiting arms imports is Latin America. In 1974, the six Andean Pact States2 plus Panama and Argentina agreed in the Declaration of Ayacucho to seek a cooperative means of limiting their arms acquisitions, although subsequent meetings have yet to produce any actual quantitative or qualitative limitations.

Recipients of arms generally are more vocal than suppliers in their objections to controls. Almost entirely dependent on imports to fill their military needs, many arms importing countries argue that transfer limitations would perpetuate or increase the discrepancies in the military strength of developing and developed nations. In addition, developing countries argue against controls on the transfer of conventional arms on the ground that these divert attention from the more urgent task of nuclear disarmament.

Most arms suppliers recognize the political sensitivity of weapons exports, and their economic motives for such exports are tempered in varying degrees by other foreign policy interests. For the United States and the Soviet Union, the political and military aspects are dominant. Only these two nations provide significant amounts of subsidized arms in support of political or military interests. The other major suppliers export mainly for economic benefits, although they may in some cases explicitly deny sales in recognition of political or strategic interests, as in the case of South Africa.

Because of the multiplicity of conflicting supplier interests the prospects for widespread general agreement on conventional arms control are not encouraging. More promising are forms of arms limitation relating to specific types of weapons or to conflict situations. For example, suppliers may well find it in their common interest to limit the flow of certain advanced systems in order to deter an incipient arms race. Regional hostilities have already inspired tacit, short-lived restraint on the part of major suppliers. In the longer run, prospects for agreement will depend on the desire of the antagonists to work toward a stable military balance and reduce the likelihood of arms conflict.

U.S. Conventional Arms Transfer
Control Activities in 1975

During 1975, Congress expressed increasing concern about the magnitude of conventional arms transfers. As a result of provisions in the Foreign

2 Bolivia, Chile, Colombia, Ecuador, Peru, and Venezuela.

Assistance Act of 1974, Congress ascribed to itself a greater role in determining where and to whom arms should be sold. According to Section 36 (b) of the Act, the President must notify the Congress of proposed sales of defense articles or services under the Foreign Military Sales Act for $25 million or more. The offer to sell cannot be made if the Congress, within 20 days, adopts a concurrent resolution objecting to the proposed sale unless the President certifies that an emergency exists which requires the sale in the national security interests of the United States.

Also in accord with the new Act, the United States took the initiative at the Conference of the Committee on Disarmament (CCD) to focus attention on the problem of conventional arms. In a speech on April 10, 1975, Ambassador Martin, the U.S. Representative, reiterated the view that regional arrangements are a particularly promising approach to control of conventional arms transfers, with the initiative coming from the region concerned. He also urged that consideration be given to the development of generally applicable principles for controlling conventional arms. He suggested that states should not acquire or transfer arms that adversely affect regional or international security; that consultations on effects of arms acquisitions could help to prevent or alleviate tensions; that states limit arms acquisitions to those deemed indispensable for security to avoid the unnecessary diversion of resources from development; and that the export of technical data and equipment for arms manufacture be subject to the same government review and authorization as arms exports themselves.

On June 24, 1975, Ambassador Martin again encouraged other CCD members to join in an exchange of views on conventional arms restraint. The U.S. initiative at the CCD has so far elicited little response from other delegations.

Regional Initiatives

Efforts to control arms transfers on a regional basis are centered in Latin America, although concrete results have not yet been achieved. If it eventually proves successful, the Andean arms control initiative would represent a significant example and stimulus for similar arrangements in other parts of the world. Acknowledging this potential, Secretary Kissinger, speaking in Houston on March 1, 1975, stated:

Last December the Andean countries, following a Peruvian initiative, pledged themselves to limit the acquisition of offensive weapons-an initiative we support and encourage.