U.S. to weigh impact of arms sales on makers

November 16, 1994|By New York Times News Service

WASHINGTON -- Making explicit a policy that has existed in practice for three years, the Clinton administration is preparing new guidelines that will consider the health of the nation's military contractors when reviewing arms sales to foreign customers.

Such sales require approval from the U.S. government, which has ruled on such deals in the past based on whether they bolster American foreign policy goals and strengthen regional alliances. Under a plan now before the president, a sale's benefit to the nation's shrinking military industry also would be considered.

With Pentagon orders rapidly declining, foreign sales now account for about 20 percent of American military contractors' business.

Much of that business ripples through Maryland. Only last week, Westinghouse Electric Corp.'s division in Linthicum received a $195.6 million order for 157 radar units to be used on F-16 fighter planes made by Lockheed Corp., which is set to merge with Bethesda-based Martin Marietta Corp. The buyer for the $6 billion worth of jet fighters: Taiwan.

Elsewhere, foreign sales are single-handedly keeping alive the M1-A2 tank line of General Dynamics Corp. in Ohio and the F-15 fighter plane lines of McDonnell-Douglas Corp. in Missouri.

Beginning with the Bush administration, the government has played an increasingly active role in lobbying foreign capitals on behalf of cash-strapped U.S. contractors.

Washington pays some costs to field American weaponry at international trade shows. Embassy officials, who once were forbidden to promote United States arms, now hawk American-made military wares as aggressively as any other product stamped "Made in the U.S.A." President Clinton is poised to make the domestic economic consideration a formal part of the arms-sales review.

The new policy was first reported yesterday in The Los Angeles Times. White House and Pentagon officials emphasized yesterday that foreign policy goals still will be paramount in guiding foreign sales.

"The basic reason for selling weapons overseas has been to advance our foreign policy goals," a Pentagon spokesman said.

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