Procurement: <b>November 18, 2004</b>

November 18, 2004

France and Germany are trying to persuade other European Union members to drop a 15-year-old embargo on weapons exports to China. The U.S. government is pressuring other EU members to keep the ban, imposed after the 1989 Tiananmen Square massacre. France seems to be determined to lift the ban, pointing out that China that already has access to advanced weapons. High-ranking Chinese military officials have also traveled to Paris for high-level talks, laying the ground work for the sale of French military equipment to China.

U.S. officials anticipate that efforts to lift the ban will increase prior to a China-EU summit in early December. The U.S. is afraid that lifting the ban would greatly accelerate China's military build-up, affect the balance of power between China and Taiwan, and send a "bad message" on China's human rights record. Even with the embargo in place, EU members sold $262 million of military equipment to China in 2002, the most recent year of available statistics. Sales do not include "lethal equipment" or big-ticket items such as aircraft or ships. But U.S. officials are worried that China is using embargo loopholes to make up for its deficiencies in night-vision gear, sensors, and command-and-control systems.

European industry officials estimate that China represents a near-term market of over $13 billion in military communications and computer system, with additional sales opportunities available for UAVs, trainers, and light helicopters. Some within the EU would like to see Beijing make a conciliatory gesture before the ban is lifted, such as freeing Tiananmen Square prisoners, but others believe an opportunity to improve commercial and strategic relations with China are too great to pass up.

U.S. defense cooperation (i.e. arms sales) with Europe, already shaky, is likely to become more difficult if the embargo is lifted. Congressional staffers have said that punitive measures are likely if the EU goes through with lifting the ban. Doug Mohney

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