How US defense companies are gearing up to arm new Asian buyers

Jan 2, 2012- US defense companies are confident that sales to east and south Asian countries will more than offset declines in purchases amid retrenching defense budgets in Europe and the US over the next few years.

While potential orders for high-tech drones, anti-missile systems and new-generation fighter jets have the group’s members salivating, a key interest will be opening new markets. Already India, which only made its first significant US arms purchase in 2008 with an order for six C-130 cargo planes, last year become the second-biggest customer for US defense systems.

Apache AH-64

Two potential new markets beckon in the region: Vietnam and Myanmar. Vietnamese Defense Minister General Phuong Quang Thanh said in June that his government wanted Washington to lift an embargo on lethal weapons imposed in 1984 so Hanoi could buy supplies to modernize its military.

His US counterpart, Leon Panetta, however didn’t directly address the issue at their joint press conference, saying only, “Additional assistance depends on progress that is being made on human rights and other reforms.” Senators John McCain and Joe Lieberman, who will leave the Senate this week, last year more explicitly told Vietnamese officials that though both sides have an interest in arms deals given China’s rising military prowess, they would not happen without visible progress on human rights.

The arms embargo was established by executive order, not law, and was already softened significantly by former president George W Bush in 2007 , so it could be stretched further if tensions in the South China Sea escalate, for example.
Defense talks with Myanmar are at a much earlier stage than with Vietnam. While the US ended trade sanctions against Vietnam in 1994, it only suspended its restrictions on most trade and investment links with Myanmar in May. Ties are growing quickly and shortly after visits by President Barack Obama and senior US military officials to Myanmar in November, a US defense official told reporters that the US would seek to begin “non-lethal” training for Myanmar military officers.

“We’re looking at ways to move forward and I think you’ll see appropriately calibrated steps in the near future,” he said.

The human rights concerns with Myanmar are probably also a more significant obstacle given the military’s ongoing campaigns against ethnic rebel armies. But this arms embargo was also set by executive order so could go through a progressive softening as with the Vietnam one.

Quartz