Arms Trade

The conventional arms trade, a multibillion dollar business, is dominated by a few powerful countries. But while providing for legitimate defense needs, weapons transfers may also fuel violence and conflict. The United States remains the world's largest arms exporter—sending approximately $13.6 billion in weapons and completing nearly 57 percent of all global arms transfer agreements in 2003. In that year, the United Kingdom was second with $4.7 billion in deliveries, and Russia was third with $3.4 billion in deliveries. In arms transfer agreements, as opposed to actual deliveries, in 2003 Russia was second with $4.3 billion in agreements and [Page 54]Germany was third with $1.4 billion in agreements. Thus the United States and Russia between them made nearly 74 percent of all international arms transfer agreements and the United States, Russia, and the United Kingdom provided almost 76 percent of all weapons delivered.

Wealthy countries are not the only nations spendingmoney on arms. Developing countries divert precious resources to pay for the tools of war. In 2003, the developing world received $8.6 billion worth of weapons. The United States was responsible for $6.2 billion in weapons deals to developing nations—approximately 45 percent of all the conventional arms deals concluded with developing nations, delivering $6.3 billion in weapons to them in 2003. The value of worldwide conventional arms trade agreements in 2003 was over $26.5 billion.

For the most part, conventional arms are traded on the legal market. In the United States, most arms sales are governed by the 1976 Arms Export Control Act (AECA) and 1961 Foreign Assistance Act (FAA). U.S. law, through the AECA and FAA, is intended to ensure that U.S. weapons are transferred only to desirable actors. These regulations were developed to prevent U.S. weapons from undermining regional and global security and stability, weakening democratic ideals, supporting military coups, escalating arms races, exacerbating ongoing conflicts, causing regional arms build-ups, or being used to commit human rights abuses.

Arms sales provided by the United States fall into five categories, but by far the two largest and most well known are: foreign military sales (FMS), government-to-government sales negotiated by the Department of Defense, and direct commercial sles (DCS), sales negotiated by U.S. companies and foreign buyers. (The three other categories of arms sales are leases of military equipment, excess defense articles, or emergency draw downs of weapons stocks.) FMS are overseen by the Defense Department while DCS are administered by the State Department's Directorate of Defense Trade Controls (DDTC). Companies transferring arms through DCS must apply for a license for each arms transfer. The International Traffic in Arms Regulations lists all items considered munitions, which require licenses from DDTC to be transferred.