EU Should Keep China Arms Embargo

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EU Should Keep China Arms Embargo

Some European nations want the 20-year embargo on sales to China lifted. Their arguments are strong, but the arguments for not lifting it are stronger.

Last month, I was in Sweden meeting with think tank and government officials. The main purpose of the visit was to discuss EU-U.S. policies toward Iran, especially the effectiveness of the international sanctions seeking to change Tehran’s nuclear policies. But some of my Swedish interlocutors, like other Europeans, also raised the issue of the ineffectiveness of the arms sanctions towards China as a reason for their skepticism regarding the Iranian sanctions.

Their arguments should be looked at, but first it’s important to offer a little background on the issue. The killing of many unarmed protesters involved in the Tiananmen Square demonstrations and elsewhere in China provoked international outrage and led many countries to adopt sanctions against Beijing, including an embargo on the sale of weapons. The EU declaration establishing an embargo is simply one sentence in a collective statement: “In the present circumstances the European Council thinks it necessary to adopt the following measures…interruption by the member states of the community of military cooperation and an embargo on trade in arms with China.”

Since then, the EU arms embargo has been seen by all as more of a symbolic act of protest than a tool for actually changing Beijing’s behavior. Technically, EU members aren’t even legally forbidden from selling military items to China. However, the 1989 EU (then the European Community) declaration is a political commitment, and EU governments are supposed to uphold the spirit of this declaration. The constraints on arms exports don’t aim to inflict economic punishment, but rather are designed to send a strong message about European values. Most disputes between the EU and China still concern human rights, which remains the single most significant stumbling block between the two parties.

Yet there’s no universal understanding of what the embargo entails in practice. Each EU member interprets the embargo in terms of their national laws, decision making processes, and regulations. Since the EU lacks strong foreign policy institutions, the arms embargo against China is best seen as a collection of national EU arms embargoes. As a result, the EU collective stance lacks coherence or means of enforcement.

Since late 2003, France has sustained a campaign calling for lifting the embargo. At times, other countries – notably Spain and Greece – have supported repeal. The United Kingdom has consistently opposed lifting the embargo in public, though reports indicate that in private, U.K. diplomats have been more flexible. Some of the EU’s new members from the former Soviet bloc have meanwhile joined with Britain on human rights grounds, remembering the horrors they suffered under Communist rule.

But proponents of repealing the arms embargo have been pushing their case. They note, for example, that the embargo complicates the EU’s relations with China and partially negates EU efforts to develop a strategic partnership with Beijing in cooperation of a variety of goals. Chinese representatives for their part consider the embargo degrading since it puts China in the same category as other EU-sanctioned countries such as Sudan, Zimbabwe, and Myanmar. PRC documents repeatedly call on the EU to repeal it.

In addition, some advocates of repeal note that the ban is poorly enforced, resulting in the EU’s annoying China without having much impact due to the embargo’s porousness. For example, EU statistics show that France issued €199 millionin licenses in 2009 for “military aircraft” and “equipment for viewing images or countermeasure” sold to China.  Although France is typically the leading annual EU seller of arms to Beijing, other EU members, including Britain, also sell China dual-use items that could (and often are) used for military purposes.

Some commercial considerations may also be at work in the effort to repeal the embargo. In light of the current global economic crisis and the low growth and high unemployment rates in many EU countries, EU governments and companies are eager to remove barriers to their exports. Even if they don’t sell arms to China, EU leaders might hope that China would reward a repeal of the embargo with increased purchases of EU goods.

More generally, China is one of the largest creditors in the world and its foreign exchange reserves have reached almost $3.2 trillion. Europe wants Beijing to use some of these vast reserves to help stabilize the euro and support the EU’s economic recovery.

The recent defense spending cuts imposed in many European counties as part of their austerity programs, which have followed years of reductions since at least the end of the Cold War, have decreased domestic sales opportunities for many EU defense companies. Meanwhile, the United States remains a reluctant purchaser of European military products. Sales to China could therefore help European defense firms sustain their work forces, achieve economies of scale, and recoup R&D expenditures through larger production runs.

Also, opponents of the arms embargo also believe it encourages China to develop its own domestic military research, development, and production capabilities, thus reducing the strategic advantage of Western countries in these sectors and making it harder for Western analysts to follow developments regarding Chinese weapons capabilities. Conversely, expanding the EU’s defense sales to China could make the Chinese government more reluctant to pursue policies Western governments oppose for fear of the EU retaliating by curtailing these sales.

It’s important to note at this point that most advocates of lifting the embargo don’t expect that the EU would sell major weapons systems to China even if the EU lifts the ban. The intent is to normalize relations by eliminating an ineffective and offensive embargo. But China might be able to acquire more dual-use technologies that could be used for military purposes.

These are certainly strong arguments, but the case for not repealing the embargo, at least at present, is stronger. For starters, China-EU mutual trade and investment have flourished despite the embargo. Europe is the largest importer of Chinese goods and China’s second largest two-way trading partner.

Opponents of lifting the arms embargo point to a lack of significant Chinese improvements regarding human rights during the past two decades. According to Amnesty International, “an estimated 500,000 people are currently enduring punitive detention without charge or trial, harassment, surveillance, house arrest, and imprisonment of human rights defenders are on the rise, and censorship of the Internet and other media has grown. Repression of minority groups, including Tibetans, Uighurs and Mongolians, and of Falun Gong practitioners and Christians who practice their religion outside state-sanctioned churches continues.”  Lifting the embargo would remove one means of possibly inducing the current Chinese government to reexamine the Tiananmen crackdown and possibly change its policies.

