Fri, Oct 08, 2004 page8

• EU arms dealers gunning for Asia

  • By Honigmann Hong 洪財隆
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  The EU has agreed in principle to lift its embargo on the sale of arms to Libya, saying the ban should be lifted at the next meeting of the union's foreign ministers, scheduled for Oct. 11 and Oct. 12 in Luxembourg.

  There is a wealth of evidence to suggest that the arms sales embargo on China is next in line to be lifted. If that really is the case, the arms procurement

  plan currently creating a great

  deal of debate in Taiwan may be expanded further.

  The possible amendment of the EU's Code of Conduct for Arms Exports toward the end of the year is usually analyzed from the perspective of international relations, the competition between strong powers -- the EU and the US are cooperating and competing with each other -- or as a matter of "currying favor" with China (with an eye on the massive business opportunities that are predicted to follow with the rise of the Chinese economy).

  This analysis is further extrapolated to mean that such a move by the EU would bring "evil results," making it a certainty that China will rise even faster to become a regional military power, and -- directly or indirectly -- increasing the possibility of military conflict in the Taiwan Strait.

  While basically agreeing with this point of view, I contend

  that there is another angle for analysis.

  Using a few simple groups of data, such as the distribution of and changes in the global arms trade over recent years, I will explore why the EU, which always talks about human rights and democracy, is so eager to help arm China.

  First, the members of the UN Security Council rank very high in global exports of conventional arms. In a report by the US Congressional Research Service, the top seven exporters listed according to real payments are, with last year's export figures in parentheses: the US (US$14.5 billion), Russia (US$4.3 billion), Britain (US$4 billion in 2001), Germany (US$1.4 billion, though not a permanent member of the Security Council), France (US$1 billion), Italy (US$0.6 billion, also not a permanent member of the Security Council), and China (US$0.3 billion).

  The major importers, on the other hand, are mainly developing countries.

  This state of affairs is due to the fact that arms development is capital and technology-intensive. Since the leading EU members are also among the biggest arms exporters, the EU is quite active in the arms market.

  Britain is more concerned about US opinion -- the US is opposed to lifting the arms embargo on China -- and therefore more reserved on the issue, but it does not oppose lifting the embargo.

  Germany and France, meanwhile, actively promote the idea that the original reasons for instituting the embargo -- human rights and democracy -- no longer exist. Their actions fully comply with their interests and status as big arms-exporting nations.

  Second, the total global arms trade has declined since 2000 as a result of changes in international politics, military affairs and the economic environment. US arms exports, however, which already make up more than half the total of global exports, continue to increase rapidly while exports from EU nations are seeing a proportional decline.

  This situation may cause the US to engage in "moral persuasion" of EU countries: there will be negative effects if they lift the arms embargo on China.

  When it comes to arms exports, most of the trade between developed countries consists of industrial goods.

  The main reasons for this are economies of scale, individual divisions of labor and mutual exchanges, meaning that there is no need for every country to produce every type of weapon.

  It is also worth noting that Asian arms purchases have been increasing significantly, and this also stands as a negative signal of sorts.

  Consecutive years of falling demand for arms will undoubtedly have an impact on the EU's arms industry. In addition to idle production capacity, unemployment and a difficult economic situation, it is easy to see that lobbying efforts will grow stronger -- bribery is now

  far more worth the risk than it used to be.

  In this area, it may be possible to cooperate with the Berlin-based Transparency International to find possible or suspected irregular trading.

  In addition, to effectively lower production and development costs, joint manufacturing or strategic alliances between arms manufacturers in EU member states is on the rise, and government policies are also aiding the gradual creation of interest groups.

  The EU's Code of Conduct for Arms Exports is gradually becoming more unified, and treats arms as a regular good. This has led to a situation in which realpolitik is transcending ethical values.

  And East Asia?

  Leave that to be solved by the people there, or leave it to the dominant world power, the US, to worry about.

  Finally, by observing the ambitions and conflicts within the EU's arms industry and evaluating what types of arms the EU may export, and even studying the technical level of these arms, we might better appreciate the true reasons for why the EU might lift its embargo on arms sales to China.

  We might even be able to better predict the timing of such a decision.

  Honigmann Hong is an associate research fellow in the international affairs division of the Taiwan Institute of Economic Research.

  Translated by Perry Svensson
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