[Senate Hearing 109-94]
[From the U.S. Government Publishing Office]
S. Hrg. 109-94
THE LIFTING OF THE EU ARMS EMBARGO
ON CHINA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED NINETH CONGRESS
FIRST SESSION
__________
MARCH 16, 2005
__________
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COMMITTEE ON FOREIGN RELATIONS
RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
LISA MURKOWSKI, Alaska BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
Kenneth A. Myers, Jr., Staff Director
Antony J. Blinken, Democratic Staff Director
(ii)
C O N T E N T S
----------
Page
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware........... 3
Brookes, Peter, Senior Fellow for National Security Affairs and
Director, Asian Studies Center, the Heritage Foundation,
Washington, DC................................................. 5
Prepared statement........................................... 7
Gill, Dr. Bates, Freeman Chair in China Studies, Center for
Strategic and International Studies, Washington, DC............ 9
Prepared statement........................................... 13
Grimmett, Dr. Richard F., Specialist in National Defense,
Congressional Research Service, Washington, DC................. 18
Prepared statement........................................... 20
CRS Report: U.S. Defense Articles and Services Supplied to
Foreign Recipients: Restrictions on Their Use.............. 26
CRS Report: European Union's Arms Control Regime and Arms
Exports to China: Background and Legal Analysis............ 31
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening
statement...................................................... 1
(iii)
THE LIFTING OF THE EU ARMS EMBARGO ON CHINA
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WEDNESDAY, MARCH 16, 2005
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met at 2:45 p.m., in room SD-419, Dirksen
Senate Office Building, Hon. Richard G. Lugar, chairman of the
committee, presiding.
Present: Senators Lugar, Allen, and Biden.
OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM
INDIANA
The Chairman. This hearing of the Senate Foreign Relations
Committee is called to order.
The Senate Foreign Relations Committee meets today to
examine the European Union's arms embargo against the People's
Republic of China. This embargo was imposed, along with a
similar one by the United States, in 1989 in response to the
brutal crackdown on peaceful demonstration in Beijing's
Tiananmen Square. But now European officials have indicated
that the EU plans to lift its embargo.
As I have noted before, this is a mistake. President Bush,
on his recent European trip, has personally expressed his
``deep concern'' about these plans. Republicans and Democrats
in Congress share this view. Rarely have Congress and the
President, Republicans and Democrats, been so united against a
proposal made by our European friends.
I have long championed strong ties with our European
allies, and I also favor appropriate engagement with China. But
the United States national security interests could be harmed
if the European Union countries sell sophisticated weapons and
technology at this time to China.
Our first concern must be stopping the proliferation of
weapons technology. China has sold weapons and associated
technology to rogue states in the past. China's military is
aggressively seeking more advanced weaponry and electronics for
its ongoing modernization. Europe will have little practical
control over where that key technology may end up.
During the past year alone, the United States has imposed
sanctions on 23 Chinese individuals and companies for violating
American proliferation laws. These violations have included the
transfer to Iran of technology related to missiles and chemical
and biological weapons. China also has helped Pakistan's
nuclear program and passed on military technology to North
Korea and the repressive junta in Burma.
President Bush highlighted another problem in his talks
with Europeans. Namely, lifting the embargo would ``change the
balance of relations between China and Taiwan.'' Tensions
across the Taiwan Strait have just been made worse by Beijing's
ill-advised passage of the so-called ``Anti-Secession Law.''
This law lists a series of events that could trigger an attack
on Taiwan by China. In light of such potentially destabilizing
action, this is no time to be taking steps that might either
help China achieve a decisive military advantage over Taiwan or
send the wrong political signal.
I favor engaging China in ways that open China's markets to
agricultural and other goods, help China assume a responsible
place in world affairs and in the region, aid the fight against
terrorism, improve the lives of its people, and promote
religious freedom and democracy. Lifting the arms embargo
advances none of these goals. In fact, lifting the embargo
would send the wrong signal in the area of human rights.
Despite strides in other areas, China still holds political
and religious prisoners, avoids meaningful dialog with the
Dalai Lama over Tibet, and has no engagement whatever with
domestic pro-democracy forces. Lifting the arms curbs would be
viewed as a reward for this intransigence.
Ending the arms ban would do little to improve European
Union-China ties, which have been developing despite the
embargo. The main beneficiaries would be European defense
companies.
There are also reports that Europe expects to be rewarded
for lifting the ban by getting more orders for Airbus
airplanes. If so, the United States would be doubly harmed by
losing sales of American-produced aircraft.
Europeans claim that lifting the embargo will not result in
more or better weapons being sold to China. They say they have
a Code of Conduct on Arms Exports that will limit the impact.
However, the current embargo already has proven to be
ineffective. In 2003, China received from Europeans export
licenses for 550 million dollars' worth of military or
sensitive dual-use goods. The Code of Conduct is only
voluntary. The Europeans promised President Bush to strengthen
the code to meet his concerns. The President is skeptical, and
so am I.
The Europeans' decision is expected in June. I would urge
the administration to keep working to dissuade the Europeans
from this course.
In addition, we should make certain that Beijing cannot
circumvent our arms embargo by buying American technology from
Europe. The administration should press for binding agreements
with each EU member explicitly banning the retransfer to China
of any United States technology or weapons that are on the
United States munitions list. If the countries fail to agree,
or if the quantity or quality of arms flowing to China from
Europe rises markedly, we should reassess sales to Europe of
our most critical military technology.
To help us estimate the likelihood that the European Union
will lift the embargo and to examine the implications if it
does, we are joined by a panel of distinguished experts. Mr.
Peter Brookes is a Senior Fellow for National Security Affairs
and Director of the Asian Studies Center at the Heritage
Foundation. Dr. Bates Gill is holder of the Freeman Chair in
China Studies at the Center for Strategic and International
Studies. Dr. Richard Grimmett is a National Defense Specialist
at the Congressional Research Service.
We thank our witnesses for joining us. We look forward to
their insights.
First of all, I would like to recognize the distinguished
ranking member of the committee, Senator Biden.
STATEMENT OF HON. JOSEPH R. BIDEN, JR., U.S. SENATOR FROM
DELAWARE
Senator Biden. Thank you very much, Mr. Chairman, and thank
you for holding this hearing. We have three distinguished
witnesses. I will try to be brief so we can get right to their
testimony.
China's defense buildup has already sparked concern among
its neighbors and lifting the EU arms embargo raises a specter
of more advanced European arms and technology; or, for that
matter, even United States technology that is sold to EU
countries being transferred to a China that has just put into
its law its willingness to use force in Taiwan, their own
policy of preemption.
Now, a European Union delegation has been visiting
congressional leaders to assure us that lifting the arms
embargo will not harm United States security interests in Asia,
partly because the EU will also toughen its nonbinding Code of
Conduct in arms transfers and partly because the arms embargo
already has plenty of loopholes. At least, they are the two
rationales they offer.
But maintaining its arms embargo and strengthening the EU
Code of Conduct are not, and should not be, mutually exclusive.
Both, in my view, should be done. Senator Gordon Smith and I
introduced a resolution, now before the Senate, calling on the
EU to do just that, that is, to maintain the embargo and to
strengthen the EU Code of Conduct.
Another reason not to lift the embargo, is that such an
action will send an unwise signal to the human rights community
in China and in all of Asia that they no longer matter to the
great mercantile states of Europe.
And China, as we know, obviously lets politics dictate
major commercial sales. So the European firms like Airbus,
Allianz insurance, and Siemens may be rewarded if the EU lifts
the embargo, at the expense of United States competitors like
Boeing, AIG, and Motorola. German officials have actually
publicly said that this nondefense trade is the real reason for
lifting the embargo, and they said that just last week on
National Public Radio.
Mr. Chairman, that is not a China policy. It is a China
problem. Rather, it is more a symptom of the estrangement and
the economic competitiveness that exists between the United
States and Europe under this administration. We need to reach
out, it seems to me, to the EU and articulate our concerns and
consult with our allies on a full range of ancient policy
issues. If we end up not being able to stop the lifting of the
EU embargo, which I am beginning to be doubtful about, Europe,
in turn, has to toughen its Code of Conduct on all arms sales
and should agree to consult with us on any sales to China. I
think we could get agreement at a minimum to do that.
The EU, in my view, is acting--how can I say this
tactfully? Well, I really probably cannot say it tactfully. But
I think that this is a very, very dangerous decision, and
particularly coming at a moment when this administration has
reached out to try to begin to mend our frayed relationships
with our European allies. I think, the administration--my
judgment, not the administration's--has come to realize that it
is overwhelmingly in our interest to have a coherent policy
agreement with Europe and our European allies on major foreign
policy questions, and is trying to do that and reconcile our
differences. Here, in the midst of this effort on a good trip
by the President and a preceding trip by Dr. Rice, Europe's
lifting of its arms embargo could do significant damage.
To be very blunt with you, Mr. Chairman, I am a little
concerned about what some of our colleagues here might do. I am
very concerned about the kind of legislation that this would
potentially generate and how it may very well begin to poison
the well again in the transatlantic relationship. Words matter.
And one of the things that has been done of late, is that both
the European capitals and our capital have toned down the
rhetoric in referencing one another. That is a very necessary
and important thing. I am worried this may spark renewed
rhetoric.
Mr. Chairman, rather than go through the rest of my
statement, let me suggest that, at a minimum, the Europeans
should fundamentally strengthen their Code of Conduct and make
it an EU common position. I am not at all assured by the fact
that each country individually will make separate judgments on
that. I think the EU could dramatically improve internal
transparency through better reporting of actual sales (not just
licenses and common categories of exports), more information on
details, and no-undercut policies. I think it could establish
better end-use certification and monitoring. It could penalize
any diversion of European dual-use exports by halting further
sales by any EU members, and so on.
But rather than go through the rest of what I have to say
here, I am anxious to hear what our witnesses have to say. I
hope we can reach a common position with our European friends
on this. I am not at all that hopeful, but I would suggest that
it is very, very important that we try.
I yield the floor, Mr. Chairman.
The Chairman. Thank you very much, Senator Biden.
I will ask the witnesses to testify in the order that I
introduced you in my opening statement. That would be, first of
all, Mr. Brookes, then Dr. Gill, and then Dr. Grimmett. All of
your statements will be placed in the record in full, so you
need not ask for permission to do that. To the extent that you
can summarize the statements to fit within perhaps a pattern of
about 10 minutes, the chair and the ranking member will be
liberal in that interpretation. We have come to hear you, not
to limit you.
But we have a distressing factor of four rollcall votes
coming in a series, at some point during the coming hour. That
is going to be disruptive, but I suspect that if we proceed in
this way, you will all be heard, and that is important. Then we
will have opportunities to ask as many questions as time may
permit at that point.
Senator Biden. And if you saw how we are voting, you would
really be distressed. [Laughter.]
The Chairman. Easy there. [Laughter.]
Mr. Brookes.
STATEMENT OF PETER BROOKES, SENIOR FELLOW FOR NATIONAL SECURITY
AFFAIRS AND DIRECTOR, ASIAN STUDIES CENTER, THE HERITAGE
FOUNDATION, WASHINGTON, DC
Mr. Brookes. Thank you, Mr. Chairman, Senator Biden. It is
an honor and a privilege to appear before you today to discuss
the European Union's pending decision to lift its arms embargo
against China.
I want to commend you for holding this very timely hearing
as there are many questions being asked on both sides of the
Atlantic, as well as in Asia, that this question should be
addressed in a prestigious open forum such as this.
I am testifying here today as an individual and my views do
not necessarily reflect the views of my employer, the Heritage
Foundation. I have submitted my testimony for the record, which
covers my perceptions of American concerns, as well as European
and Chinese motivations regarding lifting the arms embargo.
But, in addition, I would like to quickly emphasize several
general points and conclusions in my testimony and then make a
very few short, tailored remarks as well.
First, in my view lifting the EU arms embargo is a mistake.
It will endanger United States interests and that of American
allies in Asia. It will accelerate China's military buildup,
undermine stability in the Pacific, especially across the
Taiwan Strait, reduce leverage for guiding future Chinese
behavior on human rights and security matters, send the wrong
signals to repressive regimes everywhere about human rights,
and not help close the existing transatlantic divide.
Next, let me say a few words about Chinese military
modernization. Northeast Asia regional security dynamics are
increasingly revolving around China. China's military potential
continues to grow and is inexorably shifting the balance of
power in the region. There are concerns across the region about
China's strategic ambitions. China now has the largest defense
budget in East Asia, the second largest in the world, behind
the United States, but ahead of Japan. China has experienced
double-digit defense budget growth for 14 years now, and the
PLA is getting a 12-percent increase this year, including an
additional 7-percent increase for procurement. Some see these
growth figures as conservative.
Of most concern, the balance of power is shifting across
the Taiwan Strait in Beijing's favor. Considering the American
obligations under the 1979 Taiwan Relations Act, this is cause
for concern. Within the next few years, China will have a
qualitative and quantitative military advantage over Taiwan,
and some would argue that this has already happened. Members of
the committee are certainly aware of the missile buildup in
China across from Taiwan. China's ballistic missile buildup not
only threatens Taiwan but American forces and Japan as well.
The Japanese have also taken notice, adjusting their
defense posture south during their most recent defense review
and noting their concern over stability in the Taiwan Strait
for the first time in their most recent defense white paper.
China plans to develop a military which can deter, delay,
or deny American intervention in the Pacific, especially over
the issue of Taiwan. That day is not here yet, but one cannot
underestimate the possibility of misperception or
miscalculation by the Chinese over the issue of Taiwan.
To this end, Chinese military modernization priorities
center around power projection capabilities: Submarines,
surface combatants, tactical air power and air defense,
ballistic and cruise missiles, overhead satellites and space
programs, information warfare, psychological operations, as
well as doctrinal improvements for fostering joint military
operations based on their observation of such things as
Operation Iraqi Freedom.
Let me say a few words about technology flows. In the short
term, China will attempt to procure force multiplier
technologies and capabilities to fill in gaps in their military
performance. For example, C4ISR, command, control,
communications, computers, intelligence, surveillance, and
reconnaissance technology including sensor to shoot technology,
cooperative target engagement technology for improving fighting
efficiency effectiveness, and situational awareness.
Other technologies and capabilities of interest include
air-to-air refueling, amphibious warfare, naval underwater
replenishment, jet turbo fan engines, electronic
countermeasures, airborne early warning, and composite
materials of the stealth technology. China is interested in
everything a modern military such as the United States has.
Additionally, Russia, which has concerns about China
despite its arms sales relationship, might be driven to sell
additional, more lethal, more sophisticated arms to China if
Russia is placed in competition with Europe.
In the long term, China will attempt to reduce their
dependence on foreign sources of quality equipment, technology,
and expertise by strengthening its own military industrial
complex through research, development, joint ventures,
technology transfers, and even economic espionage.
Europe, if it lifts the arms embargo, will be an important
market for procuring these capabilities and can hinder or
accelerate China's progress in these areas based on their
future policy decisions.
A few words on the Code of Conduct. I am worried about a
new voluntary EU Code of Conduct that may not stem the flow of
military useful technology or equipment to China. An improved
Code of Conduct is a step in the right direction, and the
toolbox directed at China specifically is also positive. But I
am still concerned that some nations will still conduct
military sales or dual-use technology transfers to China in
order to enhance commercial relations. The Chinese are sure to
apply as much political and commercial pressure as possible to
get the military equipment and technology they need for their
military industrial complex.
Lastly, we also have to be cognizant, as you mentioned, Mr.
Chairman, of what flows into China from Europe may flow out as
well to Iran, North Korea, and others with whom China has a
security relationship.
In closing, the United States should welcome China's
peaceful integration into the international community as an
open and free society through commerce, tourism, academic
exchanges, and official dialog. These activities maximize the
free world's efforts to encourage positive political and social
change for 1.3 billion Chinese.
In my view, lifting the EU arms embargo will not do that.
In fact, the passage of the anti-secession law directed at
Taiwan by the Chinese National People's Congress on Monday,
seems to suggest just the opposite, that China sees the EU's
proposed decision on arms sales as approval to further pressure
Taiwan militarily if necessary.
I encourage the Senate to continue to look at this issue
closely and express your concerns to your European
counterparts, as I am sure you already are. I do not feel that
this decision is a fait accompli yet, especially in light of
the anti-secession law's passing earlier this week.
In addition, I recommend that Congress, in close concert
with the administration, craft an appropriate response which
seeks to protect American interests and that of our friends and
allies from this misguided decision by the EU.
So, with that, Mr. Chairman, I will conclude. Thank you for
the opportunity to testify before the committee today.
[The prepared statement of Mr. Brookes follows:]
Prepared Statement of Peter T.R. Brookes, Senior Fellow for National
Security Affairs and Director, Asian Studies Center, The Heritage
Foundation
Mr. Chairman, Members of the Committee, it is an honor and
privilege to appear before you today to discuss the European Union's
pending decision to lift its arms embargo against China.
I want to commend you for holding this very timely hearing as there
are many questions being asked on both sides of the Atlantic--and in
Asia--that should be addressed in a prestigious, open forum such as
this.
I am testifying here today as an individual and my views do not
necessarily reflect the views of my employer, The Heritage Foundation.
Later this year, the European Union (EU) will consider lifting the
Tiananmen Square arms embargo against the People's Republic of China
(PRC). The United States and the EU imposed the embargo following the
June 1989 crackdown on democracy protectors in Beijing. Lifting the
embargo would endanger U.S. interests, accelerate China's military
buildup, undermine stability in the Pacific, and send the wrong signal
to repressive regimes everywhere.
AMERICAN CONCERNS
The U.S. is rightfully troubled by the proposed EU policy change.
First, there is concern about China's refusal to renounce the use of
force against Taiwan. In light of China's ongoing military buildup,
Beijing might decide to coerce or take military action against Taiwan
to force unification. Its recent passage of an ``Anti-Secession'' law
directed at Taiwan, which may have been encouraged by the pending EU
decision, is not encouraging. But more to the point, the sale of EU
arms to China would mean that European weapons might be used against
American servicemen in a military confrontation over Taiwan.
Second, lifting the EU arms embargo would exacerbate the ongoing
shift in the balance of power across the Taiwan Strait. In the next few
years, the cross-Strait conventional military balance of power will
move decidedly in Beijing's favor. This change might lead Beijing to
perceive an ability to resolve Taiwan's political future through force.
Considering the political, economic and military issues at stake in
Northeast Asia, a Chinese miscalculation of this sort has the potential
for catastrophic results.
Third, in some quarters there is significant concern that China
wants to succeed the U.S. as the preeminent power in the Pacific.
Increased Chinese military might derived from EU arms sales or
technology transfers could at some point allow Chinese forces to deter,
delay, or deny American military intervention in the Pacific--or
replace the United States as the premier military power in Asia.
Though many Asian countries welcome China's economic opportunities,
they are wary of Beijing when it comes to security matters. Some
strategists believe that beyond unification with Taiwan, China also has
an eye towards subjugating Japan, controlling heavily-traveled Asian
sea lanes, projecting power into the Indian Ocean and dominating
Southeast Asia. Japan has already expressed their concern with the EU's
proposed policy change.
Fourth, China's handling of advanced conventional arms, WMDs, and
ballistic missiles is of great concern. The PRC's export control laws
and practices leave a lot to be desired. Willful government-supported
proliferation is even more troubling. China's relationship with North
Korea, Iran, Burma, or even Syria could lead to sensitive European
technology falling into the wrong hands.
Finally, China's human rights record remains deeply troubling and
scarcely merits reward. Just in 2004, Chinese security services
harassed and detained justice-seeking mothers of Tiananmen Square
victims, as well as political activists and Internet users. In fact,
some suggest that China's human rights record has regressed since 1989.
Once the arms embargo is lifted, the EU will lose significant leverage
with China over human rights. In addition, ending the arms embargo
would send the wrong signal to other repressive regimes.
EUROPEAN MOTIVATIONS
So why is Europe considering this change? Many believe that the EU
is trying to curry favor with China for preferential commercial
treatment. China is one of the world's most dynamic economies, and
lifting sanctions may lead to large commercial deals for EU firms. If
the political climate is right, the PRC may also look to EU companies
for high-speed rail, telecommunications, satellites, energy plants, and
even high-end nuclear plants as China's insatiable appetite for energy
grows.
A second and more sinister reason for the policy change is to open
a new arms market for European weapons in China. The PRC is a veritable
cash cow for arms sales. China's defense budget--now the world's second
largest--runs $50-$70 billion a year, including plenty of money for
arms purchases. With declining defense budgets across Europe, China
provides a golden opportunity for Europe's beleaguered defense firms to
sell arms in a growing market.
Third, from a political perspective, some EU members are looking
for political cover. Should the new arms policy go awry (e.g., the use
of EU weapons on political dissidents, Tibetans, or Uighurs), political
responsibility for the policy change would be spread across the breadth
of the EU's membership. By working under the EU's umbrella, some states
will inoculate themselves from their constituents' disapproval for
backing down on China's human rights record.
Lastly, and on the most cynical end of the scale, some believe that
the EU, especially France, is attempting to balance American global
power through the development of a ``multipolar'' world. In such a
political construct, other power centers such as China, Russia, Japan,
India, and the EU could counterbalance American power. Thus, making
China more powerful would help Europe challenge the United States'
global pre-eminence.
CHINESE MOTIVATIONS
No doubt China has motivations of its own. First, Beijing continues
to seek political absolution for the Tiananmen Square massacre among
the international community. The recent death of former Communist Party
leader, Zhao Ziyang, is a nail in the coffin of the requirement that
the Chinese government account for its actions at Tiananmen; the
lifting of the EU embargo would be another.
Second, China is looking for competitive pricing and alternative
sources for the arms it currently buys from Russia, its main advanced-
technology arms supplier. With the U.S. and EU currently out of the
Chinese arms market, it's a seller's market for the Russians.
EU arms can compete with the Russian arms producers in terms of
quality and (possibly) price. This would create a buyer's market for
Beijing, decreasing dependence on Russian arms and enhancing the
likelihood of generous advanced-technology transfers to the Chinese
arms industry as part of any arms deal. The Chinese may also be hoping
that the EU's decision will lead to pressure in Washington from defense
firms to lift the embargo.
Third, Beijing is hunting for military technology it can't find
elsewhere, especially in the Russian market. The Chinese can find top-
notch fighters, diesel submarines, destroyers, and surface-to-air
missiles in Russia, but they may not be able to find the necessary
command, control, communications, computers, intelligence,
surveillance, and reconnaissance (C4ISR) systems they need to make
these systems more effective. The EU may be just the source for such
systems.
Fourth, Beijing would also like to drive a wedge into the
transatlantic alliance. China certainly would not object to having an
ally in the EU, especially when jousting with the United States in the
U.N. Security Council or other multilateral institutions over such
issues as Iran's nuclear program (where China just signed a $70 billion
gas/oil deal) or Sudan (where China recently penned a $3 billion oil
deal).
