The issue of profligate arms sales to Third World countries arose in the presidential campaign of 1976. "I am particularly concerned by our nation's role as the world's leading arms salesman," then-governor Jimmy Carter told the Foreign Policy Association in New York. Arguing that "the United States cannot be both the world's leading champion of peace and the world's leading supplier of the weapons of war," he promised that, if elected president, he would work to "increase the emphasis on peace and to reduce the commerce in arms."
Once elected, Carter renewed his promise to reduce U.S. weapons sales. In his first interview as president, he told reporters that the National Security Council had reached agreement on the need to place "very tight restrictions on future commitments" of U.S. arms to overseas recipients. These restrictions were contained in Presidential Directive 13 (PD-13), adopted on 13 May 1977. In announcing the provisions of PD-13 on 19 May 1977, President Carter affirmed that "the United States will henceforth view arms transfers as an exceptional foreign policy instrument, to be used only in instances where it can be clearly demonstrated that the transfer contributes to our national security interests."
To implement this "policy of arms restraint," as he termed it, Carter imposed a ceiling on the total dollar value of U.S. arms transfers (set at the sales level for 1977) to all but a few traditional allies, and pledged that the United States would not be the first supplier to introduce into Third World areas "newly developed, advanced weapons systems which could create a new or significantly higher combat capability." Moreover, to dampen the overseas demand for U.S. weapons, Carter ordered American diplomats to refrain from assisting U.S. arms firms in their efforts to secure foreign buyers. (This instruction was incorporated in the "leprosy letter" of 31 August 1977, sent to all U.S. embassies and military missions abroad.)
For the next three years Carter struggled to preserve his self-imposed ceiling on the dollar value of U.S. arms exports to nonexempt countries and to fulfill the other aspects of his policy. In Latin America, for example, he reintroduced the ban on sales of high-technology weaponry first instituted by President John F. Kennedy. He also succeeded in reducing total U.S. sales to non-NATO countries from $9.3 billion in fiscal year (FY) 1977 to $8.6 billion in FY 1978 and $8.4 billion in FY 1979.
From the beginning, however, Carter came under intense pressure from both domestic and international forces to abandon his arms restraint policy. At home he was besieged by supporters of Israel, who sought to exempt that country from any of the restrictions on high-technology arms exports. The domestic arms industry also campaigned strenuously against the restrictive provisions of PD-13. Overseas the president's determination to adhere to these provisions was undermined by growing Soviet assertiveness in the Third World, most notably in Afghanistan. Buffeted on both sides by antagonistic forces, Carter decided to abandon the arms ceiling in 1979.
Even before announcing this decision, Carter had made a virtual about-face on the arms export issue. In February 1978 he authorized the transfer of two hundred advanced combat aircraft to three countries in the Middle East—-supplying sixty F-15s to Saudi Arabia, fifty F-5Es to Egypt, and a combination of ninety F-15s and F-16s to Israel. Six months later he gave preliminary approval to the sale of another $12 billion worth of high-tech weaponry to Iran. Other major sales of this sort were announced in the final months of his administration.
The changing international environment doomed another key aspect of the Carter policy: a determined U.S. effort to persuade the Soviet Union to agree to mutual restraint on arms exports to the developing areas. Between December 1977 and September 1978, the United States and the Soviet Union held four meetings to consider restrictions of this sort. Known as the Conventional Arms Trade Talks (CATT), these negotiations produced consensus on certain matters of principle and terminology, but never resulted in agreement on specific control measures. With superpower tensions rising in the Middle East and elsewhere, the two sides discontinued the talks at the end of 1978.
Ronald Reagan, who became president in 1981, repudiated what little survived of the Carter arms policy and promised to expand U.S. military aid to threatened allies abroad. His administration's revised, pro-sales stance was initially spelled out in a speech by Undersecretary of State JamesL. Buckley before the Aerospace Industries Association on 21 May 1981. Rejecting the notion that arms sales are "inherently evil or morally reprehensible," Buckley affirmed that "this administration believes that arms transfers, judiciously applied, can complement and supplement our own defense efforts." These views were incorporated into a new presidential directive on arms transfers, signed by Reagan on 8 July 1981.
In contrast to the Carter directive on arms transfers, the Reagan policy did not portray the global arms flow as a potential threat to international peace and stability. Rather, U.S. arms exports were described as a vital adjunct to America's efforts to counter (what was seen as) the growing power and assertiveness of the Soviet Union. As Undersecretary Buckley explained on 21 May, "We are faced not only with the need to rebuild and modernize our own military forces, but also to help other nations in the free world to rebuild theirs."
In line with this outlook, Reagan repudiated the arms-export ceiling set by President Carter and abolished the ban on sales of high-tech weapons to friendly Third World nations. The new administration also eased the repayment terms for any U.S. arms purchased by developing countries with credits supplied through the Foreign Military Sales (FMS) program. And, in a move that was eagerly sought by American arms manufacturers, Reagan rescinded the "leprosy letter" of 31 August 1977, and instructed U.S. diplomatic personnel to assist American military firms in securing contracts abroad.
As a result of these and similar initiatives, U.S. arms exports soared during the Reagan era. According to the Department of Defense, military sales under the FMS program jumped from $8.2 billion in FY 1981 (the last year affected by the Carter policy) to $20.9 billion in FY 1982—a one-year increase of 155 percent. In addition to condoning a dollar increase in military exports, the Reagan administration approved the sale of some of America's most sophisticated aircraft, missiles, and tanks to Israel, Saudi Arabia, and other favored clients in the developing areas. All told, the United States exported approximately $92 billion worth of arms and military equipment during the Reagan era.
For the most part, President Reagan enjoyed strong congressional support for his efforts to boost U.S. arms sales abroad. He did, however, encounter significant opposition to a number of specific transactions. Most notable in this regard was his 1981 plan to sell five Advanced Warning and Control Systems (AWACS) aircraft, along with other sophisticated weapons, to Saudi Arabia for $8.5 billion—the largest single U.S. arms package until that date. Many members of Congress, including a substantial number of Republicans, announced their intention to block the AWACS sale in accordance with the veto provisions of the Arms Export Control Act, on the grounds that it would pose a potential threat to the security of Israel. Only after a major lobbying campaign by the president was the White House able to defeat the veto effort in the Senate by the narrow vote of 52–48.
Aside from the AWACS sales to Saudi Arabia, the arms transactions of the Reagan era that provoked the most controversy involved the covert delivery of weapons to anticommunist insurgents in countries ruled by allies of Moscow. As part of his drive to combat Soviet influence in the developing areas, President Reagan authorized the transfer of arms and ammunition to the Islamic mujahideen in Afghanistan, the rebel forces of Jonas Savimbi in Angola, and the anti-Sandinista contras in Nicaragua. Although these efforts were supported by some in Congress, the covert arms program provoked a major national crisis when it was discovered in 1986 that the National Security Council staff had sold U.S. anti-tank missiles to archenemy Iran, then ruled by the Ayatollah Khomeini, in order to finance arms deliveries to the contras. In what became known as the Iran-Contra affair, the administration's covert arms program came under intense congressional scrutiny and was subjected to a number of severe constraints.