President GEORGE BUSH (during '92 presidential campaign):

"I have decided to notify Congress to sell up to 72 of your F-15s to the country of Saudi Arabia." (in St. Louis MO)

"I am announcing this afternoon that I will authorize the sale to Taiwan of 150 F-16A/B aircraft made right here in Forth Worth." (in Fort Worth TX)

NARRATOR: Less than a year after these announcements, the Pentagon spotlighted the Middle East and Northeast Asia as regions where the United States would most likely go to war in the future.

General COLIN POWELL, Retiring Chairman, Joint Chiefs of Staff (Press conference, 9/1/93):

"...being able to deal with two major regional contin- gencies or conflicts near simultaneously."

NARRATOR: Yet it is into these same regions that govern-ments, primarily our own, are pouring massive amounts of highly sophisticated weapons.

The Middle East is now the largest Third World arms market. Asia is the fastest growing arms market in the world.

Today, "AMERICA'S DEFENSE MONITOR" looks at two recent US arms sales in these regions. We ask what America gained and lost through these deals.

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

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

During the cold war, we were compelled in the United States to build a huge complex of military industries capable of building the high tech weapons we needed to wage ware with the Soviet Union. Since we no longer need those weapons to fight a war with the Soviet Union, those same military industries are doing everything they can to develop markets elsewhere in the world for their weapons. Unfortunately, they're focussing on two of the most volatile areas of the world, the Middle East and the Asian area, where of course the money is available. Our program is about that subject today and I'm sure you'll find it interesting.

President BUSH: "Nowhere are the dangers of weapons of proliferation more urgent than in the Middle East."

NARRATOR: It is May 29th, 1991, just three months after an American, European and Arab coalition drove Iraqi forces from Kuwait and destroyed a significant portion of Saddam Hussein's army. At the U.S. Air Force Academy, President Bush holds out a new vision for this war-torn region.

President BUSH: "After consulting with governments inside the region and elsewhere about how to slow and then reverse the buildup of unnecessary and destabilizing weapons, I am today proposing a Middle East arms control initiative."

NARRATOR: His words were encouraging, his actions were not. For Mr. Bush was continuing to approve a flood of arms transfers into a Middle East that had seen almost continuous warfare since 1980.

In this flood of arms, Saudi Arabia, a country largely supplied by the United States, clearly dominates. Between 1985 and '92 it bought over $63 billion worth of US military equipment and services. Between August 1990, when Iraq invaded Kuwait, and October 1993 the Saudi kingdom ordered almost $31 billion worth. Of that amount, nearly one-third, $9 billion, came in one purchase announced by President Bush right in the middle of the US presidential campaign.

President BUSH: "I have decided to notify Congress to sell up to 72 of your F-15s to the country of Saudi Arabia."

NARRATOR: But the politics were not one-sided. The week before, on August 27th, candidate Bill Clinton formally endorsed the same sale.

Why did the candidates inject a major arms sale agree-ment into the presidential campaign? What effects does the sale have on the US economy, on the stability and hopes for peace in the region?

Answering these questions requires a look back to the 1970s, when the US Air Force first suggested F-15 planes with ground attack capability for the Saudis. For years, well-publicized opposition by Israel's supporters in Congress limited the scope of any such sale. However, the Gulf war and the Soviet Union's disintegration in the early 1990s changed perceptions.

Joel Johnson, the outspoken vice president of the Aerospace Industries Association, explains:

JOEL JOHNSON: I think there were a number of reasons. I mean, obviously, the Gulf war had something to do with the fact that the Saudis proved once and for all -- one, they had a threat that had nothing to do with Israel; two, they would let the United States in if they needed help; three, they actually used their equipment and fought themselves. That took away a lot of the arguments against not bringing them up to the level of F-15s.

NARRATOR: Even so, there was another hurdle to overcome: The US pledge to ensure Israel's continued technological edge in the Middle East.

Dr. Loren Thompson, director of the National Security Studies program at Georgetown University, is an astute observer of military and security issues.

LOREN THOMPSON: It's generally assumed that both on a formal, secret basis and on an informal basis the Israeli government has repeatedly been given assurances that it would not be allowed to fall behind its Arab neighbors in terms of the military capabilities that it possesses. In fact, it's generally assumed the United States would take whatever steps were neces-sary, even if it required large direct subsidies to preserve Israeli military superiority.

NARRATOR: But the decision about when to announce the sale to the Saudis really had little to do with the Gulf war or the need for diplomatic reassurances. Iran was rebuilding its mili-tary power with Chinese and Russian weapons. Talks among Israel, its Arab neighbors and the Palestinians were making steady progress, but tensions remained high. At home, US military forces were being scaled down. And like candidates Bush and Clinton, members of Congress up for reelection were keenly focussed on the politics of jobs. Just a small push was needed.

