On June 28, 2006, the Bush Administration announced its proposal to sell 36 F-16 C/D Block50/52 Falcon combat aircraft to Pakistan at an estimated case value of $3 billion. Three other F-16related sales to Pakistan were also proposed on June 28. These sales include F16 A/B Mid-LifeUpdate Modification Kits to upgrade existing Pakistani F-16 aircraft bought during PresidentReagan's first term; engine modifications and structural upgrades for existing F-16s, and variousmissiles, munitions and associated hardware to be utilized on the Pakistani F-16s. (1) Some believe that these salesare partly an effort to reward the Pakistani Government for the role it has played in support ofU.S.-led anti-terrorism efforts, and this consideration is noted in the text of the formal notificationof the F-16 sales. From the date (June 28, 2006) when Congress was formally notified of the proposed F-16sales to Pakistan, Congress has 30 calendar days within which to review the proposed sales, andexpress its will in accordance with statutory procedures set out in Section 36 of the Arms ExportControl Act (AECA). Should Congress chose to block the Pakistani sales, it must act to do so withinthe prescribed 30 days through the enactment of a joint resolution of disapproval. Otherwise, thePresident is authorized to proceed with the sales. (2) Pakistan-U.S. relations are rooted in the Cold War and South Asia regional politics of the1950s. Differing expectations of the regional security relationship have long bedeviled bilateral ties:the United States viewed Pakistan as a valuable ally in its efforts to contain the Soviet Union;Pakistan saw the United States as a powerful guarantor of its security vis-a-vis India. In themid-1970s, strains arose over Pakistan's efforts to respond to India's 1974 underground nuclear testby seeking its own nuclear weapons capability; U.S. aid was suspended in 1979. However, onlymonths later, Pakistan again took the role of frontline ally, this time in the U.S.-supported effort topush the Soviet Army out of Afghanistan, and sanctions were waived. Despite the renewal of U.S.aid and close security ties, many in Congress remained troubled by Pakistan's nuclear weaponsprogram. In 1985, Section 620E(e) (the Pressler amendment) was added to the Foreign AssistanceAct, requiring the President to certify to Congress that Pakistan does not possess a nuclear explosivedevice during the fiscal year for which aid is to be provided. With the Soviet withdrawal fromAfghanistan, Pakistan's nuclear activities again came under intensive U.S. scrutiny and, in 1990,President George H.W. Bush again suspended aid to Pakistan. One result of this aid cutoff was thenon-delivery of 28 F-16 fighter aircraft purchased by Pakistan in 1989 (in 1998, the United Statesagreed to compensate Pakistan with a cash payment and goods, including surplus wheat). It was notuntil late-2001, when the United States again looked to Pakistan as a frontline ally, that major U.S.aid, including major weapons systems, again flowed to Pakistan. (3) The U.S.-India relationship was for decades dictated by the politics of the Cold War. TheSoviet collapse freed India-U.S. relations from the constraints of global bipolarity, but during the1990s interactions continued to be affected by the India-Pakistan rivalry and nuclear weaponsproliferation in the region. Recently, however, bilateral relations are greatly improved, with PresidentBush calling India a "natural partner" of the United States and his Administration seeking to assistIndia's rise as a major power in the new century. Despite a concurrent U.S. rapprochement withPakistan, U.S.-India security cooperation has flourished and includes regular military exercises. InJune 2005, the United States and India signed a ten-year defense framework agreement that calls forexpanding bilateral cooperation in a number of security-related areas. Some laud increasedU.S.-India security ties as providing potential counterbalance to Chinese influence in the region, butthe emergence of an overt counterweight alliance is viewed by many as both misguided andunlikely. (4) Three full-scale wars and a constant state of military friction have marked nearly six decadesof rivalry between Pakistan and India. The acrimonious nature of the partition of British India intotwo successor states in 1947 and the unresolved issue of Kashmiri sovereignty have been majorsources of tension. Both countries have built large defense establishments at significant cost toeconomic and social development. Nevertheless, a peace initiative begun in 2003 has improved therelationship and led to a January 2004 summit and an agreement to re-engage in a dialogue to bringabout "peaceful settlement of all bilateral issues, including Jammu and Kashmir, to the satisfactionof both sides." In April 2005, the two governments released a joint statement calling their currentbilateral peace process "irreversible," although some