April 19, 2018 / 4:13 PM / 3 months ago

Trump launches effort to boost U.S. weapons sales abroad

WASHINGTON (Reuters) - The Trump administration rolled out a long-awaited overhaul of U.S. arms export policy on Thursday aimed at expanding sales to allies, saying it will bolster the American defense industry and create jobs at home.

U.S. President Donald Trump speaks during a joint news conference with Japan's Prime Minister Shinzo Abe at Trump's Mar-a-Lago estate in Palm Beach, Florida, U.S., April 18, 2018. REUTERS/Kevin Lamarque

The White House aims to speed up arms deal approvals and increase the role of senior U.S. officials, including President Donald Trump, in closing foreign sales, while giving greater weight to business interests in sales decisions that have long prioritized human rights.

The initiative, as first reported by Reuters, adds the full weight of government to Trump’s direct personal role in pushing arms sales during interactions with foreign heads of state.

Companies that stand to benefit from the new policy most include Boeing Co (BA.N) and the other top U.S. defense contractors, Lockheed Martin Corp (LMT.N), Raytheon Co (RTN.N), General Dynamics Corp (GD.N) and Northrop Grumman Corp (NOC.N).

The plans have been in the works for a year, with White House trade adviser Peter Navarro playing a major role in driving the project forward. Navarro is best known for pushing the administration to take tough trade actions against China.

Human rights will now carry equal weight alongside other considerations in planned arms sales including the needs of allied nations and the economic loss if the U.S. contractor does not win the sale when decisions are made on whether to approve an arms deal.

“This is a balanced policy,” said Ambassador Tina Kaidanow, an official with the State Department who oversees arms export agreements. “We absolutely look at human rights as one of a set of considerations that we look at.”

‘SHORT CIRCUIT’

In a joint new conference with Japanese Prime Minister Shinzo Abe in Florida, Trump said late on Wednesday his administration was working to “short circuit” the cumbersome bureaucratic process at the State Department and the Pentagon to expedite arms sales to Japan and other allies.

But giving economic and commercial concerns equal weight to human rights in the arms sales decision-making process raises concerns.

“The new policy retains the legally binding language that prohibits weapons transfers when there is actual knowledge that they will be used to commit war crimes,” Brittany Benowitz a former U.S. Senate staffer and lawyer who worked on human rights issues and arms transfers.

“However, the policy did away with the more comprehensive assessment of risks when contemplating a weapons deal. A transaction can still occur to a human rights abuser so long as the U.S. has no specific knowledge that system will be used to commit atrocity crimes,” Benowitz said.

The new policy will go well beyond a relaxation of rules for foreign military sales under President Barack Obama in 2014 that enabled U.S. arms contractors to sell more overseas than ever before.

The export policy explicitly states it aims to “strengthen the manufacturing and defense industrial base” and as a part of this “when a proposed transfer is in the national security interest, which includes our economic security, and in our foreign policy interest, the executive branch will advocate strongly on behalf of United States companies.”

Trump has pressed foreign governments to buy more U.S.-made weapons in nearly every call he has had with a head of state of major allies, a State Department official said this week.

The planned revision of U.S. weapons export policy also includes a new drone export policy that allows lethal drones that can fire missiles and surveillance drones of all sizes to soon become more widely available to U.S. allies.

Two potential beneficiaries of the rule changes, Textron Inc (TXT.N) and Kratos Defense and Security Solutions Inc (KTOS.O), currently market smaller armed drones internationally.

The new approach represents a “fundamental shift” in the way the United States sells large armed drones, Rachel Stohl, director of the conventional arms program at the Stimson Center think tank in Washington, said.

The full text of the drone policy will remain classified along a list of potential buyers being given fast-track treatment is expanding to include more countries, a State Department official told Reuters this week.

Previously, U.S. government sources had said that more NATO members, Saudi Arabia and other Gulf partners as well as treaty allies such as Japan and South Korea would be given the favorable treatment regarding drone sales.

The Aerospace Industries Association trade group said the policy was an important “first step” and more needed to be done because “increasing demand for American defense products has strained the system, resulting in an overburdened and fragmented process beset by avoidable delays.”

Reporting by Mike Stone in Washington D.C.; Additional reporting by Matt Spetalnick; Editing by Chris Sanders and Alistair Bell

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