Fifth, it should come as no surprise that a lifting of the arms
embargo would be seen as a significant political defeat for the
Taiwanese in Europe and would support China's desire to isolate Taiwan
from the international community in hopes of forcing an early
unification. Some would argue that if the Europeans sell arms to China,
they should sell them to Taiwan as well.
CONCLUSION
There are sure to be consequences to the transatlantic relationship
over a decision to lift the arms embargo against China. Even with
President Bush's and Secretary of State Rice's highly successful trips,
America's perception of Europe, already troubled, will not be improved.
Americans, especially veterans, would gasp at the thought that European
arms might be used against American servicemen and women in a Taiwan or
Korean contingency. Americans will rightfully resent a decision on the
part of the Europeans that will negatively alter the security situation
in a region (i.e., the Pacific) where the Europeans have no
responsibility for stability or security. Even with the advent of a new
code of conduct for arms sales and other regulations, the Bush
administration is right to be displeased.
The EU decision will also roil the waters of the Pacific. Japan is
already alarmed by China's military buildup and has serious questions
about China's strategic ambitions in Asia beyond Taiwan. Taiwan,
already unsettled by the passage of the anti-secession law, is unlikely
to sit idly by. An EU decision to lift the embargo will likely set back
the recent progress across the Taiwan Strait.
The United States should welcome China's peaceful integration into
the international community as an open and free society through
commerce, tourism, academic exchanges, and official dialogue. These
activities maximize the free world's efforts to encourage positive
political and social change for 1.3 billion Chinese.
But in the end, the EU's decision to lift the arms embargo against
China will not help close the transatlantic divide and may even widen
it. The EU decision will also be perceived as an imprimatur for dismal
human rights records everywhere. It may also have a destabilizing
effect on Northeast Asia, especially across the Taiwan Strait. Finally,
it could increase the likelihood of military conflict in the Pacific,
which is no one's interest--not even the distant EU's.
Thank you, Mr. Chairman.
The Chairman. Well, thank you very much, Mr. Brookes, for
that testimony.
The chair now calls on Dr. Bates Gill.
STATEMENT OF DR. BATES GILL, FREEMAN CHAIR IN CHINA STUDIES,
CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON, DC
Dr. Gill. Thank you very much, Mr. Chairman. Thank you
also, Senator Biden, for the opportunity to appear before the
committee today. The ongoing consideration by the European
Union of its 1989 arms embargo raises many, many important
concerns, and I congratulate the committee on taking it up. We
encourage you to continue to do so going forward.
You have asked me to cover several topics. I will do so by
looking first at some context, the broader strategic
relationship between the EU and China; second, to talk about
the possible impact of lifting the embargo on Chinese military
modernization; and then last, put forward some recommendations
for United States policy and legislative action going forward.
I think it is important, first and foremost, to place the
arms embargo question in the larger context of China-EU
relations. It is in that way that we can craft the best
responses and elicit the best response from our European
counterparts and avoid the worst potential outcomes.
I heard a think-tank specialist on Asia, who had recently
left the Pentagon--and it is not present company--say that we
were caught ``flat-footed'' by the EU's apparent intention to
lift the embargo. I found that unsettling.
In fact, the possibility of lifting the arms embargo was
part of a far greater and ongoing dynamic that is plain to see
in EU-China relations, and it dates back at least 10 years to
the mid-1990s. It is characterized by major summits on an
annual basis and open expression of intent on both sides in
major policy documents calling for a continued strongly
positive strategic relationship going forward.
Specifically, on the military side, China's defense-related
ties with individual European countries have likewise increased
and, so far at least, largely involve what we might call softer
interactions such as military-to-military diplomacy,
peacekeeping, training, port visits, joint military exercises,
et cetera.
However, on the harder side of military relations, there
are ongoing joint programs of some concern to us, including the
development of space technologies, which may have military
applications, the continued low-level licensed production in
China of European defense equipment, and of course, direct
transfers of European military technology to China. I think it
is very important for the committee to recognize that, as the
line between military and civilian technologies continues to
blur, European exports of commercial technology and expertise
with potential military applications will continue to expand
and has already contributed to improvements in Chinese defense
production capacity. And I would say the same can be said for
commercial exports with military relevance from other suppliers
as well, including the United States, Japan, even Taiwan.
Broadly speaking, then, it is important for us to recognize
that the arms embargo question in the EU is part of an ongoing
comprehensive and carefully constructed strategy on the part of
the European Union to build a different kind of relationship
with China, which in their view has two principal aims: One, to
integrate China as a responsible member of a multipolar global
community; and second, to help China address its domestic
sociopolitical and socioeconomic transformation. As such,
strategic views of China clearly are very different from those
in the United States.
Let me turn secondly to the question of lifting the embargo
and the impact it might have on Chinese military modernization.
First, Mr. Chairman, I think it is important to understand
that it is highly likely, in my view, that the arms embargo
will be lifted at some point within the next year, but
increasingly the precise timing seems open to question. There
is obviously the need for a unanimous decision on the part of
all 25 EU member countries, and there remain a number of
countries in the European Union who are not supportive of this
move. Moreover, as has been mentioned, the recent passage of
the anti-secession law and the failure on the part of the
National People's Congress to even consider the International
Convention on Political and Civil Rights will definitely have a
negative impact in the view of many European governments about
the wisdom of lifting the embargo at this time.
As an aside, I think the convergence of several
developments, which have been raised here, including the anti-
secession law, the lack of consideration on the International
Convention on Political and Civil Rights, as well as a warming
trend in United States-Europe relations at the moment, I think
should weigh in the minds of Europeans very heavily to delay
and postpone any decision on the arms embargo, at least until
the end of this year.
Second, on the issue of the impact on Chinese military
modernization, I think we should understand that lifting the
embargo, in and of itself, is likely to have little impact on
the flow of technology to China. I think our concerns really
have to be on what is going to replace the embargo. As has
already been said, first of all, under the terms of this now
nearly 16-year-old embargo, European firms have already been
able to provide Chinese counterparts with militarily relevant
technologies. The nature of advanced technologies and the
broadening applications to military purposes has clearly
outstripped the ability of this embargo to be effective.
Second, the degree to which European firms have been
restrained in the past from providing weapons and sensitive
technologies to China has far more to do, in my view, with
individual EU member state national export control laws than
the policies of the EU embargo itself. So, it is very important
for us to look at what is going to replace this embargo at some
point, I assume, in the not-too-distant future. We need to
place our emphasis on making sure; first, that the Code of
Conduct is dramatically strengthened, and second, that we
intensify our bilateral conversations with key European
suppliers to make sure that they are appropriately
strengthening their export control guidelines on a national
basis as well.
I am encouraged to hear, during the meetings this week,
from our EU counterparts that they are debating the
strengthening of the code to make it more specific and that
with the toolbox of additional measures, they intend to
increase the level of scrutiny and transparency on European
arms exports introducing, for example, a new system to examine
on a quarterly basis and report publicly on the export license
approvals coming out of Europe, to do a 5-year retroactive
report on those license approvals that have been given from
Europe to China, and even to require so-called brokered
exports, that is, arms exports from non-EU states which are
arranged by entities based in the EU, to be included in this
reporting system.
Finally, I am also encouraged that EU officials are giving
serious consideration to proposing a formal consultative
mechanism between Europe and the United States to discuss
weapons and militarily relevant technology exports to China.
These are all positive steps. We need to encourage the
Europeans all the more strongly to move in this direction. I
think by instituting these mechanisms, we can have a far
greater expectation than we have now, at least, of stemming the
flow of certain weapons and militarily relevant technologies to
China.
A third point on military technology. In the near term, I
think it is very unlikely that the Europeans are going to
supply complete weapons systems. Rather, it is far more likely
in the near to medium term that they will provide value-added
subsystems and technologies which the Chinese military requires
to boost its capabilities across a range of issues but
especially concerning naval, aerospace, aviation, command,
control, communications, computers, and intelligence,
surveillance, and reconnaissance assets.
Let me close with several recommendations, Mr. Chairman.
I think the aim here needs to be; first, to stem the flow
of sensitive and potentially destabilizing weaponry to China on
the one hand, while also strengthening consultations on these
important issues between the United States and Europe.
So, first, through congressional and administrative action,
we should strongly urge an enhanced set of arms export
restrictions to limit Chinese arms and sensitive technology
exports to China. This needs to be done at two levels. In
Brussels, yes, but let us not forget, again, the key to this is
going to be national export laws among the EU member states. So
we need to do it both in Brussels and in the key national
capitals of concern. I do believe that the moment is
increasingly right for an intensified and judicious set of
discussions with our European counterparts and that we can be
successful in this effort.
Second, I think we need to encourage our European
counterparts to press for more vigorous policies and
pronouncements regarding questions of Taiwan, human rights, and
nonproliferation. If, and when, an embargo is lifted and new
mechanisms are put in place, I should certainly think that the
Europeans ought to accompany that with very strongly worded
pronouncements and policies about the need for China to move
ahead and raise the standard on human rights practices, on
nonproliferation activities, and in strengthening China's
commitment to a peaceful resolution of differences with Taiwan.
Third, I hope both the Congress and administration will see
the wisdom of establishing a regular mechanism for strategic
dialog and consultation between the United States and Europe on
Asia and China. This should involve the key Asia-related
experts at the White House, the Department of State, and the
Department of Defense. It is my understanding that, that kind
of dialog has been lacking in the past and, I think, partially
explains the problems we are seeing today.
Finally, I would recommend that through congressional
action, there be a tasking of authoritative research and
reporting on the extent and nature of advanced technology
exports to China and their impact on Chinese military
modernization. China is increasing its access to foreign inputs
of capital, technology, and expertise from Europe, as well as
from the United States and Japan and Taiwan and other advanced
economies. Far greater resources need to be devoted to
monitoring these developments and their implications for U.S.
interests.
Thank you, Mr. Chairman.
[The prepared statement of Dr. Gill follows:]
Prepared Statement of Dr. Bates Gill, Freeman Chair in China Studies,
Center for Strategic and International Studies, Washington, DC
INTRODUCTION
Thank you, Chairman Lugar and Senator Biden, for the opportunity to
appear before this distinguished committee.
The ongoing consideration by the European Union (EU) to lift the
1989 arms embargo against China raises concerns across a range of
critical issues: the strategic dynamic of U.S.-EU-China relations,
trans-Atlantic differences, the emergence of China as a more powerful
global and regional player, Chinese military modernization, and the
future security and stability in East Asia. I congratulate the
Committee for focusing on this important topic, and look forward to
discussing it further with you.
My remarks proceed in three principal parts. First, I would like to
provide some essential context by discussing the broader strategic
dynamic of EU-China relations as it has unfolded so dramatically over
the past 5 to 10 years. Second, the testimony will examine the impact
of lifting the embargo on Chinese military modernization. A concluding
section presents some basic recommendations for U.S. policy in
addressing developments in EU-China relations generally, and on the
arms embargo question in particular.
Broader EU-China strategic dynamic underway since the mid-1990s
It is important first and foremost to place the arms embargo
question in the larger context of China-EU relations. That is how we
better understand the motivations for lifting the embargo and craft
responses which will resonate and have effect with EU counterparts so
as to mitigate and avoid the worst potential outcomes of a post-embargo
future.
I heard a think-tank specialist on Asia who had recently left the
Pentagon say that we were caught ``flat-footed'' by the EU's apparent
intention to lift the embargo. I found that an unsettling comment. It
has been very clear to anyone who wished to look that China-EU
relations have been moving steadily closer across the full range of
their bilateral relationship, including in political-military areas,
and that lifting the embargo has been on the table and a part of EU-
China discussions for nearly two years.
In fact, the possibility of lifting the arms embargo is part of a
far greater and ongoing dynamic of intensifying EU-China relations over
the past decade. The beginning of far closer EU-China relations dates
to the mid-1990s. Since then, China and the EU have held seven major
summits, the most recent at the end of 2004. Both sides have issued
major policy documents detailing their relationship and calling for
continued strongly positive strategic relations going forward. In terms
of economics and trade, the EU became China's largest trading partner
in 2004. China is now the EU's second largest trading partner after the
United States.
On the military side, China's defense-related ties with individual
European countries have likewise increased, and largely involve
``softer'' interactions, including military-to-military diplomacy and
educational exchanges, peacekeeping training, port visits, some joint
military exercises, and expanded military attache offices to manage
this growing aspect of diplomacy between China and Europe. Most of the
EU member states have one military representative in Beijing; France
has three, Germany, Italy, Poland, and the United Kingdom have two (by
comparison, the United States has 12). China and individual member
states such as France, Germany, and the United Kingdom have established
regularized strategic consultations and security dialogues, including
counterterrorism discussions.
Other military-to-military exchanges stand out. For example, a
number of European navies have visited Chinese ports, with France
leading the way with 12 naval port visits to China dating back to the
early-1980s. Other European navies which have traveled to China include
those from the United Kingdom, Italy, Ireland, and Germany. The Chinese
navy has made only two sets of port visits to Europe, the first in
September 2001, when Chinese ships paid calls in France, Germany,
Italy, and the United Kingdom. The second set of visits was in 2002
during the Chinese navy's first circumnavigation of the globe,
including stops in Turkey, the Ukraine, Greece, and Portugal.
In August 2003, China for the first time allowed foreign military
personnel--including from the United States, the United Kingdom,
France, Russia, Germany, Canada, Tanzania, Thailand, and Turkey--to
observe Chinese military exercises involving 5,000 Chinese troops at
the country's large tactical training base in Inner Mongolia. On
September 2, 2004, military representatives invited from France,
Germany, United Kingdom and Mexico, observed an amphibian landing
exercise in Shanwei along the coast of Guangdong Province.
China has also held joint naval exercises with the French navy (in
March 2004) and with the British navy (in June 2004), both off the
coast of Qingdao in the East China Sea. These exercises involved four
to five vessels and focused on tactical maneuvers for the ships and
shipboard helicopters, replenishment-at-sea exercises, and search-and-
rescue. China also fields peacekeepers to Europe under the United
Nations flag, including civilian police to the United Nations Interim
Administration Mission in Kosova and, in the past, to the United
Nations Mission in Bosnia-Hercegovina.
There are some important developments on the ``harder'' side as
well, including some joint programs in the development of space
technologies which could have military applications, ongoing low-level
licensed production in China of European defense equipment, and direct
transfers of European military technology to China. Importantly, given
the blurring line between ``military'' and ``civilian'' technologies,
European exports of commercial technology and expertise with potential
military applications continue to expand and already contribute to
improvements in Chinese defense production capabilities (the same can
be said for commercial exports with military relevance from other
suppliers, such as the United States, Japan, Taiwan, and others). This
integration of European and Chinese high-technology R&D and production
capability has particular military relevance as it unfolds in the
aerospace, aviation, communications, and shipbuilding sectors. (China's
military-technical relations with European suppliers are discussed in
more detail below.)
In short, it is very important to recognize that the arms embargo
question in the EU is part of an ongoing, comprehensive, and carefully
constructed strategy to build a fundamentally different kind of
relationship with China. This effort has two principal aims: (1) to
integrate China as a responsible member of a multipolar global
community and multilateral international institutions and (2) help
China address its domestic sociopolitical and socioeconomic challenges
at home--so-called capacity building or ``good governance.''
In many respects, China is seen by many EU and European member
state leaders and officials as a kind of ``test case'' for how global
players will need to cooperate to face the transnational challenges of
the 21st century--terrorism, international crime, social justice,
economic stability, resource scarcity and depletion, environmental
degradation, intellectual property and the globalization of knowledge,
and other critical challenges.
As such, strategic views of China in Europe are aimed at developing
a deeper, more constructive, and more positive relationship, and tend
to see far greater opportunities in ties to China than threats. To the
degree European policymakers see threats emanating China, they tend to
be on either questions of ``soft security,'' such as economic
competition, illegal immigration, transnational crime, smuggling of
drugs and contraband, environmental issues, and human rights.
Individual European countries as well as the EU have established
regular dialogues with China to cooperate and find common ground on
these and other security concerns.
In this sense, fundamental European strategic views of China differ
in some respects from those in the United States. Unlike Europe, the
United States maintains significant strategic and political interests
around China's periphery in the form of alliances and a host of other
critical and complex political-military relationships with others
around China. Europe's relations with China are unfettered by the
complicated and important political and military commitments the United
States has made to Taiwan, the principal issue over which the United
States and China could come into conflict.
Lifting the embargo: Impact on Chinese military modernization
There are three important points to make regarding the lifting of
the embargo and its potential impact on Chinese military modernization.
It is possible the embargo will not be lifted in the immediate-
term. While it is highly likely the arms embargo will be lifted within
the next year, the precise timing is still open to some question.
Lifting of the embargo requires the unanimous assent of all 25 EU
member countries, and many member countries--such as Scandinavian
countries and some in Eastern Europe--remain opposed to lifting the
ban. For these countries and others within the EU, a number of
conditions should be met. These would include China's ratification of
the International Covenant on Civil and Political Rights, allowing
visits by the International Committee of the Red Cross, to Chinese
prisons, releasing certain political dissidents in China, strengthening
the EU Code of Conduct on arms exports, including stronger transparency
mechanisms for those exports, avoiding further deterioration in Europe-
United States relations, strengthening assurances that weapons exports
would not aggravate tensions across the Taiwan Strait, and gaining
stronger Chinese assurances about their intention to peacefully resolve
differences across the Taiwan Strait. The recent passage of the Anti-
Secession Law by the Chinese National People's Congress, and the NPC's
lack of consideration of the International Covenant on Political and
Civil Rights, will have a negative effect in the view of many European
governments about the wisdom of lifting the embargo at this time.
However, while these obstacles remain, most observers conclude that
some of the leading members of the EU, including France, Germany, and
the United Kingdom, will work to have an acceptable set of conditions
in place on the EU side, especially with regard to the Code of Conduct
and arms export transparency measures, in order to gain unanimous EU
member consent to lift the embargo by June this year. As EU member
states debate this issue, and China continues to apply pressure on
Brussels and in individual capitals, it now appears it is not a
question of ``whether,'' but ``when'' and ``how'' the 1989 embargo
statement would be lifted.
Lifting the embargo in and of itself will have little impact on
technology flows of concern to China. Instead, our concern should focus
on what will replace the embargo. This is true for two principal
reasons. First, under the terms of the now-nearly-16-year-old embargo,
European firms have already been able to provide Chinese counterparts
with militarily-relevant technologies. This is no less true for U.S.,
Japan, and even Taiwan exports of advanced technologies to China. The
fact is that the nature of advanced technologies today and their
broadening applications to militarily-relevant purposes have far-
outstripped the ability of a simple declaration of intent pronounced a
decade and a half ago to truly stem the flow of sensitive technologies
to China.
Unlike the American arms embargo on arms trade with China which is
codified as law and prohibits specifically designated military end-use
items the EU embargo is contained in a single phrase, issued as part of
a broader political statement condenming the Tiananmen crackdown in
June 1989. The statement reads that EU members will embargo ``trade in
arms'' with China, without specifying how ``arms'' are defined and
without requiring any penalty or strictures on those EU members which
chose to ``trade in arms'' with China. The EU ``embargo'' is best
understood as a political statement which is not legally binding.
Second, the degree to which European firms have been restrained
from providing weapons and sensitive technologies to China has far more
to do with the individual EU member states' national export control
laws and policies than with the EU embargo itself. In this regard, it
is important to note that a number of elected parliamentary bodies in
Europe, including the British House of Commons, the German Bundestag,
and the EU Parliament, have issued resolutions opposed to the lifting
of the arms embargo.
So in this sense, it is not the lifting of the embargo but rather
what comes to replace the embargo which will affect how European
military-technical relations with China will or will not contribute to
Chinese military modernization. This important point should lead us in
the direction of determining more specifically (1) what the EU will put
in place of the embargo, and (2) what certain individual EU member
states intend to do in their military-technical relations with China.
It is especially important to focus on what might replace the current
embargo since the leaders of the EU member states are on record as
agreeing in December 2004 that ``the result of any decisions [about
lifting the arms embargo] should not be an increase of arms exports to
China, neither in quantitative nor qualitative terms.''
Rather than focus on the ``embargo,'' a potentially more
restrictive set of guidelines deserve greater attention: the EU Code of
Conduct and the so-called ``toolbox'' of arms export transparency
measures. The 1998 Code of Conduct provides more specific guidance to
EU members in making arms sales decisions (to all countries, not just
China). This guidance consists of eight criteria which EU governments
should weigh before exporting weapons:
``Respect for the international commitments of EU member
states,'' including U.N. sanctions, EU sanctions, and other
international nonproliferation treaties and commitments;
The respect of human rights in the country of final
destination, including consideration of whether an arms export
will be used for ``internal repression'';
The ``internal situation in the country of final
destination'' so as to avoid provocation or prolongation of
tensions and conflicts;
``Preservation of regional peace, security and stability''
to avoid aggressive use of the weapons by the recipient against
another country, and to avoid use of the exported weapon to
``assert by force a territorial claim'';
The national security of the member states, their
territories, and the national security of friendly and allied
countries;
The behavior of the recipient country, especially with
regard to terrorism and its respect for international law;
The possibility that the recipient country would divert the
export within the country or reexport it to a third party in an
unauthorized or ``undesirable'' way, to include a consideration
of the recipients export control system, among other items;
The ability of the recipient to import weapons for
legitimate defense and security needs while still meeting human
and economic needs.
The Europeans are debating the strengthening of this Code to make
it more specific. In addition, EU officials state they are crafting a
so-called ``toolbox'' of additional measures which would increase the
level of scrutiny and transparency on European arms exports. These
measures would likely include a number of new and positive steps,
including:
A system to review EU member state arms exports on a
quarterly basis, including reporting on both export license
approvals and export license denials;
A 5-year retroactive report on export license approvals in
order to establish a recent baseline on arms exports from which
to gauge future and assess potential future sales;
A requirement that ``brokered exports'' (arms exports from
non-EU states which are arranged by entities within the EU
member states) be included in the reporting system.
EU officials are also giving serious consideration to proposing a
formal consultative mechanism between the United States and Europe to
discuss weapons and militarily-relevant technology exports to China. By
replacing the embargo with a better framework, including increasing the
specificity, scrutiny, and binding nature of the Code of Conduct and
the toolbox, and by instituting a more formal consultative mechanism on
this issue between the United States and Europe, we can have far higher
expectations of stemming the flow of certain weapons and militarily-
relevant technologies to China.
The flow of militarily-relevant exports to China from Europe in the
near-term is not likely to be in the form of new weapons platforms, but
in the form of subsystems and key technologies. It appears unlikely
that China would move ahead with major purchases of complete weapon
platforms, at least in the near- to medium-term. Not only is it likely
most European governments would restrict their manufacturers from
large, high-profile, and provocative weapons sales to China, but China
has a number of reasons of its own to eschew this approach. First and
foremost is cost, since they have been successful in gaining access to
relatively cheaper Russian weapons and technologies and because their
own defense industries are beginning to make significant breakthroughs.
