JAMES BAKER, Secretary of State, 1989-92 (testimony at congressional committee hearing):

"The time has come to try to change the destructive pattern of military competition and proliferation in this region and to reduce arms flow into an area that is already very over-militarized.

WARREN CHRISTOPHER, Secretary of State (13 January '93, before Senate Foreign Relations Committee):

"There have been very considerable arms sales to the Middle East. The sales to Saudi Arabia I believe were supported by Governor Clinton during the campaign."

LES ASPIN, Secretary of Defense-designate (7 January '93, confirmation hearing before Senate Armed Services Committee):

"I do not think that we're ever going to deal adequately with the issue of arms sales until you take care of the political pressure to make those arms sales -- and I'm talking about domestic political pressure -- from the people who, otherwise, are going to be put out of work."

["AMERICA'S DEFENSE MONITOR" program introduction.]

Admiral GENE LaROCQUE: Welcome once again to "AMERICA'S DEFENSE MONITOR."

Not so long ago the sale of arms from one nation to another was looked upon as if it were a dirty deal. Somehow a great deal of opprobrium was attached to any nation which sold arms. But in the last few years, the sale of weapons from one country to another has become a legitimate form of international commerce. And we in the United States are actively engaged in that commerce. I think you're going to learn some surprising facts in this program today.

NARRATOR: Recently Congressman Lee Hamilton, chairman of the House Foreign Affairs Committee, put some government data into the Congressional Record.

In 1991, the US Government sold almost $23.8 billion worth of weapons, military construction and services to other governments. In addition, it approved licenses for $39.1 billion worth of commercial arms exports. Commercial sales are those made directly by private manufacturers to foreign governments. In total, US arms sales and licenses came to $63 billion.

In 1991, the US share of all arms transfer agreements with the Third World was 57 percent, up from 44 percent in 1990. In 1991, in terms of arms transfer agreements, the United States was the major supplier to six of the top ten buyers. These were Saudi Arabia, South Korea, Egypt, Thailand, the United Arab Emirates and Kuwait.

That same year, two-thirds of the nations of the world received US arms, including 59 authoritarian governments. Their human rights abuses are outlined in the State Department's annual report on human rights practices. This is the same department which approves arms transfers.

The largest recipient was Saudi Arabia, to the tune of $13.6 billion. The smallest was Cape Verde, an island nation off the west coast of Africa, which bought $9,700 worth of weapons. In between is Indonesia, a large island nation in southeast Asia. Indonesia used US weapons to invade neighboring East Timor in 1975 and to repress and kill the Timorese ever since.

Alan Nairn, an American journalist, was in the midst of a peaceful march in 1991 in Dili, the capital of East Timor, when Indonesian soldiers armed with US M-16 rifles rounded the corner and started shooting.

ALAN NAIRN: These were several thousand people standing outside the cemetery and the soldiers were just gunning people down. And as they were doing this, they started beating me, beating me with their rifle butts, with their M-16s. And the street was full of bodies. People were falling everywhere. The street was running with blood and the soldiers just kept on shooting for from five to ten minutes.

NARRATOR: An estimated 100 to 200 people were killed.

The next year, 1992, US Government arms sales to Indo-nesia totalled over $11 million and licenses were approved for the sale of another $100 million worth of arms.

Overall, global US arms sales decreased in 1992. That year the US Government sold nearly $15.2 billion in weapons, military construction and services to other governments. It also approved licenses for almost $16 billion in sales by private corporations, for a total of $31 billion, still far more than any other nation.

There is no question that currently the United States is the world's largest arms dealer. Most weapons sold go to developing nations, where most of the world's conflicts and wars are fought.

Why do nations buy so many weapons from the United States? They're high quality, battle-tested, and they come with excellent financing terms. Low cost loans and outright grants from the US Government include excellent service guarantees. If it doesn't work, we'll provide the spare parts.

The departments of Defense, State and Commerce can mobilize a huge and effective sales force. And, hey, if we don't have it in stock, the Pentagon will take it off its own shelves. Satisfaction is always guaranteed.

Richard Grimmett is a specialist in national defense at the Congressional Research Service. He's the author of an inter-nationally recognized annual survey of conventional arms sales to the Third World.

RICHARD GRIMMETT: Well, the last year for which I have com-prehensive worldwide figures for the Third World sales, the United States total was $14.2 billion, in comparison to Russia, which was essentially 5 billion.

NARRATOR: That was for 1991. According to Mr. Grimmett, the value of US arms sales agreements with Saudi Arabia alone exceeded the value of all agreements made by the former Soviet Union with the entire Third World in the same year. In 1991, the Soviet Union's Third World market share was 20 percent, less than half of the United States'.

