Feeding the tigers: the push for Canadian military aid sales in Asia.

This past spring newly built Canadian patrol frigates visited the Asia-Pacific region for the third consecutive year to promote Canadian naval equipment to potential military customers. The tours by the frigates, which contain some of the most advanced fighting ship systems in the world, symbolize the escalating promotion of Canadian military goods abroad, especially to Asian states. More than ever, the Canadian military industry is open for Asian business, and Canadian patrol frigates are almost literally the industry's flagships.

With the end of the Cold War, Asian states are adjusting to a regional security environment without the previously dominant superpower rivalry. In the absence of well-developed regional agreements, many Asian countries have responded by boosting domestic military programs, citing a need to adjust to the new security dynamics and, in some cases, regional rivalries. For the "Asian Tigers," the economically dynamic nations of east and southeast Asia, this increase in military spending has been facilitated by the explosive growth in their GNPs in recent years. (1) More military spending has increased regional arms acquisitions, especially imports, and, as a result, Asia is in the midst of an arms race.

Meanwhile, with declining arms exports to Canada's traditional customers in the US and Europe and shrinking enthusiasm for big ticket purchases by the Canadian military, Ottawa is looking for new markets to sustain a domestic capacity for military production. Like its counterparts facing similar circumstances, the federal government has identified Asia, and especially the Asia-Pacific region, as one of two strong "emerging" markets for Canadian military exports. Supply and Services Canada's 1996-97 report on Canada's "aerospace and defence" sector notes that "the major area of growth in demand over the next few years is expected to be the Pacific Rim. British Aerospace, for example, predicts that defence spending in the Asia-Pacific region will overtake that of Western Europe and equal approximately two thirds of U.S. spending by 2010." (2)

A recently published government export strategy for "defence products" promises active government support for increasing military exports to Asia-Pacific nations. According to the strategy, government efforts will "provide Canadian suppliers with unique export assistance... to assist them in exploiting emerging markets in the Asia-Pacific and Middle East regions." (3)

In this promise, the government has been as good as its word. Recent efforts to boost military sales to Asia-Pacific have included: support from the crown corporations the Canadian Commercial Corporation (CCC) and the Export Development Corporation (for example, the CCC brokered a $146-million transport helicopter deal with the Thailand Army in 1994); active participation of the Department of National Defence, especially through equipment demonstrations and training (Canadian soldiers have trained Thai personnel on the ADATS missile system (4)); hosting of foreign military missions to Canada (in July 1995 a Korean naval equipment mission visited Vancouver, Toronto, Montreal, and Halifax); and government-sponsored promotional booths at international aerospace and military shows, in the region (the Department of Foreign Affairs hosted a booth at Singapore's Security Asia '95 exhibition) and at the biennial Airshow Canada exhibition at Abbotsford, BC (which bills itself as the "Doorway to the Pacific Rim"). (See the article on Airshow Canada beginning on page 17.) More prominently, government Cabinet ministers, including the Prime Minister, have led trade missions to the region that have included military industry representatives.

Although the Asian tours by Canada's patrol frigates are billed as politically prudent - an opportunity to "show the flag" in a region of growing importance to Canada-naval officials are candid about efforts to push Canadian-built military equipment. (5) At each port-of-call, local military delegations and business people are brought aboard for private marketing tours. Canadian naval officers and business people promote the ships and the Canadian-produced subsystems that can be used on a range of vessels. Sales efforts of these floating military showrooms have grown from regional tours by individual Canadian warships in 1995 and 1994, when ports-of-call included stops in Hong Kong, Indonesia, Malaysia, Singapore, and Thailand, to the recent two-month Pacific tour by two patrol frigates and two other vessels with stopovers in Japan, Hong Kong, Vietnam, South Korea, the Philippines, and Russia. According to press reports, future marketing trips will be annual and similar in size to this year's four-ship tour.