McDonnell Douglas, builder of the F-15, provided that push. At stake from the company's viewpoint was its survival as the dominant force in the military aircraft market. As usual, action was dictated by short term pressures.

Mr. JOHNSON: The F-15 line was shutting down; in fact, it has shut down. This order will reopen it. The longer you waited to approve this, the less possible it became to sell those F-15s because the more expensive it was going to be to restart the entire subcontractor network, let alone the line in St. Louis.

NARRATOR: Since 1987, McDonnell Douglas has been the number one contractor for the Department of Defense and the largest producer of military aircraft in the world. In 1991, it had worldwide arms sales of over $10 billion.

But three years before, McDonnell Douglas was in trouble. The Navy had cancelled its A-12 attack airplane. Another major program, the C-17 cargo plane, was suffering massive cost overruns and delays.

This made the $9 billion F-15 sale to Saudi Arabia a prime company objective. Correctly deducing that "jobs" would be the four-letter word of the 1992 campaign, they built a strategy as blunt as it was political.

November 1991: McDonnell Douglas announces that Saudi Arabia wants 72 F-15s. Videos and promotional literature flood Capitol Hill. McDonnell Douglas forms a coalition with other firms and labor unions, buys newspaper ads, organizes rallies and orchestrates 20,000 letters to Congress and the White House. Its 2000 suppliers, spread over 346 congressional districts in 46 states, support McDonnell Douglas' assertion that 40,000 near-term jobs are at stake. And it raises the specter of jobs going to Great Britain if the US Government doesn't act.

Such a sales blitz is not unusual in the arms trade. It's almost daily practice.

Dr. THOMPSON: Generally speaking, major American weapons exporters always have a campaign mounted in Congress, in the Pentagon, and in the vicinity of the White House to ease the sale of weapons overseas. That is usually not a hard sell because it represents jobs and it represents votes.

NARRATOR: In his confirmation hearings for secretary of defense, Les Aspin confirmed the overriding force behind this unending drumbeat for selling arms.

Rep. LES ASPIN (D-WI) Secretary of Defense-designate before Senate Armed Services Committee, 1/7/93):

"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."

NARRATOR: Such sales campaigns divert attention from the real concerns about foreign arms sales. These go well beyond short term economics to encompass all aspects of US security.

Natalie Goldring, deputy director of the British American Security Information Council and a seasoned analyst of international arms deals, looks at this sale from a broader perspective. Her concern is that the Saudis will never be able to defend themselves regardless of the arms they get from the United States.

NATALIE GOLDRING: We provided the Saudis over the course of the last five years with roughly half of all of the weapons that we sold around the world. They can't defend themselves. They're not going to be able to defend themselves. They don't have the kind of manpower that you need to have a military force suffi- cient to defend a kingdom the size of Saudi Arabia with the extensive borders it has and very, very challenging terrain.

NARRATOR: In short, the United States remains "on call" in the Gulf.

But this is not the only problem. Selling F-15s to the Saudis obliges us to sell more sophisticated equipment to Israel because of our commitment to maintain Israeli technological superiority. As it is, in partial compensation for the Saudi F-15 deal, Israel is in line for McDonnell Douglas' Apache helicop-ters, greater access to US satellite intelligence, more preposi-tioned US equipment and a long-term commitment to Israel's annual $1.8 billion military aid grant.

Nor has the recent accord between Israel and the Pales-tine Liberation Organization had any apparent effect on arms deals in the region. The Israelis are reportedly shopping for new aircraft at a cost of $2 billion.

Over the last 45 years, the Middle East teaches that when everyone is armed to the teeth, no one is secure. Other approaches, such as negotiating lower levels of arms imports into the region, would do more for security. In the end, the best chance for lasting stability and security involves the broadest possible range of initiatives.

Ms. GOLDRING: I think we need to be looking at our economic policy, at our foreign policy, at our diplomatic policy. I think we need to be re-evaluating the fundamental basis for our rela-tionship with other countries. What we've tended to do in the past is try and construct a web of military sales and military and economic assistance that somehow drew countries into alliance with countries of the West and had them side with us rather than with the then-Soviet Union.

NARRATOR: Even oil-rich Saudi Arabia has felt the burden of war and preparing for war. Its direct costs in the Gulf War were $55 billion, to which it has added $31 billion in new military purchases.

Janne Nolan is senior fellow at the Brookings Institu-tion and adjunct professor in National Security Studies at Georgetown University.