Despite past promises to do things differently, the United States has not undertaken any significant changes.

Lora Lumpe, a research analyst with the Federation of American Scientists, edits the Arms Sales Monitor, a highly respected newsletter on arms sales issues. She claims that, according to US Government officials, there's no such thing as a destabilizing US arms sale.

LORA LUMPE: Bush administration officials were asked that in numerous congressional hearings last year and they said, no, that in fact no US arms sales had been -- none of the $30-some billion in arms sales that have been made the last two years to the Middle East were considered destabilizing. They were, by definition of the Bush administration, all responsible, defen-sive, peaceful, if you will, weapons transfers.

NARRATOR: She believes that categorizing recent US weapons transfers, such as the sale of F-15 fighter planes to Saudi Arabia, as defensive is hypocritical.

Ms. LUMPE: We're talking about attack submarines. We're talking about attack bombers, F-15/E aircraft to Saudi Arabia, 72, from the United States last September. This is the first time that aircraft has ever been transferred to another country, period, that particular model of the F-15. And defining that as a defensive weapon is a real stretch of the imagination.

NARRATOR: Historically, arms sales were linked to contain-ing communism. But with the end of the cold war, that justifica-tion has collapsed.

One reason US military contractors seek to sell more weapons overseas is clear. As aerospace industry spokesman Joel Johnson explains, the Pentagon, the main customer for contrac-tors, is buying less because the cold war is over. During the downsizing, commercial contractors like General Dynamics and McDonnell Douglas look to foreign sales to help pick up the slack.

JOEL JOHNSON: In the mid-80s we were at about -- 6 or 7 percent of weapons production was exported. By '91 that had doubled to about 14 percent. I would guess it would go up to around 20 to 25 percent within another two to three years. And, as you know, that's not because our exports are going up drama-tically, it's primarily because domestic production or domestic buying is going down so dramatically.

NARRATOR: Mr. Johnson is a vice president of the Aerospace Industries Association, a non-profit trade association represent-ing military and commercial aerospace contractors.

Mr. JOHNSON: It's not clear to me that the world's -- our export market will necessarily shrink at any particular fore-seeable time. In fact, in a bizarre sort of way, it may increase because of decreasing defense markets overall. One of the things that's happening is, as European countries bring down the number of systems they're going to buy, it makes importing a system more attractive.

NARRATOR: These opportunities may come about because other supplier countries cannot afford to produce the limited quanti-ties of weapons that a buyer country may want. Only the United States, with its huge military-industrial complex, is able to do that.

Throughout the cold war, US arms sales were justified as tools to achieve diplomatic and political goals. That's changed. While acknowledging that weapons are unlike any other commercial export, Joel Johnson believes that jobs and profits are valid reasons to sell arms.

Mr. JOHNSON: There's no question that arms are different. They can be used to defend a country, they can be used for aggressive purposes. You have to be careful as to whom you sell those to. On the other hand, it is also true, particularly at a time when your own domestic production, domestic demand is going down, that one shouldn't ignore the economic factors.

NARRATOR: These economic arguments generate powerful influences on Congress and on the Clinton administration.

Ms. LUMPE: He ran on a campaign that placed a very high emphasis on domestic economics, and so he obviously faces tremen-dous pressure to -- and must remain sensitive to jobs issues in this country.

NARRATOR: There are about three million workers in the defense industry scattered throughout the country. They work for such major contractors as McDonnell Douglas, Lockheed, General Dynamics, Boeing, Hughes, United Technologies, Rockwell, and Northrup.

Sensitivity to defense jobs is a short-term view, except to the workers who hold them. Arming the world, and especially dictators, could cost us in the long run. Providing arms can aggravate tensions between rival neighbors and spur local arms races. Modern weapons increase the deadliness of conflicts when they erupt in war.

Arming dictators can have serious negative consequences for US interests. If American arms are used to keep unpopular or murderous dictators in power, anti-Americanism is likely to grow. And if "our man" is overthrown, someone hostile to the United States is likely to attain power.

Nevertheless, Joel Johnson emphasizes that cutting back arms sales and production will hurt American workers. He believes the result will be to cut the number of available high-paying jobs.

Mr. JOHNSON: I'm always a little concerned about the figure about how much is too much. You tell me how many Americans you would rather have us fire or not fire next year and I'll tell you how much is enough. We're letting go 100,000 Americans a year just in my industry, in aerospace. I don't see any sale out there that we don't want if it's consistent with US foreign policy practices.

NARRATOR: Like most industries, defense contractors commonly exaggerate the economic benefits of their products in order to obtain approval from job conscious politicians.

