IHS Analysis - The Uncertain Future of the Arms Trade Treaty

© 2012 IHS 1 ihs.com

Introduction

Amid ongoing concerns about the spread of weapons of

mass destruction, the issue of small-arms proliferation is

sometimes overshadowed, despite the immediate and

widespread security issues it creates.

In an effort to rectify this situation, a number of

governments, and an even greater number of non-

governmental organisations, met on 2-27 July 2012 with

the objective of negotiating a new Arms Trade Treaty. This

treaty was not to restrict or control particular types of

conventional weapons, but instead to set standards for

when producers of conventional arms would sell or

otherwise transfer such arms to other states, and for many

participants, to restrict or prohibit the supply of

conventional weapons to actors other than legitimate

governments.

At the end of an intensive four-week negotiating

conference, preceded by several years of preparatory

work, the participating governments failed to reach

consensus (as required by their terms of reference) on a

new treaty. However, they did produce a significant draft

text, albeit one with a number of flaws. Understanding the

different views about what needed to be accomplished,

and why the July negotiations did not produce the required

KEY POINTS

The global trade in small arms is often overlooked in comparison to

more high-profile proliferation issues such as weapons of mass

destruction.

Momentum has grown behind the establishment of an international

arms trade treaty, culminating in a summit in July 2012 aimed at

negotiating such a deal.

Conflicting views on what the treaty should achieve meant that no

formal agreement was reached, and uncertainty remains over

exactly what form a future treaty could take and whether it can

overcome a number of challenges.

October 2012 ihs.com

IHS Jane’s

Analysis: The uncertain future of

the Arms Trade Treaty

IHS Jane’s Analysis: The Uncertain Future of the Arms Trade Treaty


result, illustrates the complexities of the process that led to

negotiations.

Sales restrictions

Efforts to control the “export” or transfer of weapons to

outsiders (“foreigners”) are about as old as organised

society. So are efforts to profit by the transfer of such

weapons to others. Throughout most of history, the

principles of such efforts have been relatively simple: to

keep weapons, or at least the best weapons, from

adversaries; to use weapon transfers to build and

strengthen alliances; and to profit from the sale of

weapons to foreigners when possible.

Over time, efforts to restrict the transfer of sophisticated

weapons extended to key technologies or even raw

materials, with the primary motive being to prevent

adversaries from gaining military advantage. In some

cases another motive was to maintain economic

competitive advantage. However, the common element for

these historical efforts is “us versus them” – maintaining

an advantage, whether military or economic.

A gradual evolution from this “us versus them” paradigm

started in the late 20th century. Following the dissolution

of the Soviet Union, a number of former adversaries –

currently comprising 41 states – sought to create a new

multilateral export control regime to deal with conventional

weapons and related dual-use items and technologies.

The shared objective of the members of the new group –

the Wassenaar Arrangement on Export Controls for

Conventional Arms and Dual-Use Goods and

Technologies – was to promote “transparency and greater

responsibility in transfers of conventional arms” to “prevent

destabilising accumulations” and to contribute to regional

and international security and stability.

How much the Wassenaar Arrangement has succeeded in

this is arguable, with perhaps its greatest significance

being that a group of major arms exporters agreed on

shared restrictions on their respective arms exports. Yet,

even as the Wassenaar Arrangement was setting about its

work, the international arms trade was growing and

evolving.

Trading arms

Although it tends to be conflated in the international

media, or even among export control specialists, there is

not really a single international arms trade. Rather, there

are several, which are analytically separable, despite their

inter-relationships.

The predominant trade is undertaken by major arms

manufacturers. A closely related but separate sector is the

manufacturers of military small-arms and light weapons

(SALW), primarily assault rifles and semi-automatic

pistols, with some companies specialising in crew-served

weapons, such as heavy machine-guns, mortars, and

small tactical missiles (anti-tank missiles or man-portable

air-defence systems). Then there is the used equipment

market, which consists of merchants and brokers who



trade in weapons that have been classed as “surplus” by

the original military, seized during a conflict, or stolen.