In addition, China already faces significant problems in the diversity
and interoperability of its weapons systems, particularly in the case
of new jet aircraft programs. Third, because of China's traditional
self-reliant posture regarding its defense-industrial base and its need
to keep large, state-owned, defense enterprises open and avoid massive
unemployment, Beijing will be reluctant to simply buy large quantities
of European weapons off-the-shelf.
Instead, if complete weapons platforms are sold, they will likely
be a relatively small number with the probable expectation on China's
part that it could move toward some form of indigenous assembly or
licensed production of the system over time. More likely in the near-
to medium term would be the sale not of complete platforms, but certain
value-added subsystems and technologies which the Chinese military
requires to boost its capabilities, such as projecting and coordinating
military force in a maritime environment, involving naval, aerospace,
aviation, and command, control, communications, computers,
intelligence, surveillance and reconnaissance (C4ISR) assets.
Given these considerations, China is most likely to seek European
military-technical inputs and assistance in such areas as:
Jet aircraft propulsion, avionics, and fire control systems;
Naval weapons systems, including air defense, weapons
guidance and fire control, and radars, as well as submarine
technologies;
Naval propulsion systems and stealth technologies;
Information technology and communications infrastructure
improvements, especially those applicable to more
sophisticated, hardened, and secure command and control
infrastructure for military purposes;
Aerospace technologies to include satellite imagery,
reconnaissance, remote sensing, and communications.
In addition, certain past and ongoing transfers and Chinese
indigenous production of militarily-relevant systems and technologies
from Europe are likely to continue and may expand. These include the
licensed-production of various helicopters, turboshaft helicopter
engines, fire-control and surveillance radars, and air defense systems
from France, fighter jet avionics upgrades from the United Kingdom and
Italy, the British ``Searchwater'' airborne early warning radar system,
Italian naval fire control radar systems, and the British Rolls Royce
Spey Mk 202 engine, first transferred to China in the late-1970s, and
now produced in China as the WS-9, which powers the made-for-export
Chinese fighter-bomber known as the FBC-1, and its domestic version,
the JH-7.
Recommendations
Given these developments, the aim of U.S. policy should be to stem
the flow of sensitive and potentially destabilizing weaponry to China
while strengthening consultations on these important issues between the
United States and European counterparts. Four key measures should form
the basis of the U.S. policy approach.
Through Congressional and Administration action, public statements,
and consultations, strongly press for an enhanced set of arms export
restrictions to limit European arms and sensitive technology exports to
China. This needs to be done at two levels. First, such actions should
target the debate within the EU at Brussels. The next two to three
months are going to be a critical period as EU officials, in
consultation with member states, craft a more acceptable set of post-
embargo mechanisms to guide EU arms exports, including a revised Code
of Conduct and the introduction of greater arms export transparency and
reporting measures. These discussions with Brussels should specify
those particular weapons and technologies which the Washington would
find especially problematic for export to China
Second, U.S. policy should also target governments and key
constituencies in important EU member states. In the end, it will be
the domestic export control restrictions as well as the political
climate in individual countries which will have the greatest impact on
stemming the flow of sensitive weapons and technologies to China. This
demands a more intensive understanding of individual member states'
perspectives toward China, particularly within key constituencies such
as parliaments, opinion leaders, China experts and activists, and the
business community, to identify individuals and institutions which
share U.S. concerns about weapons and militarily-relevant technology
sales to China. These discussions with specific EU member states should
include those particular weapons and technologies which the U.S. side
would find especially problematic for export to China.
The moment is right for intensified, judicious, and well-informed
discussions with European counterparts on this issue to assure the most
favorable outcome regarding potential military exports to China on the
one hand, and improved U.S.-Europe relations on the other.
Through Congressional and Administration action, public statements,
and consultations, strongly press for more vigorous policies and
pronouncements from the EU and European governments on Taiwan, human
rights, and nonproliferation. Given the importance the current Code of
Conduct gives to such questions as ``the national security of friendly
and allied countries,'' the ``respect of human rights in the country of
final destination,'' avoiding use of the exported weapon to ``assert by
force a territorial claim,'' and the ``recipient's export control
system,'' the United States should insist that the EU stand by and even
strengthen these assurances with regard to China. U.S. action should
aim to shape the current EU debate on the issuance of a statement which
specifically speaks to these concerns that might accompany the lifting
of the embargo and the implementation of a new set of arms export
guidelines and transparency mechanisms.
U.S. policy action should insist that lifting the EU embargo be
linked to concrete Chinese steps to raise the standard of their human
rights practices, such as ratifying the International Covenant on
Political and Civil Rights and allowing for International Committee of
the Red Cross inspections of Chinese prisons, strengthening Chinese
commitment to a peaceful resolution of differences with Taiwan, and
strengthening China's export control system and commitment to
international nonproliferation norms.
Through Congressional and Administration action, establish a
regular mechanism for strategic dialogue and consultation between the
United States and Europe on Asia and China. Regularized dialogue on
Asian affairs and on China with European counterparts--both at the EU
Brussels level and among key European countries such as France,
Germany, and the United Kingdom--should form a normal and
institutionalized aspect of trans-Atlantic consultations by the White
House, the Department of State, and Department of Defense, as well as
by members of Congress and their staff. The appropriate officials with
responsibility for Asian and Chinese affairs from the White House, the
Department of State, and the Department of Defense should regularly
take active part in these discussions. Appropriate Congressional
committees should seek regular briefings on these discussions from
relevant officials from the Department of State and Department of
Defense.
Members of Congress, Congressional staff, and Administration
officials should also take part in and/or receive briefings from the
ongoing nongovernmental dialogue and research programs involving U.S.
think-tanks and academic institutions and their European counterparts.
These programs draw together American and European specialists and
officials to address Asian and Chinese affairs, serve as ``early
warning mechanisms'' on potential policy disputes, and generate policy
recommendations to facilitate trans-Atlantic partnership and common
goals regarding developments in Asia and China.
Through Congressional action, task authoritative research and
reporting on the extent and nature of advanced technology exports to
China and their impact on Chinese military modernization. China's
increasing access to foreign inputs of capital, technology and
expertise, including such inputs from Europe, the United States,
Taiwan, and other advanced economies, pose important concerns about
Chinese military modernization. The areas where advanced foreign
suppliers would most likely be able to make a contribution to Chinese
military modernization, even if an indirect contribution, would be in
those defense industrial sectors most relevant to a Taiwan scenario:
aerospace, aviation, naval warships and submarines, and in
communications technology. China remains at an early stage in fully
realizing its military potential and the advantages of increased access
to militarily-relevant foreign technology, R&D, and manufacturing
expertise. However, it has made important military advances in recent
years, especially with regard to the balance of power across the Taiwan
Strait, and appears likely to continue to do so. Far greater resources
should be devoted to monitoring these developments and their
implications for U.S. interests.
The Chairman. Thank you very much, Dr. Gill.
The chair now calls on Dr. Richard Grimmett.
STATEMENT OF DR. RICHARD F. GRIMMETT, SPECIALIST IN NATIONAL
DEFENSE, CONGRESSIONAL RESEARCH SERVICE, WASHINGTON, DC
Dr. Grimmett. Thank you, Mr. Chairman, Senator Biden. I
welcome this opportunity to be of assistance to you in your
review of the matters related to the prospective lifting of the
European Union's arms embargo on China.
My focus will be to set a context in which the
institutional aspects of this issue have developed,
particularly the arms control mechanisms, which probably are at
the heart of resolving it.
To that end, Mr. Chairman, I ask that two recent CRS
reports on matters pertinent to this hearing also be made part
of the record.
The Chairman. Without objection.
Dr. Grimmett. In my prepared remarks, I note that the
existing EU arms embargo on China, dating from June 27, 1989,
is a rather brief political declaration that simply calls for
``interruption by the Member States of the then-European
Community of military cooperation and an embargo on trade in
arms with China.'' This declaration does not clarify the
meaning of the term ``military cooperation'' nor does it
contain a list of arms that come within the scope of the phrase
``trade in arms.''
By contrast, with the introduction of the Common Foreign
and Security Policy (CFSP), effective in November 1993 when the
Treaty on European Union, the Maastricht Treaty, was in force,
the procedural basis for EU embargoes was altered. Decisions to
impose an embargo still require unanimity among EU member
states, but such decisions are now based on legally binding
documents, such as Common Positions, rather than declarations.
Often, implementing regulations are also adopted. Regulations
or Common Positions on embargoes now contain detailed
descriptions of the type of material covered, as well as the
terms and conditions of implementation, by member states. Arms
embargoes are also subject to EU standards on arms exports,
such as the 1998 Code of Conduct on Arms Exports. Ultimately
what a given embargo entails may be viewed differently by
different member states. As a political statement by the
European Union the EU Code of Conduct on Arms Exports is not
legally binding on EU member states.
The existing arms embargo against China has not been
interpreted uniformly by EU members since it was imposed. This
can be attributed to factors such as: One, the lack of
specificity in the political declaration in 1989; two, the
absence of a legally binding document, such as a Common
Position, which has been the case with later embargoes imposed
on other nations; and, three, the existing loopholes in the EU
arms control system generally.
The United States, by contrast and for its part, has a
long-established legal framework for reviewing and determining
which nations will be permitted to obtain defense articles,
defense services, and related military technology from it. The
principal U.S. statute governing the sale and transfer of
defense articles is the Arms Export Control Act. My formal
statement goes into detail on how the U.S. Arms Export Control
Act framework operates. I also explain in detail how the EU
arms export control system operates, and I critique the EU Code
of Conduct on Arms Exports.
But let me comment, at this point, on the EU Code of
Conduct, which was adopted on June 8, 1998, during the EU
presidency of the United Kingdom. The EU Code sets up eight
criteria for the export of conventional arms and a denial
notification procedure obligating EU member states to consult
on possible undercutting arms sales one EU state might make,
even though another EU state has chosen not to make a
comparable arms export.
The EU Code's eight criteria to be utilized by EU members
when reviewing license requests and making decisions whether or
not to make an arms export include, for example, the following:
Consistency of the export with an exporter's international
commitments arising from U.N., EU, or OSCE arms embargoes; risk
that the export would be used for internal repression or where
the recipient country has engaged in serious violations of
human rights; risk that the export would provoke or prolong
armed conflicts; risk that the recipient using the export could
undermine regional peace and security; effect of the export on
the defense and national security interests of friends and
allies; risk of diversion to third parties or to a terrorist
organization.
It is important to emphasize that these eight criteria, and
the EU Code of Conduct in its entirety, are political
statements by the EU and they are not legally binding on the
member states of the EU; although the Code is supposed to
represent a moral imperative that EU member states are expected
to uphold and enforce.
The EU Code requires an annual report on arms exports made
by member states. These reports show that despite the embargo
on China, some arms sales licenses have been approved for the
PRC. During 2002, for example, all EU nations collectively
approved export licenses for China valued at 209.8 million
Euros, about $279 million. The EU nations that approved export
licenses during that period were France, 105.4 million Euros;
the United Kingdom, 79.5 million Euros; and Italy, 22.8 million
Euros. In 2003, the most recent year for which we have a report
from the European Union, all EU nations collectively authorized
licenses for China valued at 415.8 million Euros, which is
about $550 million at the current exchange rate. During 2003,
the leaders in arms export licenses for China were France,
171.5 million Euros; Italy, 127.1 million Euros; and the United
Kingdom, 112.5 million Euros.
Now, the U.S. Arms Export Control Act, which I discuss in
detail in my formal statement, establishes strict, binding
obligations on any nation purchasing defense articles and
defense services from the United States to agree, in advance of
any purchase, that the buying nation will not retransfer the
military items obtained to a third nation or party without
receiving prior approval to do so from the President. The Arms
Export Control Act has severe penalties that can be applied to
any nation found to violate its legal obligation not to
retransfer military items obtained from the United States
without prior U.S. consent. These obligations and penalties
would apply to any EU nation that transferred any United States
origin defense article, service, or military technology to
China without prior United States approval.
The Arms Export Control Act framework, however, does not
apply to arms sales to China of indigenously developed and
produced military equipment of EU member states. Controls of
sales or transfers of that military equipment must be achieved
through application of the national arms export control
statutes of the individual EU nations, the EU Code of Conduct
on Arms Exports, or EU regulations regarding arms exports.
What remains to be seen in the current situation is what
will be the nature and scope of the revised EU Code of Conduct
on Arms Exports in the future, and any new instrument
establishing measures to address EU arms exports to post-
embargo countries, referred to by the EU as ``the toolbox.''
Private consultations among EU members on these matters are
continuing but are likely to be completed before final EU
action on lifting the arms embargo on China takes place.
Should the European Union strengthen the EU Code of Conduct
on Arms Exports and utilize effective instruments to prevent
worrisome arms exports to China in a post-embargo period,
prospects for reaching a successful accommodation in United
States-European Union relations over this issue could be
notably enhanced.
Mr. Chairman, that concludes my summary.
[The prepared statement of Dr. Grimmett and the reports of
the Congressional Research Service follow:]
Prepared Statement of Dr. Richard F. Grimmett, Specialist in National
Defense, Congressional Research Service, Washington, DC
General background on European Union embargoes
Arms embargoes fall within the sanctions or restrictive measures
imposed by the European Union against third countries. In general, EU
embargoes are either adopted to implement U.N. Security Council
resolutions acting under Chapter VII, or are ``autonomous.'' In the
latter case, embargoes are legally founded in a specific provision of
the treaties establishing the European Union. EU members have full
jurisdiction to decide on imposing arms trade restrictions.\1\ Prior to
1992, decisions on embargoes were made by the member states through an
informal political process, the so-called European Political
Cooperation.\2\ In several instances, member states convened as a body,
the European Council, adopted declarations to impose embargoes.\3\
Within such a context, the embargo on China was imposed in 1989, by the
then twelve members of the European Community, the EU's precursor. The
objective was to introduce arms trade restrictions against the regime
in China in reaction to the killing of demonstrators in Tiananmen
Square.
---------------------------------------------------------------------------
\1\ Article 296 of the Treaty Establishing the European Community.
Available at [http://europa.eu.int/eurlex/lex/en/treaties/index.htm].
\2\ It refers to the informal network of communication and
cooperation on foreign policy issues among the governments of the EC
Member states, between the period of 1970-1992.
\3\ External Relations, Common Foreign & Security Policy (CFSP),
Sanctions. Available at: [http://europa.eu.int/comm/external_relations/
sfcp/sanctions].
---------------------------------------------------------------------------
The introduction of the Common Foreign and Security Policy (CFSP)
by the Treaty on European Union (Maastricht Treaty), effective in
November 1993, altered the procedural basis for EU embargoes. Decisions
to impose an embargo still require unanimity among EU member states,
but such decisions are now based on Common Positions, rather than
declarations.\4\ Often, implementing regulations are also adopted.
Members are required to conform with the provisions or regulations and
Common Positions. Both instruments contain a detailed description of
the type of material covered as well as the terms and conditions of
implementation by the member states. Arms embargoes are also subject to
EU standards on arms exports, such as the 1998 Code of Conduct on Arms
Exports (hereafter the EU Code). Consequently, in the implementation of
the arms embargo on China, EU members are expected not only to abide by
the restrictions on arms trade on China but also with the EU
requirements on arms exports. Ultimately, what a given embargo entails
may be viewed differently by different member states. And, as a
political statement by the European Union, the EU Code on Arms Exports
is not legally binding on the EU member states.
---------------------------------------------------------------------------
\4\ Decisions are made based on articles 12 and 15 of the Treaty on
European Union. Available at [http://europa.eu.int/eurlex/lex/en/
treaties/index.htm].
---------------------------------------------------------------------------
European Union's arms embargo on China
On June 27, 1989 the European Council, convened in Madrid, agreed
to impose an arms embargo on China. The entire text of the embargo,
which is in the form of a political declaration, is rather brief. In
the first two paragraphs, it condemns the repression in China and
requests that the Chinese authorities cease executions and respect
human rights. The fourth paragraph contains the measures agreed by the
members states. These include the suspension of military cooperation
and high-level contacts, reduction of cultural, scientific and
technical cooperation programs and prolongation of visas to Chinese
students. The specific wording of the arms restrictions on China calls
for: ``. . . interruption by the Member States of the Community of
military cooperation and an embargo on trade in arms with China.'' \5\
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\5\ Conclusions of the European Council, adopted in Madrid on June
27, 1989, available at [http://www.eurunion.org/legislat/
Sanctions.htm#China]. See text in Appendix 3.
---------------------------------------------------------------------------
The declaration does not clarify the meaning of the term ``military
cooperation'' nor does it contain a list of arms that come within the
scope of the phrase ``trade in arms.'' Neither does it contain
exceptions or review clauses. By contrast, other EU embargoes imposed
later in the CFSP context are more elaborate and specific in their
scope and coverage. For instance, the Burma/Myanmar embargo, which was
first adopted in 1991, has been updated and revised a number of times
due to the lack of progress in democratization and continuous violation
of human rights, and appears as a Common Position, which is binding. It
contains, inter alia, a ban on technical assistance related to military
activities and the provision, maintenance and use of weapons and
ammunition, paramilitary equipment and spare parts.\6\
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\6\ Common Position 2004/423/CFSP and Council Regulation (EC) No.
798/2004 Renewing the Restrictive Measures in Respect of Burma/Myanmar
and repealing Regulation No. 1081/2000.
---------------------------------------------------------------------------
The arms embargo against China has not been interpreted uniformly
by the EU members since it was imposed. This has been attributed to
several factors, including lack of specificity in the political
declaration, absence of a legally binding document, such as a Common
Position, as is the case with subsequent embargoes imposed on other
countries and, more importantly, the existing loopholes and weak points
in the EU arms control system. For instance, the UK interpreted the
embargo in a narrow manner, to include the following items: lethal
weapons such as machine guns, large-caliber weapons, bombs, torpedoes
and missiles; specially designed components of the above, and
ammunition; military aircraft and helicopters, vessels of war, armored
fighting vehicles and other weapons platforms; and equipment which
might be used for internal repression.\7\ The French have interpreted
the embargo similarly.\8\
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\7\ Robin Niblett, The United States, the European Union, and
Lifting the Arms Embargo on China, 10 EURO-FOCUS No. 3 (Sept. 30,
2004). Center for Strategic and International Studies. See also:
Amnesty International. Undermining Global Security: The European Union
Exports, at [http://web.amnesty.org/library/index/engact300032004].
\8\ EU arms embargo on China. [http://projects.sipri.se/expcon/
euframe/euchiemb.htm].
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U.S. Arms Export Control System
The United States, for its part, has a long established legal
framework for reviewing and determining which nations will be permitted
to obtain defense articles, defense services, and related military
technology from it. The principal U.S. statute that governs the sale
and transfer of defense articles is the Arms Export Control Act (AECA),
P.L. 90-629 (22 U.S.C. 2751 et. seq.).\9\ Under the structure of the
AECA, the United States government reviews applications for possible
arms sales. These sales can be made through the government-to-
government Foreign Military Sales (FMS) program or through the direct
commercial sales (DCS) process. The DCS process is administered by the
Directorate of Defense Trade Controls (DDTC) in the State Department's
Bureau of Politico-Military Affairs which reviews and grants or denies
licences for arms exports to companies who seek to sell their defense
products directly to the foreign clients. Once the President has
determined that an arms sale or transfer should be made to a foreign
recipient through either of the two processes noted above, he submits
detailed information about a prospective sale in a formal report and
notification to the Congress for its review, when the dollar values of
the proposed sale exceed a specific reporting threshold. Should
Congress disagree with such a Presidential arm sale proposal, it can
nullify it by passing and obtaining enactment of a joint resolution of
disapproval.\10\
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\9\ The key regulations promulgated pursuant to the authorities
granted by the Arms Export Control Act which set out the totality of
items covered by the (AECA) and all of the pertinent procedures
regulating all aspects of U.S. arms export control and rules are the
International Traffic in Arms Regulations (ITAR) found at 22 CFR
Subchapter M 120-130. The United States Munitions List is found at 22
CFR.
\10\ Current reporting thresholds for FMS and DCS sales that carry
the potential for Congressional rejection by joint resolution are: $14
million for sales of major defense equipment; $50 million for defense
articles or services; and $200 million for any design and construction
services. Section 36 (b) and (c), AECA (22 U.S.C. 2776(b) and 22 U.S.C.
2776(c). The statutory authority of the President to promulgate
regulations with respect to exports of defense articles and defense
services was delegated to the Secretary of State by Executive Order
11958, as amended. The International Traffic in Arms Regulations (ITAR)
implements that authority. Title 22 CFR, section 120.1.
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EU Arms Export Control System
In the case of European Union (EU) member states, their arms
exports licensing process is based on the pertinent laws of each member
state. They are also regulated by the following instruments: (1) The
1998 European Code of Conduct on Arms Exports, a non-binding
instrument, which lays down minimum standards to be applied on export
licenses \11\; (2) Regulation (EC) No. 1334/2000 setting up a Community
Regime for the Control of Exports of dual-use items and technology
\12\; and (3) Common Position 2003/468/CFSP on the Control of Arms
Brokering).\13\ The EU Code of Conduct, analyzed in detail below,
establishes eight criteria to be applied by EU members on the exports
of conventional arms, including software and technology.\14\ A Common
List of Military Equipment was agreed upon in 2000 and updated
recently.\15\ In general, arms embargoes, unless specific guidance is
otherwise provided, cover at least all the items included in the Common
List.\16\ Regulation No. 1334/2000 as amended (whose scope extends to
any items that could be used for civilian and military purposes) is
directly applicable to the member states. Under its provisions, member
states grant authorizations for exports, called Community general
export authorization (CGE) of dual-use items.
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\11\ Adopted by the Council of the European Union on June 8, 1998.
\12\ 2000 O.J. (L159) 1.
\13\ 2003 O.J. (L156) 79.
\14\ Article XXI of GATT allows the imposition of trade
restrictions on arms exports and imports and military equipment and
those imposed by the U.N. Charter VII resolutions.
\15\ List included in the Council Declaration of June 13, 2000. It
was issued on the occasion of the adoption of the common list of
military equipment covered by the EU Code of Conduct on Arms Exports,
2000 O.J. (C191).
\16\ See Guidelines on Implementation and Evaluation of Restrictive
Measures (Sanctions) in the Framework of the EU Common Foreign and
Security Policy, at 17, available at EU Council Website, CFSP Section.
---------------------------------------------------------------------------
Such authorizations are valid throughout the Community, subject to
certain specific cases for which consultation is needed among EU
members prior to granting or denying an authorization. The items and
technology listed in Annexes I, II and IV of the Regulation are based
on the lists prepared by the international export control regimes. The
Regulation includes a ``catch-all'' clause which allows controls on
goods not included in the Annex of the Regulation. Under this clause,
EU members have the discretion to impose or not to impose controls on
exports and technology not listed in the Regulation. The objective of
Common Position, 2003/468/CFSP, is to control arms brokering \17\ in
order to prevent circumvention of U.N., EU, or Organization for
Security and Co-Operation in Europe (OCSE) embargoes on arms exports
and the criteria established in the EU Code. Under its provisions,
Member states are urged to put in place legal norms for lawful
brokering activities, including obtaining a written authorization prior
to engaging in arms brokering and to keep records for at least 10
years.\18\
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\17\ Regarding arms brokering, the Wassenaar Arrangement should be
noted. In December 2003, a group of conventional arms exporting Member
states agreed to establish national legislation to control the
activities of those engaged in the brokering of conventional arms.
