arms trade

The arms trade has always been in the forefront of technology transfer between more and less developed societies, usually just behind the advance of imperialist designs but occasionally, to the discomfiture of those desirous of picking up Kipling's ‘white man's burden’, in advance of it. Without the culture or the doctrine to employ modern arms effectively, as in the case of the Dahomey expedition, or without the numbers necessary, as in the case of the American Plains Indians, the trade never tipped the balance in favour of the soon-to-be downtrodden. But this may change once modern weapons of mass destruction spread, hence the western world's intense interest in arms control. In general the term refers to the transfer (by sale, exchange, or gift) of ‘conventional’ weapons—such as armoured fighting vehicles, combat aircraft, and warships— together with associated military equipment and technology. The proliferation of nuclear and chemical and biological weapons is the concern of a separate series of control regimes.

Formal arms transfers generally take place between governments, although other agencies such as arms manufacturers, banks, ‘off-set’ brokers, and some law-abiding individuals can be closely involved in the process. There are also informal arms transfers, where the identity of the participants may be more difficult to discern, and where the legality of the transaction is more questionable. Measuring the size of the international arms market is technically difficult and politically controversial. Market analysis is provided by a number of government and non-government agencies whose statistics must be treated with a great deal of caution. All such agencies have a vested interest in exaggerating the trade, because it justifies their own budgets. As a result, the size of even the formal international arms market is more a matter of debate than fact. The Stockholm International Peace Research Institute (SIPRI) estimates the value of the trade in 1997 to have been approximately $25 billion, using a unique trend-indicator system, rather than attempt to measure the real value of transfers. The US government's arms control and disarmament Agency takes a broader sample, including small-calibre weapons, other military equipment, and some ‘dual-use’ equipment (with both civilian and military applications), and they value the market several billion dollars higher.

Most agencies agree that the market has contracted dramatically since the late 1980s. This is explained by the end of the Cold War and the resulting downturn in defence spending around the world; the economic collapse of the USSR; and economic uncertainty in the Asia-Pacific region and beyond. If the formal arms market is difficult to measure, informal or ‘grey market’ transactions, as well as wholly ‘black’ supplies to terrorist and criminal organizations, are impossible to gauge with any confidence. Estimates of the size of the covert arms market range between $1 and $10 billion annually. As well as being extremely difficult to measure and control, the covert arms trade funnels arms into areas of tension placed under a formal embargo.

For much of the 1990s the main arms importing regions of the world have been Europe, the Middle East, and the Asia-Pacific region. On the supply side, the five permanent members of the UN Security Council (the USA, Russia, China, France, and Great Britain) are responsible for between 80 and 90 per cent of arms exports around the world. The principal arms manufacturers and exporters are to be found in western Europe and North America, with the USA in an unassailable position at the top of the league. The predominance of these western suppliers is an important indication that the international arms market has changed fundamentally since the end of the Cold War. The collapse of the USSR saw the collapse of a major source of new weapons systems (military surplus being another matter). But the end of the Cold War also meant the end of the adversarial logic which had underpinned much arms export activity and was often not governed by straightforward commercial considerations. The notion of the world divided into spheres of influence no longer provides an adequate explanation for the dynamics of arms supply and demand, and commercial and industrial considerations are increasingly shaping debate and policy-making.

The post-Cold War international arms market is being shaped by three forces. The first is the sharp reduction in military spending around the world, expressing the widespread reluctance of public opinion to support expensive military establishments. With manufacturing potential exceeding any likely demand, the only recourse for many arms manufacturers, and for governments wishing to sustain a defence industrial base, has been to secure and expand international market share, albeit in a much-diminished global market. This increasing pressure to export is partly responsible for the second force; changing patterns in the production of arms and military equipment. Arms manufacturers are increasingly relying upon joint manufacturing and marketing ventures, in order to share costs and reduce risks, gain access to foreign innovation, achieve economies of scale, and penetrate foreign markets. In many cases, manufacturers have shifted whole sectors of their production cycle to developing regions in order to take advantage of cheaper labour and production costs, and have outsourced the supply of certain key sub-components. The internationalization of manufacturing not only makes the control of manufacturing and export more difficult, it also results in the spread of indigenous arms manufacturing capability. Arms sales are often coupled with the transfer of key military and dual-use technologies through ‘off-set’ arrangements; rather than buy complex weapon systems straight from the production line, importers increasingly expect a phased transfer of the relevant design and manufacturing technology in order that they, too, may in time become manufacturers and exporters in their own right or make use of leading-edge technology for other, non-military sectors of their domestic industry. Furthermore, since much of the relevant technology is often non-military in origin, or has clear non-military applications, the acquisition of some sort of a weapons manufacturing capability is becoming increasingly straightforward. Added to these commercial, industrial, and technological considerations is a third force; increasing political and cultural self-confidence on the part of the importer. Freed from the constraints of the Cold War, and aware of their status in international politics and law, arms importers increasingly see the ownership of modern conventional weapons, as well as the ability to manufacture them, to be normal, inalienable, and even essential attributes of a modern nation state, and are able to exploit the international market to that end.