Statistics on the arms trade also require some deeper

explanation. The most frequently reported statistics are for

contracts signed during the previous year, primarily

between a purchasing government and either a foreign

manufacturer or a foreign government that is directly

involved in the transaction (that is, not just licensing the

transfer, but acting as an agent or intermediary). For

purchases of major weapons systems by national

governments, these are the most useful statistics. They

are also useful for a country’s armed forces’ purchases of

SALW. These statistics also reflect transfers of surplus

equipment from a major power to a smaller ally.

Data on the major suppliers of sophisticated and major

weapons systems are routinely published, but sometimes

in terms of arms deliveries and sometimes in terms of

arms transfer agreements concluded. These different

metrics produce similar (but not identical) pictures in terms

of rankings, but different pictures in terms of magnitude.

As arms agreements can sometimes be more aspirational

than realistic, it is more useful to look at deliveries data.

According to a recently published report by the United

States Congressional Research Service (probably the

most methodologically transparent data available), in 2011

the US was the largest exporter of arms, delivering

USD16.2 billion, or 36.5%, of the USD44.3 billion-worth of

global arms deliveries. Following the US were Russia

(USD8.7 billion), the United Kingdom (USD3.0 billion),

France (USD1.7 billion), Italy (USD1.7 billion), Germany

(USD1.6 billion), and China (USD1.3 billion). As would be

expected, the arms trade among these major exporters is

very small: the vast majority of their exports are to other

countries.

Data on legitimate exports of SALW are less widely

collected and recorded than data on major military

systems (such as combat aircraft and main battle tanks),

and the major players in this sector include many

countries who have little involvement in the major systems

trade. Data published by the Small Arms Survey, a Swiss-

based independent research project, indicate that

countries exporting more than USD100 million annually

during the period 2001-2007 include Austria, Belgium,

Brazil, Canada, China, Germany, Italy, Russia, Canada,

Switzerland, Turkey, the United Kingdom, and the US.

The Survey lists another 36 countries as exporting at least

USD10 million annually during this period. While this list

includes all the largest exporters of major weapons

systems, it is notable how many countries are substantial

exporters of SALW, and how relatively flat the export

market is.

Data on the import side of the market is less readily

available, and heavily skewed towards those countries

that report this information, either as arms imports or in

their customs data. The largest importers (more than

USD100 million per year) appear to be Canada, France,

Germany, Saudi Arabia, and the US. Anecdotal data



indicates that a number of countries in the Middle East,

Africa, and Latin America are also major importers.

Another sector of the market involves private merchants

who purchase surplus equipment – sometimes including

(usually “de-militarised”) vehicles and weapons from one

military and selling them to another buyer. Some of this

activity is entirely legal and properly licensed, but this

sector can also blend into the grey and black arms

markets. The most high-profile example of such illegal

activity is the case of Viktor Bout, who was sentenced to

25 years in prison by a US court in April 2012 after being

found guilty of conspiracy to kill US citizens and officials,

delivering anti-aircraft missiles, and aiding a terrorist

organisation. He developed his business by selling poorly

secured Soviet-era military equipment to a number of

regimes in conflict-ridden countries, such as Liberia and

the Democratic Republic of Congo. The value of trade in

this sector is another step below the “official”, state-to-

state SALW trade, but is the main source of weapons

used in civil wars and other conflicts in the developing

world. While much of the international attention to the

global arms trade focuses on the wider trade described

above, it is the trafficking in this grey sector that is

responsible for the violence that is the focus of many

opponents of the global arms trade. Controlling the trade

in this sector has proven even more intractable.

Taking control

Following the 1990-1991 Gulf War, the arms exports that

had built the Iraqi military prior to its invasion of Kuwait led

the five permanent members of the UN Security Council to

announce, in 1991, the Guidelines for Conventional Arms

Transfers and the establishment of a UN Register of

Conventional Arms.

Voluntary reporting to the Register of arms transfers in

seven weapons categories was a first, small step. The

reporting categories included all major weapons systems,

but did not include SALW. The transparency of voluntary

reporting was intended to prevent “excessive and

destabilizing arms buildups” that posed a “threat to

national, regional and international peace and security,

particularly by aggravating tensions and conflict

situations”.

Transparency has value, but clearly governments will not

report transfers that would attract negative attention.

