Background on Canada-Ukraine Defence Agreement: A "Rich, Mutually Beneficial" Arms Trade

Background on Canada-Ukraine Defence Agreement
A "Rich, Mutually Beneficial" Arms Trade
Tony Seed

One of the main features of the Defence Agreement between Canada and Ukraine signed on April 3 is the neo-liberal arrangements regarding arms production and the global arms trade. These arrangements are taking place within the conditions of intensified inter-imperialist rivalry to monopolize the global arms trade and the expansion of the theatre of operations of the U.S.-NATO bloc not only in Eastern Europe but also in the Middle East. The AFP news agency reports that Defence Minister Harjit Sajjan "also said[the Defence Agreement]was a step toward liberalizing arms sales to Ukraine, which are currently restricted. The accord is 'a very important step before[we]get to that,' he said." In a Department of National Defence (DND) release, he stated it "helps us continue to develop our rich, mutually beneficial relationships."

The agreement codifies, legitimizes and opens the door to government funding of private arms deals that have already been negotiated between giant arms monopolies of Canada and Ukraine. It marks the latest stage in the accelerated rapprochement between the two countries' military and security establishments in recent years. This relationship, with typically overt and covert features, is undertaking increasing strategic significance with a number of important partnerships forged in the military-industrial and educational sectors.

On the Canadian side, CBC reported on March 4 that "Canadian companies are also finding plenty of opportunity as Ukraine retools its defence industry. Pratt & Whitney Canada, Esterline/CMC Electronics, IMP Aerospace, and L-3 Wescam all have joint projects with Ukroboronprom," the Ukrainian state-owned defence consortium.[1]

Equally, the privatization of Ukroboronprom and the increase of Ukraine's share of the global arms trade constitutes a main agenda of the Poroshenko government. A state-owned authority established in December 2010 to handle the development and procurement of combat hardware, Ukroboronprom directs the consolidation of the Ukrainian arms industry, along with state arms exporter Ukrspetsexport. In the wake of the 1991 breakup of the Soviet Union, Ukraine inherited one of the biggest military-industrial complexes in the world, employing over three million people at more than 3,000 enterprises across the republic. Twenty-six years later a mere 134 such enterprises -- 123 state enterprises and nine joint stock corporations employing less than 100,000 people -- are still at work.[2]

Private agreements have already been inked for the transfer of aircraft engines by Pratt & Whitney Canada through the agency of Ukraine to Saudi Arabia for the manufacture of a new military cargo aircraft for the Royal Saudi Arabian Air Force, as well as a new electronic warfare and surveillance aircraft, TML Weekly has learned.

The agreements do not provide for the supply of weapons to Ukraine, nor do they assist in the so-called defence of the coup government. They provide for the export of modernized designs of Soviet-era Antonov military cargo planes by Ukraine for production in Saudi Arabia, a U.S. client feudal dictatorship that is waging a brutal war of aggression against Yemen and supplying insurgents in Syria and Iraq.

Here is what we know:

On July 4, 2014, just six weeks after assuming the presidency of the U.S.-backed coup government, Petro Poroshenko appointed Roman Romanov to head the Ukroboronprom with instructions to convert what was left of its production after the sanctions against Russia to meet standards dictated by NATO, to integrate it into the NATO arms trade, and to corporatize the publicly-owned conglomerate in the service of private capital. "From July till December, 2014 to the list of the international partners of concern 20 new countries were added. The concern began negotiations on cooperation with such companies as Airbus, Textron, Lockheed Martin, BAE Systems, Thales."[3]

Poroshenko is, of course, a known oligarch who made his fortune by stealing the assets of the country, selling them on the foreign market and granting concessions to foreigners in Ukraine. According to the rating of the Ukrainian edition of Forbes magazine, he ranks sixth among the richest oligarchs and manages assets worth $1.3 billion. With Leninska Kuznya, Poroshenko is active in the shipbuilding and armaments industry although his shipyard in Crimea, the Sevastopol Sea Factory with three drydocks, has been nationalized.[4]The Panama Papers leaks suggested his companies had set up offshore holdings even as his army was fighting -- and losing -- a decisive battle with the Donbass troops in August 2014.

