Clarifying the Past
Some information in the Time article is true enough: arms sales are a big-ticket item that inevitably generates thousands of well-paying jobs in many U.S. congressional districts; defense suppliers have deep pockets, and their political action committees have outspent arms control groups by several orders of magnitude; and support for changing the existing restrictions cuts across not only party lines but also broad ideological tendencies within parties. This is, indeed, how Washington works, and it would be surprising if it were otherwise. People do not elect members of Congress to neglect opportunities for job creation in their districts, and that function is unlikely to change even without aggressive lobbying by defense suppliers.
The real problem with the magazine story, however, is not its disingenuous tone but its neglect or cavalier treatment of a vast range of subjects that are more relevant to the current interagency review. Time suggests that the ban was initiated by the Carter administration in response to human rights violations. In fact, the first embargo was slapped on Peru during the Nixon administration, when a "military socialist" regime that seized power in 1968 nationalized local holdings of the International Petroleum Company.
In retaliation, the Peruvian generals turned to the Soviet Union for military equipment; today the Peruvian Air Force is the only such organization in the Western Hemisphere other than Cuba that flies MIG jets. (In fact, Peru's air arm was poised to refresh its inventory with a new order of twelve MIG-29s at bargain basement prices from Belarus, one of the Soviet Union's successor-states, until Moscow--anxious to make the sale itself--refused to provide maintenance or spare parts.)  Likewise, as long ago as the late 1960s, Argentines and Brazilians were already getting nervous about their excessive reliance on a single source of supply (in those days, the United States) and began a program of acquisition in Western Europe, as well as the development of local arms industries, typically run by retired flag officers.
These tendencies accelerated in the following decade. The advent of particularly repressive military dictatorships in Argentina, Chile, and Uruguay led the U.S. Congress to impose a series of arms embargoes and an end to military exchanges. Because the Carter administration made such denials the centerpiece of its Latin American policy, perhaps not surprisingly many people imagine that it initiated them. Whatever the symbolic value of such gestures, however, they had little effect on either human rights performance or the availability of weapons and military training. 
In the case of the latter, military and police personnel who were denied entry into the United States were immediately offered places in service schools in France, Spain, Italy, and elsewhere. Other countries--notably France but also West Germany, the United Kingdom, Sweden, Spain, Taiwan, Israel, and South Africa--rushed forward to sell jet planes, tanks, naval bottoms, and other expensive hardware to the offending countries. So conspicuous was the rush by U.S. allies to fill the gap that Carter's national security adviser Zbigniew Brzezinski was led to remark, "If we exercise restraint but others do not, nothing much has been gained in terms of security and peace." 
The situation was not altered even slightly by the advent of socialist governments in France, Spain, and Italy in the 1980s (or the presence of one throughout the period in Sweden). Indeed, one of the first decisions made by President Fran ois Mitterrand after assuming office in 1981 was to assure the Chilean generals (and others) who had bought Mirage jets that there would be no difficulty in continued acquisition of spare parts; "the signature of France," he pompously announced, would be fully honored.
Recovering Lost Markets
These background considerations are crucial to understanding why, even if President Clinton were to lift the restrictions tomorrow, the United States would still face an uphill battle to recover lost markets. Those who came to the rescue of the Latin military during the 1970s and 1980s have built firm relationships that will not easily be replaced; in the case of Chile, more than twenty air force classes have learned to use French equipment, have trained in French schools, and have worked with French maintenance crews. (Typically, maintenance agreements come as part of the sales package.) Other countries that have acquired French combat aircraft include Peru, Brazil, Argentina, Colombia, and Venezuela. The French have also established joint ventures with Chile's state arms industry, F bricas y Maestranzas del Ej rcito. (A similar arrangement with the British firm Royal Ordnance will lead to coproduction in Chile of a new multiple rocket and launcher.)
Though their equipment often costs more than the American-made equivalent, European suppliers provide advantageous financial arrangements, usually through semipublic agencies. By way of contrast, the U.S. Export-Import Bank is specifically forbidden in its charter from financing defense sales. Even occasional loan guarantees by the U.S. government to private banks do not wholly neutralize the European advantage. There is no European equivalent of the U.S. Foreign Corrupt Practices Act; in fact, Continental suppliers are even allowed to discount the bribes they pay to foreign potentates or defense officials from their corporate income taxes!
Finally, the Latins know that, unlike the United States, Europeans are reliable suppliers through thick and thin. As one official of Dessault Aviation bragged to Worldwide Weekly Defense News (March 18-24, 1997), "the French government never cut off the flow of spare parts and repairs." One of his colleagues added, "Our customers know the price of independence." The results are plain to see. In the period 1992-1995 (the most recent for which figures are available), the United States provided about $857 million worth of defense products to Latin America. Its competitors were abler to sell roughly three times that amount. 