Even as Wassenaar and the UN Register were being set

up, the international arms trade was changing. In the

states of the former Soviet Union, military equipment was

becoming a commodity. Arms and equipment were sold

for food, medicine, financial gain, or were simply stolen.

Black and grey arms trafficking blossomed during this

period.

These black market arms merchants specialised in SALW,

although they would supply whatever the customer sought

and could pay for. Civil conflict in Africa, and political

insurgents and drug cartels in Latin America, provided

ready markets for weapons, and especially SALW.



In response to the problem, in 1997 former Costa Rican

president Oscar Árias led a group of Nobel laureates in

calling for an International Code of Conduct on Arms

Transfers to govern arms transfers. The proposed code,

which in some respects had more the form of a draft treaty

than a voluntary instrument, stipulated that any country

wishing to purchase arms must meet certain criteria,

including the promotion of democracy, the protection of

human rights, and transparency in military spending. It

would also prohibit arms sales to countries that support

terrorism and to states that are engaged in aggression

against other states or peoples. This call was gradually

taken up by a number of non-governmental organisations

(NGOs), which collectively formed a coalition to advocate

for an Arms Trade Treaty.

In 2001, the first UN Conference on the Illicit Trade in

Small Arms and Light Weapons in All Its Aspects met and

established the UN Programme of Action (PoA) to

Prevent, Combat and Eradicate the Illicit Trade in Small

Arms and Light Weapons. The UN PoA is voluntary and

obliges participating states to take specific actions to

control export, import, and domestic stocks of SALW, and

to support international actions to this end.

Towards a Treaty

With international momentum gathering towards

agreement on an International Arms Trade Treaty, the UN

General Assembly met in December 2006 and adopted a

resolution titled Towards an Arms Trade Treaty. This led

to the formation of a Group of Governmental Experts,

which in 2009 became an Open-Ended Working Group.

Throughout this process the US stated its opposition,

arguing that to be effective an arms trade treaty must be

ratified by all major arms exporters, and many would join

the arrangement only if the treaty were so weak as to

have little substance. Then, in October 2009, US

Secretary of State Hillary Clinton announced a reversal of

this position. The UN General Assembly promptly passed

a new resolution changing the Open-Ended Working

Group into a series of preparatory committee meetings to

do the final groundwork for a four-week negotiation

summit.

In the fourth week, the conference president, UN

ambassador Roberto Moritán of Argentina, circulated a

draft reflecting the work of two working groups and his

own consultations. Discussions among delegations

indicated that while few felt the product was what they had

come hoping to achieve, a majority of participating

governments supported the adoption of this text as the

treaty. The NGOs that had long worked to get these

negotiations, but which found serious deficiencies in the

president’s draft, nonetheless lent their support to adopt it

as a treaty.

Other states judged the text seriously flawed, although for

varying and often contradictory reasons. The last question

for the conference would be whether there was the

consensus required by the terms of reference to adopt this

text and open it for signature and ratification. Some states

did not support the text and appeared ready to break



consensus, but as the second state to break consensus,

not the first.

On the last day, the US emphasised that it wanted to join

consensus and was aiming for a treaty the US Senate

would ratify. The US statement identified specific

provisions where the draft text was inadequate, and called

for further negotiations. Russia also called for further

negotiations. The conference president had not yet called

for consensus, but the question had been decided.

More than 90 states responded by jointly stating that they

were prepared to adopt the draft text as it stood, and

expressing frustration at the outcome. The NGO

community also expressed frustration and offered strong

support for the draft text, even though it did not include

provisions they had previously identified as key to a

successful treaty.

Limited progress

Despite the frustration expressed in New York, the draft

text (officially termed A/CONF.217/CRP.1, or simply

CRP.1) was not the feared lowest common denominator,

but neither was it as robust and comprehensive as many

had desired.

The draft makes some important advances on previous

international efforts, such as including SALW as an eighth

category of arms transfer. SALW had been added as an

eighth reporting category for the UN Register only by

making it voluntary (that is, more voluntary than the

already voluntary reporting of transfers), and it was added

to the internal Wassenaar Arrangement reporting after a

long debate. Given that many African and Latin American

states had come specifically to control SALW, this was an

important step.