[http://www.wassenaar.org/docs/]; See EU Common Position 2003/468/CFSP,
adopted June 8, 1998 by the Council of the European Union.
\18\ 2003 O.J. (L156) 79.
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European Union Code of Conduct on arms exports
The European Union (EU) Code of Conduct on Arms Exports was adopted
on June 8, 1998, during the Presidency of the United Kingdom.\19\ The
EU Code sets up eight criteria for the export of conventional arms and
a denial notification procedure obligating EU member states to consult
on possible undercutting arms sales one EU state might make even though
another EU state has chosen not to make a comparable arms export. Under
this procedure, member states are required to transmit through
diplomatic channels information on licenses refused and reasons for the
denial. Thus, before a member state authorizes a license which has been
refused by another member state for the same transaction, it is
necessary to consult the state that rejected the license in the first
place. If the member state decides to issue the license, it must inform
the state that refused to grant authorization.\20\
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\19\ The full text of the European Union Code of Conduct on Arms
Exports is in Appendix 1.
\20\ See Fourth Annual Report According to Operative Provision 8 of
the European Union Code of Conduct on Arms Exports, 2002 O.J. (C319) 1.
---------------------------------------------------------------------------
The EU Code's eight criteria, which are to be utilized by EU
members when reviewing license requests and making decisions whether or
not to make an arms export, can be briefly summarized as follows:
(1) Consistency of export with the exporter's international
commitments arising from U.N., EU, or OSCE arms embargoes;
(2) Risk that export would be used for internal repression or
where the recipient country has engaged in serious violations
of human rights;
(3) Risk that export would provoke or prolong armed
conflicts;
(4) Risk of recipient using export to undermine regional
peace and security;
(5) Effect of export on defense and national security
interests of friends and allies;
(6) Commitment of purchaser to fight terrorism and uphold
international law;
(7) Risk of diversion to third parties or to a terrorist
organization;
(8) Risk that export would undermine the sustainable
development of the recipient country.
It is important to emphasize that these eight criteria, and the EU
Code on Arms Exports in its entirety, are political statements by the
European Union, and not legally binding on the member states of the EU,
although the Code is supposed to represent a moral imperative that EU
member states are expected to uphold and enforce. Nevertheless, no
matter how strong the language of purpose and intent contained in the
Code's eight Criteria is, the 12 Operative Provisions of the EU Code--
the sections of the Code which set out the manner in which the Code is
to be carried out--contain significant loopholes which militate against
it being a strong regime, in its current form, for the control of
conventional arms exports from EU member states. This circumstance is
illustrated by the following examples:
1. While each EU member state is to review export license
applications made to it on a ``case-by-case basis'' against the eight
specific criteria in the EU Code, Operative Provision 3 of the Code
expressly states that ``The decision to transfer or deny the transfer
of any item of military equipment will remain at the national
discretion of each Member State.'' Thus, each EU member state is free
to make an arms sale based on its own determination regarding whether
it is appropriate or not under the Code.\21\
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\21\ Operative provision 6 of the EU Code states that the criteria
in the Code and the consultation procedure provided for in the Code
shall apply to ``dual-use goods as specified in Annex 1 of Council
Decision 94/942/CFSP as amended, where there are grounds for believing
that the end-user of such goods will be the armed forces or internal
security forces or similar entities in the recipient country.'' As with
sales of military equipment, the decision to grant or not grant a
license for the sale of ``dual-use'' equipment is left to each EU
nation to decide on its own.
---------------------------------------------------------------------------
2. Operative Provision 10 provides additional guidance to member
states in application of the EU Code. It states: ``It is recognized
that Member States, where appropriate, may also take into account the
effect of proposed exports on their economic, social, commercial and
industrial interests, but that these factors will not affect the
application of the above criteria.'' A literal reading of that sentence
could mean that those who adopted the EU Code recognized that national
economic or commercial interests would weigh importantly in the
decision-making process regarding any given arms sale, and may even
trump the larger stated EU-wide interest in restricting problematic
arms exports. Yet in the same sentence the provision effectively states
that while national economic self-interest may compel a member state to
sell, that state is expected not to do so to remain true to the
principles of the EU Code.
3. A major oversight mechanism within the EU Code is Operative
Provision 8, which requires that a confidential annual report is to be
circulated by each EU member state to the other EU states dealing with
its defense exports and its own implementation of the Code. These
reports are to be discussed at an annual meeting of the member states
where the operation of the EU Code is reviewed, and any
``improvements'' to it can be recommended to the EU Council.
Subsequently, a public report is produced based on the submissions of
individual EU members. However, the complete details of actual arms
exports made by EU states are not set out in this public document,
although the published annual reports made pursuant to Operative
Provision 8 of the Code do provide values of arms export licenses
issued, and values of deliveries made, if available, by the exporting
country. A supplier list is also provided, giving a total of sales
denials made, but not what specific weapon sale was denied, nor to
whom. Individual states are free to give as much or as little detail in
their national reports as they choose. Most have taken a minimalist
approach. Furthermore, individual states have different arms trade
licensing, data collecting and reporting practices, thus calling into
question the accuracy of some of the data provided in the annual public
report. In the most recent EU annual report on the Code, the Sixth,
covering calendar year 2003, categories of military systems are
indicated in the data tables. Yet this standardized reporting is still
not universal among member states, given the varied export licensing
systems and practices individual countries currently employ.\22\
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\22\ For details of individual EU member state arms data reporting
practices see generally: Sibylle Bauer and Mark Bromley. The European
Union Code of Conduct on Arms Exports: Improving the Annual Report.
SIPRI Policy Paper No. 8. November, 2004. Stockholm International Peace
Research Institute, found at [http://www.sipri.org/contents/armstrad/
PP8].
---------------------------------------------------------------------------
Arms exports authorized for China by European Union members
The European Union has published official documents which provide
general data regarding the total values of EU member states' arms
exports licenses to China. Some countries provide the total values of
actual exports. There is no uniformity in this reporting across the
membership of the EU. As noted above, these annual reports are made
pursuant to Operative Provision 8 of the EU Code. The most recent two
reports provide data for calendar years 2002 and 2003 (the Fifth and
Sixth reports respectively). What follows are the data from those
reports for arms export licenses for China as approved by named EU
countries in rank order of their license values, together with the
total license values of the European Union as a whole. These data show
that despite an embargo on arms trade with China since 1989, because
each EU member state can, and has, interpreted the mandate of the
embargo differently, some sales of military articles and services have,
nonetheless, been made. \23\
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\23\ 2003 O.J. December 31, 2003 (C320) 9, 14, 30, 42. The Sixth
report is found at Official Journal C316, December 21, 2004, pp. 001-
215.
CY2002: Total value of export licenses approved for China (expressed in
Euros):
France--105,431,246
United Kingdom--79,500,000
Italy--22,836,976
Austria--2,025,925
All European Union countries--209,794,157
CY2003: Total value of export licenses approved for China (expressed in
Euros):
France--171,530,641
Italy--127,128,192
United Kingdom--112,455,000
Czech Republic--3,610,819
Germany--1,096,261
All European Union countries--415,820,913
In the Sixth annual report, made in accordance with Operative
Provision 8, the EU for the first time breaks down the export data by
EU Common Military List category.\24\ So, for those states whose
licensing systems categorize their arms export licenses in detail, it
is possible to get a sense of what general types of military equipment
are being licensed. These data do not provide information on EU
members' transactions involving dual-use equipment and items--and there
is no publicly available official source that provides details on such
transactions. This EU report does cover the broad spectrum of military
equipment licensed for export by the European Union of EU Common
Military List categories. (See Appendix 2 for a detailed descriptive
summary of these EU Military List categories.) This descriptive list
uses an abbreviation scheme whereby a number is attached to a specific
category of military equipment, and this number/category is given in
the license data table to indicate the value of licenses granted for
sales of that specific category. For example, ML10 is: `` `Aircraft,'
unmanned airborne vehicles, aero-engines and `aircraft' equipment,
related equipment and components, specially designed or modified for
military use.''
---------------------------------------------------------------------------
\24\ Ibid.
---------------------------------------------------------------------------
The United Kingdom provides no detailed breakdown of its licenses
in the Sixth report since the way its standard export licenses are
valued in its licensing system currently preclude this. The same is
true for Italy, and the Czech Republic. However, France and Germany are
able to break down the categories of their licenses for purposes of the
EU report. The data in the report indicate that the largest share of
French license approvals for China in 2003 were in categories ML11--
electronic military equipment (98.5 million Euros), ML10--aircraft and
related equipment (45.4 million Euros), and ML15--imaging or
countermeasure military equipment (24.1 million Euros). In the case of
Germany, its largest share of license approvals for China in 2003 were
in categories ML14--specialized military training equipment or
simulators (528 thousand Euros), ML11--electronic military equipment
(433.1 thousand Euros), and ML21--software for items controlled in the
EU Common Military List (134.4 million Euros).
Thus, most of the arms exports authorized for China by EU members
have been made by France, the United Kingdom and Italy. The Czech
Republic, Austria, and Germany granted substantially smaller valued
licence approvals.
U.S. Arms Export Control Act retransfer authorities and obligations
The Arms Export Control Act (AECA) sets out a number of conditions
and obligations that foreign purchasers of U.S. defense articles,
services, and military technology must agree to prior to being
permitted to purchase such items from the United States. Among these
obligations is the signing of an agreement that prohibits, among other
things, the subsequent re-transfer of such items to another nation
without first receiving the consent of the United States government to
do so, by obtaining the express approval of the President of the United
States. These re-transfer authorities and obligations are discussed in
detail below.
Section 3(a) of the U.S. Arms Export Control Act (AECA) contains an
express obligation that for any country to be eligible to purchase U.S.
defense articles and services or to enter into a cooperative project as
defined in the AECA, that country first: ``shall have agreed not to
transfer title to, or possession of, any defense article or related
training or other defense service so furnished to it, or produced in a
cooperative project (as defined in section 27 of this Act), to anyone
not an officer, employee, or agent of that country or international
organization (or the North Atlantic Treaty Organization or the
specified member countries (other than the United States) in the case
of a cooperative project) and not to use or permit the use of such
article or related training or other defense service for purposes other
than those for which furnished unless the consent of the President has
first been obtained.'' Section 3(a) further states that: ``In
considering a request for approval of any transfer of any weapon,
weapons system, munitions, aircraft, military boat, military vessel, or
other implement of war to another country, the President shall not give
his consent under paragraph (2) to the transfer unless the United
States itself would transfer the defense article under consideration to
that country.'' \25\
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\25\ 22 U.S.C. 2753(a)(2). This obligation is also contained in the
International Traffic in Arms Regulations (ITAR). 22 CFR Section
123.10.
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Should any nation violate their agreement with the United States,
signed at the time U.S. munitions list items are sold, by not obtaining
the prior consent of the President before retransferring them, the
penalties can be severe. If the country is receiving credits or loan
guarantees from the United States in connection with financing a
weapons purchase, those credits or loan guarantees can be terminated.
Should a non-financed cash purchase be involved, the nation deemed to
have violated its agreement with the United States can be made
ineligible for future purchases from the U.S. Regardless of whether a
sale has been financed or not, any deliveries to the foreign buyer
pursuant to previous sales can be terminated.\26\ Under this provision
of the Arms Export Control Act, the President has the authority to
determine that a violation has occurred and impose a penalty provided
for by the AECA as he deems appropriate to the given situation. Any
such determination of a violation by the President must be reported to
the Congress to take effect. The President is also required to report
to Congress ``promptly upon the receipt of information'' that a section
3 violation ``may have occurred.'' Congress, can, on its own
initiative, determine that a section 3 violation has occurred and
impose a penalty it deems appropriate by passing and obtaining
enactment of a joint resolution to that end.
---------------------------------------------------------------------------
\26\ 22 U.S.C. 2753(c)(1).
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The authorities in the Arms Export Control Act noted above are
especially pertinent to the question of ensuring that U.S. defense
articles and services and the technical information associated with
them are not re-transferred to China by EU member states who have
purchased or may purchase such items from the United States in the
future. Should any EU member state transfer any U.S.-supplied defense
articles, services or the technical information associated with them to
China, without first obtaining the consent to do so from the President,
they would be subjecting themselves to the possible imposition of the
penalties discussed above. In this context, the United States has
strong, existing, authority to discourage re-transfer of U.S. defense
articles, services and technology to China within the existing AECA
framework.
The AECA framework, however, does not apply to arms sales to China
of indigenously developed and produced military equipment of EU member
states. Controls of sales or transfers of that military equipment must
be achieved through application of the national arms export control
statutes of the individual EU nations, the EU Code of Conduct on Arms
Exports, or EU regulations regarding arms exports. As matters currently
stand a formal EU decision is not expected until May or June 2005.
Since the European Council has already stated its ``political will to
continue to work towards lifting the arms embargo,'' the prospects of
it doing so when the issue is formally addressed are high.\27\ What
remains to be set out in detail, should the EU lift the Chinese arms
embargo, is what will be the nature and scope of the revised EU Code of
Conduct on Arms Exports, and the new instrument establishing measures
to address EU arms exports to post-embargo countries--what the EU
refers to as the ``Toolbox.'' The details of any such changes to the
Code of Conduct or the central elements of the ``Toolbox'' will not be
known until the EU chooses to announce them. Private consultations
among EU members on these matters are continuing, but are likely to be
completed before final EU action on lifting the arms embargo on China
takes place. Should the European Union strengthen the EU Code of
Conduct on Arms Exports, and utilize effective instruments to prevent
worrisome arms exports to China in a post-embargo period, prospects for
reaching a successful accommodation in U.S.-EU relations over this
issue could be notably enhanced.
---------------------------------------------------------------------------
\27\ Council of the European Union, 16/17 December 2004. Presidency
Conclusions. 16238/1/04 REV 1, p. 19. Published February 1, 2005.
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______
CRS Report for Congress--U.S. Defense Articles and Services Supplied to
Foreign Recipients: Restrictions on Their Use
SUMMARY
In accordance with United States law, the U.S. Government places
conditions on the use of defense articles and defense services
transferred by it to foreign recipients. Violation of these conditions
can lead to the suspension of deliveries or termination of the
contracts for such defense items, among other things. On occasion, the
President has indicated that such violations by foreign countries
``may'' have occurred, raising the prospect that termination of
deliveries to or imposition of other penalties on such nations might
take place. Section 3(a) of the Arms Export Control Act (AECA) sets the
general standards for countries or international organizations to be
eligible to receive United States defense articles and defense services
provided under this act. It also sets express conditions on the uses to
which these defense items may be put. Section 4 of the Arms Export
Control Act states that U.S. defense articles and defense services
shall be sold to friendly countries ``solely'' for use in ``internal
security,'' for use in ``legitimate self-defense,'' to enable the
recipient to participate in ``regional or collective arrangements or
measures consistent with the Charter of the United Nations,'' to enable
the recipient to participate in ``collective measures requested by the
United Nations for the purpose of maintaining or restoring
international peace and security,'' and to enable the foreign military
forces ``in less developed countries to construct public works and to
engage in other activities helpful to the economic and social
development of such friendly countries.''
Section 3(c)(2) of the Arms Export Control Act requires the
President to report promptly to the Congress upon the receipt of
information that a ``substantial violation'' described in section
3(c)(1) of the AECA ``may have occurred.'' This Presidential report
need not reach any conclusion regarding the possible violation or
provide any particular data other than that necessary to illustrate
that the President has received information indicating a specific
country may have engaged in a ``substantial violation'' of an
applicable agreement with the United States that governs the sale of
U.S. defense articles or services. Should the President determine and
report in writing to Congress or if Congress determines through
enactment of a joint resolution pursuant to section 3(c)(3)(A) of the
Arms Export Control Act that a ``substantial violation'' by a foreign
country of an applicable agreement governing an arms sale has occurred,
then that country becomes ineligible for further U.S. military sales
under the AECA. This action would terminate provision of credits, loan
guarantees, cash sales, and deliveries pursuant to previous sales.
Since the major revision of U.S. arms export law in 1976, neither the
President nor the Congress have actually determined that a violation
did occur thus necessitating the termination of deliveries or sales or
other penalties set out in section 3 of the Arms Export Control Act.
The United States Government has other options under the Arms Export
Control Act to prevent transfer of defense articles and services for
which valid contracts exist short of finding a foreign country in
violation of an applicable agreement with the United States. These
options include suspension of deliveries of defense items already
ordered and refusal to allow new arms orders. The United States has
utilized at least one such option against Argentina, Israel, Indonesia,
and Turkey.
INTRODUCTION
In accordance with United States law, the U.S. Government places
conditions on the use of defense articles and defense services
transferred by it to foreign recipients. Violation of these conditions
can lead to the suspension of deliveries or termination of the
contracts for such defense items, among other things. On occasion, the
President has indicated that such violations by foreign countries
``may'' have occurred, raising the prospect that termination of
deliveries to or imposition of other penalties on such nations might
take place. However, since the major revision of U.S. arms export law
in 1976, neither the President nor the Congress have actually
determined that a ``substantial violation'' did occur thus
necessitating the termination of deliveries or sales or other penalties
set out in section 3 of the Arms Export Control Act. This report
reviews the pertinent sections of U.S. law governing permissible uses
of U.S.-origin defense equipment and services by foreign nations,
Presidential and congressional options for dealing with such
violations, and illustrative actions previously taken by the United
States in response to possible violations.
Arms Export Control Act (AECA): Basic Conditions on Use of U.S.-
Supplied Defense Articles and Services
The Arms Export Control Act (AECA), as amended, authorizes the
transfer by sale or lease of United States origin defense articles and
services through the government-to-government foreign military sales
(FMS) program or through the licensed commercial sales process.\1\
Section 3(a) of the Arms Export Control Act sets the general standards
for countries or international organizations to be eligible to receive
United States defense articles and defense services provided under this
act. It also sets express conditions on the uses to which these defense
items may be put. Section 3(a)(2) of the AECA specifically provides
that to be eligible to purchase defense articles and services from the
United States:
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\1\ The International Security Assistance and Arms Export Control
Act of 1976 (P.L. 94-329), enacted on June 30, 1976, changed the title
of the Foreign Military Sales Act (FMSA) of 1968 (P.L. 90-629), as
amended, to its present one--the Arms Export Control Act. (22 U.S.C.
2751 et. seq.) All references to the predecessor statute, the FMSA, are
legally deemed to be references to the AECA.
. . . [a] country or international organization shall have
agreed not . . . to use or permit the use of [a defense]
article or related training or other defense service for
purposes other than those for which furnished, unless the
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consent of the President has first been obtained. . . .
Section 3(c) of the Arms Export Control Act further sets out the
circumstances under which a nation may lose (a) its U.S. Foreign
Military Financing, (b) its loan guarantees for purchases of U.S.
defense articles and services, (c) its rights to have previously
purchased U.S. defense articles or services delivered, (d) its rights
to have previously made agreements for the sale of U.S. defense
articles or services carried out. Section 3(c)(1)(A) of the Arms Export
Control Act stipulates, in part, that:
No credits (including participations in credits) may be
issued and no guarantees may be extended for any foreign
country under this Act as hereinafter provided, if such country
uses defense articles or defense services furnished under this
Act, or any predecessor Act, in substantial violation (either
in terms of the quantities or in terms of the gravity of the
consequences regardless of the quantities involved) of any
agreement entered into pursuant to any such Act \2\ . . . by
using such articles or services for a purpose not authorized
under section 4 or, if such agreement provides that such
articles and services may only be used for purposes more
limited than those authorized under section 4 for a purpose not
authorized under such agreement. . . .
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\2\ Emphasis added. The statute makes clear that any sanctions that
may be applied are for ``substantial violation'' of an agreement
entered into with the United States pursuant to the AECA or any
predecessor Act, and not for a violation of the AECA itself or its
predecessors.
Section 3(c)(1)(B) of the AECA adds that, under the above conditions:
``[n]o cash sales or deliveries pursuant to previous sales may be made.
. . .'' Section 3(g) of the Arms Export Control Act, enacted in
---------------------------------------------------------------------------
November 1999, further requires that:
Any agreement for the sale or lease of any article on the
United States Munitions List entered into by the United States
Government after the date of enactment of this subsection
[November 29, 1999 \3\] shall state that the United States
Government retains the right to verify credible reports that
such article has been used for a purpose not authorized under
section 4 or, if such agreement provides that such article may
only be used for purposes more limited than those authorized
under section 4, for a purpose not authorized under such
agreement.
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\3\ Added by Section 1225 of the Security Assistance Act of 1999
(Title XII of H.R. 3427), enacted by reference in section 1000(a)(7) of
P.L. 106-113; 113 Stat. 1526.
Purposes for Which Military Sales by the United States Are
Authorized (Section 4 of the Arms Export Control Act). The purposes for
which sales of defense articles and services by the United States are
authorized are detailed in section 4 of the Arms Export Control Act.
This section of the act states that defense articles and defense
---------------------------------------------------------------------------
services shall be sold to friendly countries ``solely for'':
``Internal security'';
``Legitimate self-defense'';
Enabling the recipient to participate in ``regional or
collective arrangements or measures consistent with the Charter
of the United Nations'';
Enabling the recipient to participate in ``collective
measures requested by the United Nations for the purpose of
maintaining or restoring international peace and security'';
Enabling the foreign military forces ``in less developed
countries to construct public works and to engage in other
activities helpful to the economic and social development of
such friendly countries.''
It should be stressed that the Arms Export Control Act as amended, the
Foreign Assistance Act of 1961 as amended, and predecessor acts do not
define such critical terms as ``internal security'' and ``legitimate
self-defense.'' It remains for the President or the Congress, as the
case may be, to define the meaning of such terms as they may apply to
the question of a possible violation by a foreign country of an
applicable agreement governing the sale of U.S. defense articles or
defense services.
Presidential Report to Congress on Possible Violations. Section
3(c)(2) of the Arms Export Control Act requires the President to report
promptly to the Congress upon the receipt of information that a
``substantial violation'' described in section 3(c)(1) of the AECA
``may have occurred.'' This Presidential report need not reach any
conclusion regarding the possible violation or provide any particular
data other than that necessary to illustrate that the President has
received information indicating a specific country may have engaged in
a ``substantial violation'' of an applicable agreement with the United
States that governs the sale of U.S. defense articles or services.
