U.S. Fears a New Arms Race--in Third World : Disarmament: Smaller countries could become customers for surplus Soviet and American weaponry.

The Bush Administration is encountering yet another reason to seek an ironclad agreement on demobilizing Soviet and Western forces in Europe: the possibility that unilateral cutbacks could spawn a second superpower arms race--to sell surplus weapons to the Third World.

The conventional arms treaty that the superpowers are expected to sign this year would create substantial surpluses on both sides. For its part, the Soviet Union would lose more than 110,000 weapons, from helicopters and planes to artillery, armored personnel carriers and tanks. And the tanks alone--about 32,000 are due to be eliminated--would be enough to equip 100 full armored divisions, U.S. analysts say.

The cutbacks on the Western side would be enormous as well. The United States and its partners in the North Atlantic Treaty Organization would eliminate about 10,000 weapons, many of which are more sophisticated, and therefore more desirable, to Third World governments.

With both Washington and Moscow facing tight budget situations at home, analysts fret that both powers are likely to be tempted to start selling portions of these arsenals to developing countries, both for the cash and political influence. And Alice Rivlin, former director of the Congressional Budget Office, fears that U.S. weapons producers will seek to offset the impact of falling orders from the Pentagon by building new weapons designed more for Third World needs.

One private defense analyst agreed. “Our defense industry is as nervous as can be about how to adjust to the budget cuts (and) how to transfer capabilities to serve other markets by designing simpler and cheaper versions of weapons they’ve been selling the Pentagon,” he said. “It is going to be hard to keep them out of the export business” unless the commitment to destroy old weapons and monitor shipments of new ones is made airtight.

Indeed, there are signs that the new arms race already may have begun:

At least 10,000 tanks, 8,500 artillery pieces and surface-to-air missiles that were taken out of active service after Soviet President Mikhail S. Gorbachev announced a unilateral cut of 500,000 troops in December, 1988, have become available for export. U.S. officials expect the Soviets to put them on the market, probably in the arms-hungry Mideast--”in search for hard currency,” as one senior U.S. Soviet watcher said.

So far, U.S. intelligence officials have not seen any firm evidence that sales have been made. But analysts point out that Soviet military shipments traditionally have followed five-year plans. The latest of these ends this year, and the old weapons may begin to appear on the market when the new plan comes into effect, they say.

“When it happens, we’ll get very mad about it,” one U.S. official said, “but I don’t know what else we’ll do. The best way to prevent that is to make sure the weapons are destroyed--tanks filled with concrete dropped into the sea to make reefs, maybe. Otherwise, you’ll have the feeling that they could pop up any time.”

European members of NATO have squelched a U.S. proposal to station inspectors at weapons production plants and at half a dozen entry and exit ports to create “a fence around Europe,” as one official called it, to monitor production and shipment of weapons. Although the aim was to catch potential violations of any arms ceilings that may be negotiated, the monitors also would have spotted shipments to Third World buyers.

British and French helicopter and plane makers in particular opposed the U.S. monitoring plan, arguing that the system would place them at a commercial disadvantage against U.S. competitors, who would have been exempt from surveillance because their production facilities are located in the United States. Since Third World customers generally want to keep arms purchases secret, they would tend to buy American, the British and French producers contended.

But U.S. officials say the Europeans’ real fear is that publicity about any arms shipments could place pressure on them to avoid the appearance of profiting from old conflicts and fueling new wars between underdeveloped nations.

Some NATO countries are seeking to escape coming requirements that they destroy existing weapons by taking the weapons out of their arsenals now, before the treaty takes effect, so they would be available for sale later, according to U.S. sources familiar with the negotiations.

U.S. officials say the danger that the superpowers’ disarmament may spawn a new surplus-arms race among Third World governments is a major reason that the United States is continuing to seek formal arms reduction agreements with the Soviets rather than opt for the faster--but decidedly more risky--unilateral reductions favored by some Europeans. Under a treaty, all surplus weapons must be destroyed, not just taken away for sale, storage or modification.

And Ronald F. Lehman, director of the U.S. Arms Control and Disarmament Agency, points out that the treaty approach offers a host of other benefits, including a legal obligation that countries comply with the reductions; strong verification requirements and inspections; a pattern of openness that builds confidence that neither side is preparing an attack, and, most important, an obligation that the two sides destroy the withdrawn weapons and demobilize their troops.

But critics argue that the treaty approach also has its weak points. The negotiations are time-consuming by nature. Verification is certain to prove costly. And some fear that setting hard-and-fast ceilings on manpower and weapons inadvertently may legitimize minimum Soviet force levels in Eastern Europe just when the newly emerging democracies in the region want their former Soviet allies to go home.

Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, warns that the accords have too many “disconnects” that would give both sides an incentive to build their forces to meet ceilings specified in the agreements, rather than reduce their forces rapidly, as political and financial pressures would seem to dictate.

“The numbers are being overtaken by events, and we can’t let the agreements be used to argue for more weapons or forces,” Aspin contends.

Still, supporters of the arms control negotiations note that the new Polish and Czechoslovak reform governments are among the most enthusiastic backers of the idea of a multipower agreement setting manpower limits in Eastern and Western Europe.

“They want the lowest force levels possible, but they want the backing of international law to keep the Soviets from ever returning in greater numbers than those levels,” said a senior U.S. official close to the current talks.