U.S. military journals have already featured reports on French and Italian efforts to overhaul export practices and make their products more competitive.3 The U.S. and Soviet picture is more complicated. The superpowers have always operated in the market more for political than economic ends. Arms have been a key tool in their competition for political influence in the Third World, and that shows little sign of changing, despite improving East-West relations. But the superpowers, especially the Soviet Union, want the economic gains that arms sales offer. In the United States, the end of the Reagan buildup is making exports attractive to suddenly contract-starved U.S. companies.
Overseas sales can provoke controversies.
Arms deals may involve technology transfers that could boost the manufacturing capability of trading rivals. Arms transfers are an important coin in Soviet diplomatic commerce with the Third World. Like U.S. exports, the bulk of Soviet arms go to a few key states, and its list of major customers has remained remarkably stable over the years. Arms have been one of the few attractive products the Soviets had to offer the world market. The Soviets now say they are reducing the production of tanks, including those intended for export.