Procedures for Making Foreign Countries Ineligible for Receipt of
U.S. Defense Articles and Services. Should the President determine and
report in writing to Congress or if Congress determines by joint
resolution pursuant to section 3(c)(3)(A) of the Arms Export Control
Act that a ``substantial violation'' by a foreign country of an
applicable agreement governing an arms sale has occurred, then that
country becomes ineligible for further U.S. military sales under the
AECA. This action would terminate provision of credits, loan
guarantees, cash sales, and deliveries pursuant to previous sales. The
President could, under section 3(c)(3)(B) of the AECA, continue to
permit ``cash sales and deliveries pursuant to previous sales'' by
certifying in writing to Congress that termination of such sales and
deliveries would have a ``significant adverse impact on United States
security.'' Such a Presidential waiver could not be invoked, however,
if Congress, under section 3(c)(3)(A), had adopted or were to adopt a
joint resolution finding that country ineligible. The President retains
the prerogative of vetoing any such joint resolution. Congress would
then have to override the veto in order to impose its will. Congress
also has the option of adopting regular legislation imposing varying
degrees of penalties upon any country for violations of the conditions
of an applicable agreement regarding use of U.S.-supplied defense
equipment. Such legislation would also be subject to the veto
process.\4\
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\4\ It should be noted that the obligations, restrictions, and
possible penalties set out in section 3 of the Arms Export Control Act
also apply to the re-transfer by foreign recipients of U.S. supplied
defense articles, defense services, and related technical data to
another nation. Should such a re-transfer occur, in the absence of
prior approval by the President of the United States to do so, then the
nation making such a transfer could be determined to be in violation of
its agreement with the United States not to take such an action without
prior consent from the U.S., and therefore could be subject to the
penalties provided for such a violation set out in section 3 of the
AECA. See section 3(a)(2) of the AECA where the retransfer prior to
consent obligation is set out (22 U.S.C. 2753(a)(2)).
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Restoration of Eligibility. Once a country is made ineligible for
sales or deliveries under the Arms Export Control Act provisions, it
can regain its eligibility only when: (1) Under section 3(c)(4) of the
act, the President ``determines that the violation has ceased'' (the
violation which led to the status of ineligibility in the first place),
and (2) the country involved ``has given assurances satisfactory to the
President that such violation will not recur.'' Alternatively, Congress
could pass regular legislation that would exempt the particular country
from specific sanctions imposed through AECA procedures, although that
legislation would be subject to a Presidential veto.
Suspension or Cancellation of Contracts and/or Deliveries by the
United States. It should be noted that the United States has additional
options to prevent transfer of defense articles and services for which
valid contracts exist short of finding a foreign country in violation
of an applicable agreement with the United States. Authority for
suspension of deliveries or defense items or cancellation of military
sales contracts is found in sections 2(b), 42(e)(1) and 42(e)(2) of the
AECA. Section 2(b) of the Arms Export Control Act permits the Secretary
of State, under the President's direction, to, among other things,
determine ``whether there shall be delivery or other performance''
regarding sales or exports under the AECA in order that ``the foreign
policy of the United States is best served thereby.''
Section 42(e)(1) of the Arms Export Control Act states that:
Each contract for sale entered into under sections 21, 22, 29
and 30 of this Act, and each contract entered into under
section 27(d) of the Act, shall provide that such contract may
be canceled in whole or in part, or its execution suspended, by
the United States at any time under unusual or compelling
circumstances if the national interest so requires.
Section 42(e)(2)(A) of the Arms Export Control Act further states
that:
Each export license issued under section 38 of this Act shall
provide that such license may be revoked, suspended, or amended
by the Secretary of State, without prior notice, whenever the
Secretary deems such action to be advisable.
Thus, all government-to-government agreements or licensed commercial
contracts for the transfer of defense articles or defense services may
be halted, modified, or terminated by the Executive branch should it
determine it is appropriate to do so.
Use of this authority does not prejudice the larger question of
whether a ``substantial violation'' of an applicable agreement
governing use of U.S. arms did in fact occur. That question can still
be answered affirmatively or negatively, or left unanswered, depending
on how the President or the Congress chooses to deal with it. To date,
the President has never taken the next step and actually determined
that a violation did occur thus necessitating the termination of
deliveries or sales or other penalties set out in section 3 of the Arms
Export Control Act.
Illustrative Responses of the United States Government to Possible
Violations of Agreements on Use of U.S.-Provided Defense
Articles
Argentina. On April 30, 1982, Powell A. Moore, Assistant Secretary
of State for Congressional Relations, reported to Congress that the
President had determined that Argentina--through its use of U.S.-
supplied military equipment in its occupation of the Falkland Islands
(Islas Malvinas) on April 2, 1982--``may'' have substantially violated
the applicable agreements with the United States governing use of this
equipment. In his April 30 report, Assistant Secretary Moore noted that
in light of these circumstances the United States was ``suspending
until further notice all deliveries to Argentina of defense articles
and services for which commitments were made prior to October 1,
1978.'' Other restrictions on military aid to Argentina were already in
place. The Reagan Administration removed the suspension on September
24, 1982.
Israel. Questions raised regarding the use of U.S.-supplied
military equipment by Israel in Lebanon in June and July 1982, led the
Reagan Administration to determine on July 15, 1982, that Israel
``may'' have violated its July 23, 1952, Mutual Defense Assistance
Agreement with the United States (TIAS 2675). Concerns centered on
whether or not Israel had used U.S.-supplied anti-personnel cluster
bombs against civilian targets during its military operations in
Lebanon and the siege of Beirut.\5\ The pertinent segment of that 1952
agreement between Israel and the United States reads as follows:
---------------------------------------------------------------------------
\5\ See U.S. Congress. House. Committee on Foreign Affairs, The Use
of United States Supplied Military Equipment in Lebanon. Hearings
before the Committee on Foreign Affairs and its Subcommittees on
International Security and Scientific Affairs and on Europe and the
Middle East. 97th Congress, 2nd sess. July 15 and August 4, 1982. 68p.
These hearings were held in open and closed sessions.
The Government of Israel assures the United States Government
that such equipment, materials, or services as may be acquired
from the United States . . . are required for and will be used
solely to maintain its internal security, its legitimate self-
defense, or to permit it to participate in the defense of the
area of which it is a part, or in United Nations collective
security arrangements and measures, and that it will not
---------------------------------------------------------------------------
undertake any act of aggression against any other state.
It should be noted that none of the critical terms such as ``internal
security,'' ``legitimate self-defense,'' or ``act of aggression'' are
defined within this 1952 U.S.-Israeli agreement. The House Foreign
Affairs Committee held hearings on this issue in July and August 1982.
On July 19, 1982, the Reagan Administration announced that it would
prohibit new exports of cluster bombs to Israel. This prohibition was
lifted by the Reagan Administration in November 1988.\6\
---------------------------------------------------------------------------
\6\ Facts on File. Annual Yearbook 1982, p. 518; Associated Press,
July 19, 1982. Washington Post, December 7, 1988, p. A36; Associated
Press, December 6, 1988.
---------------------------------------------------------------------------
In light of the Israeli attack on the Iraqi nuclear reactor on June
7, 1981, Secretary of State Alexander M. Haig, Jr., reported to
Congress on June 10, 1981, that the Israeli use of American-supplied
military equipment in this raid ``may'' have constituted a substantial
violation of the applicable 1952 U.S.-Israeli agreement. As a
consequence--and pending review of the facts of the case--the President
chose to exercise the authority set forth in sections 2(b) and 42(e)(1)
of the Arms Export Control Act to suspend ``for the time being'' the
shipment of four F-16 aircraft that had been scheduled for delivery to
Israel. As the result of this decision, the subsequent delivery of 10
F-16 and 2 F-15 aircraft to Israel was also suspended. However, on
August 17, 1981, the Reagan Administration lifted its suspension on
deliveries to Israel and all of the planes were transferred.
On two other occasions--April 5, 1978, and August 7, 1979--the
Carter Administration chose to find that the Israelis ``may'' have
violated their 1952 agreement with the United States through the use of
American-origin military equipment in operations conducted in Lebanon.
However, the U.S. did not suspend or terminate any Israeli arms sales,
credits, or deliveries in either of these cases.
In two notable instances, questions concerning the improper use by
Israel of U.S. weapons were raised, but the President expressly
concluded that a violation of the agreement regarding use of U.S.
supplied equipment did not occur. On October 1, 1985, Israel used U.S.-
supplied aircraft to bomb Palestine Liberation Organization (PLO)
headquarters in Tunis, Tunisia. The Reagan Administration subsequently
stated that the Israeli raid was ``understandable as an expression of
self-defense,'' although the bombing itself ``cannot be condoned.'' On
July 14, 1976, following the Israeli rescue mission at Entebbe, Uganda
in early July 1976, the Department of State declared that Israel's use
of U.S.-supplied military equipment during that operation was in
accordance with the 1952 U.S.-Israeli agreement.
Indonesia and East Timor. Following the military intervention of
Indonesia in East Timor on December 7, 1975, the Ford Administration
initiated a ``policy review'' in connection with the U.S. military
assistance program with Indonesia. Because of the possible conflict
between the Indonesian use of U.S.-origin equipment in East Timor and
the provisions of U.S. law and U.S.-Indonesian bilateral agreements,
the Ford Administration placed a ``hold'' on the issuance of new
letters of offer (contracts) and Military Assistance Program (MAP)
orders to Indonesia. However, military equipment already in the
pipeline continued to be delivered to the Indonesians. The ``policy
review'' was completed in late May 1976. Military assistance and sales
resumed in July 1976. No formal finding of ``substantial violation'' of
applicable U.S.-Indonesian agreements involving use of U.S.-origin
military equipment, conditional or otherwise, was made by the
administration or by the Congress.
Turkey and the Congressionally-Imposed Embargo. In July 1974,
Turkey used U.S.-origin equipment during its intervention on Cyprus.
The President and Congress disagreed on whether Turkey had
``substantially violated'' the applicable 1947 agreement with the
United States governing the use of U.S.-supplied military equipment
during its Cyprus operations. the President independently suspended the
issuance of new Foreign Military Sales credits and guarantees and major
new cash sales for Turkey from late July until October 17, 1974. The
President did permit routine cash sales of spare parts and components
for items already purchased by Turkey during this same period. The
Congress imposed an embargo on military sales, credits, assistance, and
deliveries to Turkey with the enactment of H.J. Res. 1167 (the
Continuing Appropriations Resolution for FY75, P.L. 93-448). However,
section 6 of H.J. Res. 1167 gave the President the option to waive the
effect of the embargo until December 10, 1974. President Ford exercised
this waiver authority on October 17, 1974. On December 10, 1974, the
Turkish arms embargo went into effect.
Subsequently, the Foreign Assistance Act of 1974, enacted on
December 30, 1974, continued the Turkish embargo and made it part of
permanent law. Yet it also gave the President the option of temporarily
waiving the embargo's effect until February 5, 1975. President Ford
used this waiver to suspend the embargo from December 30, 1974, until
February 5, 1975, at which time the Turkish embargo was restored. On
October 6, 1975, President Ford signed into law P.L. 94-104, which
partially lifted the arms embargo on Turkey. Successive statutes
modified military aid and sales levels for Turkey while a partial
embargo remained in effect. Finally, on September 26, 1978, President
Carter signed into law P.L. 95-384, which authorized him to end the
arms embargo against Turkey. The President exercised this authority on
September 26, 1978.
______
CRS Report for Congress--European Union's Arms Control Regime and Arms
Exports to China: Background and Legal Analysis
SUMMARY
In recent months, discussions have been held within the European
Union (EU) on the question of lifting the embargo on arms exports to
the People's Republic of China that was imposed on China on June 27,
1989. The prospect that the EU would lift its embargo on arms exports
to China has led to a number of on-going discussions between EU member
states and the United States government, which strongly opposes such an
action at this time on human rights and security issues grounds. Key
nations within the European Union, particularly France and Germany,
strongly support lifting of the embargo. And, the United Kingdom has
advised the Bush Administration that it will also support lifting the
embargo when the subject is formally addressed by the EU, most likely
during the spring of 2005.
The Council of the EU has stated that if the arms embargo on China
were to be lifted, that action should not result in either a
quantitative or qualitative increase in EU arms exports to China. The
United Kingdom has argued that it believes that the European Union's
Code of Conduct on Arms Exports, while not legally binding on EU
members, with some enhancements, would provide a solid safeguard
against worrisome arms exports by EU states to the Chinese in the
future.
The President and senior members of the Bush Administration have
lobbied the European Union to keep the arms embargo on China in place.
Many Members of Congress share the Bush Administration's concerns about
an end to the EU arms embargo. On February 2, 2005, the House of
Representatives passed H. Res. 57, a resolution strongly urging the EU
not to lift the embargo, by a vote of 411-3. Other Congressional
actions on the issue may be taken.
This report provides detailed background and legal analysis of the
nature of the current European Union embargo on arms exports to China.
It also provides detailed background on the European Union's current
Code of Conduct on Arms Exports. A strengthened version of the Code
would be one of the control mechanisms that would remain should the EU
lift the embargo on arms exports to China. This report also gives
information on recent EU arms exports authorized for China. It further
summarizes U.S. concerns regarding the lifting of the arms embargo, and
notes the prospective timing of EU action on the embargo issue. This
report may be updated should events warrant.
INTRODUCTION
In recent months, discussions have been held within the European
Union (EU) on the question of lifting the embargo on arms exports to
the People's Republic of China that was imposed on China on June 27,
1989. Following the lead of the United States, the European Union took
this action in the wake of the June 4, 1989 crackdown on Chinese
citizens by the Chinese military in Tiananmen Square in Beijing and the
serious infringement of human rights in China that followed. The
prospect that the EU would lift its embargo on arms exports to China
has led to a number of on-going discussions between EU member states
and the United States. The United States government continues to
maintain its own arms embargo against China and the U.S. strongly
opposes lifting the EU embargo at this time on human rights and
security issues grounds. Key nations within the European Union,
particularly France and Germany, strongly support lifting of the
embargo. And, the United Kingdom has advised the Bush Administration
that it will also support lifting the embargo when the subject is
formally addressed by the EU, most likely during the early spring of
2005. All 25 members of the EU must agree before the arms embargo can
be lifted.\1\
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\1\ ``Germany: Schroeder Calls for EU to End China Arms Embargo,''
Dow Jones International News, December 6, 2004; ``France Reiterates
Support for End to China Arms Embargo,'' Agence France Presse, December
6, 2004; ``EU Arms Embargo on China Probably Lifted Within Six Months;
Britain,'' Associated Press, January 19, 2005; Barry Schweid,
``Britain's Straw, Rice Differ on China Arms,'' Associated Press,
January 24, 2005. The French Defense Minister, Michele Alliot-Marie,
has argued that lifting the EU arms embargo against China could be a
beneficial step because ``China is rapidly developing its industry, and
today our experts say in five years China could make exactly the same
arms that we have today. And they will do it if they cannot import. So
maybe if we sell them arms, they will not make them. And in five year's
time they will not have the technology to make them.'' Peter Spiegel
and John Thornhill, ``France Urges End to China Arms Embargo,''
Financial Times, February 15, 2005.
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The Chinese have been seeking a lifting of the arms embargo arguing
that it is discriminatory. They note that other nations deemed pariahs,
such as Sudan or North Korea, do not have such an embargo imposed on
them. The Chinese also view lifting of the embargo as an important
symbolic political act by the EU, as they see the embargo as a Cold War
era relic, and thus an impediment to better relations with European
Union members. France, Germany, and other EU members claim the embargo
hinders stronger EU political and economic relations with China. After
their December 16 and 17, 2004 meeting, EU leaders pledged to address
lifting the embargo.\2\ The Council of the EU noted that if the arms
embargo on China were to be lifted, that action should not result in
either a quantitative or qualitative increase in EU arms exports to
China.\3\ The United Kingdom has argued that it believes that the
European Union's Code of Conduct on Arms Exports, while not legally
binding, would, with some enhancements, provide a solid safeguard
against worrisome arms exports by EU states to the Chinese in the
future.\4\ Meanwhile, as the President and Bush Administration
officials have lobbied the European Union to keep the arms embargo on
China in place, many in Congress have also expressed strong concerns
and support for that position. On February 2, 2005, the House of
Representatives passed H. Res. 57, a resolution strongly urging the EU
not to lift the embargo, by a vote of 411-3. Other Congressional
actions on the issue may be taken.
---------------------------------------------------------------------------
\2\ Marcus Walker, Marc Champion and Scott Miller, ``EU Maintains
China Arms Embargo--Pressure to Lift Ban Grows as States Risk Defying
U.S. to Cultivate Economic Ties,'' Wall Street Journal Europe, December
9, 2004, p. A1; Daniel Dombey and Peter Spiegel, ``Why Europe Is Ready
to Lift Its Weapons Ban on China,'' Financial Times, February 9, 2005;
Mure Dickie, Guy Dinmore, Daniel Dombay, Kathrin Hille, Demetri
Sevastopulo and Peter Spiegel, ``The EU's Ban on Selling Military
Equipment to Beijing Lacks Credibility But Washington Believes Any
Change Would Be Irresponsible,'' Financial Times, February 10, 2005;
Peter Sparaco and Robert Wall, ``Chinese Checkers; Widening Business
Opportunities Drive EU's Review of China Arms Embargo,'' Aviation Week
& Space Technology, December 13, 2004, p. 37.
\3\ Council of the European Union, 16/17 December 2004. Presidency
Conclusions. 16238/1/04 REV 1, p. 19. Published February 1, 2005.
\4\ ``Straw Defends Lifting of China Arms Ban,'' Guardian
Unlimited, January 21, 2005; Daniel Dombey, ``EU Finalizes Plan to Lift
Arms Embargo on China,'' Financial Times, February 3, 2005, p. 4. Marc
Champion, ``EU Aims to Calm U.S. Arms Fears--Officials Say Likely End
to Sales Embargo on China Won't Increase Imports,'' Asian Wall Street
Journal, February 21, 2005, p. A1.
---------------------------------------------------------------------------
This report provides detailed background on the nature and history
of the current European Union embargo on arms exports to China. It also
provides detailed background on the European Union's current Code of
Conduct on Arms Exports. The EU plans on issuing a strengthened Code,
which would be one of the control mechanisms that would remain should
the EU lift the embargo on arms exports to China. This report also
gives information on the level of recent EU arms exports authorized for
China. It further summarizes U.S. concerns regarding the lifting of the
arms embargo, and notes the prospective timing of EU action on the
embargo issue.
General Background on European Union Embargoes
Arms embargoes fall within the sanctions or restrictive measures
imposed by the European Union against third countries. In general, EU
embargoes are either adopted to implement U.N. Security Council
resolutions acting under Chapter VII, or are ``autonomous.'' In the
latter case, embargoes are legally founded in a specific provision of
the treaties establishing the European Union. EU members have full
jurisdiction to decide on imposing arms trade restrictions.\5\ Prior to
1992, decisions on embargoes were made by the member states through an
informal political process, the so-called European Political
Cooperation.\6\ In several instances, member states convened as a body,
the European Council, adopted declarations to impose embargoes.\7\
Within such a context, the embargo on China was imposed in 1989, by the
then twelve members of the European community, the EU's precursor. The
objective was to introduce arms trade restrictions against the regime
in China in reaction to the killing of demonstrators in Tiananmen
Square.
---------------------------------------------------------------------------
\5\ Article 296 of the Treaty Establishing the European Community.
Available at [http://europa.eu.int/eur-lex/lex/en/treaties/index.htm].
\6\ It refers to the informal network of communication and
cooperation on foreign policy issues among the governments of the EC
Member states, between the period of 1970-1992.
\7\ External Relations, Common Foreign & Security Policy (CFSP),
Sanctions. Available at: [http://europa.eu.int/comm/external_relations/
sfcp/sanctions].
---------------------------------------------------------------------------
The introduction of the Common Foreign and Security Policy (CFSP)
by the Treaty on European Union (Maastricht Treaty), effective in
November 1993, altered the procedural basis for EU embargoes. Decisions
to impose an embargo still require unanimity among EU member states,
but such decisions are now based on Common Positions, rather than
declarations.\8\ Often, implementing regulations are also adopted.
Members are required to conform with the provisions or regulations and
Common Positions. Both instruments contain a detailed description of
the type of material covered as well as the terms and conditions of
implementation by the member states. Arms embargoes are also subject to
EU standards on arms exports, such as the 1998 Code of Conduct on Arms
Exports (hereafter the EU Code). Consequently, in the implementation of
the arms embargo on China, EU members are expected not only to abide by
the restrictions on arms trade on China but also with the EU
requirements on arms exports. Ultimately, what a given embargo entails
may be viewed differently by different member states. And, as a
political statement by the European Union, the EU Code on Arms Exports
is not legally binding on the EU member states.
---------------------------------------------------------------------------
\8\ Decisions are made based on articles 12 and 15 of the Treaty on
European Union. Available at [http://europa.eu.int/eurlex/lex/en/
treaties/index.htm].
---------------------------------------------------------------------------
European Union's Arms Embargo on China
On June 27, 1989 the European Council, convened in Madrid, agreed
to impose an arms embargo on China. The entire text of the embargo,
which is in the form of a political declaration, is rather brief. In
the first two paragraphs, it condemns the repression in China and
requests that the Chinese authorities cease executions and respect
human rights. The fourth paragraph contains the measures agreed by the
members states. These include the suspension of military cooperation
and high-level contacts, reduction of cultural, scientific and
technical cooperation programs and prolongation of visas to Chinese
students. The specific wording of the arms restrictions on China calls
for: ``. . . interruption by the Member States of the Community of
military cooperation and an embargo on trade in arms with China.'' \9\
---------------------------------------------------------------------------
\9\ Conclusions of the European Council, adopted in Madrid on June
27, 1989, available at [http://www.eurunion.org/legislat/
Sanctions.htm#China].
---------------------------------------------------------------------------
The declaration does not clarify the meaning of the term ``military
cooperation'' nor does it contain a list of arms that come within the
scope of the phrase ``trade in arms.'' Neither does it contain
exceptions or review clauses. By contrast, other EU embargoes imposed
later in the CFSP context are more elaborate and specific in their
scope and coverage. For instance, the Burma/Myanmar embargo, which was
first adopted in 1991, has been updated and revised a number of times
due to the lack of progress in democratization and continuous violation
of human rights, and appears as a Common Position, which is binding. It
contains, inter alia, a ban on technical assistance related to military
activities and the provision, maintenance and use of weapons and
ammunition, paramilitary equipment and spare parts.\10\
---------------------------------------------------------------------------
\10\ Common Position 2004/423/CFSP and Council Regulation (EC) No.
798/2004 Renewing the Restrictive Measures in Respect of Burma/Myanmar
and repealing Regulation No. 1081/2000.
