President Carter has called off his much-touted 3-year-old campaign to reduce sales of U.S. weapons to foreign nations by a fixed percentage each year.
Instead of striving to reduce arms sales by another 8 percent in fiscal 1980 in hopes of curbing international trafficking, Carter will settle for the fiscal 1979 ceiling.
That ceiling, which applies to countries outside of NATO, Japan, Austrailia and New Zealand, will be $9.2 billion for fiscal 1980. A State Department spokesman said yesterday that the new ceiling represents the fiscal 1979 level of $8.43 billion, adjusted or inflation.
As a presidential candidate, Carter stressed the need to restrict the worldwide flow of arms. He imposed an 8 percent reduction in noncommercial arms sales to ceiling countries between fiscal 1977 and 1978. He ordered another 8 percent reduction between 1978 and 1979. The cuts were achieved, with the fall of the shah and Iran's subsequent cancellation of many arms orders, helping bring down the fiscal 1979 figure.
Secretary of State Cyrus R. Vance told the Senate Foreign Relations Committee on Thursday that "in the absence of agreed international restraint, we do not plan to reduce further the ceiling on our own arms transfers."
He said that "while we remained convinced" that international agreements to restrict international arms sales "can contribute to a safer world, we do not at this time foresee progress."
Sales of U.S. arms to all foreign countries, including those excluded from the ceiling, are expected to reach $14.5 billion in fiscal 1980. This compares, without adjusting for inflation, with total sales of $11.34 billion in fiscal 1977, $13.53 billion in fiscal 1978 and $13.02 billion in fiscal 1979, according to Pentagon figures.
In January, Carter made another significant change in arms policy by permitting U. S. aerospace firms to design an "FX" fighter specifically or foreign countries. This was an exception to the prohibition on developing-weapons specially for export, as distinguished from selling arms used by U.S. forces.
Matthew Nimetz, under secretary of state for security assistance, contended before the Senate Foreign Relations Committee recently that the FX would discourage foreign nations from buying more sophisticated planes.
He added that the State Department is studying requests from several U.S. aerospace companies to discuss their FX designs with 21 countries.
The companies must spend their own money, not the government's to develop the FX. General Dynamics plans to offer a version of its F16 fighter, powered by a less sophisticated engine, while Northrop is upgrading its F5 in hopes of capturing the FX market.
The American FX aircraft are likely to collide with the new fighter Israel has said it will build on its own. Pentagon officials reason that the Israelis will have to build more planes than their own forces can use to retrieve development costs. This would mean foreign sales.
Although the United States, because it will provide the engine for the Israeli plane, could veto sales beyond Israel, the U.S. government would be under heavy pressure to allow them.
This would almost certainly bring complaints from U.S. defense contractors that they are spending their own money to build a plane that must compete in the international market with an Israeli one financed largely by U.S. loans and grants.