by Daniel Katz
Recently, the U.S. arms industry has enjoyed a string of banner years. So it was surprising to read Jonathan Caverley and Ethan Kapstein’s claim that Washington has lost its dominance in the global arms market. Reports on conventional arms transfers from the Congressional Research Service contain the best public data on this topic, and the numbers reveal that the authors’ core assertion is simply not true.
Some history is in order. In the early 1990s, with the Russian economy in disarray and the Gulf states rearming, the United States’ share of the global arms market soared, peaking at 60 percent in 1993. Over the next decade, Russia’s defense industry recovered, and Moscow ramped up its arms exports to China and India, whose economies were booming. At the same time, falling oil prices and the Asian financial crisis of 1997-98 took a toll on U.S. allies, and Washington’s market share fell to somewhere between 30 and 50 percent. Finally, by 2005, it hit bottom, at 27 percent.
But contrary to what Caverley and Kapstein suggest, since 2007, the United States’ market share has increased. As Beijing began illegally copying Russian technology and Washington broke into the Indian market, Moscow’s exports declined. Meanwhile, U.S. customers in the Middle East and Asia increased their imports. Over the last five years, the U.S. weapons industry has accounted for 52 percent of global sales; in 2011, the U.S. share reached 77 percent, a record high.
Caverley and Kapstein see signs of dissatisfaction with U.S. weapons everywhere: Saudi Arabia’s purchasing the Eurofighter, Pakistan’s importing more arms from China, and India’s selecting the Rafale. But in truth, none of these decisions stemmed from displeasure with U.S.-made equipment. Riyadh has long maintained defense ties to Europe, and the Eurofighters it purchased are replacing the Panavia Tornado, which is also European. The rest of Saudi Arabia’s arms come almost exclusively from the United States, so the Eurofighter deal hardly threatens Washington’s position as the kingdom’s top weapons supplier.
Pakistan, likewise, has long maintained defense ties with China. In light of the recent tensions in U.S.-Pakistani relations, it should come as no surprise that Islamabad is increasing its imports from Beijing. As for India, seven years ago Washington did almost no business with New Delhi, which at the time purchased almost all its materiel from Russia. But since 2006, U.S. contractors have inked more than $8 billion in weapons deals with India, including for major purchases of aircraft, such as the C-17, the C-130, and the Apache.
Caverley and Kapstein concede that Washington dominates the Middle Eastern market, but they do not fully appreciate the region’s strategic importance. If the White House decides it must strike Iran, heavily armed allies in the Gulf will help the United States defend its partners against Tehran’s retaliation. The same logic holds true with regard to defending U.S. allies against potential aggression in Asia. Malaysia and Indonesia have purchased fighters from Russia, and Singapore imports ships from France, but the authors neglect to mention that during the last 15 years, Malaysia has bought F-18s, Indonesia has bought F-16s, and Singapore has bought F-15s, F-16s, and Apaches from the United States. In fact, according to the Congressional Research Service, during the last several years, Washington has regained its position as the top weapons supplier to developing countries in Asia.
Controlling 77 percent of the global arms market yields innumerable benefits for the United States: it decreases the costs of equipping American forces, emboldens U.S. allies to stand up to common enemies, and facilitates joint operations. Although the theme of U.S. decline has gained popularity of late, in the case of weapons sales, at least, the facts do not bear it out.
Daniel Katz is a former analyst with the U.S. Department of Defense. The opinions expressed here are his own. Daniel Katz is the Chair of the Defense Discussion Group at YPFP.