268. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to President Carter 1

SUBJECT

  • PRC Meeting on PRM–12—Conventional Arms Control

Yesterday the PRC met on the subject of conventional arms control. Attached you will find the following:

—At Tab A: decision memorandum covering the five major issues on which there was disagreement. In each case the options chosen and arguments for and against are presented on the facing page.

—At Tab B: For your information—to be initialed if approved—a summary of the PRM’s conclusions on which there [Page 659]was consensus. These are presented as modified by the PRC discussion.

—At Tab C: For your information only (Tab A contains the relevant portions needed for decision), a summary of the minutes of the meeting, and a list of attendees.

The major issue remains whether or not to impose a dollar volume ceiling. In my view, the implicit message of those who argued against imposing a ceiling was the feeling—or the fear—that we would not stay under it. This goes right to the heart of the question of whether you are determined to achieve real reductions in the volume of arms transferred overseas. If you are, then nearly everyone would agree that the only way to do so is to set a specific ceiling.

The fear that we might not meet a ceiling is quite justified. The FY 1976 FMS total, excluding NATO, Japan, Australia, and New Zealand, was $7.02 billion. The comparable estimate for FY 1977 (including the decisions you made earlier this week) is $8.25 billion. Possible additional major cases of which State is already aware are:

Possible Major Cases Low High
Iran 250 F–18L 2.5 3.0
Iran 140 F–16 2.2 2.2
Saudi Arabia 50 F–15 3.0 4.0
Israel 250 F–16 3.0 4.0
Spain 72 F–16 1.2 1.5
Pakistan 110 A–7 .6 .6
Korea 60 F–16 1.0 1.0
Israel Miscellaneous .3 .3
Egypt 200 F–5s .7 .7
14.5 17.3

Thus we are already more than a billion dollars over last fiscal year. A lot more is pending, and we have 5 months left to go of FY 1977.

On the other hand, if we look at the calendar year—for which this Administration is responsible—the picture is much brighter, in fact a significant cut appears possible. My point is simply that a strict discipline is going to be needed to just avoid surpassing last year—let alone cutting back.

At this time, your choice is among: a specific ceiling; an unspecified reduction; or, relying on other types of controls to achieve restraint. The decision of exactly what a ceiling should cover, exactly what level should be adopted, and which year it should be applied to, can be addressed in a follow-on paper if you decide on the ceiling option.

In my opinion there are three compelling reasons for a ceiling:

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Political necessity. Neither Congress nor the press will let you get away with saying “we will sell less” as was suggested yesterday. Conventional arms control was a major focus of your campaign.

International necessity. The U.S., as the world’s leading supplier, will have to make clear its intent to exercise restraint if we are to create any international momentum toward joint supplier restraint. Tougher management guidelines will not be sufficient.

Management realities. A ceiling is probably the only way to force the hard choices necessary to actually cut the volume of arms transfers.

Tab A

Major Issues of Disagreement 2

DOLLAR VOLUME CEILINGS

Vance recommends Control 3(b). He believes there is a need for a ceiling in the early years of the new arms sales policy, because it would help us discipline ourselves and manage the program more effectively than would a general statement on reduction. Also, it would force us to consider more explicitly the trade-offs between and among arms sales.

Brown recommends Control 2. He believes that establishing a ceiling would: 1) reduce our flexibility; 2) encourage purchasers to cluster their orders early in the fiscal year; 3) result in the ceiling being used as a floor; 4) lead to enormous accounting problems; 5) spur Congress to put ceilings or subceilings into law. He notes, however, that a ceiling is politically attractive and the only sure way to meet our goal of restraint in the conventional arms area.

Warnke recommends Control 2, agreeing that the ceiling cuts into our flexibility and may become a target. He would recommend, however, using the term “significant reduction.”

Smith (JCS) recommends Control 1.

Benson (Under Secretary of State for Security Assistance) recommends Control 2, believing that reductions in arms sales can be achieved without an inflexible ceiling.

Lance recommends Control 2, but would also use the term “significant reduction.”

