By Kristina Wong - 04/24/14 06:00 AM EDT
The thriving Russian arms trade will remain strong even if members of Congress succeed in ending U.S. and NATO contracts over the conflict in Ukraine, experts say.
But Russian firms mostly sell to customers in Asia, Africa and the Middle East, which means that they are mostly insulated from the punitive actions that could be taken by the U.S. and its allies.
Over the past five years, 65 percent of conventional arms from Russia have gone to Asia and Oceania, 14 percent to Africa, and 10 percent to the Middle East. Russia’s top customers are China, India and Algeria, whom it supplies missiles, tanks, radars, aircraft and ships.
In comparison, the U.S. market only accounted for 0.04 percent of Russia’s major conventional arms sales, and the Western and Central Europe market for only 0.4 percent during that period, according to SIPRI.
“The cancellation of these contracts by Western and Central European countries would have very little effect,” said Dr. Sam Perlo-Freeman, director of the SIPRI Programme on Military Expenditure and Arms Production.
That hasn’t stopped a stream of U.S. lawmakers calling for an end to defense contracts with Russia.
Together, more than 50 lawmakers from 25 states have sent four letters over the span of a month to administration officials asking for them to cuts ties with Russian defense firms.
The most recent letter urged Secretary of State John Kerry to “show leadership by terminating all defense contracts with Russia” and urge all NATO and Organization for Security and Cooperation in Europe members to do so as well.
“We believe this is a crucial step in reestablishing a deterrent against further Russian aggression and strengthening the impact of our targeted economic sanctions against Russia,” said the April 15 letter by a bipartisan group of 11 lawmakers.
While ending defense contracts with Russian firms would have a marginal impact on Russia, it could open up competition for U.S. defense companies who stand to gain billions of dollars in the future.
“Congress wants to punish Russia for its annexation of Crimea. However, usually there is some U.S. commercial interest behind those letters,” said Loren Thompson, chief operating officer of the Lexington Institute.
The loudest calls for ending the contracts are coming from states with a large military industrial base. The majority of the signatures on the four letters came from Texas, Connecticut and Virginia lawmakers.
Texas and Virginia are among the top five states with the highest U.S. government defense spending, according to several rankings within the last decade, while Connecticut is home to Sikorsky, a competitor of Russian arms dealer Rosoboronexport.
The lawmakers have focused on two defense contracts with Russia in particular.
One is a $553.8 million contract with Rosoboronexport to supply the Afghan air force with 30 Mi-17 helicopters. The Pentagon has already spent $546.4 million to buy 33 helicopters.
Thirty-eight lawmakers protested the helicopter contract in an April 11 letter to Kerry and Treasury Secretary Jacob Lew that was signed by 38 lawmakers and led by Reps. Rosa DeLauro and Rep. Kay Granger (R-Texas).
DeLauro is from Connecticut, where Rosoboronexport-competitor Sikorsky is based. The company also runs its assembly and manufacturing operations from there. Sikorsky also has four facilities based in Texas.
The other contract is a $2.6 billion deal with United Launch Alliance to buy three dozen rockets over the next five years, including 16 Atlas V rockets with Russian-made RD-180 engines.
The Russian firm NPO Energomash, which is mostly state-owned, manufactures the engines, and although the cost of each engine is proprietary, news reports have put the sale price at between $11 million to $15 million each.
The rockets carry U.S. satellites that conduct sensitive national security missions, and lawmakers say the contract leaves the U.S. vulnerable if Russia decides not to supply them.
If the Russian-made engines are banned, then ULA would have to buy rocket engine alternatives, or the Air Force — which runs the launches — would have to buy different rockets altogether.
Two defense firms, SpaceX and Orbital, are pushing the Pentagon for a chance to manufacture the rockets.
"Air Force reliance on the RD180 has created a major national security risk to our country's need for secure access to launch,” said a SpaceX spokesperson.
“It also results in sending hundreds of millions of US defense dollars overseas to fund the Russian missile industrial base and a company directly controlled by the Kremlin,” the spokesperson said.
But while defense companies argue that the contracts are bolstering Russia, they also acknowledge their own business interests.
"The current diplomatic crisis with Russia calls for the Air Force to reconsider the sole source 5 year block-buy, which will extend our vulnerability with Russia for national security launches for the remainder of the decade," said the SpaceX spokesperson.
"This would be a travesty of the highest order when American launch vehicle alternatives exist today that can be used by the Air Force simply by expediting competition, rather than continually deferring it."
The administration has resisted scuttling the contracts. Defense experts say there is no current alternative to the Atlas V rockets, defense experts say.
“Replacing a supplier for a complex system like an engine can take time,” said Perlo-Freeman.
Although the U.S. maintains a roughly two-year stockpile of the engines, the Pentagon estimates it would take $1 billion and five years to shift production to the U.S.
SpaceX is proposing that the rockets be replaced with its Falcon 9 model, but those would only be able to conduct 50 to 60 percent of the missions that don’t require a heavy satellite.
The company is developing a rocket that could carry the heavier payloads, but there is no timeline yet as to when they would be ready.
Orbital's rocket boosters also tend to be small, Thompson said.
The Pentagon has also pushed back against calls for ending the Rosoboronexport contract that supplies the Afghan air force with helicopters, since teaching the Afghan air force to fly and maintain a new platform would take several more years.
Lawmakers disagree, and say the contract should be scrapped immideately.
“Believe me, there are better helicopters available for the Afghan government made right here in Connecticut at Sikorsky, and that's where the helicopters should come from,” Sen. Richard Blumenthal (D-Conn.) said at a local event on March 31 according to the Connecticut Post.
Thompson said Congress has never been comfortable doing business with Russia, and the Ukraine crisis gives them “yet another reason for not doing it.”
“This is one way in which Moscow’s land grab of Crimea has played right into the hands of the U.S. Congress,” he said.
“It’s a relatively easy source of symbolic measures,” said Perlo-Freeman.