Int'l Herald Tribune

EU stance on China arms stirs 3 nations

By Judy Dempsey International Herald Tribune
Friday, March 4, 2005

BERLIN The strong possibility that the European Union will lift its embargo on arms sales to China has reverberated in different ways from Moscow to Canberra and Jerusalem to Washington as countries ponder its impact on trade relations and regional stability, diplomats and experts said Thursday.

With trade, increased competition and stability at stake for countries selling arms to China, Russia and Australia both said they wanted to be consulted by the EU over what weapons would be exported if the ban is lifted, probably in the coming months.

Israel, which has established itself as a crucial exporter to Beijing of high-technology items, including radar systems, optical and telecommunications equipment and flight simulators, said it was weighing how to reposition in the face of new competition.

Russia has not formally opposed the EU's plans - it is hardly in a position to do so, because it sells arms to China.

Australia imposed a weapons embargo on China in response to the 1989 Tiananmen Square massacres, but soon lifted it.

Moscow did not impose any embargo. This allowed its cash-strapped defense industry to enter the quickly expanding Chinese arms market, where it is now one of the biggest exporters. Russia's arms sales in 2004 totaled $5.12 billion, of which 80 percent was for China and India combined.

By contrast, the EU's arms sales to China in 2003 totaled $416 million, a result of special export licenses despite the embargo.

"Russia wants to be consulted if the embargo is lifted," said Andrei Zagorski, a Russian security expert and deputy director of the Moscow branch of the Konrad Adenauer Stiftung, a conservative think tank in Germany. Now, faced with the prospect of the Europeans entering the market in a big way, Moscow has two concerns.

"One of Moscow's concerns is how more imports of high technology will affect the future development of China as Russia's big neighbor," Zagorski said in a telephone interview.

"The second is that we would find ourselves as competitors," Zagorski added. "So it is about more competition but also real concern about how a strong China could upset the region's military balance."

Other defense experts said China would seize the chance to buy more sophisticated technology once the embargo was lifted, a move that would complicate the Russian defense industry's struggle to compete.

"China imported over the past 15 years a lot from Russia but was not totally satisfied," said Siemon Wezeman, arms transfer expert at the Stockholm Institute Peace Research Institute. "China wants electronics, engines and the technology for engines and has already started to buy German engines for its submarines."

In this respect, the Russian position on the arms embargo was almost parallel to the U.S. position - Washington wants the ban to remain in place - but for different reasons.

This is the opinion of Anton Bebler, political science professor and defense expert at Ljubljana University in Slovenia. "The U.S. is concerned about a military imbalance in the region and Russia is concerned about losing markets," he said in an interview. "So both oppose ending the embargo."

Australia, another substantial arms exporter to China after it lifted its own embargo in 1992, said it, too, wanted to be consulted by Brussels, especially over the EU's code of conduct that is supposed to set out under what conditions EU states could sell arms to China. The code is not legally binding.

"We would expect to be consulted about the details of the code of conduct," the Australian foreign minister, Alexander Downer, said in recent remarks made available by the Australian Embassy in Berlin.

He said, however, that Australia was in no position to tell the Europeans not to lift the embargo.

Instead, Downer was quoted as saying: "What we've said to the European Union is, if you're going to go ahead and lift your arms embargo on China, please do so in a way that has no impact on the power balance of the strategic structure of the East Asian region."

Israel, which never imposed any embargo on China, has had to walk a fine line in its trade deals with China on the one hand and its close relationship with its most important ally, the United States.

Its defense industry relies increasingly on exports to survive. But since Israeli receives $3 billion annually in U.S. aid, much of it military, it is obliged to support the U.S. position.

Because of Israel's already deep involvement in sales to China, it must be careful in deciding what technology it sells to Beijing.

"If the market in China is open to everyone, we would like to join the club," said Yigal Caspi, head of the North East Asia division at Israel's Foreign Ministry.

"If the U.S. decided in future over its embargo it would be different," Caspi added in an interview.

"The point is that the U.S. does not want to see Israeli weapons shooting American soldiers," Caspi said. "The priority is our friendship with the U.S."

Indeed, nearly five years ago, Israel was forced to suspend the sale to China of four advanced early warning Phalcon aircraft that Washington feared would have given China access to some of the best technology to build these air defense systems.