French arms exports highest since 2000

Defence deals with Brazil, Morocco and Saudi Arabia pushed French arms sales up 13 % last year to their highest level since 2000 the government said highlighting efforts by Paris to capture new markets.
President Nicolas Sarkozy has launched a drive to secure new business for 50 000 high-tech workers directly or indirectly employed in France’s arms industry and to try to arrest a dearth of export orders for France’s multi-role Rafale combat jet.
French companies took €6.6 billion ($9.7 billion) in new orders last year, strengthening France’s grip on fourth place in the league table of global arms exporters behind the United States, Britain and Russia, the defence ministry said.
Contract wins included France’s share of aerospace deals with Brazil and Saudi Arabia secured by Franco-German-Spanish group EADS and a frigate contract with Morocco that will boost privatised French electronics group Thales.
France has about 7 % of the global arms market, which is shifting away from a heavy reliance on the Middle East.
Earlier this month, Sarkozy led an arms export delegation to Brazil, which has a deal in the pipeline to buy four French submarines on top of 50 EC725 Super Cougar helicopters it ordered from EADS subsidiary Eurocopter last year.
“We are getting away from the classic idea that France only exports to the Middle East, and we are doing what is necessary to respond to the needs of Europe, Asia and Latin America,” defence ministry spokesman Laurent Teisseire told a news briefing.
Brazil is also weighing up whether to buy French Rafale warplanes, built by Dassault Aviation.
Latin America’s largest country has signed a strategic defence alliance with France, and the government has expressed preference for Dassault’s Rafale plane over competing models from Boeing and Sweden’s Saab.
But Brazil’s air force last week extended until Oct. 2 a deadline for companies to present improved bids.
Brazil is seeking a generous technology transfer offer and local assembly as part of a contract to buy 36 jet fighters. The deal could eventually rise to more than 100 aircraft.
Bargaining chip
The contest illustrates how buyers are increasingly driving hard bargains in exchange for lucrative contracts as Western companies face mostly stagnant defence spending at home.
“The global financial crisis is held up as a useful bargaining chip,” said Paul Holtom, a senior official at the Stockholm International Peace Research Institute, a thinktank on the global arms business.
“In Brazil, France has shown that it is willing to transfer a lot of technology; it is a case where buyers do not just want off-the-shelf equipment but to a great extent the blueprints.”
The US and Sweden have both said they would also be able to meet Brazil’s technology transfer requirements.
Last year’s jump in export orders came after Paris saw arms sales come under pressure for much of the decade as French arms salesmen struggled to repeat the success of Dassault’s previous generation of Mirage warplanes.
France suffered an embarrassing setback at the end of the previous year when Morocco snubbed a French offer of Rafales in favour of Lockheed Martin F-16 fighters, prompting Sarkozy to order a shake-up of France’s arms export system.
France sold weapons systems worth €8.2 billion in 2000.
France’s third-biggest market last year was Saudi Arabia, thanks in part to a deal to buy mid-air tankers converted from passenger planes built by EADS subsidiary Airbus.
Last year’s data was presented to France’s parliament just as EADS and US partner Northrop Grumman embarked on a fierce battle with US contractor Boeing to secure a far bigger order of mid-air tankers for the US Air Force.
Washington published draft bidding rules last week for a contest now said by a senior US military official to be potentially worth as much as $50 billion.

Pic: Rafale fighter jet