United States Arms Transfer Levels Statement by the President.

Conventional arms transfer restraint is an important objective of this administration and the Congress. To ensure U.S. leadership and to supplement existing legislation, I established for the first time a set of quantitative and qualitative standards by which arms transfer requests considered by this Government would be judged. The principal consideration in the application of these standards is whether the transfer in question promotes our security and the security of our close friends.

I am pleased to announce that this Government has kept its pledge to take the leadership in restraining arms sales. Under the ceiling I established, U.S. Government transfers of weapons and related items to countries other than NATO, Japan, Australia, and New Zealand, which totaled $8.54 billion in FY 1978, were reduced by 8 percent (or approximately $700 million measured in constant dollars) from the comparable FY 1977 level.

When I set this goal last year, I said that I would make further reductions in the next fiscal year. Today, I am announcing an additional cut of approximately $733 million* or 8 percent for FY 1979 measured in constant dollars. This means that for the fiscal year that began on October 1, 1978, and which will end on September 30, 1979, new commitments tinder the Foreign Military Sales (FMS) and Military Assistance (MAP) programs for weapons and weapons-related items to all countries except NATO, Japan, Australia, and New Zealand will not exceed $8.43 billion. This cut is consistent with our national security interests, including our historic interest in the 'security of the Middle East.

When I addressed the United Nations General Assembly in October 1977, I emphasized that the United States had taken the first steps at conventional arms restraint, but that we could not go very far alone. Multilateral cooperation remains essential to the achievement of meaningful restraint measures. We continue to believe that all nations have an interest in restraining transfers of conventional weaponry which threaten the stability of various regions of the world and divert recipient resources from other worthy objectives without necessarily' enhancing national security. We are making a maximum effort to achieve multilateral cooperation on the arms restraint issue.

*FY 1979 CEILING ON CONVENTIONAL ARMS TRANSFERS

(IN $ MILLIONS)

Fiscal year 1978 ceiling------------ $8, 551

Inflation (7.2 percent)-------------- 1616

Fiscal year 1978 ceiling in fiscal year

1979 dollars----------------------- 9, 167

Policy reduction------------------- -733

Fiscal year 1979 ceiling ----------- 8, 434

My decision on U.S. arms transfer levels for FY 1980 will depend on the degree of cooperation we receive in the coming year from other nations, particularly in the area of specific achievements and evidence of concrete progress on arms transfer restraint.