Last year, as part of its pitch to win approval of the sale of 72 F-15 fighter planes to Saudi Arabia, McDonnell Douglas produced slick brochures and videos, claiming that the sale would generate 40,000 jobs at the company and its subcontractors. But the company never released any documentation to back up the claim. An analysis done by the independent National Commission for Economic Conversion and Disarmament found that only 27,000 jobs would be created.

Looking to save a few jobs by selling more weapons overseas, however, is a dubious proposition.

According to a study by the Congressional Budget Office, a $3 billion drop in annual US arms exports would result in a loss of less than 2 percent in defense jobs, which is an insignificant loss in the country's total employment.

Richard Grimmett believes it is inevitable that mili-tary contractors must look elsewhere to stay in business.

Mr. GRIMMETT: At some point, there's only so many tanks that you can sell in the world. There's only so much demand for tanks. And many countries make tanks, not just the United States. And in the end, an expensive weapons system like that cannot sustain itself without demand. And if demand's not there, then, by definition, you go into something else, you go into a different line of business.

NARRATOR: Despite that, however, the defense industry has not stopped aggressively seeking government support for increased overseas arms sales. The industry insists it's not seeking special favors. Instead, it says it is only seeking a level playing field.

Ms. LUMPE: They are really working over Congress and the executive branch on these issues on a number of aspects of arms trade policy. For instance, they have lobbied in the last couple of years for increased US Government assistance and subsidization of demonstrations at air shows overseas.

NARRATOR: Secretary of State Warren Christopher recently sent a cable to all US embassies making the advancement of US economic interests, including defense trade, the primary priority in US overseas posts. The cable states that Lynn Davis, Under-Secretary of State for International Affairs, will oversee the defense trade, supported by the State Department's Bureau of Politico-Military Affairs. This guidance is consistent with the pro-arms export policy of the previous Republican administrations.

Ms. LUMPE: Assistant Secretary of State Eagleburger sent out a memo in 1990, telling all US overseas embassies to assist arms exporters in marketing their weapons as they would assist any other commercial vendor in selling abroad in that country.

NARRATOR: Another priority of military contractors is obtaining government financial guarantees for their arms exports.

Ms. LUMPE: There's a continued effort by arms industry to establish financing credit for commercial arms sales. Currently, the US subsidizes $4- to $5 billion of arms sales a year through grant military assistance and concessional military loans. Most of it's grant assistance. That's not enough, industry thinks. They also want to establish either Export-Import Bank financing or something analogous to that to finance commercial arms sales; that is, the sales that are negotiated directly by the arms industry and licensed by the State Department.

NARRATOR: Joel Johnson explains why his group believes Congress is sympathetic to such a proposal.

Mr. JOHNSON: I think we have a number of members now that might well support this kind of a proposal, again, as a way to help assure that their own districts, their own states keep Americans employed.

NARRATOR: Some Pentagon agencies are in business solely to facilitate overseas weapons sales.

Ms. LUMPE: At the Pentagon, there's a very self-interested bureaucracy, the Defense Security Assistance Agency, which draws its budget from a 3 percent surtax on US overseas sales. So, there's obviously an interest on the DSA's part to maximize exports so that they continue to exist.

NARRATOR: Defense contractors also attempt to justify aggressive promotion of US arms sales on the basis of leverage.

Mr. JOHNSON: When you sell, not only do you have the economic benefits, but you have a certain degree of control or influence over the country that has purchased your weapons system. Weapons systems stay in inventories generally 10 to 20 years minimum, which means that country's dependent on you over that period of time for parts and support. If they change govern-ments, if they pursue a policy that you find antithetical to your interests, you have some leverage. If they have a different coun-try's weapons system, you don't.

NARRATOR: Because several foreign producers of components exist for many US weapons systems, the United States is unlikely to be the only supplier. For example, 17 countries have or will soon have F-16 fighters. At least eight of them produce compo-nents or assemble the aircraft locally.

According to past press reports, 30 of the 80 F-14s, which the United States sold to the Shah of Iran between 1976 and '78 are still operational, with the numbers in service increasing over the past few years.

Now let's look at the traditional means of conventional arms control, such as negotiating agreements among supplier nations to reduce their exports. How have these efforts progressed?

In 1991, after the end of the Gulf War, talks began among the five biggest arms exporters, the United States, the Soviet Union, France, the United Kingdom and China. They also happen to be the five permanent members of the United Nations Security Council, but they have met formally only three times since the talks began. China walked out of the talks in 1992 after the United States announced its sale of nearly $6 billion worth of F-16 fighters to Taiwan. Some believe that these and other sales are a big blow to US credibility.

Ms. LUMPE: I think the most significant effect of those is that it erodes any credibility the United States has in using its position of global, political and military dominance to lead the world toward a new international order that doesn't rely on militarism and on weapons as the primary diplomatic tool.