JANNE NOLAN: Entrenched in the development strategy of Saudi Arabia and other oil-rich countries was a certain attitude that there would always be money and that the money could be spent on building these large, expensive military establishments. And recently, it's been discovered, certainly, by the populations and important parts of the elites that they have gotten neither development nor security from this particular approach.

NARRATOR: Finally, there is hope that conflict in the region can be stopped. On September 13th, 1993, on the south lawn of the White House, a handshake materially advanced the cause of Middle East peace. But that peace will remain fragile until all countries in the region acknowledge that weapons and violence don't produce peace. Continued arms sales into the region by the United States and other nations subvert the promise of that hand-shake. It's time we give peace a push.

Saudi Arabia is some 8000 miles off the east coast of the United States. An equal distance from our west coast lies Taiwan, another country that saw a long hoped for arms sale materialize during the 1993 presidential campaign.

President BUSH: "I'm announcing this afternoon that I will authorize the sale to Taiwan of 150 F-16A/B aircraft made right here in Fort Worth."

NARRATOR: Since the late 1970s, Taiwan has been seeking US replacements for its F-104s and F-5s. When the Reagan administra-tion came to power, Taiwan raised its sights to the F-16, one of the newest planes in the US Air Force inventory. As with the Saudi sale, powerful forces worked for and against the Taiwan buy.

In 1972, President Nixon had officially recognized the People's Republic of China. One disagreement left unresolved in this new relationship was the US position on arming and moderni-zing the Nationalist forces on Taiwan, just off the Chinese mainland. Law and executive agreements complicate the US-Taiwan-China relationship.

Mr. JOHNSON: In 1979, when the Congress passed the Taiwan Relations Act, it said that the United States would continue to provide the needed defense products and services to provide for Taiwan's defense. That was a law and has the force of law.

NARRATOR: But under Ronald Reagan, the 1982 US-China communique committed the United States not to supply armaments to Taiwan that exceeded, either in quantitative or qualitative terms, the levels supplied before 1982.

Joel Johnson thinks the United States should play a more forceful role in supplying Taiwan.

Mr. JOHNSON: I think it is clearly US policy that however the Chinese and the Taiwanese work out their differences, it should be done not through force of arms and that we will ensure Taiwan's ability to defend itself to that purpose while this process is ongoing.

NARRATOR: For tens years the United States followed the letter of its agreement with China. There were incremental trans-fers of technology that allowed the Taiwanese to develop their own fighter plane. Then, in 1991, China began purchasing MIG-29s and SU-27 warplanes from Russia. For military contractors and Taiwan supporters in the United States, this opened the door to what they had sought for many years: to sell technologically advanced planes to Taiwan.

Dr. NOLAN: As the Chinese have modernized their military and their offensive capability, the United States is in a position where if it must continue to provide for the self-defense of Taiwan, will provide more advanced technology.

NARRATOR: But selling F-16s, the plane the Taiwanese really wanted, was not the only option. Instead, Taiwan's requirements could have been met by upgrading its existing missiles, radars, and other air defense components. Taiwan's domestic fighter aircraft program could have been strengthened.

Richard Aboulafia, a long-time aerospace analyst at the Washington-based Teal Group, believes the upgraded indigenous fighter program would have met Taiwan's needs. But Mr. Aboulafia makes a more telling point about the psychology behind such sales as the F-16 to Taiwan.

RICHARD ABOULAFIA: Well, it's partially to keep pace. Partially because, very often, the military is an important component of these societies that need to maintain their relative power within the administrations.

NARRATOR: As with the Saudi sale, it's instructive to ask why the F-16 sale was announced in September 1992.

The Bush administration offered a number of reasons to justify the sale. But again, one overshadowed all others.

Dr. NOLAN: Certainly it seemed during the debate that the main reason for selling aircraft to Taiwan was to preserve jobs in the United States and to keep production lines open.

NARRATOR: Following McDonnell Douglas' lead, General Dynamics, and then Lockheed, which brought the F-16 production line in 1993, claimed that the $4.5 billion deal would directly save 3000 jobs and could add $5 billion to communities through spending by defense workers. What General Dynamics and Lockheed didn't consider was the negative Chinese reaction to the sale.

Dr. NOLAN: They completely flipped out. They find it an egregious offense against their foreign policy interests to have the United States sell that visibly to Taiwan. It's been a fairly quiet policy in the past. The F-16s exceeded in publicity, if nothing else, what they considered to be tolerable.

NARRATOR: Even within the aerospace industry itself, it seems that potentially adverse effects were ignored. Currently the United States has the inside track on commercial aircraft sales to China, a track that could be lost to European competitors such as Airbus.