The State Department has also declared it’s concerned that lifting the ban would send the wrong signals to China. For example, Beijing could plausibly interpret the embargo as signifying that Europe is less concerned than thought about China’s human rights practices, its growing and opaque military potential, uphold Beijing’s expansive territorial claims in the South China Sea, or China’s position that it has the right to employ military force to recover Taiwan. Regarding the latter, there’s a particular worry that EU action could precipitate an end to the recent warming of cross-Strait relations.

The United States is also worried that strengthening economic and political ties between the EU and China would risk neutralizing the EU’s support for U.S. efforts to deter Chinese aggression and direct China’s rise in non-threatening ways. Increased dependence engendered by China-EU arms sales works both ways. EU governments could become more reluctant to challenge China on disputed issues for fear of Beijing’s curtailing its purchases of Western weapons. U.S. officials have sometimes encountered this problem in the past when Russia-EU ties are close.

Some U.S. policy makers fear that EU companies might transfer U.S. military technologies to China due to the extensive EU-U.S. defense industrial cooperation.  Members of Congress regularly threaten to limit such cooperation if the EU should lift the arms embargo on China. The retaliation would be even greater if China were ever to use European defense technology of even partial U.S. origin against the U.S. armed forces or those of U.S. allies.

Perhaps more importantly, lifting the ban on defense-related technology transfers to China could make the Chinese military more capable and threatening by increasing the country’s  access to useful military technologies that Beijing could incorporate in its own weapons.

Most of these would go towards augmenting China’s own military potential, but others could go toward helping China achieve its goal of raising its share of the international arms market. China isn’t yet a major arms producer and exporter – it has supplied numerous governments (often with poor human rights records themselves) and militant groups with arms for decades, but with the exception of Iran and Pakistan and a few other countries, these sales have generally involved unsophisticated weapons. Helping develop China’s military-industrial complex could make the country a more formidable arms dealer.

This development could also complicate international measures to influence the behavior of rogue states. For example, the United States and Israel led a successful campaign to induce Russia to cancel a lucrative contract with Tehran for S-300 surface-to-air missiles. The cancellation helped decrease pressure on Israel to launch an urgent air strike on Iran before the systems had become operational, which would make any air strike against Iran much more difficult. At the time, Tehran approached China for such a system, but China’s domestic equivalents to the S-300 were much less sophisticated. If China could acquire more advanced defense-related technologies form the EU, they might have been able to undercut the Western diplomatic victory and precipitated a Middle East war.

In the past, it could be argued that relaxing the embargo could help weaken China’s ties with Russia by reducing Beijing’s dependence on imported Russian military equipment and technologies. But Russian arms sales to China have already decreased considerably in recent years from their peak due to the rapid improvement in the capabilities of China’s defense industry and the reluctance of Moscow to sell the People’s Liberation Army (PLA) its best defense technologies. Repealing the EU arms embargo could prompt the Russian government to change its policies and permit China to purchase its top-line weapons in order to retain its market share. For example, Russia might sell China long-range strategic bombers, more advanced air defense systems, and naval aviation systems for China’s emerging carrier fleet.

Still, there’s a general sense in the EU that the arms embargo on China should be repealed at some point. From the EU’s perspective, however, now is precisely not the time to provoke another transatlantic crisis over the issue. The United States is pivoting its military capacity to Asia to better deal with China’s rise. Europeans could doubly accelerate this trend, which has alarmed some Europeans who dread not having a major U.S. military presence in Europe, if they offered to sell arms to China. Not only could such sales increase U.S. fears about China’s growing military capabilities, but it would stimulate American perceptions that ungrateful Europeans were free-riding on U.S. defense efforts in Asia and sacrificing common transatlantic security interests in the pursuit of commercial opportunities in Beijing.

The U.S. isn’t the only country concerned about relaxing the restrictions – allies like Japan have also cited these and other reasons why the EU shouldn’t repeal the embargo at present. The EU might consider revoking the embargo later if China made significant progress in improving its human rights practices, but then it would need to establish something solid in its place. 

There are other possible solutions being considered. One proposal is to replace the embargo with a stronger EU “Code of Conduct” on arms exports that would better control arms sales to China. Yet the United States and Japan are skeptical about the efficiency of the current code, which simply requires EU members to inform one another of their arms exports, in preventing the transfer of modern defense technology to China. A stronger code might require that EU members notify their partners of any planned arms sales to China, which would allow for peer review (and ideally peer pressure) of controversial exports.

Another option – a good one for many reasons in addition to the arms sales issue – would be to deepen the EU-U.S. dialogue regarding Asian security developments. That would ensure that Europeans appreciate the depth of current American concern about maintaining military balances in Asia and also allow Europeans an opportunity to explain their positions and perspectives, including periodic efforts in the United States to grant waivers to U.S. companies for defense-related sales to China. Enhanced consultations would also help the parties avoid the spectacle we have seen recently in which several European governments have competed to sell sophisticated weapons to Russia with little consultation within NATO circles, which makes the alliance look incoherent.