analysts believe the process could quicklyunravel following a major terrorist attack or some other unforeseen development. Officials fromboth countries (and the United States) offer generally positive assessments of the ongoing dialogueeven as progress on territorial disputes, especially that involving Kashmir, has been minimal. ThePentagon's June 2006 notifications to Congress assert that Pakistan's planned purchase of new F-16sand related equipment "would not significantly reduce India's quantitative or qualitative militaryadvantage" nor affect the regional balance of power. The F-16 Falcon is a single engine multi-role aircraft manufactured by Lockheed MartinCorp. Its relatively low cost and high versatility make the F-16 one of the most exported fighteraircraft in the world. The F-16 was first fielded in 1979 and has been upgraded significantly. Thecapabilities of the F-16 vary greatly depending on the upgrade or modification fielded. The mostmodern F-16 flown by the United States is the Block 50/52. The aircraft being proposed for exportto Pakistan will incorporate high-resolution radars capable of all-weather precision targeting andair-to-air combat at extended ranges. A helmet-mounted cuing system will improve the aircraft's"dogfighting" capability as well as air-to-ground lethality. Integrated defensive electroniccountermeasures will reduce the aircraft's vulnerability to enemy aircraft and air defenses, andconformal fuel tanks will increase the F-16's range without reducing the number of weapons carried. The F/A-18E/F Super Hornet is a dual engine, multi-role aircraft manufactured by the BoeingCompany. It is the U.S. Navy's most modern and capable combat aircraft. The Super Hornet reached initial operational capability in 2001. The differences between the E/F and earlier F/A-18variants (A/B, C/D) are so great, that many consider it to be a new aircraft rather than an upgrade ofan existing model. The Super Hornet has been approved for export, but no sales have yet beenmade. The F/A-18C/D models, which are no longer in production, have been exported to eightcountries. It is currently unclear what long-term effects a potential sale of combat aircraft to South Asiamight have on U.S. political relations with Pakistan and India, or the political relationship betweenthem. The Bush Administration's decision to resume F-16 sales to Pakistan after a 16-year hiatuswas first announced at a March 2005 press conference by unnamed senior State Department officials. At that conference, the Administration unveiled a "new strategy" for South Asia that includes anintention to help India "become a major world power in the 21st century." Administration officialsalso said the United States welcomes India's interest in the possible purchase of F-16 or F/A-18warplanes and is ready to discuss the sale of "transformative systems in areas such as command andcontrol, early warning, and missile defense." (5) Two days before the State Department's March 2005 statements,twenty Members of the House wrote to President Bush urging him to not license the sale of F-16aircraft to Pakistan as such a sale would "undermine our long-term strategic interests in South Asia"and "squander an opportunity" to continue building positive relations with India. (6) Meanwhile, Indian PrimeMinister Manmohan Singh expressed "great disappointment" at the U.S. decision, saying the move"could have negative consequences for India's security environment," but he later softened hiscriticism and welcomed an apparent U.S. willingness to expand cooperation with India. Fifteenmonths later, when the Bush Administration formally notified Congress of a potential sale of F-16sto Pakistan, an Indian External Affairs Ministry statement said the step "is not conducive toimproving ties between India and Pakistan." (7) Justifications for the decision to resume F-16 sales include a U.S. interest that Pakistan "feelsecure" and a perception that a substantive U.S. defense relationship with both Pakistan and Indiawill stabilize "the balance" between them. In June 2006, the White House said the planned F-16 sale"demonstrates our commitment to a long-term relationship with Pakistan." (8) Some believe the decision isa reward to President Gen. Musharraf and the Pakistani military for their post-9/11 cooperation withU.S.-led counterterrorism efforts, and see renewed exports as potentially increasing U.S. leveragein Islamabad while eroding anti-American sentiments there. Such leverage could include increasedPakistani cooperation in the areas of counterterrorism and nonproliferation. (9) It may be that the timing ofthe June 2006 notification was influenced by developments in U.S.