Mr. ABOULAFIA: US aerospace exports to China might in jeopardy. Right now, Boeing, McDonnell Douglas and Airbus are in a three-way game to break into the China market. And if they chose to concentrate on US aerospace exports, we could find that Airbus gained the upper hand.

NARRATOR: Joel Johnson, however, doesn't think the United States has lost any edge in the commercial arena.

Mr. JOHNSON: It would be absurd for the Chinese, given the fact that we are the only country that accepts their imports in anything like the volume we do, were they to cut off our exports, I suspect they would find a very quick and rapid reaction on the Hill.

NARRATOR: If our government and business leaders could look at the longer term, they might realize that the F-16 sale hurts future US commercial opportunities.

Dr. THOMPSON: All the economic trends that we've seen indicate that China is going to be one of the great economic powers of the world in the next century. Taiwan's record is impressive, too, but in the case of China, we're talking about a country of a billion people that is growing very rapidly. We ought to think twice before we offend the Chinese because this could very easily come back to haunt us.

NARRATOR: Moreover, Taiwan now requires the United States to give it the technological know-how to repair and maintain the F-16. The skills and information Taiwan gains from working on high tech military aircraft can easily be transferred into commercial aircraft development. This would give Taiwan a boost in competing with US commercial aircraft manufacturers and threaten long term US jobs.

Mr. ABOULAFIA: It will hurt US jobs.

NARRATOR: Other evidence supports the risk to US jobs in the commercial aircraft market, our most lucrative foreign trade sector.

An October 1993 cable from the US embassy in Seoul reports that South Korea is trying to form an Asian commercial aircraft group that includes at least China, India and Singapore. Such a group, using US and other technology derived from previous military aircraft sales, would eventually compete directly with US aircraft producers such as Boeing and McDonnell Douglas. Once again, long term commercial contracts and jobs could be threatened by an "Asian Airbus."

There are also political and military risks from selling advanced fighters to Taiwan. Such sales give China an excuse to oppose US interests in other regions and on other issues.

Dr. NOLAN: There are so many grievances now between the Chinese and the United States governments that you can add it to the list of things that are complicating the relationship with China: Our objections to their human rights policies, our objec-tions to their continuing to sell missile components to countries like Pakistan, our objections to their resumption of nuclear testing.

NARRATOR: From every possible perspective, neither the F-15 sale to Saudi Arabia nor the F-16 sale to Taiwan is in the long term interest of America. Their approval lay in political expediency, with presidential candidates and many in Congress abetting the shortsighted mentality of the manufacturers.

When it comes to the bottom line of the individual working in defense industries, these sales also display political cynicism. They create false hopes among American workers that their defense industry jobs will continue even though the world-wide demand for arms is falling.

Dr. NOLAN: US contractors are looking for markets for their surplus and are trying to use, in some cases, exports to fore- stall contraction and diversification. But some companies will simply go out of business.

NARRATOR: For the first time in 50 years, Americans must question what our national interests and priorities should be. What size defense industry must we maintain to meet the military's foreseeable equipment needs? What are the potential costs in American lives and treasure from continuing to send weapons into volatile regions? What social and environmental improvements, what economic opportunities have we already lost by delays in converting from military to commercial production?

Ms. GOLDRING: What we failed to do, thus far, is do a good job of looking at what the costs are of closing these lines. I think we have to close down some lines. I think we're going to have to put some people out of work. We've got to put together the retraining programs to help them find other work. But we have to recognize that it's a very different world.

NARRATOR: We have looked at two different arms sales:

F-15s to Saudi Arabia and F-16s to Taiwan, to two widely separated, very volatile regions of the world. Unfortunately, these sales, while separate, have a common link: Neither one contributes to the overall strength and security of the United States.

Economically, advanced US technology has been exported, technology that can be used in competition with US commercial aircraft producers. This places US firms and future long term US jobs at risk.

Militarily, these fighter sales continue to fuel the tensions and arms races in the very areas the Pentagon sees as the most dangerous, areas where the Pentagon says the United States might be called upon to fight.

Politically, nations now know that they can get whatever military equipment they want from the United States if they just wait for a presidential election year.

Nations have always traded. But the arms trade does not involve ordinary items. Its goods are meant not to improve but to destroy life. Such trade has to be better controlled and evaluated in terms of the long term total security and safety of the United States and the world.

Admiral LaROCQUE: Well, I think most Americans would agree that the sale of our products to foreign countries is an impor-tant part of our strength in the international community. But we have to ask ourselves whether or not we want to maintain that position of strength by selling high tech weapons to volatile areas of the world where we may someday find ourselves embroiled in a conflict.

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

[End of broadcast.]