Brazil eyes arms deal as bargaining chip

UNASUR pledges Latin arms transparency
Guayaquil, Ecuador (UPI) May 11, 2010 - Latin American states within the Union of South American Nations will need to reveal all when buying weapons and military equipment to ensure they don't trigger a politically destabilizing and expensive arms race on the continent, officials said. Plans for transparency in all arms deals involving member countries were unveiled as leaders of UNASUR met in Ecuador's largest city for two days of talks on strengthening the organization. UNASUR was set up as an answer to the Organization of American States, which has headquarters in Washington. UNASUR is modeled after the European Union, with military integration aims resembling those of NATO.

UNASUR member states are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana , Paraguay, Peru, Suriname, Uruguay and Venezuela. The 12 members together have a population of 384 million. UNASUR backers say arms exporting countries in Europe have set sights on Latin America's trade surpluses and cash balances in a bid to raise their exports of weapons, equipment and expertise. Russia, France, Sweden and Germany have entered into major deals for supply of military hardware. Russia has extended credit to Venezuela and France and Sweden are looking to sell tens of billions of dollars of hardware to Brazil. Details of recent defense procurement deals remain patchy.

Although all arms-buying nations argue they need additional equipment for defensive purposes, critics, including the Obama administration, point out the purchases are disproportionate to the needs of Latin American nations. Critics within the group argue the money spent on arms should be channeled to development, literacy and poverty reduction programs. Leaders of the group agreed over the weekend to boost defense expenditure transparency to ensure regional stability. Venezuela, Bolivia and Ecuador dub the United States' military collaboration agreement with Colombia a major threat to the region.

The U.S.-Colombia deal provides for dual use of military bases in the country as part of a campaign against crime cartels supplying narcotics to North America. Argentina and Chile will lead a task group to devise a system to monitor and compare military expenditures of member countries. "Transparency of policies and investments in the field of defense is part of a major mutual confidence-building plan," said Ecuadorian Defense Minister Javier Ponce. Ecuadorian Security Minister Miguel Carvajal said, "We have to exchange information on expenditure to develop adequate levels of cooperation in security and defense, replacing the long established mistrust and fears about a potential aggression from one of the neighbors."

by Staff Writers
Sao Paulo (UPI) May 11, 2010
Brazil is positioning itself to use talks with France on a multibillion-dollar arms deal as a bargaining chip in Latin America's fight for better terms for Mercosur agricultural exports to Europe, officials said.

Latin America's Mercosur trading bloc, itself riven by divisions, will face European partners at the May 18 summit of Caribbean, Latin American and European countries in Madrid.

As a founding member of Mercosur, Brazil is spearheading the trade talks, aimed at increasing Mercosur bloc's agriculture exports to Europe, amid strong resistance from European farmers and governments fearful of upsetting their electorates.

The Greek debt crisis has raised concerns in Latin America that Mercosur is headed for worse options than originally anticipated as European governments grapple with a huge financial burden created as a result.

Mercosur can ill afford any backlash from Europe's current difficulties. Although four times the size of the European Union, the Mercosur bloc's 250 million people depend on agricultural exports amid sharp income disparities in the member countries -- Argentina, Brazil, Paraguay and Uruguay.

Undeterred by the European events, Brazil has embarked on a diplomatic drive to use its ongoing negotiations for a potential $6.5 billion arms deal with France as a bargaining chip to secure a better deal for Mercosur, Brazilian media reported.

Brazil and France are in negotiation over a Brazilian air force plan to acquire fighter planes for that price tag but Brazil has also talking with Sweden and the Boeing Co. for competing jets.

The French are favorites with Dassault Aviation's Rafale fighter jet, closely followed by the Boeing F/A-18 Hornet and Sweden's Saab JAS 39 Gripen. But Brazilians have delayed a decision for a number of other reasons -- such as the level of transfer of technology on offer -- before the Mercosur factor came into the frame.

The summit has further prompted Brazil to delay a decision on the fighter deal or use an announcement of its decision in response to events at the meetings.

The winner of the bid won't be made public until the start of the summit in Madrid, Sao Paulo media reported.

Dassault needs the contract under negotiation but France is also beholden to its farmers because it is the main beneficiary of $71 billion in subsidies granted annually to EU farmers.

"We have a strategic agreement with France. All decisions are concentrated on that contract, which is most important for both sides. If the Rafale fighter jets order is important for the French, agriculture is equally important for Mercosur," said an unidentified Brazilian government official quoted in the media.

"We know that an agreement at that level has an impact beyond the specific industry," said the official.

French officials have conveyed to Brussels their opposition to a new EU deal with Mercosur, saying it may be premature.

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Gates urges cuts in 'top-heavy' defense bureaucracy, budget
Washington (AFP) May 8, 2010
US Defense Secretary Robert Gates on Saturday blasted the Pentagon's "top-heavy" bureaucracy, calling for deep cuts in massive overhead costs at a time when the country faced fiscal trouble. Gates said ending or scaling back some major weapons programs over the past year had saved billions of dollars, but it represented only a first step towards getting the vast defense budget under control. ... read more

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