UAE Withdraws Lockheed’s F-35 Deal With The U.S.

The United Arab Emirates (UAE)’s recent cancellation of its plan to buy 50 Lockheed F-35 fighter jets worth $23 billion from the United States showed that the close trading partnership between the UAE and China could be playing a role.

The cancellation means that the UAE has chosen Huawei’s 5G technology over the F-35, which is used by the US as a “favor” to form military alliances with other countries.

At the U.S. request, the UAE previously agreed to halt the construction of a logistic port that is being built by China. But this time, strong U.S. pressure has failed to make the UAE drop its Huawei telecommunication projects but pushed the UAE to buy 80 Rafale fighter jets from France.

The Biden administration is now facing a dilemma about whether it should give up revenue of $23 billion or allow the UAE to use Huawei 5G. The US will be hurt, either way, making China a final winner in the incident. 

On December 14, officials of the UAE Air Force wrote to the Pentagon to withdraw the Letter of Acceptance for the purchase of 50 Lockheed F-35 fighter jets and freeze the negotiations indefinitely. 

This means the UAE’s F-35 purchase deal has entered a critical stage. It’s not dead yet, but it’s almost there. Can the UAE F-35 arms purchase deal be saved, and how did things get to this point?

The UAE is a small, rich country on the south coast of the Persian Gulf. It is a country rich in crude oil, composed of seven emirates, including Abu Dhabi and Dubai. Of its population of 10 million people, 78% are foreigners, mainly Indians. Its GDP in 2020 was about US$410 billion, about the same as Austria and Ireland. Its per capita GDP is more than $41,500, similar to New Zealand and the United Kingdom, or double that of Saudi Arabia’s and about 20 times India’s and 10 times Indonesia’s.

The UAE is a small country with a powerful air force, made up of 78 F-16 Block 60s, the first generation of fighter jets in the world that had active electronic scanning radar from the time of design, apart from the F-22. 

There are also 59 Mirage-2000 fighter jets in the UAE. To replace these obsolete Mirage-2000s, the UAE signed a contract with France’s Dassault on December 3 for 80 Rafale fighter jets. The same agreement also included 12 H225M helicopters, and the deal’s total value was $19 billion.

The UAE has been trying to buy US-made F-35 fighter jets for some time. On the last day of US President Donald Trump’s presidency, he approved an agreement for the UAE to order 50 F-35 jets and 18 MQ-9B armed drones, valued at $23 billion in total. 

This was not a final contract as the Biden government had the right to review it and decide whether to continue or suspend it. Usually, an agreement approved by a president would not be terminated by the next president unless there was a special reason.

The deal was Trump’s “reward” for the normalization of ties between the UAE and Israel in August 2020. Israeli Prime Minister Naftali Bennett paid a visit to the UAE on December 13. It was the first visit by an Israeli Prime Minister to a country in the Persian Gulf. 

Israel hoped to advance relations with the UAE and isolate Iran on the other side of the Gulf. The UAE was interested in cooperating with Israeli high-tech industries. The UAE has long been preparing for diversifying from the crude-oil economy. 

Although Israel sees the UAE as a bridgehead into the Gulf, it strongly opposes the UAE obtaining the F-35s. Israel doesn’t want to see Arab countries having advanced equipment the same as it has. 

To appease Israel, the US promised to prioritize upgrades to Israel’s F-35 jets to ensure Israel continues to enjoy an advantage. After US-Saudi Arabia relations became complicated, the UAE became a key ally of the US in the Gulf and the sale of the F-35s became an important gesture by the US.

The F-35 is the world’s only exportable stealth fighter jet and will be of key use for the US in the coming decades. Any F-35 deal is a sign that the US is a close ally of the buyer. Exports of the F-35 are seen as a “favor,” but an embargo on the sale of the F-35 is seen as a “punishment.” 

Israel was the first country to obtain the F-35. Turkey ignored pressure from the US and insisted on importing Russian S400 anti-aircraft missiles and their F-35 deal was shelved.

The software and networking of the F-35 also have substantial political significance. All F-35 jets in the sky and on the ground are members of a huge automated logistics support system. The serial number, offline time, use time, upgrade and maintenance status of all parts of each aircraft are in Lockheed’s database. 

