The EU Arms Embargo Repeal Debate

2012-10-26 By Richard Weitz

Proponents of repealing the arms embargo have offered a variety of arguments for removing it.

First, they note that the embargo complicates the EU’s relations with China and partially negates EU efforts to develop a strategic partnership with Beijing regarding key international issues.

For example, in April 2012, Klaus Ebermann, a former EU ambassador to China, called for removing the arms embargo because it continued to “poison” EU-China ties. It is publicly difficult for EU members to refuse to engage in defense industrial cooperation with Beijing when their leaders are describing China as a strategic partner. Some see ending the embargo as a step toward normalizing relations with China and helping it integrate in the modern liberal world as a responsible player.

Second, advocates of repeal note that the ban is poorly enforced, resulting in the EU’s annoying China without having much impact due to the embargo’s porousness.

For example, EU statistics show that France issued €199 million in licenses in 2009 for “military aircraft” and “equipment for viewing images or countermeasure” sold to China. Although France is typically the leading annual EU seller of arms to Beijing, other EU members, including Britain, also sell China dual-use items such as advanced information and high-tech aviation technologies that could (and often are) used for military purposes.

Perhaps more importantly, the embargo has had little effect in impeding China’s military modernization.

During the past decades, China has been able to buy entire weapons platforms—sophisticated warships, warplanes, and air defense missiles—from Russia, whose government and defense firms were eager to sell off excess Soviet weapons. Russia has also sold the PLA key defense components such as high-performance fighter aircraft engines and ship-to-ship missiles. And in recent years China’s own defense industry has been able to make major weapons systems that are on the par with late Soviet-era conventional weapons.

In fact, China has ceased buying many Russian weapons since they no longer need the Soviet-era systems Moscow is eager to offer.

Instead, the Chinese want Russia to sell its most sophisticated weapons systems, which Moscow refuses to do for fear that China would copy the technology or that the sales might disrupt regional military balances.

The EU debate about lifting the arms embargo often revolves around competition with the United States. But increasingly it is about the global impact of China and the desire of states to protect themselves against Chinese actions and pressures. This market will be more significant than any PRC market, notably given the proclivity of the PRC to borrow more than produce foreign kit. Credit Image: Bigstock 

Some commercial considerations may also be at work in the effort to repeal the embargo.

In light of the current global economic crisis and the low growth and elevated unemployment rates in many European countries, EU governments and companies are eager to remove barriers to their exports. Even if they do not sell arms to China, EU leaders might hope that China would reward a repeal of the embargo with increased purchases of EU goods.

In addition, China is the largest creditors in the world; its foreign exchange reserves reached almost 3.2 trillion dollars. Europe wants Beijing to use some of these vast reserves to help stabilize the euro and support the EU’s economic recovery.

The recent defense spending cuts imposed in many European counties as part of their austerity programs, which have followed years of reductions since at least the end of the Cold War, have decreased domestic sales opportunities for many EU defense companies.

Meanwhile, the United States remains a reluctant purchaser of European military products.

Sales to China could help European defense firms sustain their work forces, achieve economies of scale, and recoup R&D expenditures through larger production runs.

Opponents of the arms embargo believe it encourages China to develop its own domestic military research, development, and production capabilities, thus reducing the strategic advantage of Western countries in these sectors and making it harder for Western analysts to follow developments regarding Chinese weapons capabilities.

Conversely, expanding the EU’s defense sales to the PRC could make the Chinese government more reluctant to pursue policies Western governments oppose for fear of the EU retaliating by curtailing these sales.

It is important to note that most advocates of lifting the embargo do not expect that the EU would sell major weapons systems to China even if the EU lifts the ban. The intent is to normalize relations by eliminating an ineffective and offensive embargo.

But China might be able to use the opening to acquire more dual-use technologies that could be used for military purposes.

Other arguments have been raised for continuing the embargo. China-EU mutual trade and investment have flourished despite the embargo. Europe is the largest importer of PRC goods and China’s second largest two-way trading partner.

Furthermore, lifting the ban would send the wrong signals to China. For example, Beijing could plausibly interpret the embargo as signifying that Europe is less concerned than thought about China’s human rights practices, its growing and opaque military potential, uphold Beijing’s expansive territorial claims in the South China Sea, or China’s position that it has the right to employ military force to recover Taiwan. Regarding the latter, there is a particular worry that EU action could precipitate an end to the recent warming of cross-Strait relations.

The United States is also worried that strengthening economic and political ties between the EU and China would risk neutralizing Europeans’ support for U.S. efforts to deter Chinese aggression and direct China’s rise in non-threatening ways. Increased dependence engendered by China-EU arms sales works both ways. EU governments could become more reluctant to challenge China on disputed issues for fear of Beijing’s curtailing its purchases of Western weapons. U.S. officials have sometimes encountered this problem in the past when Russia-EU ties are close.

In addition, some U.S. policy makers express the fear that EU companies might transfer U.S. military technologies to China due to the extensive EU-U.S. defense industrial cooperation.

Members of Congress regularly threaten to limit such cooperation if the EU should lift the arms embargo on China. The retaliation would be even greater if China were ever to use European defense technology of even partial U.S. origin against the U.S. armed forces or those of U.S. allies.

