Missiles to the Mideast: Jeopardizing the Famed New World Order : Weapons: The Bush Administration tilts toward the view that what’s good for the defense industry is good for the American people, too.

The next Saddam Hussein may soon receive his first shipment of U.S. arms.

Prodded by hungry defense contractors and the desire to reward our allies in the Middle East, the Bush Administration is vigorously pushing foreign arms sales. New arms-promotion initiatives include a multibillion-dollar package of high-tech weapons for five Persian Gulf allies, government-backed loans for defense exports and strong State Department support. Employing an arsenal of economic and geopolitical rhetoric, the defense industry and its allies in the Administration are trying to convince Congress that new arms deals are in the national interest and won’t backfire as they did with weapons sold to Iraq.

Since Pentagon spending is projected to decrease, Washington seems to have devised these new arms-export policies as an economic bailout for the defense industry, ignoring the risks they carry for world peace. Talk about creating a new world order and curbing arms proliferation notwithstanding, the Administration is tilting toward the view that what’s good for the defense industry is good for America.

But congressional critics fear that the political and economic consequences of sparking another arms race outweigh any ostensible gains and could well lead to more and more destructive wars in the future. “The only beneficiaries are the weapons-makers,” said Rep. Jim Moody (D-Wis.). “The casualties are all the other American goals we espouse. Economic development, free choice of government and regional stability are undermined by pumping arms into these volatile regions like the Middle East.”

The Administration is offering an array of deals:

--An $18-billion package for five Persian Gulf allies, led by Saudi Arabia, that would include such items as F-16s, M-1 tanks, Patriot missiles and multiple-rocket launchers is being prepared. In addition, Congress has agreed to support a $1.6 billion sale of 46 F-16 jets to Egypt.

--Up to $1 billion in proposed Export-Import Bank loan guarantees and credits for defense exports in the next fiscal year. These guarantees would be for defense items for North Atlantic Treaty Organization countries, Israel, Japan, Australia and New Zealand, but the President would retain the authority to approve similar guarantees for Third World countries, if he deems it in the national interest.

--And help from U.S. embassies. Deputy Secretary of State Lawrence S. Eagleburger last summer sent a classified memo to U.S. embassies asking them to do more to help defense companies sell their wares. This cable, sent after considerable industry pressure, helped reverse a Carter Administration executive order that U.S. embassies stay away from defense contractors because of concerns about regional arms races.

Industry executives couldn’t be more delighted with the changes. “The difference between 1980 and 1990 is pretty close to a quantum leap,” boasted Fred Haynes of LTV Corp. “The most significant change is that defense exporters are receiving cooperative support from U.S. agencies.”

Using the cuts in defense spending as ammunition, industry executives have lobbied hard for more export backing, noting that some production lines for weapons systems might otherwise be shut down. Over the next five years, annual defense spending is projected to decrease by $56 billion in constant dollars, not including the costs of the Iraq conflict. Some companies are hoping their exports will double in the 1990s.

But a growing number of congressional members are gearing up to do battle with the Administration’s new requests. Some of the opposition is focusing on the proposed expansion of loan guarantees for defense products. The new use of Export-Import Bank credits for weapons has been criticized not only because it could spur arms races, but also because U.S. commercial exporters, who now receive about $9 billion in loans and guarantees annually, might suffer.

“I think there are limited credits available,” said Rep. Lee H. Hamilton (D-Ind.), “and they should not be used to promote arms sales, especially in the post-Gulf War period, when we should be seeking to limit arms sales rather than increase them.” Roughly 100 members of Congress have written Secretary of State James A. Baker III criticizing the Bush proposal, and Rep. Moody plans to introduce legislation opposing it.

More broadly, critics cite economic and political reasons for opposing the Administration’s new backing for foreign sales. Many potential customers, such as Egypt, have enormous economic problems--underscored by the recent Administration decision to cancel $7.1 billion in Egyptian debt. Those problems will only grow worse if the countries are forced to shift their limited resources into arms. Even the oil-rich countries of Saudi Arabia and Kuwait can ill afford a new round of arms competition.

The political repercussions could be even worse, given the recent experience of Iraq. “Today’s pro-peace friends may be tomorrow’s enemy,” cautioned Moody, adding that “weaponizing” so-called moderate countries in the Middle East has often been a dismal experience. He recalled that the late shah of Iran was well supplied with U.S. weapons, which were used against domestic opponents. It would be ironic, and probably tragic, if Syrian strongman Hafez Assad, our newfound ally in the war against Iraq, became a beneficiary of Washington’s arms-export largess.

There is also growing sentiment in Congress that the end of the Gulf War may present an unprecedented opportunity for the United States to pursue arms control rather than arms exports. Unfortunately, Bush has spurned proposals from Canadian Prime Minister Brian Mulroney and French leaders to negotiate a conventional arms-control treaty for the Middle East.

Still, Sen. Joseph R. Biden, Jr. (D-Del.) is preparing legislation urging an international suppliers’ cartel to curb the proliferation of dangerous weapons. House Majority Leader Richard A. Gephardt (D-Mo.) and four senior Democrats have written Bush urging a unilateral pause in arm sales to Persian Gulf and other Middle Eastern countries.

To be sure, ending arms proliferation isn’t solely the responsibility of the United States. But in 1989, we sold $10.8 billion in conventional arms, right behind Moscow’s $11.7 billion--together more than two-thirds of the world’s total. If we really wanted to check the spread of conventional arms, now is the time to try to work together with the other permanent members of the U.N. Security Council--France, China, Britain and the Soviet Union--to reach an accord.

Experts worry that Washington is now putting too much weight on economics and paying too much attention to the defense industry’s pleas. “There’s a danger that the economic justifications (to sell arms) will dominate even in situations where it’s not in our foreign policy or our national interest,” said Natalie Goldring, a senior analyst with the Defense Budget Project.

At present, however, Washington is plainly going along with the defense industry’s entreaties to spur foreign sales. There is scant recognition that these policies carry high risks of escalating arms races, in the Middle East and elsewhere, that in all probability will come back to haunt the United States. Apparently unchastened by the devastating results of foreign arms sales to Iraq, the Administration seems bent on repeating past mistakes.