12 September 1996 - 14 September 1996

Controlling the Arms Trade

Chair: The Hon Cyrus R Vance KBE

Ditchley’s first addressal of the arms trade for several years started from ready agreement that wholesale condemnation had no place. States were entitled to self-defence, and therefore to acquiring the means for it; and it followed that other governments and firms could legitimately undertake supply. But we knew equally that, given their function, arms were not ordinary goods and extra considerations, including moral ones, must therefore bear upon commerce in them.

Our discussion focused mostly upon general kinds of conventional weaponry, rather than on special categories such as “weapons of mass destruction” where distinctive control regimes were in place. The general categories accounted for the great part of overall trade volumes - and of the killing done in conflicts around the world, especially amid the new disorders of the post-Cold-War scene. We observed that the total measured amount of trade in military equipment had in recent years declined substantially, a fact in itself welcome enough even though sales anyway accounted for only a small proportion of global defence spending. The significance of global totals in isolation was however limited. Such totals included intra-alliance transfers between developed countries, scarcely a category of common concern (arguably indeed a positive good, as entailing resource-saving rationalisation); and the prime cause for worry, so most of us felt, was not the big deals in advanced platforms and missiles but comparatively modest flows of low-cost weapons like small arms into such environments as Bosnia or Rwanda.

Such examples brought home the difficulty and complexity of establishing neat criteria by which to rate particular sales as good or bad. The nature of the equipment itself, though relatively easy to manage as a control feature where it was apt, was only rarely the key aspect; in most instances evaluation needed to look primarily at the recipient to whom, and the environment into which, equipment was to be sold. And the relevant context might import a very wide range of factors - political, economic and social as well as military - hard for governments to bring together in a tidily arranged and prioritised decision-making pattern (even where, as was far from generally the case, governments were well organised internally to identify and compare the factors candidly for overview and trade-off). There was gradual advance discernible in international awareness of the range of considerations to be addressed - for example, the five permanent members of the Security Council had explicitly recognised a duty to weight the impact of arms sales upon the recipient’s economic development; but even if the discomforts of attempting what recipients might perceive as presumptuous paternalism could be managed, there was no possibility of a neat decisional algorithm to replace in-context case-by-case judgement. The devil was in the detail, and the prevailing coloration was shades of grey. The problems were compounded by the fact that adverse effects of a particular sale might not emerge until far in the future; and governments could not easily base their decisions on conjectures about regime stability or international behaviour twenty years on.

It was evident that, despite the downward trend in total sales volume, pressures to sell had in many respects intensified, as firms in developed countries struggled for profitability or even survival amid sharp defence-budget reductions. Over-capacity was a widespread phenomenon, and the result was a temptation to elevate economic factors - and therefore, as a rule, shorter-term advantages - relatively to strategic ones in the selling country’s appraisal.

We acknowledged special difficulties in respect of Russia. A massive military industry now had very few domestic orders, and faced extreme difficulty both in diversifying marketable output and in re-deploying labour (amid acute countrywide housing shortage) away from large defence-dependent communities. The problems of handling all this were compounded by uneven central authority and will, and poor information spread (factors, we noted in passing, at least as marked in China). It could not be in the wider global interest to see these problems persist, for the pressure would then be formidable to make sales to customers undesirable on most other grounds. We talked of possible market-sharing understandings or of collaboration in development or production, but we glimpsed no easy practical solution.

Our recital of difficulty further noted that effective limitation upon the transfer of high- technology capability was becoming steadily more awkward as dual-use or generic technologies became increasingly the key to military performance, and as moreover purchasers sought joint development or joint production, rather than simple sale, as a component of deals. The COCOM system had evaporated with the Cold War, and even the Missile Technology Control Régime - a clear success in some degree - was becoming harder to apply. Several participants nevertheless urged that the avenue of constraint upon technology transfer should not be wholly abandoned.

In all such respects, we accepted, difficulty must not be allowed to dictate inaction. What was being done, and what more could and should be? We heard much comment on the recently-concluded “Wassenaar” accord, whereby some 30-40 of the more industrialised countries had agreed new arrangements including the exchange of information on many categories of military export to others. Our discussion of Wassenaar had a half-full/half-empty character, with some stressing its utility as a valuable start (reaching beyond the more limited and voluntary-only United Nations register) and others its substantial limitations such as the fact that information was to be transferred only between governments, not to publics.