NARRATOR: The only international initiative of any signifi-cance was the establishment of a conventional arms register at the United Nations. The register provides for the voluntary reporting of data by both selling and buying nations on seven categories of offensive weapons considered most destabilizing: battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, and missiles and missile launchers.

While generally seen as a useful first step in promo-ting greater openness about the arms trade, the register does not limit or reduce the trade.

Joel Johnson is not opposed to negotiated restraints on the arms trade, but does not want the United States to go it alone.

Mr. JOHNSON: Yes, if you can get a multilateral agreement to limit certain kinds of weapons to the Middle East, fine, we're all for that. Then you're denying a market to everybody and you really may have an impact on reducing weapons systems. For the US to try to go it alone, you're simply going to get more sales into John Major's pocket. If you remember, the prime minister went through Saudi Arabia and, basically, wrapped up a sale for Tornados, which I think most of us are suspicious that the Saudis weren't terribly interested in once they had the F-15s.

NARRATOR: If US arms sales are going to be reduced, the initiative will probably not come from Congress. Lora Lumpe explains why.

Ms. LUMPE: Congress, because it's politically inconvenient oftentimes or because they simply don't care enough, whatever, haven't been pushed, don't have the constituency that's agitita-ting on these issues and because, at the same time, they're being lobbied very aggressively by industry to minimize their over-sight and the publicity that these issues get simply don't enforce many of the provisions of the laws.

NARRATOR: In fact, the last serious US attempt to limit the international arms trade occurred during the Carter administra-tion. President Carter issued a directive calling for a ceiling on total US arms sales to the developing world, limits on the sophistication of armaments that could be sold to developing countries, restrictions on sales of arms production technology, and changes in the role played by the US Government in the promo-tion of arms sales abroad.

The United States and the Soviet Union even held talks where they agreed on general principles to limit the weapons trade. However, the Soviet invasion of Afghanistan ended the talks.

Richard Grimmett believes there is some small room for hope.

Mr. GRIMMETT: Well, traditionally, our policy toward weapons sales has been to use it as an instrument of American foreign policy, not as a means of enhancing the commercial advan-tage of American corporations. And to the extent that that has been the case, that American corporations have benefitted from weapons sales, that's been an ancillary benefit, not one which was the principal reason for advancing weapons sales in the first instance.

I think that, based on statements that have been made by President Clinton during the campaign, the positions that were articulated in the Democratic platform, that there is likely to be a continued interest in maintaining a policy of restraint.

NARRATOR: As the United States struggles with a weak economy, arms sales are increasingly portrayed as a way of main-taining jobs and profits. But, as we have seen, these sales can also have dire consequences.

Ms. LUMPE: My main problem with selling arms at this point in time is that it's perpetuating the Third World instability and threats that are now the direct justification for a continued $270 billion defense budget. The US has no credibility in asking China and Russia to end their arms exports to their client states, who we may consider bad actors, but who have legitimate security needs and who are often responding to our arms exports overseas. I think we tend to look at most of the world from a US perspective only and don't allow that these countries have -- that their insecurity is being enhanced as we build up the arms capabilities of our allies.

NARRATOR: Unless the United States wants to face a world divided by numerous regional conflicts, fueled by international arms sales, it must find the courage to reject the business-as-usual approach.

MAN-on-the-Street: If we are going to live in a democratic system, we have to have an informed democracy.

MAN-on-the-Street: We are arming dictators in the Third World, people who abuse human rights, and we need to stop this, have some respect for democracy and human rights in our foreign policy.

WOMAN-on-the-Street: I would like to see people getting involved because I don't think they realize that their taxpayer dollars go towards promoting this, this kind of stuff. And they can write to their congresspeople. They can ask them why are we selling arms abroad? Why are we even making this stuff anymore when the cold war is over?

Admiral LaROCQUE: Well, it's pretty obvious, I think, that there are many disturbing and disquieting aspects to this matter of selling arms to foreign countries. We in the United States pride ourselves on our peaceful intentions and our desire to bring about peaceful resolution to international difficulties.

At the same time, we are the number one arms seller in the world. We sell more arms to Third World countries than any other nation in the world and much of those arms sales are conducted in secret. Many of the arms that are sold by the United States are actually sold by our government, others are sold by private concerns under license from our government.

We have a responsibility, it seems to me, to lead the world to the peaceful conclusion of international disputes, but we don't make that any easier if we are the leader of arms sales in the entire world. We have a responsibility to set an example and I think our arms sales undermine that good example that we would like to demonstrate to the rest of the world.

Until next time, for "AMERICA'S DEFENSE MONITOR," I'm Gene LaRocque.

[End of broadcast.]