-India relations. Washington andNew Delhi are moving forward with a landmark civil nuclear cooperation initiative. Islamabadclaims the initiative will cause a power imbalance in the region and it repeatedly has requested asimilar arrangement with Washington. The Bush Administration rejects such requests and also hasnot moved to provide Pakistan with a defense cooperation pact similar to that made with India in2005. (10) Some analysts see the decision to resume F-16 sales to Pakistan as disruptive of regionalstability and efforts to resolve disputes there. This concern was articulated by India's external affairsminister in April 2005: "[M]ilitary assistance, particularly when unrelated to counterterrorismefforts, conveys a political signal both within Pakistan and vis-a-vis India-Pakistan relations. ... Itconsequently has repercussions for our dialogue that is currently at a sensitive stage." (11) Some in Congress voicesimilarly grounded opposition in more explicit terms: At a June 2005 House hearing on U.S. SouthAsia policy, one lawmaker said, "F-16s is how you fight India. It's not how you fight terrorists. Thisis outrageous." The sentiment was echoed by several other Members in attendance. However, twonongovernmental experts appearing before the House panel approved of such sales as importantsymbolic gestures that would likely result in much-needed improvement in U.S.-Pakistanrelations. (12) Several critics have contended that renewed F-16 sales may strengthen nondemocratic forcesin Islamabad. Though the Bush Administration has made spreading democracy a cornerstone of itsforeign policy, Pakistan continues to be governed by an army general who came to power througha military coup, and the State Department has noted that Pakistan's democratic institutions remainweak. (13) In H.Rept.109-486 (June 2006), the House Appropriations Committee expressed concern about Pakistan's "lackof progress on improving democratic governance and rule of law." Furthermore, some Pakistanicommentators wonder why Islamabad plans to spend billions of dollars on weapons of allegedlyquestionable utility while the country's social services and infrastructure are in dire need ofimprovements. (14) Thisperspective gained additional traction in the wake of Pakistan's catastrophic October 2005earthquake, when Islamabad chose to postpone and eventually scale down the number of F-16s itwould seek to purchase. As noted above, congressional concerns about Pakistan's nuclear proliferation activities arelongstanding. Some opponents of resumed F-16 sales argue that the United States should notprovide sophisticated weapons to a country that has been a source of significant horizontal nuclearweapons proliferation. Legislation introduced which reflects this concern in the 109th Congressincludes H.R. 1553 and S. 12 (Sec. 232), which prohibit aid or militaryequipment to Pakistan unless the President certifies that Pakistan is cooperating with U.S. nuclearnon-proliferation efforts. In 2004, Pakistani metallurgist Abdul Qadeer Khan, known as the founderof Pakistan's nuclear weapons program and a national hero, confessed to involvement in an illicitnuclear smuggling network that sold crucial nuclear weapons technology and uranium-enrichmentmaterials to North Korea, Libya, and Iran. To date, Pakistan refuses to allow any direct access toKhan by non-Pakistani investigators and, in May 2006, the Islamabad government declared the Khaninvestigation "closed." Some in Congress remain skeptical, however, and a House panelsubsequently held a hearing to further discuss the issue. At that hearing, non-governmental expertsurged that U.S. and international investigators be given direct access to Khan, in particular to learnmore about assistance given to Iran's controversial nuclear program. (15) The importance of the proposed transfer of new F-16s and the upgrade of Pakistan's legacyF-16s can be viewed in the context of Pakistan's conventional military confrontation with India, itsnuclear confrontation with that country, and its struggle with terrorists and insurgents. India dominated the air when it last clashed with Pakistan in 1971. According to someaccounts, Pakistani air strikes were largely ineffective, and air support of ground forces was"non-existent." (16) Indiacurrently enjoys a significant quantitative advantage over Pakistan's air force. It has 21 more fightersquadrons than Pakistan and a larger number (124) of modern aircraft. India operates an aircraftcarrier with short-take off and vertical landing fighters. In terms of quality, the F-16 Block 50/52aircraft appears to be roughly equivalent to India's most advanced combat aircraft, the Russian-madeSu-30. (17) Unlike Pakistan, however, India supports its combat aircraft with aerial refueling, electroniccountermeasures, and modern airborne warning and control aircraft. (18) The sale of 36 F-16s toPakistan and the upgrade of existing F-16s would increase that country's number of modern combataircraft but would still not bring it close to parity with India. If India were to add F-16s or F/A-18sto its inventory, the disparity in aviation capabilities between the two countries would grow evenmore. Some express concern that