US Roadblocks re: the Venezuela-Israel F-16 Upgrade: Politics or Protectionism?Oct 26, 2005 10:18 UTC by Defense Industry Daily staff
Citing members of the Israeli defense ministry, the Israeli newspaper Yedidot Aharonot reports that pressure from Washington has now forced Israel to freeze a $100 million contract with Venezuela to upgrade its U.S.-manufactured F-16 fighter jets. The Fuerza Aaerea Venezolana (FAV) had originally purchased the F-16A/B aircraft in 1982. Israel replaces most of the original American equipment inside its F-16s with Israeli-designed electronics and other modules, making companies like Israel Aircraft Industries a viable second source project lead and integrator for F-16 maintenance and upgrade deals.
The recent back and forth between the USA and Israel over defense-related exports came to a head over China’s purchase of Israel’s indigenously-developed Harpy anti-radar UAV and subsequent request for maintenance. By suspending Israel’s participation in the F-35 Joint Strike Fighter (JSF) program, Washington was recently able to pressure Israel into essentially granting the USA veto rights on all Israeli defense exports.
At the time, concern was expressed in some Israeli defense circles that this power would be used for protectionist purposes. Is that the case here?
Venezuela’s neo-Marxist el Caudillo Hugo Chavez has certainly drawn considerable attention over his open support for the Iranian mullahs’ atomic weapons program, not to mention his own anti-democratic internal practices and violent intimidation of political opponents, alleged cooperation with transnational FARC narco-terrorists, close ties to Cuba, and active fomenting of unrest as far away as Bolivia. On the other hand, Venezuela is one of the USA’s top 5 global suppliers of imported oil and petroleum products.
The Fuerza Aaerea Venezolana (FAV) had originally purchased the F-16A/B aircraft in 1982. Israel replaces most of the original American equipment inside its F-16s with Israeli-designed electronics and other modules, making companies like Israel Aircraft Industries a viable second source project lead and integrator for F-16 maintenance and upgrade deals. As such, they do represent competition for US companies like Lockheed Martin, as well as second tier refurbishment and maintenance specialists.
Scramble has the full Fuerza Aaerea Venezolana order of battle, while FAV-Club details all of Venezuela’s military equipment. Their compilations underline the diversity of the FAV’s supplier base, which includes equipment from Brazil, Canada, Spain, France, Israel, Italy, Netherlands, Russia, and the USA.
In 2002, Israel sold Venezuela’s air force 54 surface-to-air missiles (apparently additional Barak-1s, which the FAV had integrated with Thales Netherlands’ Flycatcher radar in 1999); and in 2004, the FAV received 57 air-to-air missiles (apparently Python 4s, nearly equivalent to the new AIM-9X Sidewinder).
The Christian Science Monitor notes that the USA itself has been issuing permits to US companies to sell the Chavez government small arms, ammunition, tear gas grenades and riot-control gear, and even equipment and spare parts for Venezuela’s F-16s. Russia’s Novosti Press Agency, meanwhile, claims that Venezuela’s interest in MiG-29 Fulcrum light fighters, SU-27 family multi-role fighters, and SU-25 Frogfoot close air support aircraft arises in part because the United States has refused to sell F-16 spare parts.
Who is correct? Perhaps both reports. Acording to the Defense Security Cooperation Agency, public affairs:
The Government of Venezuela has been under Trafficking In Persons (TIP) sanctions since October 1, 2004. As a consequence of that, there have not been any U.S. Foreign Military Sales (FMS) cases entered into since the sanctions became effective. FMS cases entered into before the sanctions became effective are not affected and Venezuela has continued to received defense articles and services from such cases.”
Lockheed did not respond to DID’s query re: whether Venezuela continued to receive F-16 spares under earlier contracts. (UPDATE: A Nov 16, 2005 statement from the US Ambassador to Venezuela admitted that the USA would indeed provide F-16 spares per the contract; until an August 2006 directive firmly ended spare parts sales as well.)
Like their counterparts in many countries, therefore, Israeli companies do business with Chavez’ Venezuela, continuing their pre-Chavez status as a significant military supplier to that country. Yedidot Aharonot reports that senior officials within Israel’s military industries expressed frustration with the latest developments, accusing Washington of bringing pressure to bear for commercial, rather than political reasons. Defense Minister Shaul Mofaz is planning a visit to the Pentagon next month, a ministry spokeswoman confirmed, and is likely to focus on defense deals as a topic of conversation.
DID Op/Ed: Our Take
While DID considers Israel’s protectionist concerns understandable, the extent of Chavez’ belligerence and the level of concern he is raising in his region make it far more likely that recent American efforts are motivated by geopolitics rather than protectionism.
If the Venezuelan F-16 upgrade contract is indeed canceled, we do not forsee any American companies stepping into the void. Support for this belief is strengthened by a Reuters AlertNet report that according to Spain’s ABC newspaper, Washington is also considering blocking the transfer of U.S. technology used in aircraft that Spain had planned to sell to Venezuela.
In short, this has all the hallmarks of a geopolitical weapons supplier squeeze, which makes it very similar to the efforts that America is mounting with respect to China. An effort that, not coincidentally, also sparked real friction between Israel and the USA over arms exports that the USA had once actively encouraged.
The need to avoid stepping on American toes has cost Israel’s arms industry heavily in the past (vid. its canceled $1 billion Phalcon AWACS sale to China, which entailed a $350 million penalty on top of lost revenues), and will likely cost Israel again in future. By reducing the potential scope for Israeli weapons exports, the USA also has the effect of restricting the growth and viability of Israel’s native defense industry, making Israel more dependent on US technology and equipment over the long run.
As long as Israel considers its alliance with the USA to be an anchor of its foreign policy, however, it will simply have to accept this. At best, Defense Minister Mofaz will be able to negotiate clearer boundaries with Washington, so Israeli defense companies do not gain a reputation for unreliability.
The world has become a more dangerous place, and Washington is far more concerned than it used to be about the proliferation of weapons that have the potential to be turned on American forces.
- US Directorate of Defense Trade Controls – Exports of Defense Articles and Services to Venezuela
- Chavez’ Bolivaran Military Machine. Describes the organization and composition of Venezuela’s military
- Slate (Nov 4/05) – Does that F-16 come With A Warranty? Describes the spare parts/ maintenance items procurement process, initial provisions, and attached restrictions.