Lockheed can arrange the required spare parts in the supply chain when the user is unaware, greatly shortening the maintenance cycle for spare parts.

Lockheed not only provides remote technical support but also remotely monitors the use of any aircraft, including its mechanical status, route, mounting and manoeuvring. The same system also manages the maintenance and flight crew, not only their qualifications and regular assessments but also their promotions. 

Personnel who have not had their qualifications approved by Lockheed are not allowed to connect to the network or log in, so they cannot do overhauls and maintenance. Lockheed can remotely lock any F-35 in the world.

This is a double-edged sword for any user. On the one hand, the maintenance efficiency and quality, as well as the fleet dispatch rate, have been greatly improved. On the other hand, all users face a national security risk. 

In theory, Lockheed can monitor the US Air Force. In practice, Lockheed and the US Air Force work closely together. The US maintains full-time monitoring of any country that uses F-35s. However, other countries cannot look at the operations of the US Air Force.

US arms sales also have terms of use: they cannot be used in attacks against American allies or combat operations that violate human rights and justice. The UAE, and Saudi Arabia, have used US-made equipment to intervene in the civil war between the Yemeni government and the Houthi forces, causing humanitarian problems. 

This has resulted in public opinion pressure in the US and Europe. With the F-35s, it is impossible to hide anything. From the UAE’s national security perspective, U.S. restrictions are unacceptable.

The cost-effectiveness of the F-35 is an interesting question for the UAE. In a sense, the UAE is a country lacking enemies. Most people in the UAE are Sunni Muslims. The UAE has a good relationship with Saudi Arabia. 

The UAE has been trying to connect with countries in the Persian Gulf and maintains a good relationship with Iran. With Iran’s fighter jets in disrepair, the UAE’s existing jets could crush them. The UAE does not need F-35s.

The UAE is also not involved in the Arab-Israeli conflict. Neighboring countries such as Iraq, Kuwait, Bahrain and Oman are not hostile to the UAE. Qatar is a bit ambiguous, but not hostile. 

The Houthi forces in Yemen are hostile, but the UAE has no need to use F-35 jets, and the US may impose restrictions on their use. The Rafales and F-16 Block 60s ensure the UAE maintains its military advantage in the Persian Gulf.

The F-35s also have a software hierarchy problem and users may not be able to access all the functions of the plane. For example, even among NATO allies, nuclear capabilities can only be unlocked by a few countries such as Germany, if it buys the F-35. 

In terms of other weapon functions, country A can mount and launch a weapon, but country B may not be able to do the same. Everything depends on the technical capabilities stipulated in the agreement between Country B and the US. 

In fact, if the software is not unlocked, even high G manoeuvres may be automatically restricted. In a sense, the high degree of software makes the F-35 the dream realm of US arms sales. The US can control all users’ use in every detail to ensure it is in its interests. 

Limitations on the UAE F-35’s weapons and flying capabilities are not known, but many questions remain unanswered.

After confirming the order for 80 Dassault Rafales, whether the UAE military needs the F-35s is another question. On one hand, having F-35s is a sign of regional strength, prestige and close ties with the US. On the other hand, it is not necessary for the UAE’s military. In this case, factors other than equipment are important.

The UAE mentioned in the official letter: technical requirements, sovereign operation restrictions and cost-benefit analysis have led to a reconsideration of the F-35 deal. While these are all correct, the main problem is China. 

Relationships between the UAE and China are good. China is the UAE’s largest trading partner. China has never interfered in Gulf affairs and has kept a low profile on the issue of the Houthi armed forces. China says these ongoing ethnic and religious issues cannot be resolved by outsiders. 

The UAE also became a key area for China’s overseas vaccine trials. The UAE was one of the first countries to roll out China’s Sinopharm vaccine on a large scale and produces the vaccine, with an estimated annual output of 200 million doses.

The UAE hopes to transform into a technology-based country. The government has four technology-related ministers: the Minister of State for Artificial Intelligence (the first in the world), the Minister of Industry and Advanced Technology, the Minister of State for Advanced Technology and the Minister of Food and Water Safety. 