Pakistan could use its new F-16s to deliver nuclear weapons. Theoverall potential impact on nuclear deterrence and stability in South Asia of additional PakistaniF-16s, however, appears unclear. First, because the 32 F-16s that Pakistan already fields are believedto be nuclear capable, additional F-16s don't appear to introduce new capabilities but may expandexisting ones. Second, Pakistan also fields nuclear-capable ballistic missiles. Some believe thatballistic missiles add instability to the security equation because they are high priority targets, andconsequently the pressure to use them early in a conflict can be great. (19) Thus, if additionalnuclear-capable F-16s were to replace existing nuclear-capable ballistic missiles in Pakistan'sarsenal, some may argue that additional F-16s could reduce nuclear instability. Some suggest that Pakistan could use F-16s against terrorists and insurgents. It appears thatF-16s could be used in such operations, but they could also be considered "over-designed" for thesetasks. The Block 50/52 variant that is being proposed for export is the most advanced version of theF-16 flown by U.S. military forces. It incorporates advanced weapons and avionics for air-to-aircombat that appear unnecessary for counterinsurgency operations. Less expensive and lesssophisticated aircraft such as attack helicopters, unmanned aerial vehicles, and combat search andrescue aircraft would appear to have greater utility in combating insurgents and other non-state actorsthan supersonic fighter aircraft. (20) According to the Indian Defense Minister, "The F-16 and otherlethal weapons are not required for fighting terrorism and are used in full-fledged wars. GivenPakistan's track record, we fear that such weapons will be directed toward India." (21) Combat aircraft are considered "essential for conducting surprise attacks or initiatinglarge-scale offensive operations." (22) Therefore, the transfer of combat aircraft can be a significantpolicy decision, especially to a region with known tensions and territorial disputes. The sale of F-16 Block 50/52 aircraft to Pakistan, will upgrade its inventory of this fighter,but may not completely fulfill its perceived need for a highly advanced, current generation, combatfighter. While financing the purchase of two different fighter aircraft could be problematic forPakistan, some in Pakistan are reportedly concerned about the potential for future military salescutoffs by the U.S. given the history of difficulties Pakistan has had with the United States overproliferation issues. They argue against limiting future aircraft procurement to the United States. Further, the proposed sale of F-16s appears to offer no opportunities for off-sets or co-productionwhich limits the long-term benefit to Pakistan's aerospace industry. Consequently, Pakistan continuesa relationship with China, including testing of China's advanced J-10 fighter, and co-developmentwith China of the JF-17 fighter. Pakistan has been negotiating a possible purchase of the SwedishJAS Gripen multi-role fighter. Should the United States sell the F-16 to Pakistan, Sweden wouldreportedly offer to sell the Gripen . Thus, it seems unlikely that the United States will becomePakistan's principal supplier of advanced combat aircraft. (23) The reported U.S. willingness to sell F-16s or F/A-18s to India may mitigate that country'sdisappointment with any renewed U.S. arms sales to Pakistan and neutralize any increase inPakistan's military capability. India may also use the prospect of the purchase of U.S. fighters asleverage in negotiations with its primary military supplier, Russia, to obtain more sophisticatedsystems, better financing, or additional licensed production options for its domestic defense industry. Should India choose to purchase U.S. fighters, it may seek not just the aircraft and support services,but some form of co-production or co-assembly options -- a prospect that would raise policyquestions for the United States regarding the release of military technology, and how suchinformation might be used by India. This is particularly important given India's ambitions to developa significant aerospace production capability and its past and present aerospace acquisitions fromRussia, France, the United Kingdom, and Israel. (24) Much of the commentary following the June 28th announcement centered on how a potentialsale of aircraft to Pakistan, and possibly to India, would be beneficial to industry. The potentialbenefits most frequently mentioned were extending the production life of U.S. aircraft with limiteddomestic prospects and improving U.S. industry's position vis-a-vis other rivals in an increasinglycompetitive military export market. After decades of successful production, the F-16 production lineappears to be approaching its end. As currently projected, the F-16 production line -- whichemploys approximately 5,000 workers -- could close in 2008. A