On September 3, 2014 NATO convened a conference on the occasion of the "International Defence Industry Exhibition" held in Kielce, Poland to discuss the future of Ukraine's arms industry in the aftermath of Kiev's pro-western coup d'état. On March 4, 2015 Ukroboronprom announced that it was working with NATO's codification and standardization teams to improve its industrial capabilities.[5]A "roadmap," designating the path toward the Ukraine arms industry's adaption of NATO's standards by 2018 was then established on March 31, at an international seminar of experts. "Participating at the conference were experts from Poland and the Czech Republic, who had had the experience of making the identical transformations of their own arms industries, back in the 1990s," German-foreign-policy.com reported.[6]

The standardization of their military products with those produced in and exported by the NATO combat alliance was accompanied with U.S. sanctions on supplying equipment to Russia. This adversely affected such major industrial centres of southeastern Ukraine as Zaporizhia, Dnipropetrovsk, Kharkiv and Nikolaev. (In the post-war period Nikolaev, for example, had become one of the shipbuilding centres of the USSR, with three shipyards: Black Sea, 61 Kommunara, and Okean. It was the sole supplier of heavy gas turbine engines to the Russian navy.) The U.S. sanctions forced the Ukrainian arms industries to permanently shut themselves off from Russian companies, with which they had been closely cooperating up to 2013.[7]

The Saudi Deal

On May 12, 2015 the SE Antonov company, Ukraine's chief aircraft company which is based in Kiev, announced it had signed an agreement with Taqnia Aeronautics Company -- a subsidiary of the Saudi Company for Development and Investment (Taqnia) -- to develop and manufacture a light cargo plane (Antonov-132) in Saudi Arabia.

The announcement cites "the aircraft's ability to perform many tasks including the transport of materials and equipment, and transporting personnel and soldiers, parachuting, medical evacuation, reconnaissance, maritime surveillance and other military and civilian tasks."[8]

The AN-132 project itself is a "vehicle to achieve several objectives," states Antonov. "In the near-term there is a worldwide market for about 1,000 of this type of aircraft," an Antonov representative told AIN in late 2015. "Therefore, we think we can capture about 300 of those orders. The KSA requirement alone is for 80 aircraft or more, and then additional numbers can be built at the KACST site for third countries."

The transformation of the AN-32 -- a Soviet-era aircraft that has largely only been operated by traditional users of Russian and Ukrainian-made aircraft -- into the AN-132 as a light transport aircraft that can be configured for military and civil applications is so that it will "appeal to almost any nation, including those that have only procured western aircraft in the past" -- the members and "partners" of the U.S.-NATO bloc.

The aim of NATO's "Southern Strategy" adopted at the Warsaw Summit in July 2016 and personally endorsed by Prime Minister Justin Trudeau and then-Minister of International Trade Chrystia Freeland who attended the Summit, is precisely to exclusively equip and provide "partners" such as Saudi Arabia with training for waging war in the Arab World.

Taqnia is owned totally by a public investment fund of the ruling al Saud clan, sponsored by the Council of Economic Affairs and Development; it is chaired by HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, deputy Crown Prince and Defence Minister and Special Adviser to the custodian of the Two Holy Mosques. The CEO of Taqnia is retired Major General Ali Alghamdi.

The facility is to be located not in Ukraine but at the King Abdulaziz City for Science and Technology (KACST) in Riyadh -- nominally a scientific government institution that supports and enhances scientific applied research.

In June 2015 a high-level Ukrainian delegation participated in the CANSEC arms show in Ottawa. It was led by the chief of the General Staff of the Armed Forces of Ukraine, Victor Muzhenko, and included representatives of Ukroboronprom. According to Ukroboronprom, "The parties held negotiations with such giants of the Canadian aviation industry as Bombardier, Pratt & Whitney, CAE, Magellan Aerospace, Bell Helicopter (MTL), Esterline CMC Electronics and others, having noted advantages of cooperation for both countries."