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Aaron recommends Control 3(b). He believes that, given your statements on this subject, defense of a new policy of restraint would be a political impossibility without a quantified percentage reduction or ceiling. He stated that this would be the first question asked of Jody Powell and our witnesses on the Hill.

Brzezinski recommends Control 3(b), believing that only a ceiling will allow you to fulfill your pledge to reduce the transfer of arms. Establishment of a ceiling would tell the U.S. public and the world that we intend to scale down our arms transfers, thus indicating our sincerity to the French, British, and other suppliers.

DOLLAR VOLUME CEILINGS

Issue: Should there be a fixed ceiling on the dollar volume of U.S. arms transfers?

Controls:

1. Utilize ceilings for planning purposes only, relying on other specific controls to achieve greater restraint in arms transfers.

2. State that the dollar volume of arms transfers in FY 1977 will be reduced from the FY 76 total, and that the volume of FY 1978 transfers will likewise be reduced from the FY 1977 total.3

3. For FY 1977, impose a ceiling on total U.S. arms transfers at a level equal to the FY 1976 total. For FY 1978, reduce the ceiling by 10 percent4 from the FY 1976 total. The ceiling could be applied:

a. Across the board to all types of transfers: weapons, ammunitions, supporting equipment, spare parts, training, and construction.

b. Only to weapons and weapons-related items, exempting those sales which clearly can be classified as services.

Decision:

Control 1. _______

2. ______5

3a. ______

3b. ______

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LIMITS ON TRANSFERS OF NEW SYSTEMS

Vance recommends Controls 1, 2, and 4. He believes that this issue is at the heart of the arms sale problem, and strict controls need to be established.

Brown recommends Control 1, and if dollar volume ceilings are not imposed, he recommends Control 4 also. He does not recommend Control 2, because of our Latin American experience which has demonstrated that unilateral restraint on our part does not reduce the flow of weapons to a region.

Warnke recommends Controls 1, 2, and 4. He also believes this issue is central to the arms sale problem, and that strict control is thus a necessity. He notes that Controls 2 and 4 are inextricably bound, that applying Control 4 without Control 2 would be of little use.

Smith recommends Control 4.

Lance recommends Controls 1, 2, and 3.

Brzezinski recommends Control 1, assuming dollar volume ceilings are established. He notes that while Control 2 appears reasonable in the abstract, it might unduly limit our flexibility in future situations, where transfer of limited amounts of high-technology equipment may advance our interests.

LIMITS ON TRANSFER OF SIGNIFICANT NEW SYSTEMS

Issue: The issue is the extent to which we should limit the transfer, or production abroad, of significant, newly-developed weapons systems. The transfer of advanced systems raises concern about destabilizing effects in the region involved, the financial burdens involved for recipients, and the compromise of new technology.

Controls:

1. Establish more extensive guidelines for assessing requests for equipment sales, including requirements 1) that supplying the system would uniquely strengthen the requestor’s ability to perform military functions which serve U.S. security interests, and 2) that less-advanced existing systems with roughly comparable capabilities are unavailable from the United States.6

2. Enunciate the principle that the United States will not be the first supplier to introduce into a region an advanced weapon that creates a new or significantly higher combat capability.7

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3. Compile a list of all major advanced systems which we will not release overseas for sale, cooperative R&D, or coproduction.

4. Prohibit the commitment for sale, cooperative R&D, or coproduction of newly-developed, major weapons systems at least until the systems are operationally deployed with U.S. forces.8

Decision:

Control 1. ______9

2. ______

3. ______

4. ______

LIMITS ON NEW TECHNOLOGY EXPLICITLY DEVELOPED FOR EXPORT

Vance recommends Control 3.

Brown recommends Control 2. He is against U.S. manufacturers becoming so involved in a foreign market as to have a vested interest.

Warnke recommends Control 2, but would support Control 3.

Benson recommends Control 3, but would support Control 2.

Brzezinski recommends Control 1.

LIMITS ON NEW TECHNOLOGY EXPLICITLY DEVELOPED FOR EXPORT

Issue: Should the United States permit the sale abroad of systems which represent advanced U.S. weapons technology, but which are developed or modified especially for the foreign market?