Lifting the ban on defense-related technology transfers to China could increase the PLA’s access to useful military technologies that Beijing could incorporate in its own weapons. Most of these would go towards augmenting China’s own military potential, but others could go toward helping China achieve its goal of raising its share of the international arms market.

China is not yet a major arms producer and exporter of more advanced weapons. It has supplied numerous governments (often with poor human rights records themselves) and militant groups with arms for decades, but with the exception of Iran and Pakistan and a few other countries, these sales have generally involved unsophisticated weapons.

But helping develop China’s military-industrial complex could make the country a more formidable arms dealer. And the PRC has made it clear that arms exports are part of its approach for military modernization.

China’s becoming a major arms seller could complicate international measures to influence the behavior of rogue states. For example, the United States and Israel led a successful campaign to induce Russia to cancel a lucrative contract with Tehran for S-300 surface-to-air missiles. The cancellation helped decrease pressure on Israel to launch an urgent air strike on Iran before the systems had become operational, which would make any air strike against Iran much more difficult. At the time, Tehran approached China for such a system, but China’s domestic equivalents to the S-300 were much less sophisticated. If the PRC could acquire more advanced defense-related technologies from the EU, Beijing might have been able to undercut the Western diplomatic victory and precipitated a Middle East war.

In the past, it could be argued that relaxing the embargo could help weaken China’s ties with Russia by reducing Beijing’s dependence on imported Russian military equipment and technologies. But Russian arms sales to China have already decreased considerably in recent years from their peak due to the rapid improvement in the capabilities of China’s defense industry and the reluctance of Moscow to sell the People’s Liberation Army (PLA) its best defense technologies. Repealing the EU arms embargo could prompt the Russian government to change its policies and permit China to purchase its top-line weapons in order to retain its market share. For example, Russia might sell China long-range strategic bombers, more advanced air defense systems, and naval aviation systems for China’s emerging carrier fleet.

There is a general sense in the EU that the arms embargo on China should be repealed at some point, but now is a bad time to provoke another transatlantic crisis over the issue. The United States is pivoting its military capacity to Asia to better deal with China’s rise. Europeans could doubly accelerate this trend, which has alarmed some Europeans who dread not having a major U.S. military presence in Europe, if they offered to sell arms to China. Not only could such sales increase U.S. fears about China’s growing military capabilities, but it would stimulate American perceptions that ungrateful Europeans were free-riding on U.S. defense efforts in Asia and sacrificing common transatlantic security interests in the pursuit of commercial opportunities in Beijing.

Japan and (more quietly) other East Asian allies of the United States have also cited these and other reasons why the EU should not repeal the embargo at present.

“Economic pressures make it attractive to lift the embargo,” a senior Japanese official told The Daily Telegraph in November 2010. “But we believe such an action will be short-sighted and dangerous.”  The Japanese government subsequently lobbied hard against a December 2011 proposal by EU high representative Catherine Ashton to end the embargo, asserting that, “An end to the arms embargo would be a mistake, it would destabilise the situation in the region.”

One proposal is to replace the embargo with a stronger EU “Code of Conduct” on arms exports that would better control weapons sales to China. The current 1998 EU Code of Conduct does not cover dual-use technologies, is not legally binding, and is subject to subjective and often diverging interpretations by the various EU member governments. Some Europeans believe the current Code simply requires EU members to inform one another of their arms exports.

Another option—and a good one for many reasons in addition to the arms sales issue—would be to deepen the EU-U.S. dialogue regarding Asian security developments. That would ensure that Europeans appreciate the depth of current American concern about maintaining military balances in Asia and also allow Europeans an opportunity to explain their positions and perspectives. Arms sales by either party, including periodic efforts in the United States to grant waivers to U.S. companies for defense-related sales to China, should be discussed within this framework.

At a minimum, the United States and European countries should notify all the participants in advance of any planned sales to China of weapons or dual-use technologies, which would allow for peer review (and ideally peer pressure) of controversial exports.

The parties could profitably review the old multilateral Coordinating Committee on Export Controls (COCOM) system and the current Wassenaar Arrangement for guidance regarding what dual-use technologies should be subject to advanced notification.

It would also be helpful if the parties routinely informed one another of whatever defense-relevant items the Chinese express interest in acquiring, which would help apprise other Western governments of what capabilities the PRC is interested in and may soon be acquiring. These enhanced consultations and information exchanges would also help the parties avoid the spectacle we have seen in recent years in which several European governments have competed to sell sophisticated weapons to Russia with little advanced or even after-sale consultation within NATO circles, which makes the alliance look incoherent.

Editor’s Note: European defense firms have significant global exports.  And many of their clients now and hoped for are directly confronting Chinese pressures.  For example, Vietnam is becoming more important for European suppliers.  Such countries want assurance of re-supply in times of conflict which will not be forthcoming if China is the major partner of a particular European company.  More generally, conflict globally is going up and not down.  And Chinese arms will be a growing part of various conflict zones.  This will also set the stage for countries seeking to protect themselves against forces aligned with China or supplied by China. It is not simply or even largely a US-European affair anymore.

"If everyone is thinking alike, someone isn’t thinking."

—General George Patton Jr.

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