British Hopes of $10B Emirates Typhoon Deal Sink

Britain's high-profile drive to sell Eurofighter Typhoon combat jets in the Persian Gulf seems to be running into trouble, with the United Arab Emirates reportedly having second thoughts about acquiring as many as 60 of the aircraft.

If Emirates' planned $10 billion procurement to replace its aging Dassault Aviation Mirage 2000-9 jets to counter regional rival Iran is still on, that could boost the prospects of the Typhoon's main rival, Dassault's Rafale multirole fighter.

Boeing's F/A-18E/F had been an outsider, but its prospects too may be enhanced if, as the British newspaper the Guardian reported Friday, the Typhoon deal, which the British had been expected to be announced before the end of the year, is now on hold.

That's seen as a personal setback for British Prime Minister David Cameron, who's an energetic promoter of British arms sales, particularly in the gulf.

He and Defense Secretary Philip Hammond have been pushing the Typhoon, built by the European consortium that includes BAE Systems of Britain, with the Emirates and Bahrain, which is in the market for 12 in a deal worth more than $1 billion.

As recently as early November, Cameron's office in London was saying his talks on the Typhoon with Sheik Mohammed bin Zayed al-Nahyan, the crown prince of Abu Dhabi, were "progressing well."

Oil-rich Abu Dhabi is the economic powerhouse of the seven-sheikdom federation and has charge of military procurement.

Saudi Arabia, the United Kingdom's biggest arms customer, bought 72 Typhoons in 2006 in the al-Salaam fighter program that's still expanding and could eventually reach a value of $16.2 billion.

London is now trying to sell Riyadh 72 more Typhoons. But given the $6.8 billion arms package the United States is providing the kingdom, along with hitherto restricted precision weapons like Boeing's AHM-84H stand-off land attack missiles that may not be in the cards.

The sultanate of Oman bought 12 Typhoons, along with eight Hawk jet trainers in November 2012 as part of a $4.04 billion contract Cameron clinched during a gulf tour.

The Emirates' deal is important because it is one of the biggest fighter contracts around at the moment and British officials say winning it will open hefty sales prospects for the Eurofighter consortium -- BAE, European defense and aerospace giant EADS and Finmeccanica of Italy -- in Qatar and Kuwait.

British officials suggested the Emirates is playing hard to get and driving a hard bargain with the Rafale in contention.

But longtime observers of the gulf arms market suspect the Emirates, like other Arab states in the oil-rich region, seek to avoid antagonizing Iran at a time when an agreement with U.S.-led Western powers to curtail its much-feared nuclear program may be in reach.

It should be noted since early November, when the British appeared to be confident of a deal in Abu Dhabi, the United States and its European allies, including Britain, signed an interim agreement with Iran on its nuclear program, with expectations a final deal can he reached in six months.

That dramatically changed the security perspective in the gulf, where Saudi Arabia, and to a lesser extent the other Arab monarchies, were increasingly fearful of Tehran's regional ambitions.

So the Emirates' leadership may be pausing to reassess military needs.

"Gulf states may soon realize that they don't actually need the Typhoons," British security analyst Richard Norton-Taylor said. "What they may need more urgently are weapons for use in internal repression."

Referring to growing criticism in Britain of arms sales to Arab governments, such as the absolute monarchies of the gulf, as they seek to overwhelm pro-democracy opponents, Norton-Taylor echoed criticisms that are now emerging in the United States over weapons contracts.

"If there were any remaining doubts that arms sales take precedence over human rights or concerns about exacerbating regional tensions, the British government has been unashamedly quashing them," he said.

However, Britain's defense sector, like those in the United States, Europe and Russia, are increasingly dependent on export sales to maintain production lines for their own militaries, and in what's increasingly a buyer's market they're having to fight hard for the big-ticket deals available in the gulf.  [via]