sale of 36 or more F-16s to Pakistancould keep the line open for another year. (25) The larger prize, however, is a potential sale to India and the consequent opening of a marketlong-closed to U.S. industry. India is seeking a larger number of combat aircraft than Pakistan -- 126-- and has a much larger inventory of combat aircraft, approximately 700, that it will eventually needto replace. U.S. companies are contending with competitively priced Russian and European aircraftfor a share of the global military aircraft market. Penetrating the Indian market, and beatingEuropean competitors, could, many believe, help U.S. companies compete in other aircraft exportmarkets. Also, it is argued that aircraft sales to India could prove a "tip of the iceberg" for all typesof military exports to that country. India has embarked on a long-term plan to upgrade its armamentsand strengthen its military, and some say that "high on its list are early warning and missile defensesystems, nuclear fuel and technologies and space-related technologies." (26) Questions remain about the potential domestic U.S. benefit from these prospective sales. While preserving U.S. jobs appears clearly beneficial, the number of jobs preserved and the valueof those jobs remains unclear. India would likely demand that the majority of aircraft be producedin India. This would increase jobs in India and reduce jobs in the United States. Also, some say notall jobs are equal in terms of their benefit to the U.S. industrial base. Producing for India andPakistan the exact same aircraft that is currently being produced in the United States would preserveassembly line-type jobs. Many argue this would do little to advance innovation or make U.S.industry more competitive. Only if the exported aircraft require noteworthy design and engineeringchanges, they say, would these skills be developed to benefit the of industrial base.

Summary:
On June 28, 2006, the Bush Administration announced its proposal to sell 36 F-16 C/D Block50/52 Falcon combat aircraft to Pakistan at an estimated case value of $3 billion. The F-16 Falcon is a single engine multi-role aircraft manufactured by Lockheed Martin Corp. Its relatively low costand high versatility make the F-16 one of the most exported fighter aircraft in the world. The F-16was first fielded in 1979 and has been upgraded significantly. The capabilities of the F-16 varygreatly depending on the upgrade or modification fielded. The most modern F-16 flown by theUnited States is the Block 50/52. Three other F-16 related sales to Pakistan were also proposed. Some believe that these sales are partly an effort to reward the Pakistani Government for therole it has played in support of U.S.-led anti-terrorism efforts, and this consideration is noted in thetext of the formal notification of the F-16 sales. Some analysts, however, see the decision to resumeF-16 sales to Pakistan as disruptive of regional stability and efforts to resolve disputes there. Combat aircraft are considered "essential for conducting surprise attacks or initiatinglarge-scale offensive operations." Therefore, the transfer of combat aircraft can be a significantpolicy decision, especially to a region with known tensions and territorial disputes. Generallyspeaking, arguments for foreign military sales tend to focus on advancing U.S. industry, supportingallied countries, and promoting interoperability with those countries. Arguments against arms salestend to focus on the negative aspects of military technology proliferation and the potential forcausing regional instability. The federal government approves arms sales on a case-by case basis. It is currently unclear what long-term effects a potential sale of combat aircraft to South Asiamight have on U.S. political relations with Pakistan and India, or the political relationship betweenthem. The reported U.S. willingness to sell F-16s or F/A-18s to India may mitigate that country'sdisappointment with any renewed U.S. arms sales to Pakistan and neutralize any increase inPakistan's military capability. Militarily, the importance of the proposed transfer of new F-16s and the upgrade of Pakistan's legacyF-16s can be viewed in the context of Pakistan's conventional military confrontation with India, itsnuclear confrontation with that country, and its struggle with terrorists and insurgents. Much of the commentary following the June 28th announcement centered on how a potentialsale of aircraft to Pakistan, and possibly to India, would be beneficial to industry. The potentialbenefits most frequently mentioned were extending the production life of U.S. aircraft with limiteddomestic prospects and improving U.S. industry's position vis-a-vis other rivals in an increasinglycompetitive military export market. For broader discussion, see CRS Report RL33498 , Pakistan-U.S. Relations , and CRS Issue Brief IB93097, India-U.S.-Relations .This report willbe updated as events warrant.