The Great Unwinding: The U.S.-Turkey Arms Sales Dispute

March marks a critical month for U.S.-Turkish relations, chiefly on the topic of Ankara’s recent acquisition of the Russian S-400 surface-to-air missile systems. First, since Turkey’s removal last July from the F-35 Joint Strike Fighter program, the U.S. government had consistently stated that the “unwinding” of Turkey’s participation from the program would be completed by this month. However, the Department of Defense (DoD) announced in January that it would no longer be able to meet in full that initial end of March timeline, with several contracts with Turkey estimated to continue through December 2020. Furthermore, Secretary of Defense Mark Esper plans, in the coming weeks, to provide to Congress his long-term plan for the F-35 aircraft that were purchased by and slated for Turkey.

In addition, U.S.-Turkey relations have been further complicated by the recent rise in fighting involving Turkish troops and Russian-backed Syrian government forces and by Ankara’s subsequent call for the United States to deploy Patriot missile defense systems to defend Turkish forces. Despite other frictions in the relationship, some in the Trump administration have strongly supported this request. Even still, Turkish President Recep Tayyip Erdogan has doubled down on his S-400 purchase and has stated that he will activate his S-400 systems next month.

Q1: How did the latest crisis in U.S.-Turkey relations begin?

A1: Although Turkey has been a NATO member for nearly 70 years, Turkey broke with the alliance by completing a deal with Russia to purchase two S-400 systems for $2.5 billion. For years, the U.S. government warned Turkey about the danger this decision would pose to NATO interoperability efforts, especially with regard to common air defense. Under Secretary of Defense for Acquisition and Sustainment Ellen Lord had said, “Turkey's purchase of the S-400 is inconsistent with its commitments to NATO and will have detrimental impact on Turkish interoperability with the alliance.” In an attempt to deter Turkey from going through with the S-400 purchase, the United States threatened to cut Turkey out of the F-35 program during this same timeframe. Furthermore, DoD argued that the F-35 and S-400 would not be compatible with one another, claiming that the S-400 system could retrieve valuable intelligence while in close proximity to the F-35, thereby compromising the F-35’s stealth capabilities. Independent analysts have differed in their assessment of the extent of these risks, although integrating the S-400 and NATO air defense systems is commonly agreed to be an intelligence-gathering opportunity.

Prior to the deal with Russia, Turkey had not only been on track to buy more than 100 F-35s to replace its F-16 fleet but was also a co-producer of the F-35 itself. Despite U.S. and allied objections, Turkish senior leadership continued to argue that having both the S-400 and F-35 would not involve a “compatibility” issue or pose a threat to the United States or to NATO. Subsequently, on July 12, 2019, parts of the S-400 started arriving in Turkey. That same month, DoD announced its decision to discontinue Turkey’s role in the F-35 program.

Throughout this back and forth, the United States gave Turkey many off-ramps, with Lord stating that “none of the steps [being] taken are irreversible” and that if Turkey “forgo[es] delivery of the S-400, [the U.S.] look[s] forward to restoring normal program activity.” Since 2009, the United States has also been in talks with the Turkish government regarding the sale of the Patriot air and missile defense system. Turkey has rejected those offers, instead seeking better deals with technology transfer or joint production. Yet initial shipments of the S-400 to Turkey do not include technology transfer. The second phase of shipments to Turkey is being held up at this time due to disagreements and ongoing negotiations with Russia on technology transfer and co-production—and perhaps because of continued tensions between Ankara and Moscow on Syria.

Q2: What is current U.S. policy regarding Turkish receipt of the S-400 systems?

A2: The Pentagon has been resolute in its position that Turkey cannot rejoin the F-35 program without fully divesting from the S-400; however, DoD has had to backdown on initial timelines in order to avoid delays to F-35 production. Phasing Turkey out of the F-35 supply chain is estimated to cost DoD between $500 to $600 million. Previously, DoD had said that all Turkish production would stop in July 2019, but program officials realized taking such sharp action would cause major delays to the F-35, so they set the March 2020 deadline to replace the 900 Turkish-made parts—400 of which were sole-sourced to Turkish companies. Shortly after the new year, Lord provided an update, stating that a “handful of contracts” would continue through the end of 2020. Senior officials from both U.S. companies involved in the F-35’s production, Lockheed Martin and Pratt & Whitney, testified in front of Congress that around 80 percent of the F-35’s parts had been picked up by those two U.S. companies themselves rather than by international suppliers or even new U.S. suppliers. This was likely done for speed but also potentially to keep the door open for a possible change in the political situation between the United States and Turkey. Regardless, DoD indicated that the hope would be to eventually offer manufacturing and co-production opportunities to other interested allies and partners, such as Poland. While DoD has maintained its hardline policy stance on the Turkey situation, it is clearly prioritizing production and trying to avoid scheduling delays to the F-35.

