Accessibility links

Breaking News

NATO: Canadian Military Suppliers Welcome Eastern Expansion

Ottawa, 22 July 1997 (RFE/RL) - The expansion of NATO to include Poland, Hungary and the Czech Republic is being welcomed by Canadian companies that produce military goods and technology.

Earlier this month, the alliance invited the three countries to join NATO by 1999. The details of admission will be negotiated this fall and then 13 of NATO's 16 members must ratify the terms in their legislatures. Canada, Britain and Norway's parliamentary systems do not require such approval.

Edward Healey, president of the Canadian Defence Preparedness Association, says Canadian companies can benefit from NATO's expansion because they are major suppliers to the American defence industry which is vying for major contracts in Eastern Europe. His Association, which represents more than 200 Canadian military suppliers, sent a delegation to Europe a few months ago to learn about NATO procurement practices and to meet with potential buyers.

Healey says that while there are opportunities, the three newly-accepted NATO members "are all short of money and have an interest in promoting production within their own defence industries." However, he says, the new members "are expected to purchase equipment to modernize their Soviet-era military inventories and to ensure compatibility with their Western counterparts."

A spokesman for the Polish Embassy in Ottawa, Jolanta Rejniak, says her country "will move quickly to improve its command, control and communications systems." She says the Montreal firm of Pratt and Whitney "is already supplying engine parts to a Polish helicopter company."

At the Hungarian Embassy in Ottawa, spokesman Istvan Torzsa says the Hungarian military "will be NATO-compatible within a decade but it is too early to say how much that will cost."

In 1995, Canada exported $116 million worth of military goods. About one-quarter of that went to NATO countries, excluding the United States. Healey estimates that military sales to the U.S. are worth about $1 billion a year.

One Canadian defence supplier believes the Canadian government should make funding or other incentives available to Poland, Hungary and the Czech Republic.

Bob Fischer, vice-president of corporate business development at Computing Devices Canada, says this would encourage the purchase of Canadian military exports. Fischer says "this could be a little problematic because then you are into the domain of what should the Foreign Affairs Department be prepared to support in terms of exports. There are things that Canada produces that are far more politically palatable than things that go bang in the night."

Canadian government rules require that all military sales - except to the U.S. - must have special permits. However, sales to NATO allies are exempt from one stage of the permit process: exports of so-called "offensive military goods and technology" to NATO allies do not require the written approval of the Canadian Foreign Minister. Healey says that "in terms of export permits, NATO membership makes the process easier."

A spokesman for the Foreign Affairs Department, Patricia Low-Bedard, says "it is too soon to assume exports of offensive military goods to the three countries would be automatically exempted from Ministerial approval." That, she says, "is not a hard and fast rule. Occasionally, even something that is going to a NATO country may have to go to the Minister. We reserve the right to do that if we feel it is necessary."

That is not stopping companies from looking to expand their export markets for military goods and technology. An Ottawa company, Dy 4 Systems Inc., has already talked "with several Eastern European countries before and after the news that Poland, the Czech Republic and Hungary will join NATO in 1999" says spokesman Andy Katz. Although he says there are no immediate deals in the works, he says "it makes it a lot easier for us to do business with countries when they are in NATO." His company makes computer boards for advanced avionics components in military aircraft and defense systems.

Deborah Allen, a spokesman for Spar Aerospace Ltd. says her firm already produces parts of the AWACS - Airborne Warning and Control System - program used by NATO and has contracts for maintenance support services. She says Spar is "well-placed to profit from any new opportunities arising from East European countries joining NATO."