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"The Arms Control Association’s work is an important resource to legislators and policymakers when contemplating a new policy direction or decision."

– General John Shalikashvili
former Chairman of the Joint Chiefs of Staff
Israel Rebuffs U.S. Demand To Cancel China Arms Deal
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May 2000

By Wade Boese

Despite strong public opposition from the United States, Israel is proceeding with the sale to China of an advanced airborne early-warning (AEW) radar system, which U.S. officials warn could affect the strategic balance between China and Taiwan. After April meetings with Defense Secretary William Cohen and President Bill Clinton, Israeli Prime Minister Ehud Barak would say only that Israel would continue discussions on the deal with the United States.

In a 1996 deal with China worth approximately $1 billion, Israel agreed to equip four Russian-supplied aircraft with the Phalcon system, a state-of-the-art, long-range radar capable of simultaneously tracking multiple airborne and surface targets. U.S. government officials believe, and Israeli officials insist, that no U.S. technology is involved.

If delivered, the Phalcon system—previously supplied to Chile—would provide China's first airborne early-warning and control capability. Taiwan's inventory includes four U.S.-made AEW Hawkeye aircraft, and two more are scheduled for delivery in 2004.

Informed of the sale in June 1996, U.S. opposition only became public last fall. State Department and Pentagon officials contend that Washington has voiced its concerns through diplomatic and military channels since 1996. A National Security Council (NSC) spokesperson said the administration has raised the issue "regularly and repeatedly."

Meeting with Barak on April 3 during a 10-nation visit to Africa and the Middle East, Cohen told a joint press conference, held with the Israeli prime minister, that the United States objected to the Phalcon deal because of its "potential of changing the balance" in the Taiwan Strait. A week later, Cohen repeated Washington's strong opposition and described the sale as "counterproductive" because the technology could find its way back to Israeli rivals in the Middle East.

Barak told the April 3 press conference that Israel was "aware of the sensitivity in the United States with regard to China." However, he said Israel was also "aware of [its] commitments in the contracts that [it has] signed." Barak finished by saying Israel understood the need for "close coordination and contact" with the United States. A senior U.S. administration official reported that Barak repeated similar sentiments in an April 11 meeting with President Bill Clinton in Washington and that discussions would continue.

Barak later met with Chinese President Jiang Zemin in Israel during the first-ever visit to that country by a Chinese head of state. At a joint press conference April 13, Barak intervened twice to answer questions addressed to Jiang about the deal. While again noting U.S. concerns, Barak described Israeli credibility and Israeli relations with China as being of "high importance."

Israel is concerned about canceling the deal and upsetting China, which Israeli officials worry could lead China to increase weapons exports to countries hostile to Israel. In addition, Israel is reluctant to forfeit a profitable deal with a long-time arms customer that could be picked up by British or French companies that competed for the original sale.

An official for BAE Systems, a British company that manufactures AEW systems, said talks with China have been dormant for several months and that BAE is not currently pursuing any deal. The NSC spokesperson remarked that the United States is "prepared to engage other countries in expressing our concerns about issues that could affect the stability of the Asia- Pacific region." When asked, a U.K. government official said he was "not aware of any direct U.S. government lobbying effort on this particular issue."

In his proposed fiscal year 2001 budget, Clinton requested a total of $2.82 billion in military aid and economic support for Israel. Representative Sonny Callahan (R-AL), chairman of the House Appropriations Subcommittee on Foreign Operations, Export Financing and Related Programs, indicated he would put a hold on $250 million—the value of one Phalcon system—of the proposed aid unless the Pentagon certifies that the Israeli deal does not jeopardize U.S. national security interests. State Department spokesman James Rubin, however, said April 10 that the radar deal should not be tied to U.S. foreign aid.

Israel, the largest recipient of U.S. aid, is also seeking a security package worth approximately $17 billion, involving arms, as well as greater intelligence and early-warning cooperation with the United States, as part of a potential Israeli peace deal with Syria. With the Israeli-Syrian peace negotiations currently stalled, talks on the proposed U.S. security package have been put on hold.