President Carter is holding up action on about $6 billion in U. S. arms sales to foreign nations in an undeclared moratorium that has been in effect since his administration took office.
Carter said Jan. 24 that he did not contemplate "an abrupt and total termination" of foreign arms sales, but no sale requiring notification to Congress has not gone forward since Carter took office.
The purpose of the moratorium is to give government officials time to draft the new adminsitration's arms sale policy, which will be formally titled Presidential Review Memorandum 12.
Presidents Nixon and Ford encouraged arms sales, in part as a way to strengthen the U. S. balance of trade after the price of oil quadrupled in 1974.
Carter, in contrast, promised during his campaign for the presidency to change the arms sales policy, which he called "as cynical as it is dangerous."
Leslie H. Gelb, director of the State Department's Bureau of Politico-Military Affairs, is running the inter-agency review of arms sales. The first deadline was March 15 and officials now hope the review will be finished by late new month. The present draft is reported to be 168 pages.
White House officials said they hope to submit Carter's arms sales policy paper to Congress late in April.
Although the State Department has been heavily engaged in the preparation of the new policy memorandum, it has made recommendations of approval of disapproval on roughly $6 billion in arms sales and sent them to White House national security affairs adviser Zbigniew Brzezinski's office where they remain.
Perhaps the most controversial of these sales is $1.14 billion in improved Hawk missiles for Saudi Arabia, a commercial sale agreement signed by the Raytheon Corp. with the Ford administration's approval last June.
Carter has said he wants to be personally involved in such controvesial arms sales and in February he canceled a sale to Israel of CBU-72 concussion bombs that Ford had approved last October.
Carter's campaign statement urging a reduction in arms sales and his repeated statements that nothing should be done to endanger the security of Israel would appear to conflict with approval of the Hawk sale.
On the other hand, defense contractors, the Pentagon and the Saudi Arabians want the Hawk sale to go through.
Defense industries are troubled by the delay in arms sale approval although none is complaining publicly. Corporations are faced with the problems of holding to prices arrived at several months ago despite increased costs. The Vought Corp. of Dallas has pinned its hopes for surviving as a major aerospace contractor on getting permission to sell 110 A-7 attack jets to Pakistan.
Almost all U. S. foreign military sales are to NATO nations, Iran, Israel and Saudi Arabia. There is little controversy over the size of NATO purchases as Gelb said in a Foreign Policy magazine article last winter.
Arms sales were "not a problem of quantity except for the Middle East area," he wrote before joining the administration.
The Senate Foreign Relations Committee had already acted, asking the administration to submit a study of the policy implicactions of arms sales to the Persian Gulf area before approving any more sales to that region.
One result to the presidential review memorandum will be the establishment of an Arms Export Control Board, according to reliable sources. State officials see the board as a way to reduce Pentagon leverage in making deals for selling arms abroad.
The board will be chaired by Lucy Wilson Benson, under secretary of state for coordinating security assistance programs. Benson will have members of all concerned departments plus an observer from the White House National Security Council on the board which will make its recommendations to the President through the national security adviser.
Carter and his Cabinet officials have stressed that other nations must cooperate with the United States if conventional arms sales are to be reduced throughout the world.
The President told a group of editors and publishers at the White House March 4 that he had discussed the problem with officials of Britian, France, West Germany and the Soviet Union and found them receptive.
In its fiscal year 1977 report to Congress, the Pentagon said: "Although U. S. sales agreements peaked in 1974, the demand for military exports worldwide is unlikely to lessen precipitiously in the near future regarless of U. S. unilateral actions."
The United States, however, is by far the biggest arms seller. In fiscal 1974 it sold $10.8 billion worth and in fiscal 1976 $8.2 billion, according to Pentagon figures.
The Arms Control and Disarmanent Agency reported tilted "World Military Expenditures and Arms Tranfers 1966-1975" says that military spending by developed nations has been declining slightly since 1969 but that underdeveloped nations have greatly increased their spending.
Total world military program costs rose from $285 billion in 1966 to $345 billion in 1974, the reports says.
The economic pressures within the United States to continue unrestricted military sales are considerable.
Several defense corporations are in shaky financial condition and would be hard-pressed to continue if they lost one or more significant contracts.
In two separate studies last year, the Congressional Budget Office estimated that 350,000 jobs in the United States are tied to foreign arms sales. The Budget Office estimated that the pentagon gets $560 million for every $8 billion in foreign sales in savings realized from larger production runs, which bring lower per unit costs and in research money recovered.
At the McDonnell-Douglas plant in St. Louis, the white flag outside the main entrance symbolises how hard previous adminstrations pushed the overseas arms sales Carter is trying to reduce.
The flag emblazoned with a blue "E" was awarded to the company by the Commerce Department in 1971 in appreciation for all the military and civilian aircraft McDonnell-Douglas sold overseas.