---------------------------------------------------------------------------
The arms embargo against China has not been interpreted uniformly
by the EU members since it was imposed. This has been attributed to
several factors, including lack of specificity in the political
declaration, absence of a legally binding document, such as a Common
Position, as is the case with subsequent embargoes imposed on other
countries and, more importantly, the existing loopholes and weak points
in the EU arms control system. For instance, the UK interpreted the
embargo in a narrow manner, as to include the following items: lethal
weapons such as machine guns, large-caliber weapons, bombs, torpedoes
and missiles; specially designed components of the above, and
ammunition; military aircraft and helicopters, vessels of war, armored
fighting vehicles and other weapons platforms; and equipment which
might be used for internal repression.\11\ The French have interpreted
the embargo similarly.\12\
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\11\ Robin Niblett, The United States, the European Union, and
Lifting the Arms Embargo on China, 10 EURO-FOCUS No. 3 (Sept. 30,
2004). Center for Strategic and International Studies. See also:
Amnesty International. Undermining Global Security: The European Union
Exports, at [http://web.amnesty.org/library/index/engact300032004].
\12\ EU arms embargo on China. [http://projects.sipri.se/expcon/
euframe/euchiemb.htm].
---------------------------------------------------------------------------
Since 1989, European non-governmental organizations have reported
that the embargo on China has been bypassed by several EU members and
has been reduced to a mere ``symbolic instrument.'' \13\ One arms trade
expert with the Stockholm International Peace Research Institute
(SIPRI) of Sweden has stated that ``many European licenses for the arms
trade are actually issued for material which, on paper, can be used for
civilian purposes; what is known as `dual usage' . . . The embargo has
actually been circumvented in this way for years.'' \14\ Amnesty
International in its 2004 report, Undermining Global Security: the
European Union Arms Exports, contains several examples of EU members
that have made exports to China within the framework of the existing
arms embargo.\15\ For instance, the United Kingdom exported components
for Chinese military aero engines as well as technology, software and
related systems for weapons platforms; an Italian joint venture company
was involved in the manufacture of vehicles reportedly used as mobile
execution chambers in China. In addition, the German Deutz AG diesel
engines were incorporated into armored personnel carriers that were
transferred to China.\16\
---------------------------------------------------------------------------
\13\ Thijs Papot, `` `A Symbolic Instrument' the EU's Arms Embargo
Against China,'' Current Affairs, January 25, 2005.
\14\ Ibid.
\15\ Amnesty International. Undermining Global Security: The
European Union Exports. Available at [http://web.amnesty.org/library/
index/engact300032004].
\16\ Press Release of Coalition of European NGOs including
Saferworld, Oxfam, Pax Christi, and Anmesty International: ``Flimsy
Controls Fail to Prevent EU Countries Selling Arms to Human Rights
Abusers.'' September 30, 2004. The text of this document can be found
at [http://web.amnesty.org/library/index/ENGACT300152004].
---------------------------------------------------------------------------
European Union's Arms Exports Regime
To place in context any potential actions European Union members
may take with respect to the Chinese arms embargo, it is important to
understand the general EU regime on arms export controls. The following
EU instruments apply to arms embargoes and arms exports in general: (1)
the 1998 European Code of Conduct on Arms Exports, a non-binding
instrument, which lays down minimum standards to be applied on export
licenses \17\; (2) Regulation (EC) No 1334/2000 setting up a Community
Regime for the Control of Exports of dual-use items and technology
\18\; and (3) Common Position 2003/468/CFSP on the Control of Arms
Brokering.\19\ The EU Code of Conduct, analyzed in detail below,
establishes eight criteria to be applied by EU members on the exports
of conventional arms, including software and technology.\20\ A Common
List of Military Equipment was agreed upon in 2000 and updated
recently.\21\ In general, arms embargoes, unless specific guidance is
otherwise provided, cover at least all the items included in the Common
List.\22\ Regulation No. 1334/2000 as amended (whose scope extends to
any items that could be used for civilian and military purposes) is
directly applicable to the member states. Under its provisions, member
states grant authorizations for exports, called Community General
Export Authorization (CGE) of dual-use items. Such authorizations are
valid throughout the Community, subject to certain specific cases for
which consultation is needed among EU members prior to granting or
denying an authorization. The items and technology listed in Annexes I,
H and IV of the Regulation are based on the lists prepared by the
international export control regimes. The Regulation includes a
``catch-all'' clause which allows controls on goods not included in the
Annex of the Regulation. Under this clause, EU members have the
discretion to impose or not to impose controls on exports and
technology not listed in the Regulation. The objective of Common
Position, 2003/468/CFSP, is to control arms brokering \23\ in order to
prevent circumvention of U.N., EU, or Organization for Security and Co-
Operation in Europe (OCSE) embargoes on arms exports and the criteria
established in the EU Code. Under its provisions, Member states are
urged to put in place legal norms for lawful brokering activities,
including obtaining a written authorization prior to engaging in arms
brokering and to keep records for at least 10 years.\24\
---------------------------------------------------------------------------
\17\ Adopted by the Council of the European Union on June 8, 1998.
\18\ 2000 O.J. (L159) 1.
\19\ 2003 O.J. (L156) 79.
\20\ Article XXI of GATT allows the imposition of trade
restrictions on arms exports and imports and military equipment and
those imposed by the U.N. Charter VII resolutions.
\21\ List included in the Council Declaration of June 13, 2000. It
was issued on the occasion of the adoption of the common list of
military equipment covered by the EU Code of Conduct on Arms Exports,
2000 O.J. (C191).
\22\ See Guidelines on Implementation and Evaluation of Restrictive
Measures (Sanctions) in the Framework of the EU Common Foreign and
Security Policy, at 17, available at EU Council Website, CFSP Section.
\23\ Regarding arms brokering, the Wassenaar Arrangement should be
noted. In December 2003, a group of conventional arms exporting Member
states agreed to establish national legislation to control the
activities of those engaged in the brokering of conventional arms.
[http://www.wassenaar.org/docs/]; See EU Common Position 2003/468/CFSP,
adopted June 8, 1998 by the Council of the European Union.
\24\ 2003 O.J. (L156) 79.
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European Union Code of Conduct on Arms Exports: Background and
Assessment
The European Union (EU) Code of Conduct on Arms Exports was adopted
on June 8, 1998, during the Presidency of the United Kingdom.\25\ The
EU Code sets up eight criteria for the export of conventional arms and
a denial notification procedure obligating EU member states to consult
on possible undercutting arms sales one EU state might make even though
another EU state has chosen not to make a comparable arms export. Under
this procedure, member states are required to transmit through
diplomatic channels information on licenses refused and reasons for the
denial. Thus, before a member state authorizes a license which has been
refused by another member state for the same transaction, it is
necessary to consult the state that rejected the license in the first
place. If the member state decides to issue the license, it must inform
the state that refused to grant authorization.\26\
---------------------------------------------------------------------------
\25\ The full text of the European Union Code of Conduct on Arms
Exports is in Appendix 1.
\26\ See Fourth Annual Report According to Operative Provision 8 of
the European Union Code of Conduct on Arms Exports, 2002 O.J. (C319) 1.
---------------------------------------------------------------------------
The EU Code's eight criteria, which are to be utilized by EU
members when reviewing license requests and making decisions whether or
not to make an arms export, can be briefly summarized as follows:
(1) Consistency of export with the exporter's international
commitments arising from U.N., EU, or OSCE arms embargoes;
(2) Risk that export would be used for internal repression or
where the recipient country has engaged in serious violations
of human rights;
(3) Risk that export would provoke or prolong armed
conflicts;
(4) Risk of recipient using export to undermine regional
peace and security;
(5) Effect of export on defense and national security
interests of friends and allies;
(6) Commitment of purchaser to fight terrorism and uphold
international law;
(7) Risk of diversion to third parties or to a terrorist
organization;
(8) Risk that export would undermine the sustainable
development of the recipient country.
It is important to emphasize that these eight criteria, and the EU
Code on Arms Exports in its entirety, are political statements by the
European Union, and not legally binding on the member states of the EU,
although the Code is supposed to represent a moral imperative that EU
member states are expected to uphold and enforce. Nevertheless, no
matter how strong the language of purpose and intent contained in the
Code's eight Criteria is, the 12 Operative Provisions of the EU Code--
the sections of the Code which set out the manner in which the Code is
to be carried out--contain significant loopholes which militate against
it being a strong regime, in its current form, for the control of
conventional arms exports from EU member states. This circumstance is
illustrated by the following examples:
1. While each EU member state is to review export license
applications made to it on a ``case-by-case basis'' against the eight
specific criteria in the EU Code, Operative Provision 3 of the Code
expressly states that ``The decision to transfer or deny the transfer
of any item of military equipment will remain at the national
discretion of each Member State.'' Thus, each EU member state is free
to make an arms sale based on its own determination regarding whether
it is appropriate or not.\27\
---------------------------------------------------------------------------
\27\ Operative provision 6 of the EU Code states that the criteria
in the Code and the consultation procedure provided for in the Code
shall apply to ``dual-use goods as specified in Annex 1 of Council
Decision 94/942/CFSP as amended, where there are grounds for believing
that the end-user of such goods will be the armed forces or internal
security forces or similar entities in the recipient country.'' As with
sales of military equipment, the decision to grant or not grant a
license for the sale of ``dual-use'' equipment is left to each EU
nation to decide on its own.
---------------------------------------------------------------------------
2. Operative Provision 10 provides additional guidance to member
states in application of the EU Code. It states: ``It is recognized
that Member States, where appropriate, may also take into account the
effect of proposed exports on their economic, social, commercial and
industrial interests, but that these factors will not affect the
application of the above criteria.'' A literal reading of that sentence
could mean that those who adopted the EU Code recognized that national
economic or commercial interests would weigh importantly in the
decision-making process regarding any given arms sale, and may even
trump the larger stated EU-wide interest in restricting problematic
arms exports. Yet in the same sentence the provision effectively states
that while national economic self-interest may compel a member state to
sell, that state is expected not to do so to remain true to the
principles of the EU Code.
3. A major oversight mechanism within the EU Code is Operative
Provision 8, which requires that a confidential annual report is to be
circulated by each EU member state to the other EU states dealing with
its defense exports and its own implementation of the Code. These
reports are to be discussed at an annual meeting of the member states
where the operation of the EU Code is reviewed, and any
``improvements'' to it can be recommended to the EU Council.
Subsequently, a public report is produced based on the submissions of
individual EU members. However, the complete details of actual arms
exports made by EU states are not set out in this public document,
although the published annual reports made pursuant to Operative
Provision 8 of the Code do provide values of arms export licenses
issued, and values of deliveries made, if available, by the exporting
country. A supplier list is also provided, giving a total of sales
denials made, but not what specific weapon sale was denied, nor to
whom. Individual states are free to give as much or as little detail in
their national reports as they choose. Most have taken a minimalist
approach. Furthermore, individual states have different arms trade
licensing, data collecting and reporting practices, thus calling into
question the accuracy of some of the data provided in the annual public
report. In the most recent EU annual report on the Code, the Sixth,
covering calendar year 2003, categories of military systems are
indicated in the data tables. Yet this standardized reporting is still
not universal among member states, given the varied export licensing
systems and practices individual countries currently employ.\28\
---------------------------------------------------------------------------
\28\ For details of individual EU member state arms data reporting
practices see generally: Sibylle Bauer and Mark Bromley. The European
Union Code of Conduct on Arms Exports: Improving the Annual Report.
SIPRI Policy Paper No. 8. November, 2004. Stockholm International Peace
Research Institute, found at [http://www.sipri.org/contents/armstrad/
PP8].
---------------------------------------------------------------------------
Arms Exports Authorized for China by European Union Member States
The European Union has published official documents which provide
general data regarding the total values of EU member states' arms
exports licenses to China. Some countries provide the total values of
actual exports. There is no uniformity in this reporting across the
membership of the EU. As noted above, these annual reports are made
pursuant to Operative Provision 8 of the EU Code. The most recent two
reports provide data for calendar years 2002 and 2003 (the Fifth and
Sixth reports respectively). What follows are the data from those
reports for arms export licenses for China as approved by named EU
countries in rank order of their license values, together with the
total license values of the European Union as a whole.\29\
---------------------------------------------------------------------------
\29\ 2003 O.J. December 31, 2003 (C320) 9, 14, 30, 42. The Sixth
report is found at Official Journal C316, December 21, 2004, pp. 001-
215.
CY2002: Total value of export licenses approved for China (expressed in
Euros):
France--105,431,246
United Kingdom--79,500,000
Italy--22,836,976
Austria--2,025,925
All European Union countries--209,794,157
CY2003: Total value of export licenses approved for China (expressed in
Euros):
France--171,530,641
Italy--127,128,192
United Kingdom--112,455,000
Czech Republic--3,610,819
Germany--1,096,261
All European Union countries--415,820,913
In the Sixth annual report, made in accordance with Operative
Provision 8, the EU for the first time breaks down the export data by
EU Common Military List category.\30\ So, for those states whose
licensing systems categorize their arms export licenses in detail, it
is possible to get a sense of what general types of military equipment
are being licensed. These data do not provide information on EU
members' transactions involving dual-use equipment and items--and there
is no publicly available official source that provides details on such
transactions. This EU report does cover the broad spectrum of military
equipment licensed for export by the European Union of EU Common
Military List categories. See Appendix 2 for a detailed descriptive
summary of these EU Military List categories. This descriptive list
uses an abbreviation scheme whereby a number is attached to a specific
category of military equipment, and this number/category is given in
the license data table to indicate the value of licenses granted for
sales of that specific category. For example, ML10 is: ``Aircraft,''
unmanned airborne vehicles, aero-engines and ``aircraft'' equipment,
related equipment and components, specially designed or modified for
military use.
---------------------------------------------------------------------------
\30\ Ibid.
---------------------------------------------------------------------------
The United Kingdom provides no detailed breakdown of its licenses
in the Sixth report since the way its standard export licenses are
valued in its licensing system currently preclude this. The same is
true for Italy, and the Czech Republic. However, France and Germany are
able to break down the categories of their licenses for purposes of the
EU report. The data in the report indicate that the largest share of
French license approvals for China in 2003 were in categories ML11--
electronic military equipment (98.5 million Euros), ML10--aircraft and
related equipment (45.4 million Euros), and ML15--imaging or
countermeasure military equipment (24.1 million Euros). In the case of
Germany, its largest share of license approvals for China in 2003 were
in categories ML14--specialized military training equipment or
simulators (528 thousand Euros), ML11--electronic military equipment
(433.1 thousand Euros), and ML21--software for items controlled in the
EU Common Military List (134.4 million Euros).
Thus, most of the arms exports authorized for China by EU members
have been made by France, the United Kingdom and Italy. The Czech
Republic, Austria, and Germany granted substantially smaller valued
licence approvals.
United States Concerns
As the European Union has moved towards lifting the existing
embargo on arms exports to China in recent months, significant emphasis
has been placed by some EU members on the proposition that the European
Union's Code of Conduct on Arms Exports, with additional modifications,
would be a more effective control device than the existing embargo on
arms exports to China. At the same time, some EU members have argued
that ending the existing arms embargo on China would acknowledge that
some progress has been made in China since the 1989 Tiananmen Square
actions that originally led to the embargo. The U.S. Government,
however, remains skeptical that a strengthened EU Code would provide an
effective deterrent to increased arms sales to China.
The United States' objections to the lifting of the European
Union's arms embargo on China center on three major concerns. First,
the United States is concerned that China would use EU member state
weapons or weapons technology to enhance the capability of China's
military by providing them with items they could not obtain elsewhere,
including from their principal arms supplier, Russia, or from other
non-EU suppliers, such as Israel. Such items could include electronic
warfare equipment, command and control systems and technology, advanced
communications equipment, radar, sonar, avionics, and fire control
systems. Advanced air-to-sea and air-to-ground missiles might also be
obtained. A number of the above items could contain advanced, state-of-
the-art technology which could be used to upgrade existing Chinese air
and naval weapons systems. Should China obtain high technology items
such as these from EU sources, the United States military operating in
Asia could face a notably increased threat from the Chinese military as
they conduct their operations in areas close to China and to Taiwan, a
capability China has been pursuing in recent years. Second, the United
States is concerned that through EU arms exports, China could secure
sufficient enhancement of its military equipment and capabilities that
it could be emboldened to seriously threaten Taiwan in its continuing
dispute over Taiwan's political status. Such an event could increase
Sino-U.S. tensions and increase the prospects of a military
confrontation between the two countries. Third, the United States
believes that China has not seriously addressed the human rights
violations against its own people since the 1989 Tiananmen Square
events, and therefore, the arms embargo should not be lifted until
significant steps to improve human rights in China have taken
place.\31\
---------------------------------------------------------------------------
\31\ Robert J. Saiget, ``China Will Upgrade Technology if EU Lifts
Arms Embargo,'' Agence France Presse, December 15, 2004; Agence France
Presse, December 17, 2004, ``EU Leaders Hint at June Date for Lifting
China Arms Ban''; Joe McDonald, ``End to European Ban Could Make Little
Difference to China's Arms Ambitions,'' Associated Press, February 7,
2005; John Rossant and Dexter Roberts, ``An Arms Cornucopia for China?
Europe Will Probably Lift Its Embargo, But Companies Will Be Careful
What They Sell,'' Business Week, February 21, 2005, p. 26; Eric Schmit,
``Rumsfeld Warns of Concern About Expansion of China's Navy,'' New York
Times, February 18, 2005, p. 9; Daniel Blumenthal and Thomas Donnelly,
``Feeding the Dragon, Hurting the Alliance,'' Washington Post, February
20, 2005, p. B5.
---------------------------------------------------------------------------
The President and senior Bush Administration officials have made
such arguments to the European Union membership. During Secretary of
State Condoleezza Rice's European trip in February 2005, Secretary Rice
stated, on February 9, that with respect to the arms embargo, that
``human rights concerns need to be taken into consideration in any
decision that was tied to Tiananmen,'' noting that the status of the
2,000 Tiananmen prisoners had not been resolved. She added that she had
``made clear our concerns about the military balance, the fact that
there are still American forces in that region, and about the need to
be concerned about the transfer of technology that might endanger in
some way that very delicate military balance.'' \32\ The U.S. House of
Representatives had earlier raised such concerns through passage of H.
Res. 57 on February 2, 2005, in which the House strongly urged the EU
not to lift the arms embargo on China. During his European trip, on
February 22, 2005, President Bush noted that ``[T]here is deep concern
that a transfer of weapons [to EU states] would be a transfer of
technology to China, which would change the balance of relations
between China and Taiwan. . . .'' The President stated that European
leaders had informed him that they could develop a ``protocol'' that
could address U.S. concerns. He added . . . ``whether they can or not,
we'll see.'' The President also said that when the Europeans settled on
the new code of conduct, they would have to ``sell it to the United
States Congress.'' \33\ Senator Richard Lugar, Chairman of the Senate
Foreign Relations Committee, in a press interview noted the
implications of not addressing Congressional concerns on the issue,
reportedly stating: ``The technology the U.S. shares with European
allies could be in jeopardy if allies were sharing that through these
commercial sales with the Chinese.'' He further said that if the
lifting of the EU arms embargo on China resulted in such a diversion,
he would support restrictions on sales of American arms technologies to
Europe.\34\
---------------------------------------------------------------------------
\32\ Transcript of remarks by Secretary of State Condoleezza Rice
at February 9, 2005 news conference with European Commission President
Jose Manuel Barroso. Federal Document Clearing House. CIA Director
Porter Goss and Vice-Admiral Lowell E. Jacoby, DIA Director, in
testimony before the Senate Select Committee on Intelligence on
February 16, 2005 both took note of Chinese military modernization
efforts, which they concluded were affecting the military balance of
power in the Taiwan Strait. This modernization effort, they said, was
improving the capabilities of China's military to threaten U.S. forces
in the region, as well as its capability to take military action
against Taiwan, should China choose to do so. Statements at the
committee's website: [http://intelligence.senate.gov].
\33\ [http://www.whitehouse.gov/news/releases/2005/02/print/
20050222-3.html] gives text of President Bush's press conference of
February 22, 2005 in Brussels at NATO headquarters; Elisabeth Bumiller,
``Bush Voices Concern on Plan to Lift China Arms Embargo,'' New York
Times, February 22, 2005, p. A1, A10; for House debate on H. Res. 57
see Congressional Record, February 2, 2005, pp. H299-H303 [daily
edition]. The full text of H. Res. 57 is at page H299.
\34\ Edward Alden and Demetri Sevastopulo, ``Lugar Makes Threat on
EU Arms Sales to China,'' Financial Times, February 21, 2005.
---------------------------------------------------------------------------
Status of European Union Action
Based on the directive given to the Luxembourg Presidency of the EU
during the European Council meetings on December 16 and 17, 2004, the
EU expects to review a report on the issue of lifting the Chinese arms
embargo during the first half of 2005, and could address the matter as
early as March 2005 at the meeting of the European Council scheduled
for that month. A formal EU decision is not expected until May or June
2005. Since the European Council has already stated its ``political
will to continue to work towards lifting the arms embargo,'' the
prospects of it doing so when the issue is formally addressed are
high.\35\ What is not clear, should the EU lift the Chinese arms
embargo, is what will be the nature and scope of ``the revised Code of
Conduct, and the new instrument on measures pertaining to arms exports
to post-embargo countries''--what is referred to by the EU as the
``Toolbox.'' The details of any such changes to the Code of Conduct
will not be known until the EU announces them. Internal consultations
among EU members on this question are continuing. What is reasonably
clear is that the issue of lifting the EU embargo on Chinese arms has
become a contentious issue in U.S-EU relations and could have important
implications for future cooperation between the U.S. and EU member
states in the military sphere, if the U.S. becomes convinced that
military technology shared with EU nations could end up being
transferred to China in a post-embargo period.
---------------------------------------------------------------------------
\35\ Council of the European Union, 16/17 December 2004. Presidency
Conclusions. 16238/1/04 REV 1, p. 19. Published February 1, 2005.
---------------------------------------------------------------------------
Appendix 1--European Union Code Of Conduct On Arms Exports
Adopted on 8 June 1998 by Council of the European Union.\36\
BUILDING on the Common Criteria agreed at the Luxembourg and Lisbon
European Councils in 1991 and 1992,
---------------------------------------------------------------------------
\36\ Source: Council of the European Union, European Union Code of
Conduct on Arms Exports, document 8675/2/98 Rev 2, Brussels, 5 June
1998.
---------------------------------------------------------------------------
RECOGNIZING the special responsibility of arms exporting states,
DETERMINED to set high common standards which should be regarded as
the minimum for the management of, and restraint in, conventional arms
transfers by all Member States, and to strengthen the exchange of
relevant information with a view to achieving greater transparency,
DETERMINED to prevent the export of equipment which might be used
for internal repression or international aggression or contribute to
regional instability,
WISHING within the framework of the Common Foreign and Security
Policy (CFSP) to reinforce cooperation and to promote convergence in
the field of conventional arms exports,
NOTING complementary measures taken against illicit transfers, in
the form of the EU Programme for Preventing and Combating Illicit
Trafficking in Conventional Arms,
ACKNOWLEDGING the wish of Member States to maintain a defence
industry as part of their industrial base as well as their defence
effort,
RECOGNIZING that States have a right to transfer the means of self-
defence, consistent with the right of self-defence recognized by the UN
Charter,
HAS DRAWN UP the following Code of Conduct together with Operative
Provisions:
CRITERION ONE
Respect for the international commitments of Member States, in
particular the sanctions decreed by the UN Security Council and those
decreed by the Community, agreements on non-proliferation and other
subjects, as well as other international obligations.
