U.S. looking to thwart $1 billion Israel-South Korea arms deal

The United States is trying to stop an $1 billion-plus arms deal between Israel and South Korea.

Israel Aircraft Industries (IAI) and Elta have proposed selling the Koreans four early-warning aircraft (EWA) for $1.25 billion. In efforts to thwart the deal, the Americans have argued that part of the system includes U.S.-made parts, which require an export license.

Washington is applying great pressure on South Korea to give the tender to the American firm Boeing, even though the Israeli offer is far less expensive. The South Korean Defense Ministry is expected to make a decision early next week, although it might be delayed due to American pressure.

Sources in South Korea's Defense Ministry and local media say the government is leaning toward the Israeli bid due to its quality and attractive price. Boeing's initial offer was over $2.1 billion, and it lowered the amount by $500 million, still $400 million more than the Israeli bid.

The United States have argued that the country is South Korea's most important ally, many American soldiers were killed at war on its behalf 50 years ago, and thousands of soldiers are currently serving on Korean land, protecting its sovereignty and independence from North Korea.

After failing to win over Seoul with these arguments, the Americans said the Israeli EWA system consists of American-made parts, for which Israel would have to obtain a U.S. export license. They said the Pentagon and Department of Commerce would hinder such a request. As a result, the Koreans are hesitating to purchase the aircraft from Israel.

IAI has made it clear to South Korea that it is in the process of obtaining the American license, but that it would take some time. South Korea, which has already postponed the project several times for internal reasons, is not keen over another delay, since it would disrupt defense and equipment stocking plans. However, it appears that South Korea will give Israel a few-week extension to obtain the permits.

The early warning, radar and control system, produced by IAI's Elta Systems Group with the help of several American sub-contractors, already has been installed on an American Gulfstream 550 and fitted on a Russian Ilyushin. The system is more advanced than the Phalcon early-warning system, and has been chosen by the Israeli Air Force and India.

Defense establishment sources expressed concern over increasing American involvement in Israel's defense export policy. They cited several occasions in recent years in which the administration foiled, postponed or tried to obstruct Israeli arms export deals including the Phalcon deal with China, the Harpy assault UAV deal with China, arms sales to India, and defense and arms sales to Venezuela.IAI management refused to comment.