[Part 1 of 2]

Table 1: Canadian military equipment recently promoted to Asian countries

Military Equipment/Service      Canadian Supplier
A: Major systems

Bell 412 & 430 multimission     Bell Helicopter
helicopters                     Textron Canada


Bell 206B (TH-67) training      Bell Helicopter Textron
helicopters                     Canada
Challenger aircraft             Bombardier Canadair
(with spy equipment)
CL-415 amphibious aircraft      Bombardier Canadair

CF-5 fighter/trainer aircraft   Department of
                                National Defence
Light-armoured vehicles         General Motors
                                of Canada
Air defence anti-tank           Oerlikon Aerospace Inc.
system (ADATS)
Patrol frigates and subsystems  Saint John Shipbuilding Ltd.,
                                with major subsystems from
                                CAE Electronics Ltd.
                                Computing Devices Canada
                                Loral Canada, and related systems
                                from 22 other companies
Patrol vessels                  Western Canada
                                Marine Group
B: Other full systems           CRV-7 rockets
Singapore, Thailand             Sonar coastal
                                intrusion detection
                                system
South Korea                     "Meshnet" communi-
                                cation system
Pacific Rim                     Synthetic aperture
                                radar systems
South Korea                     Integrated Maritime
                                Surveillance system
India                           Tactical Air Naviga-
                                tion (TACAN) system
Southeast Asia, especially      Night Vision Thermal
Thailand                        Imaging System
South Korea                     C: Subsystems or parts

C-Tech Ltd.                     China


Computing Devices Canada        South Korea


Computing Devices Canada        Taiwan

Computing Devices Canada        Southeast Asia


DY-4 Systems Inc.               Asia


Litton Systems Canada Ltd.      Asia, especially Indonesia
                                and Thailand
Lockheed Martin Canada Inc.     Malaysia


MacDonald Dettwiler             Southeast Asia
& Associates

Com Dev Ltd. Lockheed           South Korea
Martin Canada
Inc. Northern
Telecom Ltd. Thomson-CSF
Systems Canada
Stork Canada
Pratt & Whitney Canada          Malaysia



Spar Aerospace Ltd.             Southeast Asia

Spar Aerospace Ltd.             Japan

F-5 fighter aircraft upgrades   Bristol Aerospace Ltd.



Aerospace training              Department of
                                National Defence
C-130 transport aircraft        CAE Aviation
repair & upgrades
E: Unspecified equipment        Bristol Aerospace Ltd.

[Part 2 of 2]

Table 1: Canadian military equipment recently promoted to Asian countries

Military Equipment/Service      Proposed Asian Customers
A: Major systems

Bell 412 & 430 multimission     India, Indonesia,
helicopters                     Malaysia, Philippines,
                                South Korea, Taiwan,
                                Thailand
Bell 206B (TH-67) training      Taiwan
helicopters
Challenger aircraft             China
(with spy equipment)
CL-415 amphibious aircraft      Asia Pacific region,
                                especially Malaysia
CF-5 fighter/trainer aircraft   Philippines, South
                                Korea, Thailand
Light-armoured vehicles         China, Indonesia,
                                Malaysia, Thailand
Air defence anti-tank           Pacific Rim, especially
system (ADATS)                  Thailand
Patrol frigates and subsystems  Hong Kong, India, Indonesia, Japan,
                                Malaysia, Philippines,
                                Russia, Singapore,
                                South Korea, Taiwan,
                                Thailand, Vietnam

Patrol vessels                  Malaysia, Philippines,
                                Vietnam
B: Other full systems           Bristol Aerospace Ltd.
Singapore, Thailand             C-Tech Ltd.


South Korea                     Computing Devices Canada

Pacific Rim                     MacDonald Dettwiler &
                                Associates
South Korea                     Raytheon Canada Ltd.

India                           Spar Aerospace Ltd.

