The decision to relax arms-export rules for the two close U.S. allies - for which the Pentagon and the defense industry pushed hard - is part of the biggest overhaul of defense-trade controls since the end of the Cold War.

Arms manufacturers had sought relief from the tangle of red tape that ensnares even such low-tech items as signal flares and M-16 rifles shipped to friendly countries.

Pentagon officials, who have called the White House decision "a national security imperative," wanted to ease the flow of war goods between the United States and its allies to improve technological cooperation, increase sales for the defense industry and avoid shipment delays such as those affecting NATO's air war in Yugoslavia last year.

"We have an export control system which is sclerotic, which is very slow. It does not serve national security interests as well as it needs to," said James M. Bodnar, a top policy official in the Pentagon. "We need to close the gap with our allies by facilitating their getting things, getting technology."

Many of the reforms announced by Secretary of State Madeleine K. Albright on May 23 - such as reducing the number of export licenses required for sophisticated arms systems - enjoy broad congressional support.

But a sweeping move to cut controls on most U.S. arms sold to Britain, Australia and potentially other allies stirred opposition not only on Capitol Hill but from Albright, several administration officials said.

"We will stop it. This will not come to pass," said a senior Republican congressional aide. "This notion of going license-free on weapons sales to various countries is an unsupportable step. It was opposed by the secretary of state ... and we oppose it for the same reasons."

Albright fought the deregulation of weapons sales to Britain and Australia but was overruled by White House Chief of Staff John Podesta, acting for President Clinton, in a meeting last month between Albright, Podesta and Defense Secretary William S. Cohen, said congressional and administration officials.

U.S. companies have been required to have a State Department license for every defense-related export, from helmets to cruise missiles. The new rules would eliminate license requirements on items sold to Britain and Australia except on missiles, nuclear-weapons technology, sensitive electronics components and other so-called "classified" items.

Worries about resales

Critics of looser arms controls fear that a relaxation of U.S. export rules - even for close allies - will raise the risk of overseas arms dealers reselling American weapons or technology to potentially unfriendly nations. They also point to Europe's role as a major weapons exporter, noting examples of recent allied arms sales to China, which frequently threatens Taiwan, an American friend.

Britain, for example, has sold air-to-air refueling systems that increase the range of Beijing's fighter aircraft. Britain's Marconi company bid unsuccessfully to sell sophisticated AWACS airborne radar systems to China. France and Italy, which could eventually benefit from the same deregulation the administration is proposing for Britain and Australia, have sold missile components to China.

None of those sales involved U.S. products, but critics said they show a pattern among American allies that could cause defense-export deregulation to backfire on Washington.

"Those governments don't have the same standard of oversight on their defense companies as the United States does," said Tamar Gabelnick, an arms control analyst for the Federation of American Scientists.

Critics also note that a blanket license exemption for U.S. arms sales to Canada, which for decades was the only country to enjoy the type of deregulation being granted to Britain and Australia, was revoked last year. The State Department stopped uncontrolled weapons trade with Canada after authorities discovered evidence of armored vehicles, missile-guidance systems and other U.S. technology being shipped from Canada to Iran.

Pentagon and defense industry officials argue that reform of weapons-export procedure is overdue.

Government munitions monitors spend most of their time tracking widely available products going to close U.S. allies. More than two-thirds of weapons-export licenses granted last year covered sales to Australia, NATO countries and Japan, according to the State Department.

Freeing monitors to focus on export applications with greater potential to harm U.S. security is a better use of scarce government resources, defense officials argue.

Sufficient safeguards will remain in place after the United States loosens arms-export controls for Britain and Australia, administration officials argue.

For example, both countries will be required to create a system to restrict any re-export of American weapons or components to other countries, a process that will be closely watched by U.S. officials, said David R. Oliver, a top Pentagon official involved in the deregulation plan.

The White House said looser controls for Australia and Britain won't become effective until Washington negotiates agreements to ensure that London's and Canberra's arms-export systems are adequate.

And although Oliver said the U.S. export changes could eventually apply to other allies, he doesn't foresee other countries being added to the list soon. He pointed to the close U.S. security and trading relations with Australia and Britain, adding that "nobody else comes close to those two."

Making a similar point, one Defense Department official noted that Britain's Rolls Royce recently bypassed a potential deal to upgrade the engines of Iran's air force after the Pentagon objected.

With the eased export restrictions, Pentagon officials said, U.S. defense contractors will be able to work more closely on joint projects with European and Asian companies. Moreover, those companies will be able to sell weapons and high-tech defense systems to allies who fall far short of U.S. technology.

During NATO's 78 days of airstrikes against Yugoslavia last year, U.S. forces carried most of the attacks because the allies lacked the necessary precision aircraft, bombs and - in some cases - sophisticated encrypted radios.

With the White House favoring weapons-export changes, the State Department is officially behind the measure, too.

Safeguards on sales

A State Department spokeswoman said that Albright dropped her opposition to the measure after the Pentagon agreed to require Britain and Australia to improve their arms-export controls and to require careful vetting of each British and Australian weapons buyer before allowing license-free transactions.

"Initially we were not comfortable with exemptions" for Britain and Australia, the State Department official said. "We are very comfortable with the initiative the way it now stands."

But the administration must contend with Congress.

Under current law, the president can order changes in defense-export rules without obtaining congressional approval, but some on Capitol Hill promise to change that.

Two months ago, the chairmen and ranking Democrats on the Senate Foreign Relations and House International Relations committees warned Albright in a letter of their "adamant opposition" to easing defense-export controls for U.S. allies.

Their staffs are examining the administration's decision and waiting for further details. But House Republicans have drafted a bill that would eliminate the White House's ability to change export rules on arms shipments to allies or anybody else.

One congressional concern was that the State Department, which regulates weapons exports, was being steamrolled by an aggressive Defense Department that was seeking the biggest possible cuts in export rules.

"State let itself, in many ways, get run around," said a congressional staffer who spoke on condition of anonymity. "Prerogatives of the State Department in this regard were effectively being usurped by the Department of Defense. And we were concerned about that."

Copyright 2000 Baltimore Sun

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