This article was written by Prof Ron Smith from Birkbeck’s Department of Economics, Mathematics and Statistics, with Maria Garcia-Alonso, (University of Kent) and Quentin Michel (Université de Liège). It originally appeared on The Conversation
The decision by the UK to leave the EU will have many implications, including consequences for the control of arms exports. Exports of weapons and dual-use equipment, which can have both military and civilian applications, raise major security concerns: you don’t want to arm your enemies and you don’t want your allies to arm your enemies either.
Most states have arms export control regulations and supplies are also restricted – to some extent – by international regimes like the Wassenaar Arrangement on export controls for conventional arms, as well as by UN embargoes and the Arms Trade Treaty that entered into force in December 2014.
European states are major suppliers of military equipment and close competitors in the export markets. But they have different economic and security interests, so a sale that seems problematic to one country may not seem so to another – see, for example, the disagreements about the supply of arms to various players in the Syrian civil war or the supply to Saudi Arabia of equipment used in the Yemen. However, the EU’s rules do not allow other states to block UK sales to Saudi Arabia.
So what are those rules? To avoid exactly this sort of problem, in 2008 the EU defined common rules governing control of exports of military technology and equipment which replaced an earlier code of conduct on arms exports. This EU Common Position is presently the sole example of a group of states that have agreed to coordinate conventional (usually interpreted as not nuclear, biological or chemical which are covered by different rules) arms exports with a supranational constraining mechanism.
While producer countries have individual incentives to control the quantity, quality and use of the arms they export, these incentives are affected by the interactions with other exporter countries who have their own security and industrial objectives. In such situations, coordination among exporters is required to ensure a better outcome for everyone involved.
However, uncertainty regarding the implementation of controls and fear of noncompliance are a barrier to the implementation of multilateral controls. In particular there needs to be a mechanism to stop “prisoner dilemma” situations in which countries think: “If we don’t export, others will.” To deal with the uncertainty, the EU has a list of items subject to control and a no-undercutting mechanism to stop the fear of noncompliance by others.
Finding common ground
The EU Common Position says that member states are determined to set high common standards for the management of – and restraint in – conventional arms transfers, and to strengthen the exchange of relevant information with a view to achieving greater transparency.
The criteria that govern export control include the respect for the international commitments of EU member states (including any UN sanctions). They also take into account the situation in the buyer country, which includes its respect of human rights, its internal security situation, its respect for international law and its technical and economic capacity. The common position is also concerned for the preservation of regional peace, security and stability and the existence of a risk that the equipment will be diverted into the wrong hands within the buyer country or re-exported under undesirable conditions.
To make sure all states interpret these criteria in the same way – and to avoid the risk of unfair competitions between member states’ defence industries, several mechanisms have been adopted. These include strengthening the exchange of information by requiring the notification to all EU member states of the denial of a licence, together with the no undercutting rule. This rule has been respected and member states have almost never undercut a licence denial without the consent of the state which has issued it.
There are many difficult areas where exchange of information is valuable. These include dual-use equipment – where countries may differ over whether it is going to be used for civilian or military purposes – and brokering – where a firm facilitating the transaction may be outside the control of national authorities. There has been discussion in many countries about the extent to which arms brokers should be registered.
Britain plays a central role in this process, currently drafting the list of items subject to control. But when it leaves the EU it will lose access to this mechanism. This increases the risk that its defence industry will not face the same trade rules as its EU competitors. While the UK will no longer be constrained by EU rules, the converse is also true and – given the breadth of UK security interests – this may not be to its advantage.
Other EU states will be able to supply weapons for which the UK has denied a license and may not include on the control list items that the UK regards as sensitive. So given the value that countries attach to the sharing of arms export information, it may be in the interests of the UK and the other EU countries to maintain joint participation in these arrangements even in the post-Brexit era.