Controls:

1. Establish more extensive guidelines for assessing requests for equipment sales, including requirements 1) that supplying the system would uniquely strengthen the requestor’s ability to perform military functions which serve U.S. security interests; 2) that after a specified period, the requestor must have the ability to maintain the system with minimal U.S. assistance; and 3) that less-advanced, existing systems with roughly comparable capabilities are unavailable from the United States or friendly suppliers.

2. Permit the export of unique systems or major modifications of U.S. systems on a case-by-case basis if the recipient validates a requirement for a specific weapon system to fulfill a specific mission, but nor[Page 664]mally prohibit sales if roughly comparable capabilities could be provided by existing or planned systems.10

3. Permit export of unique advanced weapons systems or major modifications only11 to key treaty allies (NATO, Japan, Australia, and New Zealand). Prohibit in all other cases.

Decision:

Control 1. ______

2. ______

3. ______12

LIMITS ON COPRODUCTION

Vance recommends Control 1.

Brown recommends Control 1, but would not object to imposition of Control 2.

Warnke recommends Control 1, but would not object to imposition of Control 2.

Smith recommends Control 1.

Lance recommends Control 2.

Brzezinski recommends Control 2, noting that it would be inconsistent to approve significant numbers of coproduction agreements while restricting U.S. exports of high-technology items.

LIMITS ON COPRODUCTION

Issue: The development of indigenous military industries is a priority objective of an increasing number of countries. Responding to requests for assistance in establishing production capabilities is a growing policy issue for the United States. There are two interrelated concerns: (1) Should the United States limit the number of significant coproduction agreements; and (2) How might we restrict the proliferation of arms we do approve for coproduction.

Controls:

1. Subject all requests to review under guidelines applied globally. In reviewing requests, analyze closely whether or not the proposed coproduction project would over time provide equipment in excess of [Page 665]local needs. Stipulate in each approved agreement the terms under which exports will be permitted, if at all, emphasizing the principle that coproduction is intended for the co-producers’ requirements and not for export.

2. Prohibit all new coproduction agreements of significant weapons, equipment, or major components, beyond assembly of subcomponents and the fabrication of high-turnover spare parts, except with key allies and where the President determines that such agreement is justified by extraordinary circumstances. Subject requests for any other items (e.g., major overhaul facilities) to review under guidelines applied globally. Apply to all agreements the export restrictions specified in Control 1.

Decision:

Control 1. ______

2. ______13

SENSITIVE WEAPONS

Vance recommends Control 3.

Brown recommends Control 3.

Warnke recommends Control 1, believing that a list is unnecessary if we establish a policy presumption against sales. If a list were approved, he has no opinion on whether it should be public or private.

Smith recommends Control 3.

Benson recommends either Control 2 or Control 3.

Lance recommends Control 1, with the President approving exceptions.

Brzezinski recommends Control 3.

SENSITIVE WEAPONS

Issue: Certain weapons are considered sensitive from a political or a security point of view, because they are particularly deadly, or are particularly susceptible to use by terrorists. Should there be a public listing of sensitive weapons which the United States will not transfer to foreign countries?

Controls:

1. Continue the current system of informal, unpublished guidelines.

2. Establish a public list of sensitive items which the United States will not transfer abroad.

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3. Establish a list of sensitive items which the United States will not transfer abroad, but do not make it public.14

Decision:

Control 1. ______

2. ______

3. ______15

Tab B

Areas of Consensus16

1. Management

RECOMMENDATION:

1. Maintain essentially the present system, but improve procedures by means of more explicit guidelines drawn from the policy controls chosen.

2. Additionally, approve in principle the establishment of an interagency Arms Export Control Board, advisory to the Secretary of State and chaired by the Under Secretary for Security Assistance, with the Director of State’s Bureau of Politico-Military Affairs as Vice Chairman. Terms of reference for the Board would be determined later.17

2. Multilateral Restraint

RECOMMENDATION: On the basis of the President’s decisions that define U.S. policy, State and ACDA will develop a plan to promote international cooperation in restraint of arms transfers.