An export licence should be refused if approval would be
inconsistent with, inter alia:
(a) The international obligations of Member States and their
commitments to enforce UN, OSCE and EU arms embargoes;
(b) The international obligations of Member States under the
Nuclear NonProliferation Treaty, the Biological and Toxin
Weapons Convention and the Chemical Weapons Convention;
(c) The commitments of Member States in the framework of the
Australia Group, the Missile Technology Control Regime, the
Nuclear Suppliers Group and the Wassenaar Arrangement;
(d) The commitment of Member States not to export any form of
anti-personnel landmine.
CRITERION TWO
The respect of human rights in the country of final destination.
Having assessed the recipient country's attitude towards relevant
principles established by international human rights instruments,
Member States will:
(a) Not issue an export licence if there is a clear risk that
the proposed export might be used for internal repression;
(b) Exercise special caution and vigilance in issuing
licences, on a case-by-case basis and taking account of the
nature of the equipment, to countries where serious violations
of human rights have been established by the competent bodies
of the UN, the Council of Europe or by the EU.
For these purposes, equipment which might be used for internal
repression will include, inter alia, equipment where there is evidence
of the use of this or similar equipment for internal repression by the
proposed end-user, or where there is reason to believe that the
equipment will be diverted from its stated end-use or end-user and used
for internal repression. In line with paragraph 1 of the Operative
Provisions of this Code, the nature of the equipment will be considered
carefully, particularly if it is intended for internal security
purposes. Internal repression includes, inter alia, torture and other
cruel, inhuman and degrading treatment or punishment, summary or
arbitrary executions, disappearances, arbitrary detentions and other
major violations of human rights and fundamental freedoms as set out in
relevant international human rights instruments, including the
Universal Declaration on Human Rights and the International Covenant on
Civil and Political Rights.
CRITERION THREE
The internal situation in the country of final destination, as a
function of the existence of tensions or armed conflicts.
Member States will not allow exports which would provoke or prolong
armed conflicts or aggravate existing tensions or conflicts in the
country of final destination.
CRITERION FOUR
Preservation of regional peace, security and stability.
Member States will not issue an export licence if there is a clear
risk that the intended recipient would use the proposed export
aggressively against another country or to assert by force a
territorial claim.
When considering these risks, Member States will take into account
inter alia:
(a) The existence or likelihood of armed conflict between the
recipient and another country;
(b) A claim against the territory of a neighboring country
which the recipient has in the past tried or threatened to
pursue by means of force;
(c) Whether the equipment would be likely to be used other
than for the legitimate national security and defence of the
recipient;
(d) The need not to affect adversely regional stability in
any significant way.
CRITERION FIVE
The national security of the Member States and of territories whose
external relations are the responsibility of a Member State, as well as
that of friendly and allied countries.
Member States will take into account:
(a) The potential effect of the proposed export on their
defence and security interests and those of friends, allies and
other Member States, while recognizing that this factor cannot
affect consideration of the criteria on respect for human
rights and on regional peace, security and stability;
(b) The risk of use of the goods concerned against their
forces or those of friends, allies or other Member States;
(c) The risk of reverse engineering or unintended technology
transfer.
CRITERION SIX
The behavior of the buyer country with regard to the international
community, as regards in particular its attitude to terrorism, the
nature of its alliances and respect for international law.
Member States will take into account inter alia the record of the
buyer country with regard to:
(a) Its support or encouragement of terrorism and
international organized crime;
(b) Its compliance with its international commitments, in
particular on the non-use of force, including under
international humanitarian law applicable to international and
non-international conflicts;
(c) Its commitment to non-proliferation and other areas of
arms control and disarmament, in particular the signature,
ratification and implementation of relevant arms control and
disarmament conventions referred to in point (b) of Criterion
One.
CRITERION SEVEN
The existence of a risk that the equipment will be diverted within
the buyer country or re-exported under undesirable conditions.
In assessing the impact of the proposed export on the importing
country and the risk that exported goods might be diverted to an
undesirable end-user, the following will be considered:
(a) The legitimate defence and domestic security interests of
the recipient country, including any involvement in UN or other
peace-keeping activity;
(b) The technical capability of the recipient country to use
the equipment;
(c) The capability of the recipient country to exert
effective export controls;
(d) The risk of the arms being re-exported or diverted to
terrorist organizations (antiterrorist equipment would need
particularly careful consideration in this context).
CRITERION EIGHT
The compatibility of the arms exports with the technical and
economic capacity of the recipient country, taking into account the
desirability that states should achieve their legitimate needs of
security and defence with the least diversion for armaments of human
and economic resources.
Member States will take into account, in the light of information
from relevant sources such as UDP, World Bank, IMF and OECD reports,
whether the proposed export would seriously hamper the sustainable
development of the recipient country. They will consider in this
context the recipient country's relative levels of military and social
expenditure, taking into account also any EU or bilateral aid.
OPERATIVE PROVISIONS
1. Each Member State will assess export licence applications for
military equipment made to it on a case-by-case basis against the
provisions of the Code of Conduct.
2. The Code of Conduct will not infringe on the right of Member
States to operate more restrictive national policies.
3. Member States will circulate through diplomatic channels details
of licences refused in accordance with the Code of Conduct for military
equipment together with an explanation of why the licence has been
refused. The details to be notified are set out in the form of a draft
pro-forma set out in the Annex hereto. Before any Member State grants a
licence which has been denied by another Member State or States for an
essentially identical transaction within the last three years, it will
first consult the Member State or States which issued the denial(s). If
following consultations, the Member State nevertheless decides to grant
a licence, it will notify the Member State or States issuing the
denial(s), giving a detailed explanation of its reasoning. The decision
to transfer or deny the transfer of any item of military equipment will
remain at the national discretion of each Member State. A denial of a
licence is understood to take place when the Member State has refused
to authorize the actual sale or physical export of the item of military
equipment concerned, where a sale would otherwise have come about, or
the conclusion of the relevant contract. For these purposes, a
notifiable denial may, in accordance with national procedures, include
denial of permission to start negotiations or a negative response to a
formal initial enquiry about a specific order.
4. Member States will keep such denials and consultations
confidential and not use them for commercial advantage.
5. Member States will work for the early adoption of a common list
of military equipment covered by the Code of Conduct, based on similar
national and international lists. Until then, the Code of Conduct will
operate on the basis of national control lists incorporating where
appropriate elements from relevant international lists.
6. The criteria in the Code of Conduct and the consultation
procedure provided for by paragraph 3 of these Operative Provisions
will also apply to dual-use goods as specified in Annex 1 to Council
Decision 94/942/CFSP,\37\ where there are grounds for believing that
the end-user of such goods will be the armed forces or internal
security forces or similar entities in the recipient country.
---------------------------------------------------------------------------
\37\ (1)OF L367, 31.12.1994, p. 8. Decision as last amended by
Decision 98/232/CFSP (OJ L92, 25.3.1998, p. 1).
---------------------------------------------------------------------------
7. In order to maximize the efficiency of the Code of Conduct,
Member States will work within the framework of the CFSP to reinforce
their cooperation and to promote their convergence in the field of
conventional arms exports.
8. Each Member State will circulate to other Member States in
confidence an annual report on its defence exports and on its
implementation of the Code of Conduct. These reports will be discussed
at an annual meeting held within the framework of the CFSP. The meeting
will also review the operation of the Code of Conduct, identify any
improvements which need to be made and submit to the Council a
consolidated report, based on contributions from Member States.
9. Member States will, as appropriate, assess jointly through the
CFSP framework the situation of potential or actual recipients of arms
exports from Member States, in the light of the principles and criteria
of the Code of Conduct.
10. It is recognized that Member States, where appropriate, may
also take into account the effect of proposed exports on their
economic, social, commercial and industrial interests, but that these
factors will not affect the application of the above criteria.
11. Member States will use their best endeavors to encourage other
arms exporting states to subscribe to the principles of the Code of
Conduct.
12. The Code of Conduct and Operative Provisions will replace any
previous elaboration of the 1991 and 1992 Common Criteria.
ANNEX
Details to be notified
[name of Member State] has the honor to inform partners of the
following denial under the EU Code of Conduct:
Destination country:
Short description of equipment, including quantity and where
appropriate, technical specifications:
Proposed consignee:
Proposed end-user (if different):
Reason for refusal:
Date of denial:
Appendix 2--Brief Descriptions of EU Common Military List Categories
\38\
ML1 Smooth-bore weapons with a caliber of less than 20 mm, other
arms and automatic weapons with a caliber of 12,7 mm (caliber 0,50
inches) or less and accessories, and specially designed components
therefor.
---------------------------------------------------------------------------
\38\ See OJ C314 of December 23, 2003 for the full EU Common
Military List. Sixth Annual report according to Operative Provision 8
of the European Union Code of Conduct on Arms Exports. Official Journal
C316, December 21, 2004, pp. 1-215.
---------------------------------------------------------------------------
ML2 Smooth-bore weapons with a caliber of 20 mm or more, other
weapons or armament with a caliber greater than 12,7 mm (caliber 0,50
inches), projectors and accessories, and specially designed components
therefor.
ML3 Ammunition and fuze setting devices, and specially designed
components therefor.
ML4 Bombs, torpedoes, rockets, missiles, other explosive devices
and charges and related equipment and accessories, specially designed
for military use, and specially designed components therefor.
ML5 Fire control, and related alerting and warning equipment, and
related systems, test and alignment and countermeasure equipment,
specially designed for military use, and specially designed components
and accessories therefor.
ML6 Ground vehicles and components.
ML7 Chemical or biological toxic agents, ``tear gases,''
radioactive materials, related equipment, components, materials and
``technology.''
ML8 ``Energetic materials,'' and related substances.
ML9 Vessels of war, special naval equipment and accesories, and
components therefor, specially designed for military use.
ML10 ``Aircraft,'' unmanned airborne vehicles, aero-engines and
``aircraft'' equipment, related equipment and components, specially
designed or modified for military use.
ML11 Electronic equipment, not controlled elsewhere on the EU
Common Military List, specially designed for military use and specially
designed components therefor.
ML12 High velocity kinetic energy weapon systems and related
equipment, and specially designed components therefor.
ML13 Armored or protective equipment and constructions and
components.
ML14 Specialized equipment for military training or for
simulating military scenarios, simulators specially designed for
training in the use of any firearm or weapon controlled by ML1 or ML2,
and specially designed components and accessories therefor.
ML15 Imaging or countermeasure equipment, specially designed for
military use, and specially designed components and accessories
therefor.
ML16 Forgings, castings and other unfinished products the use of
which in a controlled product is identifiable by material composition,
geometry or function, and which are specially designed for any products
controlled by ML1 to ML4, ML6, ML9, ML10, ML12 or ML19.
ML17 Miscellaneous equipment, materials and libraries, and
specially designed components therefor.
ML18 Equipment for the production of products referred to in the
EU Common Military List.
ML19 Directed energy weapon systems (DEW), related or
countermeasure equipment and test models, and specially designed
components therefor.
ML20 Cryogenic and ``superconductive'' equipment, and specially
designed components and accessories therefor.
ML21 ``Software'' specially designed or modified for the
``development,'' ``production,'' ``use'' of equipment or materials
controlled by the EU Common Military List.
ML22 ``Technology'' for the ``development,'' ``production'' or
``use'' of items controlled in the EU Common Military List, other than
that ``technology'' controlled in ML7.
The Chairman. Well, thank you very much, Dr. Grimmett.
I will ask a couple of questions and then I will ask my
colleague, Senator Biden, to ask some questions. We will
continue until duty calls on the floor for these rollcall votes
regarding the budget that the Congress is discussing, the
Senate more particularly.
Let me start by pointing out that we really would hope that
the Europeans might consider Asian security, and our policies
toward Taiwan and China. Nonproliferation is important for all
the countries involved in the war against terrorism. You have
suggested, Dr. Grimmett, moral imperatives. Clearly that
dictates the eight conditions that you listed in terms of our
screening.
At a luncheon, today, sponsored by the Ripon Society as a
part of their ambassadorial roundtable, I heard a talk, after I
gave one, on this subject from Dr. Bruton, the former Prime
Minister of Ireland who is now an Ambassador to the United
States. He accompanied the delegation that Senator Biden
mentioned. He visited him and visited me and visited with many
people in this city this week. He is very articulate on these
subjects.
He suggested that one method of proceeding is not
inconsistent with what you have suggested; namely, that we have
never thought together with Europe about Asian policy, that we
have thought a great deal about our relations with Europe, even
Africa, and more recently the Middle East under some duress,
but that we have not ever come together to really think through
how we think about Asia. This is a good time to do that, and I
think we would agree.
I hope that maybe, in the new spirit that has been
initiated through our President visiting the EU and NATO and
what have you, that the agenda might be broadened to discuss
common policies on Asia, in addition to these moral imperatives
and nonproliferation concerns.
Now, you have all made the point that essentially
indigenous supplies of arms are not what we cover. We are
talking about things in which we believe there is an American
component, something that is highly classified or important.
How large, as you have cited these arms sales by European
countries, are the indigenous arms? What part does that play
now? To what extent are we so integrated in most of our systems
that there are American components, some American intellectual
property? In other words, if we were to go into a strict
separation of this, and we were to withdraw whatever we have,
what does that mean to Europe in terms of its own defense,
quite apart from whatever it may want to export to China or
others? Does anyone have any thought about that?
Dr. Gill. Let me respond just very quickly to a couple of
your remarks, Mr. Chairman.
First, I am very encouraged to hear that both European and
American sides recognize the importance of regularized dialog
and discussion about Asia and China. It is my understanding in
the past, while some of these discussions have been carried
out, it has not been done on a regularized basis, more on an ad
hoc basis and often involving not really the right experts in
the room. I think our East Asia experts need to go talk to the
East Asia experts in Europe and vice versa rather than our
European experts talking to one another about Asia, if you see
my point.
There have been some academic and think-tank consultations
of this type over the past 3 to 5 years and have involved, from
time to time, mid-level serving officials traveling in their
unofficial capacity, and that has been very useful. I think we
should hope to expand that, but more importantly, to make sure
that it is regularized and occurring often enough that these
sorts of issues can be caught.
On the second point, I think this is precisely the kind of
work that perhaps could be tasked out of this committee to look
very, very carefully at precisely the questions you ask because
it is my sense that the internationalization of the global arms
industry is such that it will become, over time, increasingly
difficult to make those fine distinctions between so-called
indigenous and so-called joint weapons programs. It may be
possible to undertake some kind of research and get answers to
questions that you are looking for, but I think the longer we
wait, the more difficult it is going to be to make those kind
of distinctions.
Dr. Grimmett. I would just add, Mr. Chairman, that for the
moment, a good deal of the export trade we have in weapons to
Europe involves pretty sophisticated technology and items that
we make that they cannot make, or items they buy and integrate
into a number of defense systems. We have some advanced
projects underway right now. The Joint Strike Fighter is one
that comes to mind. There are, obviously, a lot of smaller
sales of a variety of things. But we retain some rights to the
contents that we sell. That is why the buyers have to sign a
no-retransfer provision when they sign any contract for a small
item or a big item.
So in the meantime, until we get to the point that Dr. Gill
referred to where everything in defense production has gotten
to be so internationalized in terms of its total content, we
still have some control of those things we sell. I think it is
still a matter of concern as to how we might be able to affect
foreign sales of advanced items, integrated or developed solely
as indigenous products. I would be hard-pressed to give you,
off the top of my head, a significant European defense product
that has some American content in it at this time over which we
can't claim control. Now, that may change, but I think
currently that is not the case.
The Chairman. Now let me quickly ask the second question.
At this luncheon that I cited and just enjoyed, there were
ambassadors from countries that shall remain nameless in Europe
who do not sell any arms to anybody. As a matter of fact, they
do not have very large----
Senator Biden. You kind of narrowed the scope pretty
quickly, almost to the point of identifying them. [Laughter.]
The Chairman. In any event, the point is that you have
talked about unanimous votes of the EU. Let us say that the EU
tries to get together and think through what sort of a policy
we are going to have. Some countries might say, well, we do not
really have a dog in the fight, as a matter of fact. We are not
going to be selling anything to China, and we value our
relationship with the United States.
So, where are we then? Now, you could say, well, we are
back where you have cited, with hundreds of millions of dollars
of sales under various categories that these countries are
making. Or maybe they have never really considered, nor maybe
have we, precisely what the doctrine is. So, we all signed up,
and we understood our constitutional principles here. Rather,
it may have been more of an ad hoc interpretation, country by
country, as it stands.
But if we were to say to our friends in Europe, fair
enough, if the EU, the EU all together, unanimously, has a
policy, that is interesting, but are all of you really in the
same situation? My guess is not. What is your interpretation of
that?
Dr. Gill. I take your point that some countries do not have
a dog in the fight. They are not interested. They do not even
have arms producers to be concerned about lifting the embargo.
I think that is the wrong way to look at this. Lifting the
embargo is not about selling arms to China. It really is not
ultimately. I think it is about much bigger things, about a
better economic relationship, about trying to, in the
Europeans' mind, treat China in a way that can draw them into
the international community. So, for those countries that do
not have an arms production capacity, a vote ``yes'' on lifting
the embargo is not going to be about the possibility of selling
weapons. It is going to be about a belief in this larger sense
that by lifting it and replacing it with something stronger, it
is going to improve the overall relationship they can have with
China going forward.
The Chairman. Well, I agree with you, and I think Senator
Biden has indicated that, too. This has been taken in some
quarters as a rather cynical way of looking at it. Some say
this is purely an arms control type of thing, national defense.
What an undercutting thought that, in fact, we are talking
about commercial sales, and just regular old trade and
competitive elements, and utilizing something that we think is
very serious, in terms of potential harm to our Armed Forces or
to things in foreign policy that we value. That, I suspect, has
to become a more important part of the dialog. It is not a
cynical view. It may, in fact, come to reflect a sense of
considerable realism about people who have no arms and, as you
suggest, still might like a little trade with China and would
be willing to come under the umbrella of this advantage.
Mr. Brookes. This is also the third side, Mr. Chairman, of
the triangle: What does China want out of this? Obviously, we
are talking about the United States and Europe and the
commercial aspects of it and advantages potentially to
Europeans by lifting this, which has a symbolic side to it as
well. But what China is going to try to pull out of this
relationship through joint ventures, forced technology
transfers, commercial dual-use technologies, are the things we
really need to worry about.
They can get a lot of large weapons systems right now from
the Russians, but China ultimately wants to be self-sufficient
in its military industrial complex, and wants to be able to
challenge the United States militarily in the out-years in
Asia. That is something we need to be concerned about. So, we
have to think about what is China going to try to get using its
own methods from the Europeans to support its own military
industrial complex. So, it is not just a matter of the United
States and the Europeans, as you know, but there is the third
side of the triangle that we have to, obviously, keep in mind
at all times, and so do the Europeans.
The Chairman. Thank you.
Senator Biden.
Senator Biden. Thank you.
I would like to just touch on three seemingly disparate
aspects of this issue.
The first one is the one that the chairman raised, which I
think is the single most important one, and that is, that
without ascribing blame or responsibility, the fact is, from my
perspective, we lost a lot of time in the last 4 years of not
doing what we should have been doing with Europe and because of
misunderstandings, misstatements, individual European countries
taking advantage of mistakes we made, us taking advantage of
mistakes they made, and us all ending up worse off.
The President has initiated what appears to be a new spirit
in terms of our relationship. I take him at his word. I have
praised his efforts since his second inauguration. I think his
large prescription for advancing freedom is what we should be
talking about and should be doing. I noted that an article--I
do not know what newspaper it was in Germany, but a Green
newspaper--said after Bush's inaugural address, ``Bush
threatens freedom,'' which tells us a little bit about the
messenger, rather than the message, I think.
But the bottom line of all this is, to paraphrase--my staff
is tired of hearing me say this--Yates, writing about Ireland
in 1916, said, ``the world has changed. It has changed utterly.
A terrible beauty has been born.'' The world has changed
utterly in the last 10 years, and we have, unlike in the
previous 50 years, had very little regularized, consistent,
hard-nosed discussion dealing with consequential topics with
our European allies. That we do not have regularized meetings
at the subcabinet level on a monthly basis, working out
everything from the notion of preemptive use of force to a
China policy, is, I think, close to criminal. It is
understandable how we got here, but close to criminal that we
are not trying to do that because, maybe I am a little too
optimistic, but I am convinced that the value set that propels
our European friends and us is essentially the same. We may
disagree, and we do. Every think tank from Brookings to
Heritage, to Cato writes about our differences on choice, our
differences on the death penalty, our differences on religion,
et cetera, that is all true. But the core questions, the core
value set that propels our democracies, I do not think are very
much different. And we have not done any real hard thinking or
discussion as the world has changed. We have not gone down and
done the same kind of rigorous intellectual debate, discussion,
seeking consensus that we did in the fifties after World War II
and through the sixties, I think. That is just my view.
So, I think the chairman is correct about this idea, as I
understood it, that this, maybe, should be another wake-up call
that real hard-nosed discussion is needed. I do not mean even
bargaining. I just mean an honest debate with our counterparts
in the EU, which is not a defense establishment, and NATO, most
of the members of which are members of the EU as well. This is
something that we should be getting underway.
Intellectuals like yourselves and the think tanks, I
respectfully suggest, have great influence on us. You have
great influence on administrations, and I mean left, right, and
center, although I do not know any left think tanks these days,
but center and right. I wish there were.
But all kidding aside, I really think--this is a bit of
proselytizing here--it would be a useful thing for us to be
generating discussion about this notion of a regularization of
discussions with our European allies of what we know are the
main issues on the agenda. If you know anything about foreign
policy and international economic policy, they are sitting
right there, issues yet to be resolved and, I would argue,
resolvable with honest intentions, which I presume with regard
to our friends, and if serious intellectual horsepower is put
to work on them.
I have been trying to figure out how, from a legislative
perspective, you can promote that. I do not know how to do
that. Institutionally we are not built for that purpose. We can
try to do it, as the chairman has in trying to--and I have
joined him, but it has been him trying to figure out post-
conflict resolution issues. It is a genuine effort. He has
gotten the administration involved. He has gotten people to
participate who hold office now, et cetera. But it needs to be
much larger than just here.
So I respectfully suggest that you all talk about that,
because you influence us. Your organizations, not that you are
all CRS, are organizations we rely on heavily.