On June 16, 2015 Antonov announced at the Dubai Air Show that the number of partners in the Saudi project had been expanded from two to five. It had signed two memorandums on cooperation with Taqnia Aeronautics (KSA), the Ukrainian Scientific Research Institute of Aviation Technology (UkrNII), Altis Holding (Ukraine), and Broetje-Automation (Germany) to establish the manufacturing facility in Saudi Arabia as part of the offset requirements for the program.[9]

According to arrangements spelled out in the agreement, Antonov will lead the design team for the AN-132 configuration, while being "consultants" in setting up the plant and producing the first prototype aircraft. The Saudis will retain proprietary rights to the design.

In addition, according to Antonov, in late 2015 it signed a memorandum of understanding to sell at least six AN-132 platforms to Saudi Arabia, four of which will be used for military and search-and-rescue operations, and two for electronic warfare. According to the designers, "the new electronic warfare (EW) aircraft can counter airborne warning and control system planes, air defence systems and manned and unmanned aircraft."

In fall 2015 the influential Pratt & Whitney Canada monopoly based in Longueuil, Quebec provided the SE Antonov corporation with PW150A engines for a new AN-132D demonstration or prototype aircraft.

In 2016, Antonov and Taqnia Aeronautics signed a formal agreement on cooperation on the construction of an aircraft complex and production of AN-132 in the Kingdom of Saudi Arabia.

The export of military aircraft engines and avionic systems were an integral part of the Canada-Ukraine Free Trade Agreement, signed in Kiev on July 11, 2016 by then-Minister of Trade Chrystia Freeland in the company of Prime Minister Justin Trudeau and Ukrainian President Petro Poroshenko, and which provides the treaty framework for the Canada-Ukraine Defence Agreement. Negotiations for the agreement were originally initiated by the Harper government in 2014. Trudeau and Freeland were in Kiev on the heels of the NATO Summit in Warsaw, Poland and a visit to the misnamed International Peacekeeping and Security Center in northwestern Ukraine, where Canadian and American forces are training the National Guard of Ukraine for Kiev's internal war against the Donbass in Eastern Ukraine.

Free Trade in Arms

Although bilateral trade between Canada and Ukraine is insignificant (an estimated $95 million annually), hundreds of millions are potentially at stake in the arms trade. The free trade deal signed on July 11 eliminates Ukrainian tariffs on imports.

Also on July 11, 2016, Ukroboronprom announced within the framework of the Canada-Ukraine Free Trade Agreement that it had concluded strategic agreements with two Canadian monopolies:

1. Esterline CMC Electronics (formerly Canadian Marconi Company) inked two contracts with Antonov to supply avionics systems for a total of 67 transport aircraft (AN-12 and n-148/158/178) for military and commercial use. These contracts were signed in Kiev.[10]

2. Pratt & Whitney Canada will furnish the AN-132 aircraft with the new version turboprop engine PW150A.[11]

Yet another agreement signed in Kiev provided for the training of Ukrainian avionic students from the National Aviation University at Candamore College in North Bay, Ontario and the training of Canadian students in Ukraine, illustrating the role of universities as arms of the arms corporations, rather than institutions that work in the public interest.

Lucrative Business

Both Pratt & Whitney and CMC Electronics are U.S. subsidiaries. Pratt & Whitney is a subsidiary of the giant U.S. arms monopoly, United Technologies (UTC), which also has a factory at Rzeszów in southern Poland engaged in researching, designing, manufacturing, and servicing aerospace engines and components in Central Europe. UTC makes jet engines, missile systems, Sikorski and Black Hawk helicopters and other war materiel as well as consumer products. CMC Electronics, formerly the Canadian Marconi Company (and thence BAE Systems Canada), was acquired in 2007 for U.S.$335 million from the Onex investment group by Esterline Corporation of Bellevue, Washington which is connected to Boeing. Over 50 per cent of its military sales are to the U.S.

