Globalization of the arms industry

The arms industry has changed radically since the end of the Cold War, primarily due to the reduction in military spending during the early-mid 1990s (military spending has been growing again since 1998¹) and widespread company privatisations. Military industry is no longer comprised of discrete companies, but of 'a labyrinth of licensed production, joint venture, conglomerates, strategic partnerships, and Co-operative Armament Programmes.'²

Western companies outside the US are torn between global aspirations and dependence on their 'home' governments for preferential treatment. BAE Systems is a prime example. It is desperate to be an international company (though being a US one would do) and dropped the 'British' from its name accordingly. Its shares are now held primarily outside of the UK and it has acquired parts of Lockheed Martin to provide access to US spending. However, it still expects to receive exactly what it wants from the UK government and demands political favour on the basis of its history and of UK jobs. The present government is willing to oblige, though the demise of the national military industrial base may one day become too obvious for this position to be sustained.

Exports

Corporate manoeuvrings are not just about dividing up US and European domestic markets. The globalization of production has an impact on further exports in two main ways:

l Companies in industrialising countries are purchased or pulled into partnerships to provide both a cheaper source of labour and an additional, almost guaranteed, home market. The country might also have fewer export controls, providing a further source of income.

l Companies demand reduced export controls to help their new cross-border collaborations to function, and then it is only a small step to restructuring export controls for further afield. A prime example of this is the so-called 'Six Nation Framework Agreement' between France, Germany, Sweden, Spain, Italy and the UK. One purpose of the Agreement is to reduce the export controls between the six countries but, for each individual arms programme, participants will agree a list of 'permitted destinations' to which the equipment can be sold. The lists will be kept secret and are likely to permit exports according to the lowest common denominator – it is hard to see countries like Germany or Sweden maintaining their traditionally more restrictive export policies against pressure from, say, France or the UK.

DSEi

Arms fairs have changed in parallel with the arms industry. The Royal Navy and British Army Equipment Exhibitions, forerunners of DSEi, used to be showcases for domestic arms producers. But now over 400 of the 1000 exhibitors at DSEi are non-UK. There are companies from Israel, Turkey, Pakistan, Bulgaria, Romania, Russia and Singapore, as well as many from South Africa, Europe and the US. As an MoD letter has stated, the 'move to the private sector with the launch of DSEi in 1999 reflected the increasingly transnational nature of the defence equipment industry'.³ DSEi has become a centre for, and a symbol of, the international, globalizing arms trade, where sales are being arranged on UK soil that are not subject to UK licensing arrangements.

1 SIPRI Yearbook 2002
2 Christopher Wrigley, 'The Arms Industry', CAAT, March 2001
3 Letter from Dr Lewis Moonie MP, MoD, 29.7.02