Congress, meanwhile, has presented a united front in its response to Turkey, with bipartisan support for sanctioning Turkey. The FY 2020 National Defense Authorization Act (NDAA) included a provision titled “Limitation on Transfer of F-35 aircraft to Turkey” (Title XII—Section 1245), which formally prevents any transfer of F-35s to Turkey so long as it possesses the S-400 systems and calls on the president to implement the Countering America’s Adversaries Through Sanctions Act (CAATSA) of 2017. CAATSA requires that the President sanction countries that acquire military equipment from Russia. During the same period, both the Senate and the House passed a bill with bipartisan support that recognized the Armenian Genocide, which had been avoided for years because of Turkish sensitivities, as well as two other bills involving other sanction provisions.

Congress has also acted on the other lingering question about what the United States will do with the F-35s that Turkey has already ordered. Four of those completed aircraft are parked at Luke Air Force Base in Arizona, while others are in different production stages. Marillyn Hewson, CEO of Lockheed Martin, said during a call in January with investors that the company is still looking at what to do with the aircraft that were designated for Turkey. The NDAA provision requires Secretary Esper to prepare by mid-March a report to the defense committees outlining the path forward for the F-35s. The report will provide detailed guidance on what to do with the F-35s slated for Turkey and how to handle the “storage, preservation” and “final disposition” of those aircraft. In the FY2020 appropriations bill, Congress reprogrammed unobligated dollars from the F-35 program from previous years to identify alternatives to Turkish suppliers and to “convert” Turkish F-35 to the U.S. Air Force configuration.

Finally, President Donald Trump and President Recep Tayyip Erdogan continue to maintain a warm personal relationship despite growing complications in the government-to-government relationship. Erdogan is relying on his close interaction with Trump to smooth over complications related to the possible sanctions in response to the S-400 purchase. Trump has blamed the Obama administration for mishandling previous discussions over the sale of Patriot air and missile defense systems and has defended Erdogan’s stance and frustration regarding the fallout of the S-400 purchase. Furthermore, the Trump administration worries that if CAATSA sanctions were imposed, Turkey might double down on purchasing Russian-made equipment in the future. It is possible that Trump might issue a national security “waiver” to Congress on the CAATSA question or delay the prospect of sanctions for 180 days, should he choose to argue that it is in the United States’ national security interest to do so.

Q3: How is Turkey handling the situation?

A3: Erdogan, angered by congressional reactions to Ankara’s S-400 purchase and the possibility of U.S. sanctions, threatened to close two important NATO installations in Turkey: Incirlik airbase and the Kurecik NATO radar base “if necessary.” Secretary of Defense Esper reacted to Erdogan’s statements from December by questioning Turkey’s commitment to the broader alliance.

The loss of the F-35 program marks a major blow to Turkish manufacturers, which produced 937 parts. Turkey had been one of eight countries involved in the joint production of the F-35 program and a partner since the program’s inception in 1999. Lockheed leadership has stated that Turkey has consistently been an affordable, reliable international partner in the program and that if it were not for the government-to-government political issues, the company would not have any issues with their production. Eight Turkish companies, including major defense contractors such as Turkish Aerospace Industries (TAI), Roketsan, and Tusas Engine Industries Turkey, produced parts for the fuselage, landing gear, and cockpit display of the plane. The United States has stated that this loss will total “around $9 billion over the life of the program” for Turkey, although Turkey’s Under Secretary for Defence Industries, who has been arguing that Turkey’s exclusion from the F-35 program is a breach of contract, claims the losses would only be temporary.