3. Control of U.S. Government Financing: MAP

RECOMMENDATION: Continue to use grant MAP as an element of base agreement quid pro quo, and in special cases on a temporary basis for specific political and military purposes (e.g., Jordan).

4. Control of U.S. Financing: FMS Credits

RECOMMENDATION: Continue to provide FMS financing at levels determined essentially by U.S. political and military objectives.

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5. Employment of U.S. Citizens on Overseas Defense Contracts

RECOMMENDATION: The question of the extensive use of U.S. citizens to support overseas military projects will be a factor in arms transfer decisions.

6. Third Party Transfers

RECOMMENDATION: That a policy recommendation be made to terminate assistance in cases of substantial violations;

Additionally, as a condition of sale for certain categories of equipment and certain countries, require agreement between the United States and the recipient that the equipment will not be transferred.

Additionally, in cases where there is a serious risk of future unauthorized third party transfer or the quantity of items appears to exceed military needs, deny the original sales request or reduce the quantity requested.

7. Arms Transfers to Low-Income Countries

RECOMMENDATION: Obtain an interagency assessment of the economic impact of proposed transfers of major defense equipment to those LDCs receiving United States economic assistance. Consider denying arms requests when the economic impact is substantial.

8. Restricting Arms Transfers to Government-to-Government Transactions

RECOMMENDATION: Maintain a mix of government-to-government and commercial sales. Review present categories of commercial transfers to identify those items which might be shifted to government channels. Remove civilian-type items from the Munitions List.

9. Commercial and Government Incentives to Stimulate Arms Transfers

RECOMMENDATION: Policy level approval by the Department of State is required before authorizing:

(a) licenses for sales promotion or technical data transmission by private firms;

(b) U.S. military or civilian briefings, site surveys, transmission of technical information, or any similar activity which might promote the sale of defense articles or services.

Additionally, U.S. embassies and military elements will not promote nor assist in the promotion of arms sales without specific authorization.

Additionally, the Defense Department will continue its review of Government procedures which may promote sale of arms, reporting the results of this review to the President within 60 days.

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Tab C

Summary Minutes of a Policy Review Committee Meeting 18

SUMMARY MINUTES

POLICY REVIEW COMMITTEE MEETING ON ARMS TRANSFERS (List of Attendees Attached)19

Dollar Volume Ceilings

Brown argued against dollar volume ceilings, citing the following reasons: 1) reduces our flexibility; 2) encourages purchasers to cluster orders early in the fiscal year; 3) encourages use of the ceiling as a floor; 4) would lead to enormous accounting problems; 5) might spur Con-gress to put ceilings or even subceilings into law. Brown said the arguments for dollar volume ceilings include: 1) the political attractiveness of ceilings; and 2) the fact that it is the only sure way of doing what we said we would do in the conventional arms area. Brown, Warnke, and Benson recommended that instead of imposing a ceiling, we should state that we will agree to sell less each year, something that has occurred over the past two years anyway, and something which would indicate our commitment to restraint. Warnke and Lance recommended further that the President announce that we will have “significant reductions” in arms sales. Smith stated his opposition to a ceiling, maintaining that we will have trouble with our allies if we set an arbitrary ceiling at the outset of a fiscal year.

Brzezinski said that he thought ceilings would allow the President to fulfill his pledge to reduce the transfer of arms, and that ceilings would tell the U.S. public and the world, especially other suppliers, that the President intends to scale down the transfer of arms. Brzezinski stated, however, that he would recommend focusing on weaponry since that is what contributes most significantly to the arms race. Vance stated that he believed there was a need for a ceiling in the early years of the new arms sales policy, because it would help us discipline ourselves and manage the program more effectively than would a general statement on reduction. Aaron stated that, given the President’s strong statements on this subject, defense of the new policy would be a political impossibility without a number indicating some percentage reduction or ceiling. Vance agreed, and Brzezinski stated that, excluding allies [Page 669]and focusing on weaponry alone, a 10 percent cut would be an appropriate number.