Transparency was a constant theme throughout our discussions. We knew that in some settings legitimate difficulties arose in its application, but there was now a powerful tide favouring it in public and political opinion; and it seemed to most of us an essential component of any durably satisfactory control regime, whether national or international. Without it democratic accountability was hard to achieve, and so indeed was international equity among suppliers. Recipients might sometimes dislike it, but some participants argued that the aim should be general acceptance - perhaps even by way of standard contract condition - that promises of secrecy should not be allowed to secure competitive advantage.

Transparency on its own, we acknowledged, was not a control mechanism or a guarantee of keen democratic accountability. It needed to be partnered by an effective parliamentary and public opinion genuinely ready to express concern and criticism and so help forge political will towards restraint; and we noted that this did not exist uniformly across even the main exporting countries. Voluntary organisations and pressure groups had a valid role to play in heightening public sensitivity, especially when their interventions were rooted in serious effort to understand awkwardly competing factors, reasonable interests and difficult uncertainties rather than in simplistic ideological stance- taking. We heard a vigorous plea for a non-governmental right to be consulted in advance, or to take governments before some international tribunal. Few of us however thought this reasonable or realistic, especially given the massive number of individual transactions and the fact that the most worrying were rarely the largest; the more practical route - and, cumulatively, an effective one in democracies - lay through the right to know sooner or later what deals were being allowed by governments, and to be able to test these against general policy principles openly declared.

How was the problem of industrial overcapacity, and of consequent domestic pressures that risked distorting policy decisions by government, to be overcome? Not all of us were sure that industrial consolidation in itself could be much help - it might even, in the wrong configuration (such as the purely national that strengthened monopoly weight) make matters worse; and some forms of industrial globalisation, cutting across nationally-based control systems, might import further difficulty. There was, many of us suspected, no real substitute for “downsizing” - the transfer of capital and labour out of the defence business. Some participants commented that in any event defence industry lacked special economic merit, despite apparent political perceptions to the contrary; if subsidy and other government-conferred advantages (such as loan guarantee support) were accurately weighed, defence had no exceptional power as a job-creator, and the mounting importance of generic technology had largely invalidated the “spin-off” argument. That said, we recognised that diversification out of defence had nowhere proved easy, for both technical and cultural reasons, though the record was not without success stories. We disagreed vigorously on how far, and by what means, government could usefully help the process forward.

Our discussion of industry viewpoints noted that defence firms, though they could not reasonably be expected to set themselves up as prime judges of wider political and economic factors, fully accepted the need for regulation and indeed welcomed it as providing - if properly framed and applied - the consistency and predictability which business operations always valued. But perceived fairness as between suppliers was crucial, and this - like much else in our discussion - underlined that dependably-sustained control of the arms trade had to rest on effective international consensus about the rules, effective and harmonised national implementation and enforcement of them in practice (by no means always easy, across different national systems and attitudes) and effective visibility of outcomes.

Our exchanges concentrated mostly - in reflection of the conference’s composition - upon the supplier aspects of controlling the trade. We were however aware that the demand side - the buyers - mattered equally, and that though instruments in that regard were less easy to define or operate the possibilities should not be ignored. Economic conditionality - the linking of arms sales to desired behaviour by the purchaser in non-military development effort - could sometimes have a part to play; so too could the wider techniques, such as confident-building measures and dialogue on security doctrine, that bore upon regional perceptions (as in East Asia, the only major arms market still growing) of security need.

We reverted repeatedly to the hard fact that most of the conflicts of the past decade - sometimes with slaughter on a massively inhuman scale - were fought primarily with low-technology armaments. Most of us seemed strongly disposed to welcome the continuing drive - despite a setback in recent international dialogue - to outlaw anti-personnel landmines. The broader category of small arms raised familiar difficulties - the ease of transfer or manufacture, the wide dispersion already in place, the difficulty of controlling leakage or drip-feed; perhaps too a climate of opinion complicated in some countries by domestic attitudes to guns. To the pleased surprise of some participants, however, there was much vigorous urging that possibilities existed and should be pursued (especially in respect of Africa, as a crucial area) of channelling the traffic and of making it at least rather more difficult to conduct without restraint or in secret; much was known or knowable about it, and agencies reaching beyond the normal arms-control apparatus, such as the police, might well have a contribution to make. It seemed to almost all of us that there was a powerful case for an order-of-magnitude heightening of attention upon this issue, for example to support and extend the current UN study effort.