The enhancement of Ukraine's military capacities becomes therefore a lucrative business for Canadian producers of war materiel, which can make large dents in both the Canadian and Ukrainian state budgets.

Although Canada very much needs small and medium civil aircraft designed for Canadian conditions, these Canadian-based private monopolies are deeply involved in designing and producing military equipment and in the training of U.S. and other military personnel, especially combat pilots. The feverish expansion of military forces and spending in the Afghanistan and Iraq wars of occupation presented new opportunities.

Governments began increasing the flow of tax money collected from individual Canadians to certain privileged monopolies. Overall, between 1961 and March 31, 2012, Pratt & Whitney Canada Corp. received the most funds from Industry Canada of any Canadian registered corporation under various pretexts: almost $3.3 billion via 75 disbursements that began in April 1970. CMC Electronics, ranking tenth, received between March 1972 and January 2009, $309 million in 83 disbursements, according to a study by the Fraser Institute.[12]

Brazen Deception

It is worth recalling that in January and again on March 29, 2016 Freeland's predecessor, Stéphane Dion, gave the false impression that a 14-year, $14.8 billion sale of light armoured vehicles (LAVs) by General Dynamics Land Systems in London, Ontario to the Kingdom of Saudi Arabia was a done deal. Prime Minister Trudeau explicitly claimed on October 11, 2015 -- on the eve of the federal election on the Radio-Canada television program Tout le monde en parle -- that the agreement was to sell "jeeps" to Saudi Arabia. He denied that the government had anything to do with it, saying it was merely "an agreement between a manufacturing company here in Canada and Saudi Arabia."

The brazen deception by the Trudeau Liberals, rightly condemned by Canadians at the time, went much deeper. The Globe and Mail reported earlier in 2016 that vehicles matching Canadian-made LAVs purchased by Saudi Arabia had already been photographed in use in Yemen. Secondly, Canadian-made LRT-3 sniper rifles produced by Winnipeg-based PGW Defence Technologies were also in use in the Saudi invasion of Yemen, according to a CBC report on February 22, 2016.[13]Thirdly, Pratt & Whitney Canada was simultaneously signing a Memorandum of Understanding with Ukraine for the export of high-power aircraft engines for use by the Saudi Arabian Air Force, and had already exported engines for the demonstration model. Fourthly, there were credible reports that as early as May 2014 Canada was already participating with Antonov in a clandestine program of weapons shipments to Ukraine.[14]

It could scarcely be clearer. On top of laying the groundwork for increased arming of the Ukrainian armed forces, the Canada-Ukraine Defence Cooperation Agreement constitutes another means to expand arms sales from Canada to the Saudi Arabia dictatorship for war and aggression in the Middle East using Ukraine as a transit, as well as to potentially increase the share of the global arms trade by Pratt & Whitney, Esterline GMC Electronics and other private arms monopolies. Unable to sustain its land forces in sustained fighting on other continents, U.S. empire-builders and their proxies consider better fighter and cargo planes and missiles crucial to achieve military superiority in the air. This is all being done presumably with the approval of the United States and Israel and their military and security interests, although the terms of the new arms agreement have never been presented to the Canadian parliament nor the Canadian people.

Notes

1. Evan Dyer, "Ukraine looks to Canada to help modernize military's 'Soviet mentality,'" CBC News, March 4, 2017.

2. "Military-Industrial Collapse: How Ukraine Sells Its Weapons," Sputnik, June 5, 2016.

3. Canada will help "Ukroboronprom" to revive the Ukrainian aircraft industry, news.pn , June 8, 2015

4. The shipyards were placed under control of Poroshenko-owned Ukrprominvest in 2010. The oligarch was foreign minister 2009-10 and member of the National Security and Defence Council. The factory sold output worth $5.3 million in 2013.

