312. Memorandum From Secretary of Defense Brown and Secretary of State Vance to President Carter 1


  • Assessment of U.S. Arms Transfer Policy

We have recently assessed our experience of the past two years with the arms transfer restraint policy established by PD–13.2 On the whole, we believe the policy has supported U.S. interests in restraint without denying us the capability to meet our foreign policy requirements and the defense needs of our allies and friends.

There has been considerable criticism of the policy from several quarters. Some allies and friends perceive the policy as being artificially restrictive to the point of denying legitimate access to U.S. military equipment. U.S. industries complain that it disadvantages them in international markets vis-a-vis other exporters. Most significantly, however, members of Congress continue to be skeptical of the policy. Some believe its only achievement has been creative bookkeeping; others feel that arms transfers are no longer being used as an effective instrument of foreign policy. We believe that all these criticisms have been overstated, but we nevertheless expect them to emerge once more as Congressional studies currently under way are completed and the Senate Foreign Relations Committee moves to hearings at the end of the year.

Our own principal conclusions are:

—The policy has required the creation of a planning system that allows us to look at the flow of U.S. arms transfers over a multi-year period and to establish priorities.

—The machinery created to implement the policy ensures that the Executive Branch takes a wide range of factors—political, security, arms control, economic, and human rights—into account in all major arms transfer cases.

—The policy has imposed measurable restraint on U.S. arms transfers.

—Even though we have sold less than we could have, there has not been a subsequent reduction in the total volume of the world’s arms trade.

(U) In the course of this policy reassessment, we have identified the following issues that will require attention in the near future.

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Qualitative Controls

(C) The qualitative controls of PD–13 have been generally effective. Nevertheless, there are a couple of questions that may require decisions over the coming months.

(S) 1. We are currently considering whether to authorize the development of an intermediate fighter aircraft solely for export. (The F–5E currently fills this role.) If we decide that this is a good idea for policy reasons, we shall then have to decide whether it requires an exception to PD–13.

(S) 2. Several countries are expressing interest in the F–18L, a land-based version of the Navy aircraft modified solely for export. In 1977 an Iranian request for the F–18L was denied because the aircraft was not operationally deployed with U.S. forces. It is necessary that we review our position on this at an early date because of renewed interest in the aircraft.

(S) Another area of concern is co-production. We have chosen to make exceptions to this guideline in a number of instances. This is a basic dilemma for U.S. policy. As our non-NATO friends and allies continue to expand their own production capabilities, the long-term task of arms control becomes more difficult; on the other hand, co-production provides us a measure of control that would be lost if other suppliers sold the concerned equipment. An interagency study, chaired by ACDA, is currently under way to examine the trends in Third-World arms production capability.

(C) A related problem has been the reluctance on the part of some NATO countries to enter into RSI co-production arrangements because of our control over third-party sales outside of NATO. These controls have their foundation in our statutes as well as in the arms policy. We are trying to work out these problems on a case-by-case basis.

Quantitative Control (The Ceiling)

(C) The ceiling on sales to non-exempt countries has been the most controversial aspect of PD–13. Its positive features include its visibility as a symbol of the US commitment to arms transfer restraint and the managerial reforms associated with it. While it has not led to the rejection of any specific arms transfer requests, it did achieve its purpose of reducing sales in FY 78 compared to FY 77. In FY 79, because of cancellations by Iran, total sales could drop significantly and come in well under the ceiling. This could lead to pressure to lower the base for calculating the FY 80 ceiling. Such pressure should be resisted because in FY 80 important sales to Israel, Egypt and Saudi Arabia could largely fill the gap left by Iran in FY 79.

(C) In any case, we believe that no further reductions in the ceiling should be made unless there is evidence of progress in our multilateral restraint effort. After four rounds of negotiations with the Soviets we [Page 776] have no tangible evidence of Soviet restraint, and our European allies have made future restraint on their part (they have not shown any in the past) contingent on our ability to get restraint from the Soviets. We will be submitting our formal recommendation to you later this summer in the context of our FY 80 plan.

Multilateral Cooperation

(C) PD–13 recognized that achievement of the objective of a worldwide reduction in arms transfers required the cooperation of other suppliers and recipients. We have not yet made concrete progress toward such cooperation although our efforts will continue. Nevertheless, we believe that the qualitative controls in PD–13 support U.S. national interests regardless of such cooperation. The substantive and procedural benefits of the qualitative controls, as distinct from the FY 80 ceiling level noted above, are not vitiated by the lack of multilateral progress. We shall be assessing the results of the multilateral restraint effort and commenting on its implications in a report due to the Congress by December 31, 1979.


(C) We believe that PD–13 continues to support our national objectives in arms restraint and that the policy should be maintained with no further reductions under the ceiling. As noted above, our experience suggests that certain aspects of the policy will raise questions of interpretation as circumstances change. We will continue to review PD–13 to ensure that it remains in consonance with our basic foreign policy needs and arms control objectives. We will also continue to tailor carefully rhetoric about the policy and specific policy decisions in order that it reflect realistically the objectives and achievements of PD–13.

(U) The Chairman, Joint Chiefs of Staff and the Director, Arms Control and Disarmament Agency concur in this memorandum.

  • Harold Brown
  • Cyrus Vance
  1. Source: Library of Congress, Manuscript Division, Harold Brown Papers, Box 78, 1977 Arms Transfer/FMS Policy. Secret. Carter initialed the top of the memorandum.
  2. See Document 271.