But that leads me to my second point here. In the past, our
relationships with our European friends in particular were so
good, although we had bumps in the road all the time from
neutron bombs to Pershing missiles--there have always been
disagreements and sometimes serious. But there was a sense, in
the first 28 years I was a Senator, that there was an
inevitability to consensus. It did not mean that, but there was
that notion that, we would end up on the same page because we
talked a lot about it. And we were accustomed to dealing from
capital to capital. If you got the German Chancellor to agree
with the American President, there was no need to talk to the
German people, which leads me to this point. I will start with
you, Mr. Grimmett, if I may, because you just recently made a
little tour. Right? You were on the road.
Dr. Haltzel of my staff translated for me from German,
because I do not read or speak German, a letter that was
addressed to Chancellor Schroeder from leading members of the
FDP, the CDU, the SPD, and the Greens, signed by four specific
members of the European Parliament. These are members of each
of the parties within Germany.
They are opposed to this change in policy on the part of
Germany and the EU generally. They talk about human rights.
They talk about the impact on the strategic stability in
Northeast Asia, and they talk about transatlantic relations.
I will ask unanimous consent this letter be placed in the
record, Mr. Chairman.
The Chairman. The letter will be placed in the record.
[The letter follows:]
Strasbourg, March 7, 2005.
Mr. Gerhard Schroder,
The Federal Chancellor of the Federal Republic of Germany,
Federal Chancellor's Office, 11011 Berlin.
Dear Mr. Chancellor: It is with great concern that we--Members of
the European Parliament of the CDU, SPD, FDP, and the Greens--observe
the efforts of the [German] Federal Government in the European Council
to lift the weapons embargo against the People's Republic of China.
1. We are worried about human rights in China. The embargo was
instituted after the brutal suppression of the freedom movement on
Tienanmen Square. Participants in this peaceful democracy movement are
still being held in captivity, and there is no reason to believe that
they are being treated better than the other prisoners in penal and
reeducation camps who are, in part, being treated in a degrading
manner.
2. We are worried about strategic stability in northeast Asia. The
region is the site of two serious international crises: the one in
North Korea, the other concerning Taiwan. Other territorial questions
such as the Kuriles and the Spratley Islands also remain unresolved. In
the region there are no security structures in which dialogues are
being pursued and conflicts peacefully settled. All multilateral
organizations are significantly weaker than comparable European
structures.
3. We are worried about transatlantic relations. The just completed
visit of President Bush offers the chance to overcome the tensions of
the last few years between Europe and the U.S.A. The U.S. House of
Representatives voted 411 to 3 against the lifting [of the China arms
embargo] and in concrete terms threatened a worsening of relations.
This is understandable since the U.S.A. guarantees the security of
Japan, Taiwan, and South Korea according to the wishes of those
countries' governments. Therefore, the United States has a legitimate
interest in special consideration of its interests in this region.
The lifting of the arms embargo would be a contradiction to a
consistent human rights policy, to a strategically farsighted foreign
policy, and to transatlantic solidarity. For all these reasons we call
on you publicly and in the Council to speak out against a lifting of
the arms embargo.
Sincerely,
Count Alexander Lamsdorff,
Elmar Brok, Erika Mann, Cem Ozdemir.
Senator Biden. Now, here is the reason why I raise the
issue. I do not know this to be the case, but through
interlocutors and public officeholders in Germany, we are
told--my staff has been told--that their estimate is--and they
range across the party spectrum--that if this came up for a
vote in the Bundestag--the assertion was made by a well-
respected member of the Bundestag to us--the vote would be 80/
20, 80 percent against lifting the embargo; 80 against, 20 for.
Now, I do not know that to be true, which raises this question,
a long way to get to a very basic question.
I realize this may be above your pay grade and mine in
terms of expertise. But it seems to me one of the reasons why
we need a much more aggressive public diplomacy program is to
be able to make our case to the German population, to the
French population, to the British population in order to
connect with them about our motives and characterize our
position in a way in which, I believe, having been in and out
of Europe a lot the last 33 years, the majority of Europeans
would agree with us.
Am I missing something here, Doctor? What is your sense? I
know you are not a pollster. I know this is not your expertise.
What is your sense? If each of you would chime in. What is your
sense about whether or not we are really that far off from our
European friends, meaning the populations in the EU, or is this
driven by, in part, as happens here, special interest
requirements that lead one to believe that it is more important
to sell Airbus--I am overstating it in the interest of time; it
is not fair, but I am trying to figure out how to summarize
this notion--that you have got to do this to give a leg up on
Airbus, say, versus Boeing. Because everybody has to be looking
at this gigantically expanding Chinese economy as the ultimate
enchilada, that this is the place, man. You have got to get
there whether it is insurance you are selling or whether you
are selling commercial aircraft or you are selling widgets.
Would you be willing, any one of you, to be crazy enough to
respond to those general propositions I have laid out?
Dr. Grimmett. I guess if we can define the frame of
reference, the answer will not be too far off the mark. I could
just say, based on my experience as a senior staffer over the
years, traveling back and forth to Europe and talking with
people in the political elites, you get one perception because
these people are focused on the issues and they have got some
kind of a context with which to work.
On the other hand, you hear these casual comments from
them. Even though it sounds like an urban legend--they'll say,
``well, I do not agree with your government's policy, but I
like Americans.'' You hear that all the time. I can honestly
say that I have actually had people say that to me personally,
outside of an official context, and I think it is true.
With respect to the specific question that is before the
committee today, I have been somewhat surprised at the level of
misunderstanding in the EU of where we are coming from on this
particular issue. I do not think it is necessarily a function
of people not wanting to understand what the various positions
are and the rationale. When you get down to the details, start
talking to people, and get past the initial shock of why we
seem to be going off in such divergent paths on something so
fundamental as this, I think you grasp there is a difference in
political culture in Europe compared to the United States. That
is just a part of the explanation. They have parliamentary
systems. They have a series of histories that are different
from ours. We have had a government that has evolved in a
certain way, and the way that people here interact politically
is different. They are more consensus driven in the EU. It is
very important for them to take a variety of peoples' views on
board. And that is why, if you think about the unanimity
principle in the EU, any one EU nation can, theoretically,
block nearly anything.
Senator Biden. I am taking too much time, Mr. Chairman, I
realize. But here is my worry. Maybe if I articulate the worry,
you may be able to allay it or give me some sense of how we
should respond.
I am worried about the instinct here, because of the
different sort of political cultures here, for us to say,
``hey, wait a minute. They have all American components in all
these various systems. So if you go ahead and sell, we are
going to go ahead and we are going to essentially embargo
you.'' And that will be read, wrongly, I believe, in Europe
among populations at large as the unilateral United States
dictating policy, deciding to use its economic, political, and
military strength to try to determine an outcome when, in fact,
I think to overstate it, if our position were accurately
articulated on every major talk show in Europe, the average
European sitting there listening would go, ``that makes
sense.'' I know why they are concerned. I do not want my
scenario to happen. I do not want the balance to change in
Northeast Asia, either; I do not want that to happen. I am
worried about it. That is what I am trying to drive at.
Dr. Gill. There have been resolutions passed in several
parliaments in Europe, including the Bundestag, the European
Parliament. Even the House of Commons has passed nonbinding
resolutions opposed to the idea of lifting. So the general
point that you are making is absolutely right.
It also, I think, underscores the point that even if we
have a tougher code of conduct and greater scrutiny, et cetera,
et cetera, at the EU level, it is still not going to be legally
binding in the way that it is in our country. So our efforts
definitely have to be focused on the individual countries and
their export control guidelines. We have to bring to bear the
kinds of pressures that we can in bilateral contexts on certain
countries of concern in Europe that we are worried about what
they might do. So both in terms of a public policy, sort of the
carrot and the sort of intellectual richness of our explanation
on the one hand, but, I think, also the stick of pressure
bilaterally needs to be brought to bear.
Senator Biden. It would be nice to inform their societies
of our position, it seems to me. I have spoken too long. The
doctor may want to respond.
Mr. Brookes. I think there is a big difference between the
populations and the governments in Europe on this issue. I have
not met many people who really support the lifting of the arms
embargo. I think this is being driven by the French and big
business, and that is what is driving this right now. Remember,
when you talk about Europe, there are all sorts of--I do not
think it is very popular in the UK. But the French are the
dominant power in Europe, along with the Germans, and they are
driving it, along with business interests.
Senator Biden. Maybe we should compete with their own
constituency.
The Chairman. Thank you, Senator Biden.
The chair would just recognize that the first vote has
started. Therefore, we are in that zone.
We have been joined by the distinguished chairman of our
European Subcommittee, Senator Allen, and I want to recognize
him. I would say to the Senator that when we get into the
second half of the votes, I may even yield the chair to the
Senator so that he can preside and conclude. But for the
moment, I recognize him for his comments.
Senator Allen. Thank you, Mr. Chairman. I thank you and
Senator Biden for having this hearing on a very important
issue, and I thank all our witnesses for being here.
This hearing this afternoon is on an issue of great concern
to many members of this committee on a bipartisan basis, as
well as I believe all members of the Senate when they are
confronting it. It is important for us to analyze how the
removal of this embargo affects our own interests, our own
security, as well as the symbol, the symbol it sends to the
rest of the world.
I heard Mr. Brookes saying, well, this is being driven by
economic reasons, financial reasons, and that is probably the
case. I have met with European leaders, including those from
the country of France in the last several weeks, heard their
arguments. They talk about their toolbox and their code of
conduct and how they are going to somehow make the controls
tighter and more consistent. I will be frank with you,
gentlemen, I am less than convinced that this is really an
approach. Reality is that the embargo was put on because of
Tiananmen Square and that massacre. What has changed since then
in the People's Republic of China's Government? Nothing. It is
still a recalcitrant government.
The collaboration issue on our arms, things such as the
joint strike fighter and others. I think we need to examine
what are we going to do in the future in the event that we have
this joint effort, which makes sense with our NATO allies so
that we get the best, they get the best, the training on the
equipment, whether it is French, whether it is United States,
whether it is British, maybe Italian, maybe German, that there
is that cooperation. But how can we have any confidence in the
future and what safeguards could be put into place that then
these technologies, these systems, this equipment would then be
transferred, sold to China.
I want to commend whoever wrote, Mr. Chairman, the briefing
for this committee. What an outstanding piece that everyone
should read. It is not just about Europe. It is about the
growth in the military equipment and capability of the People's
Republic of China, and it is not just missiles. It is not just
aircraft. It is helicopters. It is submarines. And while we are
cutting back on our Navy and cutting back in certain areas, it
is something all Americans need to be aware of in the larger
context.
So, here they are selling advanced equipment, new
technologies to the Chinese. Look at China's latest efforts
that are trying to use threats of duress and military might
against the free will of the people of Taiwan. Japan is
concerned. You add from their threats to the region, China also
is a proliferator. They sell arms to belligerents, countries
that are not friends of ours or our allies, and plus, they sell
it to terrorist groups. They also prop up the North Koreans who
are also notorious proliferators as well.
So, before we start any more advancements and joint
military capabilities and construction and manufacturing, I
think the ending of this embargo is going to put a big damper
on it.
Then, finally, it is a message. What message does this
send, even if they put in their codes of conduct and toolboxes
and so forth, which really is again unconvincing to me in their
arguments? But the message is that China, a country that has
not made any demonstrable improvement or progress in protection
of human rights, nonetheless, the Europeans are going to lift
the embargo at virtually the same time the Chinese are enacting
policies that are belligerent toward Taiwan, and Europe is
considering making it easier for them to get more weaponry.
Japan is concerned. So, what does that say to our allies,
whether they are Japan, whether they are South Korea, whether
they are our friends in Taiwan?
So, I do not know what can be done. I hope the Europeans
will reconsider it. But, maybe, since the motivation is clearly
one of financial rather than human rights--and that is the
bottom line message that is sent, is the Europeans are more
about business relationships, making sales, and finances than
they do about human rights. There is no other conclusion that
one could draw. I think the people of Europe, speaking to
Senator Biden's comments, would actually care about human
rights. They are sovereign countries, but they share many of
our values, of course.
So the question is: As Europe is looking to compromise the
concept of human rights for a sale, how can we get them
possibly to reconsider, or at least, understand that if
finances is what motivates them the most, how would
transatlantic defense cooperation be affected by the EU's
decision to lift the 1989 arms embargo with China? If they saw
that as a greater negative, maybe they would find it not in
their interest to do it.
From any of you all, what rational objective statement
could we say, for example, on trade controls on their defense
programs that--you take joint strike fighter or some other
advanced weapons systems. Would any of those in your judgment
be compromised by the lifting of this arms embargo because of
the fear of the transfer of these capabilities? And, if any of
them are, is there a quantifiable way that we could explain to
our European friends that cooperation in the future will be
lessened, therefore, trade with the United States will be
diminished?
The Chairman. Let me intervene just briefly to give credit
to Dr. Grimmett for the fine memo that you mentioned.
Senator Allen. Where is this gentleman?
The Chairman. Right here.
Senator Allen. You wrote this memo?
The Chairman. Well, he contributed very substantially to
that, and we appreciate that.
Senator Allen. It is outstanding. I have been using it for
a lot of other things other than this hearing.
Dr. Gill. Mr. Chairman, if I could respond to the Senator's
question.
The Chairman. Let me just also yield the gavel to Senator
Allen. Then please conclude the meeting, if you will.
I appreciate your testimony.
Dr. Gill. On the issue of the embargo, it is a little bit
confusing to me in a logical sense. On the one hand, we are
already unhappy with the Europeans that under the current so-
called embargo they are providing the Chinese already with
military technology. And yet, we are asking them not to lift
the embargo. I do not understand that.
Clearly what we should be saying is your current embargo
does not work and you need to do something to improve it, which
is exactly what they claim that they will do. I would just
slightly disagree and say that I do think that the current
embargo, as it stands, is not effective, and they do need to
take measures to strengthen it. We can only hope that they
will. I guess I am more convinced than many that they will.
They understand very clearly what is at stake in terms of
relations with the United States, in terms of relations with
their own populations, and in terms of their relations with
important friends in the region such as Taiwan and Japan.
The current embargo is not going to work anymore. It never
did very well, and asking them to keep it is really against our
own interests to do that. We should be saying do something
better than what you have got, and we can only hope that they
will.
Mr. Brookes. Senator Allen, I am not sure--you know, we
have to disaggregate Europe, too, because we are dealing with
different countries. The UK is often considered part of Europe.
You are dealing with the French and Germans and Italians. Some
of them have been supportive of us on security issues,
obviously, in Iraq and other places. But in some senses, you
have to look at it that if we are able to limit defense
cooperation, it would have an effect on our joint strike
fighter program, for example.
But I am not so sure that every European country
considering the small amount many are spending on defense
today, would really care. I know we are all casting about for
ways to find some sort of way to, perhaps, punish the Europeans
if they do not come along with us. I think one of the drivers
for the Europeans is that they do not have any security
responsibilities in Asia. The United States is the security
structure in Asia right now based on our five bilateral
alliances. So they are being driven by commercial issues and
then probably human rights, but not security. You do not see
the French Navy--there are some French Navy ships actually out
in the South Pacific, but you do not see the French Navy like
the United States 7th Fleet patrolling the waters of the
Pacific. So they do not feel that the same way, emotionally, we
do when we think about the Pacific Command, the 7th Fleet, our
soldiers and marines in Japan and Korea. The Europeans do not
have that same sort of feeling.
I am not sure that there is much we can do in that respect,
but I think we should look at options to get them to come
around by limiting defense cooperation. But because a lot of
them, if you see how little they are really spending on
defense, I do not know if it would really make a big difference
to them. Remember, the European defense industry is very
beleaguered right now. They certainly might look for another
market in China, but I am not sure how much effect that will
really have on them ultimately.
Dr. Grimmett. Senator, as far as your basic question of how
you might influence the EU on this, I can tell you the
following. I just came back from an official trip to London. I
was there for a week discussing this matter with a lot of
people. And I can tell you, they got the message that people in
the United States Government are upset about this. It is not
that they are not seized of the fact that there are a variety
of concerns such as those that have been laid out and
articulated by yourself and the chairman and others about this
whole larger strategic question.
Now, there was some level of confusion--maybe that is not
the right word. I am not sure I know what the exact word would
be, so I will go with confusion for now--as to why this issue
was something that we let get to the place we are now; how this
whole controversy evolved to the point that we seem to be going
in significantly different directions. I find that a little
worrisome because I think that there are enough people on both
sides of the Atlantic that have talked about this issue and
have talked about defense trade controls and export control
systems. We have had talks on other issues, such as the ITAR
waiver and things like that that have been going on for a
couple of years. So, it was a bit surprising to me that there
was a lack of appreciation of why this was going to be a very
significant matter for the United States. But they certainly
know it is now. Notwithstanding how we got to where we are
today, they know now that the United States is very much
concerned about this.
I think by that fact alone, you have got the predicate laid
for a follow-on series of discussions and consultations to
maybe resolve the issue in a way that would satisfy U.S.
concerns. But those are matters above my pay grade. That is for
policymakers--people in government with influence to address.
Mr. Brookes. And I think, Senator, the Chinese passage of
the anti-secession law on Monday may help our cause because it
looks like--since the lifting of the arms embargo has been
talked about for a long time--in fact, they actually thought
they were going to lift the arms embargo last December during
their China-EU summit. It got put off and now we are talking
about June and who knows when now. But the Chinese may have
seen it as a green light to move forward with the anti-
secession law, and I think people are very concerned about that
since they have kind of codified their policy--a less than
peaceful policy toward Taiwan. So, it could have an affect on
public opinion, as well as the opinion of legislators and
officials in Europe since it passed on Monday.
Senator Allen [presiding]. That is a good point. That is a
follow-on question. There have been loopholes in the existing
embargo, but clearly the motivation here is not to make the
embargo stronger. They may say, gosh, these codes of conduct
and toolboxes will make it better. But, if you just look at
what has been going on, you must admit that there has been an
increase in sales.
Things have happened since last fall/last winter, such as
with Japan being more concerned about Taiwan, their passage of
this anti-secession act. Actually things were getting better
with us transatlantically with our European friends, and
actually the air flights back and forth from the People's
Republic of China to Taiwan and so forth. And then they have
come up with this anti-secession law which really is an
irritant in the peaceful stand-off that has existed across the
Taiwan Strait for many decades.
The question I have for you gentlemen, because I am going
to have to wrap this up and vote, is that regardless of the
embargo and its efficacy and protocols and standards of
conduct, toolboxes, and all the rest and how this might affect
our relationships with the Europeans in joint military ventures
and so forth is: How will the human rights situation in China
be affected by this? How will the Chinese portray this? My gut
reaction is the Chinese will say, look, that was Tiananmen
Square.
They do not allow people to celebrate Tiananmen Square or
recognize it. I just came from the 40th anniversary of Selma,
marching across the bridge in the civil rights pilgrimage.
Could you imagine if in Selma and Alabama they did not allow
people to recognize Bloody Sunday, which was like, for the
civil rights movement, what the Alamo was for Texas
independence? Could you imagine if that were not the case, that
we could not reflect on what happened there and how we have
progressed as a country? But in China's case, we cannot have
any talk about Tiananmen Square.
How will they portray this? What will be the human rights
impact on the people of China?
Mr. Brookes. I think they will portray it as a victory. I
think as much for China wants getting access to appropriate
technology for their military industrial complex, they will see
this as a major symbolic victory. They just had the passing of
one of the major reformers, Zhao Ziyang, with very little
fanfare about that. He was there at Tiananmen Square, and I
think this will be another nail in the coffin on this issue of
addressing the Tiananmen Square crackdown.
Now, that is not to say that human rights may not progress
in China for other reasons, but I think that the Chinese
certainly will see it as a symbolic victory. If you look at the
State Department's most recent human rights report, it says
that human rights is poor in China. I think that is the exact
term, ``poor,'' and serious human rights abuses continue. So I
do not think that this will help the situation at all.
Dr. Gill. In terms of our discussions and dialogue with
European friends on this, the human rights question is
absolutely the weakest link in the European argument on this
question. No doubt. I think it is one we ought to try to
leverage even harder because I think we can agree that, by and
large, European populations, as well as leaders, are attuned
and sensitive to the need for the spread of democracy and human
rights. They are. And we can point very clearly to the fact
that on a number of specific requests made to the Chinese as a
part of this whole arms embargo lifting business, the Chinese
have not come forward and complied with what the Europeans are
asking them to do.
In particular, Senator, I think Europeans had expectations
that during the most recent National People's Congress a couple
of weeks ago, the National People's Congress would consider and
ratify the International Convention on Political and Civil
Rights, which they did not. This is making some people in the
European capitals rather unhappy. I think, again, by pressing
on this human rights issue with our European friends, I think
we can make a very strong case that the Chinese are not doing
what the Europeans have asked them to do. And so, therefore,
the notion of lifting the embargo or moving ahead into some
different direction is not ripe. It is not ready.
I think it also would send a very strong signal to our
Chinese friends that they are going to have to take some
actions, some better concrete action, allowing access, for
example, to the prisons by the International Committee on the
Red Cross and other important steps before they can expect the
Europeans to offer up this trophy of lifting the embargo.
Mr. Brookes. I think the Chinese think that it is a done
deal and that is why they did what Bates talked about: Not
passing the convention and also moving ahead with the anti-
secession law. They feel that there is so much momentum in
Europe over this that the train has already left the station
and they can go ahead on these other issues even though they
are counter to European interests.
Senator Allen. Dr. Grimmett, do you have anything to add?
Dr. Grimmett. I think they have covered it, Senator.
Senator Allen. Thank you. I want to thank Peter Brookes,
Dr. Gill, and Dr. Grimmett for your testimony. Thank you, Dr.
Grimmett, for truly an outstanding brief for our committee, to
the extent you contributed to it.
What I get from this is what will touch the heart strings,
maybe not the purse strings, of the Europeans will be, do you
really want to reward a regime that represses its people, has
not made any demonstrable improvement in human rights
opportunities for the people of China since Tiananmen Square,
and indeed, most recently have become even more embolden, and
in fact, in the years since, in the last several years, has
really been on quite a trend of a strong military buildup. And
rather than passing that civil rights protocol or law, that
same congress rubber-stamped the anti-secession law,
threatening the free will and peacefulness of the people of
Taiwan to determine their own destiny as to which government
they care to pledge allegiance to in a peaceful manner and not
under duress.
So, while Mr. Gill makes a good point that there were
loopholes, big loopholes I suppose you might say, in the
embargo, you have given me, at least this Senator, some insight
as to how best to make our point to our European friends. And
they are friends. They are sovereign countries and people. I do
not want to characterize their views on things, but I do think
that that issue of human rights, do you really want to be on
the side of repressors as opposed to the side of freedom, and I
think that they will aspire to be on the side of freedom and
liberty as opposed to the side of repression and strong
military buildup and threatening of neighbors.
So, gentlemen, thank you all so much. I am sorry that this
hearing is the way it is with the way votes are right now.
Thank you for being great patriots. I appreciate your
forbearance.
This hearing is adjourned.
[Whereupon, at 4:12 p.m., the committee was adjourned.]