5. Charles Forrester, "Ukroboronprom works on NATO part codification," www.janes.com , March 5, 2015.

SE Antonov has a long relationship as a supplier to the NATO bloc. In 2004, Ukraine signed an agreement with NATO on Strategic Airlift in preparation for service in NATO and EU combat missions to transport NATO soldiers and their weapons to theatres of operations anywhere in the world. The contract therefore increased the NATO strike capability "in the context of the NATO Response Force (NRF) and EU Battle Groups" -- against Eastern Europe, the Middle East and Asia. The NATO Support Agency signed a contract with the Russian Volga-Dnepr Airlines -- a Ukrainian Antonov Airlines joint venture, "Ruslan Salis Inc" ("Salis" stands for "Strategic AirLift Interim Solution"). Together, the two aviation companies had at their disposal more than 17 of the exceptionally large Antonov AN-124 cargo planes, with an exclusive cargo capacity of up to 150 tons. Since 2006, within the framework of their Ruslan Salis Inc. joint venture -- Volga-Dnepr and Antonov have each placed six jumbo AN-124s at NATO's disposal at the Leipzig/Halle airport in Germany.

In the meantime, the Canadian Forces used the Antonov to transport its DART team to Sri Lanka in 2006 and France to transport war materiel to Mali. The German Bundeswehr has used the AN-124s on more than 300 flights, particularly to transport combat equipment to and from Afghanistan and deliver relief supplies and weaponry to Northern Iraq.

To this end, the Leipzig Airport was converted to a NATO air base for freight transport in violation of the 4-plus-2-Accord, which forbids foreign troops and military goods being stationed on and transferred by way of the territory of the former German Democratic Republic. Moscow not only accepted the forward deployment of NATO and EU troops to Leipzig, but also sought to be affiliated with the EU's civilian-military aviation hub. Long-term cooperation meant a business worth U.S.$25 billion. The Russian/Ukrainian-produced heavy cargo transporters, stationed at the Leipzig Airport, were capable of transporting -- alongside helicopters, tanks and similar weapons -- also a new rocket system to NATO and EU theatres of intervention.

See: "Crash with Consequences," german-foreign-policy.com , May 11, 2015 and "Cooped Up in Leipzig," german-foreign-policy.com , March 3, 2006.

6. "Moving West," german-foreign-policy.com , April 10, 2015.

7. Yuri Selivanov, a defence specialist from Odessa for the "New Russia" Internet portal, pointed out geopolitical reasons that underlay the U.S. sanctions:

"They[ United States - TML ]are very interested in this for two reasons. Firstly, the cessation of supplies to Russia of Ukrainian aircraft engines and marine power plants, components, rocket and space systems and the like, will cause a direct blow to the defence capability of the Russian Federation and, in particular, delay the implementation of the State program of modernization of the armed forces, that given the current situation of pre-war USA gives additional benefits. Second, these restrictions to some extent affect the Russian military exports, which for Americans is also very important, because the Russian defence industry is in many ways their important and dangerous competitor."

For these mainly Russian-speaking cities in southern and eastern Ukraine where the defence industry and general engineering are major employers, this was a real tragedy. According to Selivanov, "Actually it is the elimination of the socio-economic basis for the existence of a good half of the country, and its most developed part. And the creation of conditions for the mass exodus of Russian inhabitants of these territories, which is simply not be able to find other equivalent source of food. All this is fully consistent with the plans of the most extremist of the Ukrainian elite, which (for example, presidential adviser Lutsenko) unabashedly speaks of the necessity of ethnic cleansing in the south-eastern Ukraine, on the model of the expulsion of the entire Serb population from Croatia in the mid 90s."

8. The characteristic of the AN-132 is that it can operate on unpaved runways or in other harsh desert or mountainous environments where many other transport aircraft could not. Many Soviet-era designs were known for being suitable for climatic conditions that are hot, desert-like and with performance still at near-peak efficiency. The advantage of the AN-132 in comparison with its competitors, such as the CASA C-295 and Alenia C-27J is that it will be capable of flying with one inoperative engine at altitudes over 4,000 metres (13,132 feet), which is considerably higher than the "one-engine only" operational ceilings of both the C-295 and C-27J.