Turkish Foreign Minister Mevlut Cavusoglu has been saying that Turkey is exploring alternatives to the F-35. Since the S-400 purchase, Erdogan has been in talks with Russian President Vladimir Putin about Su-35 and Su-57 fighter aircraft and attended the August 2019 Moscow Air Show where he saw these aircraft firsthand. Furthermore, Ankara has also set ambitious goals of creating an indigenous, fifth-generation Turkish fighter with Erdogan claiming the aircraft will be flying by 2023. He has been citing the conflicts in Libya and Syria as the impetus for the development. TAI, which formerly produced parts of the F-35’s fuselage, presented a full-scale mockup of a Turkish fighter at the Paris Air Show in June 2019. While these efforts may help Erdogan appease his domestic audiences, who may be concerned about the fallout of participation in the F-35 program, they are no more than ambitious, albeit unrealistic, goals for Turkish defense industry.

Q4: How does the situation in Syria affect the dynamics concerning the F-35 and S-400?

A4: What Erdogan has characterized as Turkey’s new “strategic” relationship with Russia has been mired in disagreements on key foreign policy priorities as the two have sat on opposite sides in military conflicts in both Syria and Libya. It should have been no surprise to either side that they would clash again, even in light of the S-400 deal. Some scholars attributed Ankara’s push to acquire S-400s from Russia as an angered response to the United States for its support for the Kurdish People’s Protection Units in Syria—an issue Turkey took as a direct assault against its national security concerns. However, last month, more than 30 Turkish soldiers were killed in an air strike in Idlib by Russian-backed Syrian forces, which led to Turkey’s cry for help from its U.S. ally and a renewed plea for the deployment of Patriot missile systems. However, the irony of Turkey’s renewed plea for the United States to deploy Patriot support to protect its troops in Syria resides in the fact that Turkey accepted the S-400 from Russia partly with the hope that Russia could be a better negotiating partner in Syria.

Cavusoglu has stated that the situation in Syria would not affect the S-400 deal. That being said, tensions between Russia and Turkey have clearly risen, as evidenced by Turkey’s call for U.S. and allied support in Syria following the killing of Turkish troops. Secretary Esper and Turkish Defense Secretary Hulusi Akar had talks about what “work[ing] together” might look like in Syria, while Erdogan met with Putin in Moscow in early March and stood by his S-400 purchase.

Q5: What happens next?

A5: On the U.S. side, it can be safely assumed that Washington will not move forward on any future contracts with Ankara for U.S. military stealth aircraft so long as Turkey keeps its S-400 systems. Secretary Esper’s 90-day guidance to Congress will provide a critical framework regarding next steps for the F-35 aircraft initially set out for Turkey. It will also be important to see whether or not DoD’s timeline of the end of 2020 will be met in terms of phasing Turkey out completely from the F-35 supply chain and whether or not this “unwinding” will ultimately impact the F-35 cost or schedule. The situation has been costly for both the United States and Turkey, while Russia has clearly benefited. Not only did Russia sell the S-400 to an active NATO member, but it has continued to make decisions in Syria that are extremely costly to Turkey.

Assuming the United States and Turkey maintain their respective hardline positions, the lessons learned from the U.S. “unwinding” of Turkey from a major joint-development effort, or the “decoupling” of the F-35, could be an important case study for the future. This is especially true as the United States starts confronting the reality that its adversary nations, such as Russia or China, may pen more military and commercial deals with U.S. allies and partners. One might have thought the United States could compel Turkey not to accept the S-400 by threatening to “unwind” Turkey from the F-35 program, but it ultimately turned out to be not that easy. Both sides underestimated the costs, creating a painful situation for both countries.

Is threatening to “unwind” an effective strategy to deter allies from engaging in technology partnerships that the United States sees as risky? When do the risks of economic integration between competing powers make unwinding necessary to uphold treasured interoperability priorities with United States allies? Can unwinding be compartmentalized to preserve the larger bilateral relationship? In an era where interdependence is being weaponized in new ways, the United States would benefit from a considered framework on how address these issues.

Asya Akca is a program manager with the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Gregory Sanders is deputy director and fellow with the CSIS Defense-Industrial Initiatives Group.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Gregory Sanders
Deputy Director and Fellow, Defense-Industrial Initiatives Group

Asya Akca