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26th May 2022

EU urges US to back off on arms firms sanctions

  • Federica Mogherini speaking in Brussels on Tuesday (Photo: consilium.europa.eu)

Joint EU military projects will not hurt US arms firms, Europe's top diplomat has said, following yet another American sanctions threat.

"The European Union is and remains open to US companies and equipment," EU foreign relations chief Federica Mogherini told press in Brussels on Tuesday (14 May) after a meeting of European defence ministers.

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  • EU ministers to decide on Pesco details in June (Photo: consilium.europa.eu)

"At the moment, the EU is actually much more open than the US procurement market is for the European Union companies and equipment," she said.

"In the EU there is no 'Buy European Act' - and around 81 percent of international contracts go to US firms in Europe today. I do not see real reasons for concern," she added.

Mogherini spoke after two senior US defence officials, Ellen Lord and Andrea Thompson, sent her a letter on 1 May which threatened to impose sanctions on European arms firms if new EU schemes for joint military procurement ended up locking out US ones.

"It is clear that similar reciprocally imposed US restrictions would not be welcomed by our European partners and allies, and we would not relish having to consider them in the future," the letter, leaked to European media in recent days, said.

The US complaint targeted the European Defence Fund (EDF) and Permanent Structured Cooperation (Pesco) initiatives.

The EDF is a €13bn EU pot to help fund joint military projects.

Pesco, launched in 2017, has already outlined 34 schemes, such as the creation of new attack helicopters or armoured infantry vehicles, to be rolled out by small coalitions of member states.

They are part of wider plans to create what some have called a future EU "army" for the sake of European "strategic autonomy".

EU states will decide in June on what basis non-European firms can take part.

But the US letter said that earlier drafts of the June compromise contained "restrictive language" and "poison pills", such as a clause that intellectual property arising from Pesco projects would stay in European hands.

The wrong decision in June could "represent a dramatic reversal of the last three decades of increased integration of the trans-Atlantic defence sector" and lead to "confrontational discussions", the US officials said.

The EDF and Pesco could also "produce duplication, non-interoperable military systems, diversion of scarce defence resources and unnecessary competition between Nato and the EU", they noted.

For her part, Mogherini said: "Pesco projects are an additional element that comes on top of everything we have already in place when it comes to [US] cooperation, including on defence, industrial and research projects".

She also said that they would help Nato, for instance by clearing legal obstacles for Nato troops to move forces through various EU jurisdictions.

The German defence minister, Ursula von der Leyen, also defended the EU initiative on Monday, saying it was "doing what our American friends have been demanding we do for years. Our task now is to convince our allies that Nato will only profit from the efforts to create a European Defence Union".

But her Dutch counterpart, Ank Bijleveld, said the June decision ought to contain an "emergency brake" for keeping out non-EU firms if member states did not want them to take part.

The dispute over arms procurement comes after US president Donald Trump spoke of pulling out of Nato if EU members did not increase defence spending.

It comes amid US threats to sanction EU firms who did business with Iran or who built new gas pipelines to Russia.

It also comes amid a widening transatlantic rift on trade tariffs, aircraft subsidies, and climate change in what amounts to the worst period in US-EU relations in modern times.

Iran

Mogherini, on Monday, had also urged the US to avoid a military confrontation with Iran amid US threats to respond with force if Tehran resumed uranium enrichment.

The US has already sent extra forces to the region, but Spain, also on Tuesday, said it was recalling one of its warships, a frigate called the Mendez Nunez, from the US naval force in the Persian Gulf on grounds that America had changed the mandate of the fleet from its original purpose as a training exercise.

"I am legally-minded and when I see that there is a deviation from the agreement, I feel that it is better to temporarily suspend it," Spanish acting defence minister Margarita Robles said.

A senior British defence official, major general Chris Ghika, the same day, also questioned US reports that Iran was posing new threats to US assets in the region.

"No, there has been no increased threat from Iranian-backed forces in Iraq or Syria," he said in Washington.

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