9. The agreement included four AN-148-100 aircraft, four reconnaissance and rescue variants of the AN-132 aircraft, and two devices for producing radio interference based on the aircraft for the Saudis.

10. The two CMC Electronics contracts with Antonov for avionics systems provided for:

- the upgrade of seven AN-124 transport aircraft, CMC will supply its CMA-9000 Flight Management System (FMS), CMA-5024 GPS Sensor and MFD-2068 Multi-Function Display in a dual configuration; and

- sixty, new production AN-148/158/178 transport aircraft, for commercial and military use, Esterline CMC Electronics will supply dual CMA-9000 FMSs as well as five MFD-3068 Multi-Function Displays.

"Antonov Aircraft Will Receive Avionics from Esterline CMC Electronics," Ukroboronprom, July 12, 2016.

11. "Ukraine and Canada Sign Free Trade Agreement," Ukroboronprom, July 12, 2016 and "Ukraine's Antonov and Pratt & Whitney Canada sign MOU," joinfo.com, July 14, 2016.

12. In addition, one must add paramilitary subsidies from other federal agencies such as the National Research Council as well as from provincial governments. For example, some 15 years ago the Chretien Liberals announced the creation of the Centre des Technologies de Fabrication de Pointe en Aerospatiale at l'Ecole Polytechnique de Montreal, which represented a $46 million investment to be added to the hundreds of millions already provided to Pratt and Whitney, Bell Helicopter, Heroux, Bombardier, etc., all of which have factories in the Montreal area.

A vice-president from Pratt & Whitney Canada, Walter Di Bartolomeo, heads up the newly-formed Consortium for Aerospace Research and Innovation in Canada (CARIC), according to the organization's press release reprinted verbatim in the Ottawa Citizen. "CARIC's mission is to develop advanced technologies for the Canadian[sic]aerospace community." CARIC was spawned directly by a similarly titled body, the Consortium for Research and Innovation in Aerospace in Quebec (CRIAQ). That body is headed by Pratt & Whitney President and CEO Denis Faubert, who is also now a member of the first CARIC board of directors.

The first CARIC board of directors illustrates the increasing role of universities as research arms for the arms monopolies. Seven Quebec universities are founding members of CRIAQ. One quarter of the CARIC board -- six high-level executives from Dalhousie, McGill, Ryerson, Carleton, University of British Columbia and École de technologie supérieure -- have placed their institutions at the service of war and conquest. Meanwhile, Canadian Business magazine reports that Canadian monopolies are increasingly relying on universities to provide research and development. Rob Annan, interim CEO of global communications company Mitacs, says that by outsourcing innovation to universities, monopolies are able to minimize their exposure to risk. Moreover, university labs may have access to funding channels not available to the private sector.

According to a study by the Canadian Association of University Teachers, Open for Business , proprietary information from this collaboration always remains with the "partners." See here .

Arms monopolies are plundering the resources of the Canadian people to fuel a feverish and lethal race, the motor force of their existence. It should be considered a serious crime to siphon off public money to enrich individuals or companies and enhance their monopoly right and power.

13. "The LRT-3 has an effective range of 1.8 km. CBC News said that more than $28 million worth of guns and rifles have been exported from Canada to Saudi Arabia in the past decade. Commentators suggested that this is a case of arms being 'diverted into the wrong hands.' This covers up that Canada is arming a country engaged in an aggressive invasion of another country. The plight of the people of Yemen as a result of the Saudi aggression has never been mentioned in either the House of Commons nor in any government statements while the casualties continue to rise and the humanitarian situation worsens."

"Liberal Government's Unacceptable Definitions of Democracy and Human Rights -- The Example of Yemen," Renewal Update , February 22, 2016 No. 5.

14. Wayne Madsen, "American Lethal Military Aid to Ukraine is a Throwback to Iran-Contra Days," Strategic Culture , February 3, 2015.

(TML Weekly No. 18, May 20, 2017)