Southeast Asia, especially      Spar Aerospace Ltd.
Thailand
South Korea                     Anti-submarine warfare/
                                mine detection equipment
C-Tech Ltd.                     Fire control
                                computer for
                                K-1 main battle tank upgrade
Computing Devices Canada        Fire control computer
                                for XM8 Armored
                                Gun System
Computing Devices Canada        CLASS computerized laser
                                sight for direct fire weapons
Computing Devices Canada        Tank and military
                                vehicle
                                computer components
DY-4 Systems Inc.               Liquid crystal cockpit
                                display systems
                                for military aircraft
Litton Systems Canada Ltd.      Naval electronic warfare
                                equipment
Lockheed Martin Canada Inc.     Air traffic control
                                & supply management
                                subsystems
MacDonald Dettwiler             Components of
& Associates                    Active Phased
                                Array Radar (APAR) for warships
Com Dev Ltd. Lockheed           PT6A turboprop engines
Martin Canada                   for Pilatus
Inc. Northern                   PCXII Eagle
Telecom Ltd. Thomson-CSF        special mission aircraft
Systems Canada
Stork Canada
Pratt & Whitney Canada          Processing subsystem
                                for SIRIUS
                                infrared search
                                & track set for warships
Spar Aerospace Ltd.             Noval communications
                                system
Spar Aerospace Ltd.             D: Upgrades and
                                services
F-5 fighter aircraft upgrades   Indonesia, Malaysia,
                                Philippines,
                                Singapore, South
                                Korea, Taiwan, Thailand
Aerospace training              Malaysia, Singapore
                                (and Commonwealth)
C-130 transport aircraft        Asia, especially
repair & upgrades               Malaysia

E: Unspecified equipment China

As with allied organizations in other (mostly NATO) nations, military product marketing is a growing role for the Department of National Defence, and the Navy is not shy about showing its newly acquired wares to virtually any Asian government. The Department also is interested in disposing of surplus equipment (especially the expensively upgraded CF-5 fighter/trainer aircraft) in the region, and in finding Asian nations to share in the cost of military training. That said, a large part of the cost of promoting Canadian weapon systems to Asia is still borne by Canadian industry, albeit with the enthusiastic backing of the Canadian government.

Table 1 lists the Canadian military equipment for which there are reports of industry and government sales efforts to Asian countries since 1994. Some sales may have occurred but, because the government does not disclose the details of Canadian military exports, these cannot be verified. In many cases, the sales efforts involve years of marketing that may not see results until well into the future.

Reports of efforts to land Canadian military export orders are irregular, so Table 1 is incomplete. Nevertheless, the table does provide some indication of the variety of Canadian equipment currently on offer, as well as of the number of nations to which manufacturers are hoping to sell. The equipment covers the spectrum of Canadian military industrial capability - from costly large weapon systems such as the patrol frigates to relatively inexpensive system components. Major systems include equipment for armies (light-armoured vehicles), air forces (helicopters and fighter aircraft), and navies (patrol frigates and vessels). Subsystems include parts for weapons (such as the fire control computer for a Korean tank), as well as parts used in other military equipment such as naval mine detection systems. In keeping with an expanding upgrade market (in which equipment is modernized rather than replaced), Canadian industry is also offering Asian customers aircraft upgrade services.

If only a few of these sales efforts are successful, and especially if Canadian suppliers of major systems win orders, Canadian arms exports to Asia may continue at, or exceed, their current elevated sales levels. As shown by Figure 1, Canadian arms exports to Asia reached a post-Cold War peak in 1994, jumping past the recent (1991) peak of $30.8-million to $54.9-million, almost five times the $11.3-million in Asian sales for 1993. (All figures are in constant 1995 dollars to adjust for inflation.) At $45.4-million, 1995 sales were down from the previous year but still were almost 50 percent higher than the 1991 total.

The sizeable increase revealed by the government export data does not tell the full story of the growth in Canadian military equipment sales to the region, however. If we add the estimated value of Canadian equipment sold to military forces but not included in official figures (this equipment includes "civilian" transport helicopters sold to the Thailand Army and military aircraft engines supplied via Italy to the Philippines), then the total value of Canadian military equipment shipped to Asia in each of 1994 and 1995 probably exceeded $100-million.

It is apparent from recent military sales and arms marketing to Asian nations that Canadian government practice diverges markedly from its post-Cold War rhetoric calling for restraint in conventional weapons proliferation. If Canada truly wishes to reach the conventional arms control high ground sought by the Foreign Affairs Minister, among others, it could begin by reining in its participation in the militarization of Asia.