Taken together, these three forces have created a market in which the initiative lies increasingly with the importer. With huge excesses in supply combined with declining demand, and with changing patterns of military production, the post-Cold War world has an arms market which, although considerably reduced, is in many respects more diverse, vigorous, and competitive than its predecessor. As well as these commercial and industrial considerations, the new buyer's market has important strategic implications: even the most sophisticated equipment and technologies are finding their way onto the market place, such as satellite surveillance systems, missile countermeasures, stealth technologies and cryptographic equipment. Furthermore, as the market and the manufacturing sector become more diffuse, so the prospects for timely and effective control of arms and technology exports diminish. Effective control of arms transfers requires multilateral action, including recipients as well as suppliers of arms.

Throughout history there have been attempts to control the manufacture and flow of arms and military technology thought to be strategically crucial. An early example was in 455, when the eastern Roman emperor, Marcian, banned the export of weapons and manufacturing materials to the barbarians. In other cases, the use and effect of certain weapons was thought especially repugnant, hence the Greek ban on the Roman short sword, the prohibition on crossbows ordered by the Second Lateran Council in 1139, French condemnation of the longbow in the 14th century, unease about the introduction of the machine gun in the 19th century, the banning of poison gas and bio-weapons in the 20th, and so on.

The most recent example of this impulse came after the defeat of Iraqi forces in 1991. Information about the ease with which Saddam Hussein had acquired the means to develop weapons of mass destruction and the embarrassing provenance of much of Iraq's military capability led to demands for better regulation of the arms trade. While most manufacturing states have developed elaborate (albeit often porous) arms and technology export control systems, after 1991 attention turned to the prospects for effective multilateral control. The early 1990s saw a series of initiatives from such bodies as the Conference on (now Organization for) Security and Co-operation in Europe, the Group of Seven industrialized nations, the European Community/Union, the permanent five members of the UN Security Council, and the UN General Assembly. The most recent formal initiative is the ‘Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies’, established in 1996 by 33 states. Replacing the Co-ordinating Committee for Multilateral Export Controls (CoCom), which had been known during the Cold War as ‘the economic arm of NATO’, the Wassenaar Arrangement sought to be more inclusive and to complement other dual-use technology export control regimes.

Several new arms embargoes have also been put in place during the 1990s. In short, as conventional weapons have proliferated after the Cold War, so have initiatives to control or supervise the market. In most cases the expectation surrounding these initiatives far outstripped their performance. The initiatives face a number of obstacles, not least the fact that the relationship between the arms trade and the incidence and severity of war has been more assumed than proven, and remains open to question. There is also something of a political presumption of access for states to the international arms market; since all states have the right to self-defence, under Article 51 of the UN Charter, it could reasonably be argued that states without a domestic arms manufacturing sector must have access to an arms market if their security and self-defence are not to be imperilled. For these reasons, if the international arms market of the late 1990s is considerably smaller than ten years previously, this seems more likely to have been the result of market forces than multilateral control arrangements.

There is nevertheless one area where more tangible results have been forthcoming, and where scepticism may be less justifiable. On 3 December 1997, some 121 states signed the Ottawa Convention on the Prohibition of the Use, Stockpiling, Production, and Transfer of Anti-Personnel Mines and on their Destruction. The Convention was the result of a long-running, Nobel prize-winning, non-governmental campaign against anti-personnel mines. It remains to be seen whether the Convention will be observed and honoured sufficiently, and whether it achieves its goal, but it does stand in stark contrast to the failure by governments to agree a ban in 1997 during negotiations at the Conference on Disarmament in Geneva. But then again, as in the celebrated case of the ban on poison gas being respected during WW II, it may also be that some weapons are simply so ‘two-edged’ that their continued use becomes unattractive.

Most analyses of the international arms market suggest that the dramatic decline may have halted, and that the arms market may have reached equilibrium; the market will neither contract dramatically in the future, nor expand vigorously. That said, there will continue to be fluctuations in demand, particularly as tensions and conflicts arise, and as the effect of the global economic uncertainty of the late 1990s is felt. But even in its reduced state, the international arms market is likely to remain controversial. A series of arms export scandals in supplier states have led to demands for a more ‘ethical’ approach to arms trading, where closer account is taken of human rights violations and the quality of governance in the importing country. Sophisticated lobbying campaigns have as their goal the implementation of ‘codes of conduct’ for arms export decision-makers, nationally, regionally, and globally.

— Paul Cornish/Hugh Bicheno