The Fruits of Change
Would a change in U.S. policy go further than merely reshuffling the existing pattern of acquisitions and lead to a sudden burst of defense spending far in excess of these levels? There is little reason to think so. Though it may surprise many, on a comparative basis Latin America is one of the least extravagant regions of the world when it comes to arms acquisitions. For the same period cited above, for example, its total bill for weaponry acquired from outside the region came to a mere $3.3 billion, compared with $10.2 for Africa, $19.6 for Asia, and a whopping $43.3 for the Middle East. Nor is this the case only in absolute terms; for many decades, Latin America has devoted a smaller percentage of its gross national product to defense acquisitions than any other region in the world.
There are many reasons for Latin America's relative parsimony. The end of the cold war and the advent of democratic governments throughout the region have led to a downsizing of the military establishment and, in some countries, to an end to conscription.  Free market reforms in Argentina and Brazil are forcing the dismantling of state military factories. Latin American armies have always been labor-intensive, relying on large quantities of poorly paid soldiers rather than on sophisticated weaponry. The growth in regional trade agreements has greatly diminished the potential for hostility between traditional strategic rivals; a case in point is MERCOSUR, which has thrown Argentina and Brazil into an economic complementarity that is almost a special relationship. In many countries, the police have become the crucial security agency, requiring only (relatively) inexpensive small arms, vehicles, and communications equipment.
The argument that Latin countries do not need expensive jet fighters to police their streets has an undeniable superficial appeal. As long as countries consider the possession of an air force or a navy to be an attribute of sovereignty, however, they will want to have planes and naval bottoms. Moreover, countries simply cannot permanently freeze their level of military technology and operate with increasingly antiquated equipment. Things wear out, and spare parts become increasingly difficult to acquire. As it is, much of the aviation hardware in use throughout the region is several generations old. A more realistic approach for U.S. policy would be to attempt to maintain some level of balance between countries, as well as to encourage general economic policies that restrain the acquisition of nonproductive assets.
The case for denial--which is to say, the case for the present policy--rests on the notion that if we refuse to sell weapons to the Latins, they will have no choice but to go without. It has been amply demonstrated that this is far from the case. Nor is it even clear that standing by while others take advantage of our restraint will accomplish other, more important moral and social goals ("saving our souls").
Although Latin America is one of the more peaceful regions of the world, a policy of denial has not restrained countries from engaging in hostilities (Argentina against Great Britain in the Falkland/Malvinas Islands or, more recently, Ecuador against Peru). The policy has not prevented human rights violations. It has not even relieved the United States of its putative responsibility for everything bad that happens in the region--at least, to read the Latin American press or listen to speeches by Latin politicians.
A more interesting question is what a change of policy might accomplish not just for defense companies or their employees but for broader U.S. goals. The more intense the defense relationship, the greater the number of incentives the United States can dangle in front of the Latin American military--from trips to Miami and other points in the United States, to courses at U.S. military schools, to specialized treatment for senior officers at the National Institutes of Health or other specialized hospitals.
At the same time, to the degree that the United States moves to the position of principal supplier for entire groups of countries, the more it can determine the relative balance of weaponry. (Indeed, the precise goal of neutralizing this capability in the bad old days led the Argentines and Brazilians to diversify their acquisitions in the first place.) If the United States provides the same equipment to neighboring countries, it is in a position to promote confidence-building measures through joint maneuvers with the U.S. Air Force and Navy, since doctrine tends to follow equipment. The bottom line is that the United States--unlike suppliers outside the hemisphere--has a vested interest in the peace and stability of the region. A change of the current policy would not mean, contrary to what Time suggests, an abandonment of all restraint. Arms sales would still be subject to the Arms Export Control Act, which requires a determination by both the executive and legislative branches of government that any such sale is in the interests of our own national security. Each major purchase would be considered on a case-by-case basis in which appropriate bilateral balances would be taken into account.
Given that some level of defense modernization in Latin America is inevitable, that question is, therefore, not whether the United States should stand aside but from whom we would rather see the Latins acquire their equipment. Are the French really more interested in human rights and democracy or, for that matter, regional peace and security than we are? Are the Chinese? Are the former republics of the Soviet Union? The present policy amounts to affirming what the experience of the past thirty years roundly denies. Small wonder that the Clinton administration is taking another hard look at the subject.
Mark Falcoff is a resident scholar at the American Enterprise Institute.
1. Belarus apparently could provide the machinery but not the servicing. See New York Times, May 31, 1997.
2. In Chile, the vast majority of political murders occurred before the Humphrey-Kennedy Act (1976) took effect; in Argentina, most "disappearances" occurred after President Carter took office. For further discussion, see Mark Falcoff, A Tale of Two Policies: U.S. Relations with the Argentine Junta, 1976-83 (Philadelphia: Foreign Policy Research Institute, 1989).
3. Quoted in Heliodoro Gonz lez, "U.S. Arms Transfer Policy in Latin America: Failure of a Policy," Inter-American Economic Affairs, vol. 32, no. 2 (1978), p. 79.
4. Congressional Research Service, Conventional Arms Transfers to Developing Nations, 1988-1995 (CRS Issue Brief).
5. Argentina and Honduras have both done away with obligatory military service, and the Chilean Congress is studying the same possibility.