France’s Ship Sale to Russia Latest Example of Commerce and Policy Clash

France is under increasing international pressure to cancel or, at the very least, scale back its $1.6 billion sale of two Mistral warships to Russia. The sale has been under the microscope for some time, given Moscow’s supplying of weapons to the regime of Syrian President Bashar al-Assad and its annexation of Crimea in March. But following charges that Russian-backed rebels in Ukraine shot down Malaysia Airlines Flight 17, pressure on France to pull out of the sale is at an all-time high.

Although European and U.S. officials have been quick to suggest that France may have lost its moral compass in pursuit of the deal, the country is far from alone when it comes to balancing foreign policy and security goals with the other economic and domestic pressures that accompany selling weapons to foreign customers.

And if history’s any guide, it’s going to take a lot more before France feels like it has to walk away from this sale. The United States faces a similar dilemma with Egypt, where the government’s leadership has changed three times in less than four years. In April, the United States announced it would provide the country 10 Apache helicopters, a deal that had been halted after the country’s democratically elected president, Mohamed Morsi, was ousted a year ago.

The Egyptian government of Abdel Fattah al-Sisi has not made many of the democratic reforms that the United States has pushed, but many still expect most of the $1.3 billion in annual U.S. military assistance to eventually be restored, including the delivery of four F-16 fighter jets. Had the United States labeled the ouster of Morsi a coup, it would have been legally required to cut off all assistance.

At the moment, though, France is in the hot seat. British Prime Minister David Cameron told Parliament on Monday that it would be "unthinkable" for England to fulfill such a contract. And on Tuesday, State Department spokeswoman Marie Harf called the French sale "completely inappropriate."

"We obviously don’t think the Mistral should go ahead…. We don’t think anyone should be providing arms to Russia," she said at a press briefing in Washington.

The public shaming is having some effect. French President François Hollande opened the door to scaling back the sale earlier this week.  He told reporters in Paris on Monday that the delivery of the first warship in October is basically a done deal, but that the decision to deliver the second one depends on Moscow’s attitude regarding the Ukraine crisis.

Lincoln Bloomfield, who served as assistant secretary of state for political-military affairs from 2001 to 2005, agrees with Hollande’s more subtle approach to pressuring Moscow. "Acting in a blunt manner is not always the most sensible or effective approach. These are complicated transactions. They’re long-term programs. And there could be other aspects to French-Russian cooperation."

The Financial Times reported that 400 Russian sailors have been training to operate the first ship, called the Vladivostok, at a port in western France for three weeks. And even the second warship may be too far along for Hollande to follow through on his threat.

"I would be astonished if the French don’t deliver both ships," said Joel Johnson, a defense trade consultant with the Teal Group.

An official at the French Embassy in Washington declined to provide comment beyond what Hollande said on Monday.

Bloomberg reports that the construction of the second carrier, called the Sevastopol, is roughly 75 percent complete and paid for.

Russia is buying the ships from France because it’s cheaper and faster than having to design one on its own. In the original deal, signed in 2011, the two countries agreed that the first two ships would be built and completed in France, with a third and fourth ship to be built in Russia.

Johnson said France could refuse to provide technical assistance to build the follow-on ships for Russia but that beyond that, France would most likely stick to its original agreement. This is partly because France, like other European countries, can’t afford America’s idealism when it comes to defense exports.

"There’s no European country that can support a defense industry without exports," Johnson said. "It’s much more painful for them to cut off exports and antagonize a customer than it is for the United States."

Therefore, compared to the United States, France has a reputation as a "highly dependable arms exporter," Johnson said. France risks hurting that image if it reneges on its Mistral contract with Russia.  

Facing potentially steep budget cuts from sequestration, American defense companies and the military services are increasingly feeling pressure to go out and find opportunities for foreign military sales.

This was clearly on display earlier this month at the Farnborough International Airshow in England, where a large contingent of top Pentagon officials took meetings and talked with international partners about potential deals, as Defense News reported.

"This has put an added layer of pressure on defense corporations to export and more pressure on U.S. export-control authorities to take a very close look at the proposals they’re seeing," Bloomfield said.

There are a handful of examples where the United States has pulled out of a contract, temporarily halted military assistance, or pressured another country to do the same.

Lockheed Martin confirms that it still has eight C-130s built for Libya, which have been on the company’s property in Marietta, Georgia, since the early 1970s, when the State Department halted the sale. Libya paid Lockheed for the planes but never received them after a U.S. embargo blocked the transfer.

According to Bloomfield, after the Chinese government violently cracked down on protests in Tiananmen Square in 1989, there were several Chinese arms transfers underway that did not go through either.

"The Pentagon sent teams to sit with the Chinese, who refused to acknowledge any implications of the crackdown and were faced with a lot of fine-print penalties for the storage of items that had not been shipped," he said. The United States also returned Chinese equipment and delivered sold items without any U.S. technical support as part of its suspension of military-to-military contacts and arms sales.

The United States was also successful at convincing Israel to shelve the sale of an advanced airborne early-warning radar system to China in 2000.

"It was probably very painful for [Israel], but they didn’t want to be on a separate page strategically from a new administration and they accommodated us at great cost to themselves," Bloomfield said.

The United States tries to maintain a strong connection between its foreign-policy objectives and the weapons sales it allows, he said. Still, he said, "there is a continuous tension between the defense industry, seeking obviously to boost profits, and the U.S. bureaucracy not wanting to contribute to the instability in the world with an ill-considered arms transfer."

That tension is evidenced by the huge weapons deals the United States makes with countries such as Saudi Arabia, the United Arab Emirates, and Kuwait, where the United States has security and economic interests although they are hardly Western-style democracies. And then there are instances in which the government says it must make purchases from countries it would prefer not to give defense business to.

The United States is still buying Russian-made Mi-17 helicopters for the Afghan security forces. That decision is constantly challenged on Capitol Hill, where lawmakers question the morals behind it. Many would also like to see some of that business moved to the United States, where defense companies in their districts can benefit.

In response to questions from Congress, Pentagon officials have explained that the aircraft is right for the Afghan military as it’s less expensive and easier to fly and maintain.

"We transfer arms with our eyes wide open, with laws, regulation, and policy designed to reflect caution, but also shaped to ensure that our security policy supports, and reinforces, our foreign policy," said Gregory Kausner, deputy assistant secretary of state in the Bureau of Political-Military Affairs, speaking in April at the International Institute for Strategic Studies in Washington.

It’s up to France now to decide whether the Mistral sale supports its objectives.

Of course, if France does decide to halt the delivery of ships to Russia, Moscow could always attempt to steal them away, something Israel successfully did on Dec. 24, 1969, when it managed to escape from the French port of Cherbourg with five unarmed missile boats it had paid for before France imposed an arms embargo.