Significant New Systems

Vance and Warnke recommended: adoption of restrictive guidelines; enunciation of a principle that we would not be the first to introduce significant systems into a region; and, prohibition of transfer at least until the system was deployed with U.S. forces. Brown and Smith supported the prohibition of transfer at least until U.S. operational deployment. Brzezinski and Brown were hesitant about establishing the principle prohibiting our first introduction of a significant system, because it might be beneficial in selected instances to introduce limited quantities of new significant items to preclude proliferation of less-significant, but still dangerous, weaponry. If dollar volume ceilings are established, Brzezinski recommended only adopting restrictive guidelines.

New Technology Developed Solely for Export

Brown, Warnke, and Lance recommended that systems developed or modified solely for export normally be approved only if a special need exists and comparable capabilities cannot be provided by an existing U.S. system. Brown stated that he is against U.S. suppliers becoming so involved in foreign markets that they develop a vested interest. Vance recommended an even more restrictive control, allowing transfers of this type only to key allies. Brzezinski recommended establishment of extensive guidelines, rather than the other two controls.

Coproduction

Brzezinski and Lance recommended prohibition of coproduction agreements except in very limited circumstances. Brzezinski noted that it would be inconsistent to approve coproduction agreements while restricting U.S. exports of military equipment. All other participants recommended adoption of restrictive, but not prohibitive, guidelines, although Brown, Warnke, and Benson stated they could accept the guideline calling for prohibition.

Sensitive Weapons

Most of the participants agreed that a list of sensitive weapons needs to be established. Vance, Brown, Smith, and Brzezinski recommended keeping the list private, Brown asserting that a public list could be an attractive nuisance. Lance recommended maintaining the current system of informal, unpublished guidelines, while Warnke said that a list would be unnecessary if we established a presumption against sales.

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Arms Export Control Board

There was agreement in principle to establish an interagency Arms Export Control Board, advisory to the Secretary of State, and chaired by the Under Secretary of State for Security Assistance. Terms of reference will be established in a follow-on memorandum, with special emphasis given to ensuring the President is kept apprised of significant developments.

Multilateral Initiatives

Vance reiterated our commitment to seek multilateral cooperation after establishing our own policy. He stated that it would be ACDA and State’s responsibility to develop a proposed program for submission to the President.

  1. Source: Carter Library, Brzezinski Donated Material, Subject File, Box 24, Meetings—PRC 11: 4/12/77. Secret. Although the memorandum is undated, a list of attendees attached to the Summary of Minutes at Tab C, but not printed, indicates that the PRC meeting occurred on April 12. (Ibid.)
  2. Secret.
  3. Carter bracketed the phrase that begins with “the dollar volume” and ends with “transfers will likewise”, drew a line through “likewise”, and wrote a comment in the right-hand margin that is illegible.
  4. Carter underlined “10 percent” and wrote a comment in the right-hand margin that is illegible.
  5. Carter drew lines to 2 and 3a here and wrote “Combine. J” and “Specific to reductions or # limits [that] will be set by me with Cy + Harold—J” in the right-hand margin.
  6. Carter wrote “ok” in the right-hand margin beside this paragraph, and a comment beneath it that is illegible.
  7. Carter wrote “ok” in the right-hand margin beside this paragraph.
  8. Carter wrote “ok” in the right-hand margin beside this paragraph.
  9. Carter checked options 1, 2, and 4.
  10. Carter wrote “ok” in the right-hand margin beside this paragraph.
  11. Carter underlined “only”, drew a line to the word “modifications”, and wrote “unless special circumstances [illegible] by president—” in the space above this paragraph.
  12. Carter checked option 3, and wrote “Does this change present policy toward Israel? J” in the margin.
  13. Carter checked option 2 and wrote “Explain consequences to me” in the right-hand margin.
  14. Carter wrote “ok” in the right-hand margin beside this paragraph.
  15. Carter checked option 3 and wrote “J” in the right-hand margin.
  16. Secret.
  17. Carter wrote a comment beneath this paragraph that is illegible.
  18. Secret.
  19. Attached but not printed.