Many of those governments, and the NGOs, had also

sought a ninth category to be included – ammunition. This

met strong opposition from many arms exporters. The

compromise provided that ammunition exports should be

evaluated using the same criteria as arms, something

many, but by no means all, arms exporters already do.

CRP.1 also establishes criteria for evaluating a proposed

arms transfer to determine whether to authorise it or deny

it. This includes whether the exported arms could be used

to commit or facilitate serious violation of international

humanitarian law, international human rights law, or a

“terror offense”. States are also to consider whether the

export might be diverted from authorised use and to take

“appropriate measures” to prevent diversion to the illicit

market or for unauthorised end use. However, these

stipulations are tempered by the fact that it “shall not

prejudice” a state’s obligations under “other instruments”

or be grounds for voiding contractual obligations under

“defence co-operation agreements”. These criteria fall far

short of those in, for example, the EU’s Code of Conduct

on arms exports.

Additionally, CRP.1 calls for measures to regulate transit

and transshipment of arms, but does not indicate what

characteristics such regulations should have. For



instance, it does not outline to what degree a transit or

transshipment state has the right, much less obligation, to

judge the appropriateness of a transfer. While states are

required to keep records of transfers authorised over the

previous 10 years, making such records public is not

addressed. Voluntary reporting to the UN Register may be

deemed to be adequate.

As is increasingly common in multilateral treaties, CRP.1

would establish a staff, separate from the UN Secretariat,

to assist with implementation. How this staff would have

either the competence or the resources to provide such

assistance is not addressed. Finally, verification is not

addressed or plausible, as this is a treaty to regulate

trade, not to restrict the arms states possess or build.

Conclusion

The UN General Assembly will take up the report from the

July conference. The report will initially be discussed in

the First Committee, which will send a recommendation

for the General Assembly.

It is likely that this recommendation will be driven by a

draft resolution submitted by the seven sponsors of the

original 2006 resolution (Argentina, Australia, Costa Rica,

Finland, Japan, Kenya, and the UK). Other states might

submit competing resolutions proposing different

outcomes, although this is less likely.

The key question is whether the seven original sponsors

will choose to propose a new negotiating conference. The

July 2012 conference completed its mandate, so an

entirely new conference would be technically necessary,

but the resolution could easily mandate that the new

conference pick up working on CRP.1, as suggested by

the US and Russia.

The seven original sponsors (or others) might instead

propose that the UN General Assembly formally adopt

CRP.1 as the Arms Trade Treaty and open it for signature

and ratification. As the US and Russia have said that

CRP.1 is not acceptable in its current form, this would

represent a decision to proceed without the world’s two

largest arms exporters, together accounting for around

45% of global arms deliveries in 2011. As some other

major arms exporters may also remain outside the treaty,

given the reduced international pressure on them after the

US and Russian decisions, the result could be a treaty

purporting to regulate the arms trade but not accepted by

those responsible for the majority of that trade.

Other states, perhaps dissatisfied with whatever the First

Committee recommends, might seek to take the entire

process outside the UN framework, as was done with the

landmines convention. Such an “Ottawa” process would

mean that neither the United States nor Russia, and

almost certainly some other important arms exporters,

would participate. Fearing a “rump treaty” with little or no

practical effect, the original sponsors and many others

would most likely oppose such a move.

As of October 2012 the UK, as the leader of the seven

original sponsors, has not made a clear or authoritative



statement of its desired next step, nor have the other co-

sponsors. The 67th regular session of the UN General

Assembly Plenary formally opened on 18 September and

action on Ambassador Moritán’s report will begin in

October. With key states either still considering their

course of action or holding their decisions closely, the only

certainties are that there will be some political fireworks in

New York, and some supporters of the Arms Trade Treaty

will again be sorely disappointed. Which will be

disappointed and for what reason remains to be seen.

launch.

This analysis was first published in IHS Jane’s Intelligence

Review in October 2012 and is available with additional

related analysis within IHS Jane’s Military & Security

Assessments Intelligence Centre.

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IHS Analysis - The Uncertain Future of the Arms Trade Treaty