On the same day as President Barack Obama's inauguration, China issued a white paper outlining its national defense strategy on Tuesday. In that paper, China pointed to a security situation that was "improving steadily" overall. At the same time, the paper explicitly referred to the growing threat from increased U.S. arms sales to Taiwan. Over Beijing's protest, the Pentagon announced last October a deal for the sale of $6.5 billion in arms to Taiwan, including 30 Apache attack helicopters, 330 Patriot missiles, and 32 Harpoon missiles. Beijing referred to the deal as a "violation" of established principles that would cause "serious harm to the China-U.S. relations as well as to peace and stability across the Taiwan Straits."

The Taiwan sale is but one of hundreds of deals the Bush administration made in its two terms. In 2008, as in each of the previous seven years, the United States led the world in arms sales at $32 billion. In 2006-2007, the U.S. sold weapons to more than 170 nations, up from 123 at the start of the Bush administration.

These arms deals are supposed to accomplish a range of foreign policy goals: winning influence, gaining access, maintaining and encouraging friendly regimes, as well as bolstering the U.S. balance of payments and domestic economy. At the same time, these large-scale weapons sales prop up teetering regimes and dictatorships, sow discord, promote violent solutions to international problems, and result in widespread civilian suffering. In fact, U.S. weapons "played a role in 20 of the world's 27 major wars in 2006-07," according to a December 2008, report from the New American Foundation. Weapons from the United States are now present in half of the major armed conflicts currently taking place worldwide. And 13 of the 25 leading U.S. clients were either undemocratic and/or guilty of human rights violations, including Pakistan, Saudi Arabia, Israel, Korea, Kuwait, Egypt, and Colombia.

Stabilizing Iraq?

One obvious omission from this abbreviated list is Iraq. Having supported Saddam Hussein with arms exports, as did other Security Council members, the United States is now sending into Iraq an enormous volume of weapons. Aside from those destined for the U.S. military, hundreds of millions of dollars in weapons have gone to arm the Iraqi army and its police and security forces. In the last four years, the Pentagon financed the shipment of more than 1 million rifles, pistols, and infantry weapons to Iraqi forces. These shipments are largely the responsibility of private arms firms such as Taos Industries. Taos alone received contracts totaling more than $95 million for supplying arms to Iraq. All told, the Pentagon oversaw the signing of 47 weapons-supply contracts amounting to nearly $220 million since 2003. Due to little oversight and widespread corruption, now as many as several hundred thousand of those weapons have been "lost." Unable to account for the distribution of these weapons inside Iraq, many officials have concluded that some have found their way into the hands of insurgents.

One overarching and troubling pattern in all of this has been the shift in responsibility from the State Department to the Defense Department since 9/11. This shift has meant, among other things, vastly increased arms available to a wider range of clients (an additional $40 billion in new funding for arms sales), less oversight from State Department (whose regulations include at least a nod to human rights), and less congressional scrutiny (the responsible congressional committees differ substantially from State to Defense).

This isn't a new phenomenon. However, U.S. arms sales grew in importance in American foreign policy in the fairly recent past. Following the Vietnam War and amid a faltering economy, Richard Nixon ordered the Pentagon to relax and/or remove the barriers to international arms sales in 1974. As the result of that decision - coupled with aggressive marketing from U.S. arms suppliers and the new wealth of the Organization of the Petroleum Exporting Countries (OPEC), arms sales skyrocketed. In the 20 years leading to 1969, U.S. arms sales totaled less than $12 billion - and $9 billion of that went to the "developed" world. From this low, the numbers quickly climbed: $1.4 billion in 1971, $3 billion in 1972, $5.3 billion in 1973, $10 billion in 1974. Added up, the U.S. shipped $49.8 billion in arms in 1974-1977. U.S. arms shipments to Persian Gulf countries alone shot up 2,500%.

Some at the time recognized the contradictory nature of these deals and the resulting blowback. The Shah of Iran was the lead recipient of U.S. arms. "We kidded ourselves," Senator Joseph Biden complained in 1982. "We had close to $30 billion worth of the most sophisticated arms in the world in Iran." And yet, "without a shot being fired, the Shah was marched out of the country." Now, "all those weapons are either lying dormant or have become accessible to the Soviet Union." Indeed, massive arms sales proved better instruments for dealing with balance of payments problems than for charting a sustainable foreign policy.

Though the years immediately after the end of the Cold War brought a sharp decline in arms sales, this trend was soon reversed. Within a few short years arms-makers adapted, and the administration of Bill Clinton obliged with aggressive marketing and massive subsidies. Presidential Decision Directive 34, issued in February 1995, articulated the new strategy of promotion of arms sales: "the United States continues to view transfers of conventional arms as a legitimate instrument of U.S. foreign policy - deserving U.S. government support - when they enable us to help friends and allies deter aggression, promote regional security, and increase interoperability of U.S. forces and allied forces." Both directly and indirectly, neoliberalism and globalization of the post-Cold War decade were very good to arms exporters.

Building on this trend - and spurred by the events of 9/11 - the Bush administration took arms exports to a new level.

Obama's Choice

With considerably more political capital than its predecessor, the new administration now has a choice to make. President Obama has talked about a less militarized foreign policy. He admonished the Bush administration for too often seeing international problems as "amenable to military solutions." So there is at least an opening to raise this issue of continued and expanded arms sales. However, the last Democrat in the White House, Clinton, dramatically increased arms exports. He did this largely to compensate the arms industry for the loss of contracts connected to the post-Cold War downsizing. Obama may well be tempted to do something similar by relying on military Keynesianism to help pull the U.S. economy out of recession.

Still, the sale of a large volume of arms to Taiwan seems an appropriate place to start. Though there will no doubt be entrenched opposition, the Obama administration should signal a new policy by reducing the flow of arms to Taiwan. At this time of global economic crisis, the Obama administration will need China's cooperation far more than revenues generated from the arms deal with Taiwan. The Taiwan Strait would be an ideal place to apply the new diplomatic approach that both Obama and his new Secretary of State, Hillary Clinton, have promised.