Unrest Makes U.S. Rethink Arms Trade In Arab World The U.S. has long been the chief supplier of defense equipment in the region — including selling some nonlethal goods to the Gadhafi regime in Libya. Transactions with Libya are now suspended, and defense sales to other governments are also getting another look.

Unrest Makes U.S. Rethink Arms Trade In Arab World

Unrest Makes U.S. Rethink Arms Trade In Arab World

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The outcome of popular revolts in the Arab world is yet to be determined, but they have already forced the United States to reconsider military sales to the region.

The first country to be affected is Libya, which under Moammar Gadhafi had actually moved closer to the U.S. in recent years and was rewarded with some new trade deals.

"It was a promising market, because we saw it as a promising relationship," says Mark Kimmitt, a retired Army brigadier general. He directed security assistance programs at the U.S. military's Central Command from 2004 to 2006 and later served as assistant secretary of state for political-military affairs.

Gadhafi had renounced any interest in developing nuclear weapons and ended his support for terrorism, leading to improved diplomatic relations with Washington.

"It was clear that the United States was moving toward a normalized trade relationship as well," Kimmitt says. "As the situation improved, the amount of trade improved."

Among the items Libya purchased from the U.S. were spare parts for C-130 transport aircraft, equipment for border security such as infrared cameras, and blasting cartridges for use in oil exploration. Assistant Secretary of State Andrew Shapiro even visited Libya last year in an effort to build better relations and boost trade.

A State Department official, however, says the United States made clear that no lethal arms would be made available to Libya until the Gadhafi government improved its human rights record.

Other governments — Italy and Russia, for example — were less scrupulous, reportedly providing $10 billion or more in weaponry to the Gadhafi regime.

All such transactions are now suspended due to an international arms embargo prompted by Gadhafi's bloody crackdown.

Concerns About Instability

And that's just Libya. Across the Middle East, popular protests against authoritarian governments are prompting a major reassessment of the arms trade.

"Whenever unrest spreads in places like the Middle East, there's a tendency for Western governments to become cautious in making arms transfers," says Loren Thompson, a defense industry analyst at the Lexington Institute. "They either take longer to sign contracts, or they take longer to actually deliver weapons that have been contracted, because they're worried the weapons may fall into the hands of anti-Western regimes."

That concern clearly applies to Tunisia and Egypt, both of which have been U.S. allies but are now facing major government reorganization.

"I think the amount of instability in the region has taken a lot of people by surprise," says Jeffrey Abramson, deputy director of the Arms Control Association. "And I think when you see that instability, you start thinking, 'Is this the way I want to help that area become more stable? Is it by selling more arms, or is it something else?' My expectation is the United States and other countries will rethink their approach and start looking at nonmilitary ways of moving forward."

U.S. Dominates Arms Market

The U.S. has long been the chief weapons supplier to Middle East governments. Arms sales have been justified by a belief that it is in the U.S. interest for allied governments in the region to have well-trained and well-equipped militaries.

The risk that countries receiving American arms might someday turn them against the United States is somewhat mitigated by their continued dependence on U.S. firms for spare parts.

"When we sell key components to other countries, we have a strict end-use monitoring program," says Kimmitt, now executive vice president at Advanced Technology Systems Co., a defense contractor. "If a country turns against us, we can turn off the spigot."

The U.S. dominance in the global arms market is due in part to the reputation of American military manufacturers. It's one area where U.S. companies consistently beat their competitors.

Defense contractors, however, now have to worry about reduced demand for their products, if the United States pulls back on arms transfers to the Middle East or if Middle Eastern governments choose to spend less money on U.S. weaponry and more on social programs, in order to calm their restive populations.

"There's a lot of bubbling under the surface [and] a lot of demands from citizens in the region," says David Hamod, president of the National U.S.-Arab Chamber of Commerce, reached by telephone in Oman. Hamod is looking for signs that governments in the region may be considering a change in their budgetary priorities.

"Our companies are interested in knowing what's happening on the ground, and they will be looking for a full report on my return to the States," Hamod says. "But to the best of my knowledge, there hasn't been a long-term impact yet on the defense needs of countries in the region."