It was evident throughout that special burdens of responsibility for building consensus, setting example and devising and implementing patterns of control and restraint in the arms trade rested with the Permanent Five, who accounted for close to ninety percent of the assessed volume; and, among them, still more upon the United States as leader, possessing now virtually a half-share of the total (proportionately more than during the Cold War, whereas the West European component had declined markedly in both absolute and relative amount). Several participants doubted whether genuinely and consistently compliant behaviour could realistically be looked for among all the Wassenaar signatories, and were concerned that sporadic failures in this should not be accepted as excuse for the key actors.

Several aspects of our subject defeated the time available to us - just for example, we could do no more than note the potential importance of trade in services (such as military training and construction support) as well as in equipment itself. No single formulation of overall impression would have commanded general assent; but there was, for many, a sense of some useful advance being achieved internationally, and an awareness that though every available instrument of control had imperfections or left gaps, the aggregate could progressively, given genuine political will and a patient concentration upon the realistically achievable rather than the ambitiously ideal, achieve genuine and important improvement in a field where no-one could regard the present situation as satisfactory. Ditchley conferences often end with a call for political will; in this instance we could perhaps see an above-average chance that it might be forthcoming.

This report reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: The Hon Cyrus R Vance KBE
United States Secretary of State, 1977-80


Professor Keith Krause
Professor of International Politics, Graduate Institute of International Studies, Geneva
The Hon PeterL McCreath
formerly Chairman, Sub-Committee on Arms Export Policy, House of Commons

Monsieur Francois Heisbourg
Senior Vice President (Strategic Development) Matra Défense-Espace
Monsieur Denis Verret
Executive Vice President, International Affairs & Marketing, Aerospatiale

Herr Volker Hahn
Head of Division responsible for export control, Federal Ministry of Economics
Dr Harald Loeschner
Director of Export Controls Division, Federal Foreign Office
Mr Hermann H Schaedla
President, Abeking & Rasmussen, Lemwerder 

Rt Rev Monsignor Diarmuid Martin
Secretary, Pontifical Council for Justice and Peace

Mr Dmitri Trenin
Carnegie Endowment for International Peace, Moscow, Director, Russian-American Working Group on Conventional Arms Proliferation.

Mr Ashley Adams
Defence Export Services Secretariat, Ministry of Defence
Lord Avebury 
Chairman, Parliamentary Human Rights Group

Mr Norman Barber
Chairman, Aerospace Group, Smiths Industries pic
Sir Nicholas Bonsor BtMP
Minister of State, Foreign & Commonwealth Office
Dr Malcolm Chalmers
Senior Lecturer, Department of Peace Studies, University of Bradford
Dr Paul Cornish
Senior Research Fellow, International Security Programme, Royal Institute of International Affairs.
Mr Jack Dromey
Public Services National Secretary, Transport and General Workers’ Union
Mr Bernard Gray
Defence Correspondent, Financial Times
Mr Paul Ingram
Researcher, Oxford Research Group
Mr Anthony Sampson
Writer and journalist
Mr Roland Smith CMG
Director (International Security), Foreign & Commonwealth Office
Mr John Spellar MP
Opposition front bench spokesman on Defence, Disarmament and Arms Control
Sir Alan Thomas             
Chairman, Firth Holdings plc; Head of Defence Export Services, Ministry of Defence 1989-94
Ms Susan Willett
Senior Research Fellow, Centre for Defence Studies, Kings College, University of London
Dr Roger Williamson
Assistant Secretary, International and Development Affairs Committee, Board for Social Responsibility, General Synod of the Church of England

Dr Barry M Blechman
Chairman, Henry L Stimson Center, Washington DC
Mr David Cooper
Associate Director, Defense Acquisition Issues, National Security and International Affairs Division, US General Accounting Office
Dr William W Keller
Deputy Director, Center for Trade & Commercial Diplomacy, Monterey Institute of International Studies
Dr Ann Markusen
Director, Project on Regional and Industrial Economics, Rutgers University
Ms Margaret Osmer McQuade
President, Qualitas International, New York

Dr Janne Nolan
Senior Fellow, The Brookings Institution, Washington DC
Mr Andrew Pierre
Senior Associate, Carnegie Endowment for International Peace, Washington DC
The Hon Daniel Poneman
Special Assistant to the President, Non-proliferation and Export Controls, National Security Council.
The Hon Lawrence Scheinman

Assistant Director for Non-proliferation and Regional Amis Control. Arm Control and Disarmament Agency