EU and Mercosur agreements change the picture upon arms trade

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The agreement signed today by representatives of the European Union and the Mercosur is set to change many aspects of the international arms trade between Europe and South America.

While China and the U.S. are seen by some to have taken the sharp end of the stick, in some situations, it wouldn’t be precisely like that. Many high level, both historic and circumstantial, relations could still provide a valid context for business, being by ideology, tradition or to thank the support given on a particular moment.

For example, in the current bid to replace the UH-1H helicopters of the Argentine Army. Three strong proposals, one in particular more than the other, are directly influenced by it. Italian proposal for Leonardo’s AW-139, French proposal for H225 and U.S. proposal for the UH-60M.

While Italians have offered civilian versions of the AW-139, the U.S. has just signed a deal with Boeing/Leonardo to provide militarized (and built in the U.S.) versions of the AW-139, dubbed MH-139 for USAF use, destined to replace the UH-1N fleet. The U.S. has offered both versions of the UH-60M, built in Connecticut, and the S-70i, built in Poland by PZL Mielec, now a part of Sikorsky and subsidiary to Lockheed Martin. On the other hand, Airbus Helicopters holds production lines of their H225 helicopters both in Brazil with Helibras and in France.

Indeed, a complex analysis to make, considering that all versions compared within their own civilian or military tier, are very much alike. But on the other hand, the transcendental support for Argentina by the U.S. with the International Military Fund (IMF) and the access that an equipment that can be acquired and supported (as CLSSA) at the same cost as the U.S. military does and with a relatively low interest is very appealing for 100% military equipment and could turn a decision for another.

Still, this recent agreement is not a Free Trade Agreement but will definitely change the shape on the Latin-American civilian-military relations with the European Union

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