Pacific Pivot Spikes Arms Sales
As the region remains jittery following a year of maritime territorial disputes and nuclear rocket launches, American arms transfer agreements to Asia continue to boom.
U.S. arms sales to Asia set to boom on Pacific “pivot”
(Reuters) – U.S. sales of warplanes, anti-missile systems and other costly weapons to China’s and North Korea’s neighbors appear set for significant growth amid regional security jitters.
Strengthening treaty allies and other security partners is central to the White House’s “pivot” toward a Pacific region jolted by maritime territorial disputes in China’s case, and missile and nuclear programs, in North Korea’s.
The pivot “will result in growing opportunities for our industry to help equip our friends,” said Fred Downey, vice president for national security at the Aerospace Industries Association, a trade group that includes top U.S. arms makers.
Demand for big-ticket U.S. weapons is expected to stay strong for at least the next few years, the trade group said in a 2012 year-end review and forecast released in December.
Fears resulting from China’s growing military spending should lead to enough U.S. sales in South and East Asia to more than offset a slowdown in European arms-buying, according to the forecast.
The trade group, whose members include Pentagon suppliers Lockheed Martin Corp (LMT.N), Boeing Co (BA.N) and Northrop Grumman Corp (NOC.N), did not put numbers to its 2013 forecast. Nor did the Pentagon’s Defense Security Cooperation Agency, which has overseen a boom in worldwide deals under President Barack Obama.
The security agency, in response to a Reuters request, said sales agreements with countries in the U.S. Pacific Command’s area of activity rose to $13.7 billion (8.4 billion pounds) in fiscal 2012, up 5.4 percent from a year before. Such pacts represent orders for future delivery.
In 2012 there were about 65 notifications to Congress of proposed government-brokered foreign military sales with a combined potential value of more than $63 billion. In addition, the State Department office that regulates direct commercial sales was on track to receive more than 85,000 license requests in 2012, a new record.
Overall, the United States reached arms transfer agreements in 2011 totaling $66.3 billion, or nearly 78 percent of all such worldwide pacts, according to the nonpartisan Congressional Research Service. The 2011 total was swollen by a record $33.4 billion deal with Saudi Arabia. India ranked second with $6.9 billion in such agreements.
Rupert Hammond-Chambers, who consults for U.S. arms makers through BowerGroupAsia, an advisory with 10 offices in the region, predicted Southeast Asian defense budgets would expand steadily as a hedge against Chinese assertiveness in disputes in the South China and East China seas.