Recent Team Canada results

The record of recent Canadian military exports to Asian countries reveals discrepancies between government policy and military export decisions. As illustrated by Table 2, during 1995 Canada exported military goods to 13 countries in Asia. (6) Of these, four countries - India, Pakistan, the Philippines, and Sri Lanka - each suffered one or more major conflicts within their borders. (7) These shipments were approved in spite of the government's claims that it maintains "close control" of arms exports "to countries involved in, or under imminent threat of, hostilities."

Although Canadian arms sales to Asian states in conflict total just over one-tenth of all shipments to Asia during 1995, they clearly demonstrate the government's endorsement of military exports to countries engaged in internal conflicts, today the predominant (and in 1995 the sole) form of war. Indeed, it is likely that the volume of sales to Asian states at war was determined more by competitive market conditions than by government export controls. (8)

Canada also exported military equipment to Asian governments involved in human rights violations in 1995. According to the Amnesty International Report 1995, six Asian governments that purchased Canadian military goods during 1995 - those of the four states at war above plus Bangladesh and China - also perpetrated major violations of the rights of their citizens in that year. Abuses included torture of political detainees, illtreatment and death under custody, and extra-judicial executions.

According to Canadian export control guidelines, Canada controls military exports to countries with a persistent record of serious human rights violations, unless "it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population." How the Canadian government assesses the risk level of arms shipments is not made public. It is apparent, however, that there is a risk in dealing with any government capable of attacking its own citizens. The only means to avoid a risk is to deny all sales of military equipment to human rights violators, which also would serve to remove the political endorsement implied by the approval of military sales.

The 1995 record of Canadian military exports to Asia demonstrates the existing divergence between export practice and proclaimed government policy. If the current marketing efforts by the Canadian military industry achieve the success hoped for by both industry and government, then military sales to Asian countries at war or perpetrating human rights abuses can only increase.

Table 2: Canadian military exports to Asian states (in current dollars)

State                       1994         1995

Bangladesh (2)                     $1,389,665
Brunei                   $11,200
China (2)                 $9,247       $7,316
Hong Kong               $109,278      $75,155
India (1) (2)            $64,460     $701,579
Indonesia (1) (2)     $1,227,116
Japan                 $2,628,638   $2,649,694
Malaysia             $11,869,506  $17,790,511
Pakistan (1) (2)        $235,000   $3,498,789
Philippines (1) (2)                  $348,999
Singapore             $3,346,596   $1,040,895
South Korea          $12,848,470  $12,231,106
Sri Lanka (1) (2)                    $169,860
Taiwan                  $961,206   $3,593,026
Thailand             $20,621,270   $1,874,569

Total                $53,931,987  $45,371,164

(1) States involved in one or more major conflicts in 1995.

(2) States where there were 1995 reports of major human rights violations
by government.

(1) One report of recent East Asian military spending lists four states with military spending increases of more than 20 per cent between 1985 and 1992, two states with increases of over 30 per cent and one, South Korea, with an increase of 63.5 per cent. During the same period average European NATO spending decreased 0.7 per cent and US spending declined 5.7 per cent (B. Buzan and G. Segal, "Rethinking East Asian Security," Survival, Summer 1994, International Institute for Strategic Studies, p. 9).

(2) Minister of Supply and Services Canada, "Canada's International Business Strategy 1996-1997: Aerospace and Defence," 1996, p. 5.

(3) Minister of Supply and Services Canada, "Canada's Export Strategy: The Industrial Trade Business Plan, 1995/96 - #11, Defence Products," 1995, p. 5.

(4) Defense News, February 27 - March 5, 1995, p. 30.

(5) See, for example, "High-tech navy makes sales pitch in Far East," Toronto Star, June 12, 1995.

(6) The 24 Asian countries under consideration here do not include Australia, New Zealand, the Micronesian states or the Central Asian countries that were formerly part of the USSR. Elsewhere, these 24 countries are viewed to be within East Asia or South Asia (by the US state Department, for example).

(7) See "The 1996 Armed Conflicts Report," Ploughshares Monitor, March 1996, p. 13.

(8) It is also worth noting that this value covers only those states that were involved in hostilities in 1995. The value of Canadian military goods shipped to countries both involved in, and threatened by, hostilities would be far higher, especially if these included threats from border disputes and rival territorial claims, such as those between India and Pakistan or the multistate claims on the Spratly Islands in the South China Sea.