In March 2021, the UAE launched the “Operation 300bn” plan for the next 10 years, aimed at transforming the country into a technology-based sustainable economy. China’s mid-and-high-level technologies are well connected with those in the UAE and are what the UAE wants. 

Chinese agronomist Yuan Longping once conducted a trial planting of desert sea rice in Dubai. Huawei participated in the construction of UAE railway communications in 2013 and signed a 5G cooperation agreement in 2019. In May 2021, Huawei and the UAE signed a memorandum to expand and deepen cooperation.

The UAE has also been cooperating with the Chinese Academy of Sciences and Tsinghua University in the fields of biosecurity, food security, life sciences and pharmaceuticals, space, renewable energy and advanced manufacturing.

The US wants to stop cooperation between any country and China. Huawei 5G is a sore point with the US. While the F-35 deal makes it a “US ally,” if the UAE allows Huawei to develop a 5G network, the US will not be happy. 

Except for sporadic components, the US has no 5G technology. Huawei’s 5G technology is leading and its cost-effectiveness is higher than that of its European and South Korean counterparts. If the market competition was allowed, Huawei has the potential to be better than Nokia, Ericsson and Samsung. 

The US uses security risks as an excuse to force its allies to abandon Huawei and prevent Huawei from having a market outside China. Among the Five Eyes countries, three bowed to US wishes, while Australia volunteered. Canada does not have explicit rules, but major telecom companies have abandoned Huawei and excluded it from Canada.

European countries are under pressure from the US and many European countries have taken the same approach as Canada. They have no explicit rules, but secretly encourage major telecom companies to choose Nokia, Ericsson and Samsung and exclude Huawei. 

But the world is not limited to Europe and America. 5G will surpass 4G and become the backbone of wireless IoT. Huawei will not only adopt a strategy of “surround the cities from rural areas” outside Europe and the US, but also build an ICT technology ecosystem out of the control of the US. 

If F-35 deals are a sign of closeness to the US, Huawei’s 5G is to some extent a sign of closeness to China. China never grants Huawei 5G deals as a “favor” to other countries. It sees it as an opportunity for common development and mutual benefit. 

With the US politicizing Huawei’s 5G deals, China values the responses of other countries towards Huawei’s 5G.

Countries that want Huawei’s 5G have to resist pressure from the US. The US believes it has “favored” the UAE. But the UAE abandoned the F-35 deal to stick with Huawei’s 5G. This is unprecedented. 

Even Turkey’s President Recep Tayyip Erdogan was embargoed by the US on the F-35, but he did not call off this F35 deal. Erdogan tried to save it although he did not plead with the US.

Due to its prosperous economy, open-minded politics and stable and neutral policies, the UAE has an increasing influence in the Greater Middle East. It is also an important sponsor for many underdeveloped countries and regions in the world. 

The UAE’s adoption of Huawei 5G means other countries may follow suit. Huawei’s 5G certainly has a strong foothold in China, but this is not enough. It needs to expand. It wants to not only be part of telecommunication markets, but also to help the digitalization and modernization of countries. In this process, Huawei and China’s science and technology ecology will expand globally.

The development of technological ecology involves factors such as technological advancement and development space, but the biggest driving force is the expansion of the user circle. This is like a process of rising tides. 

As Huawei’s technology ecosystem moves towards Asia, Africa and Latin America, the development of applications suitable for local needs in the regions will accelerate. This trend will create effective competition for the ecosystem of Android and Apple. 

Huawei and China’s science and technology ecology do not seek to squeeze anyone out. They only need to have room for survival and development.

But this is “not allowed” by the US. China has already been the world’s only superpower in the manufacturing industry. If China also breaks the US’ monopoly on the top in the technological food chain, there will be nothing left for the US to take a substantial lead-in. 

The US has exhausted its dirty tricks to hinder the development of Huawei and China’s science and technology. What it has done is to contain China and force its allies to cut off its technological and economic ties with China. These ties may not be completely cut off, but the US has cut off those in strategic places.

The US pressured the UAE to ban not only Huawei but also China’s port construction project. China has major economic interests in the Persian Gulf. 

The UAE port that is being built by China is aimed at boosting logistics. It has strategic significance but is not a military installation. It is not a monopoly by China, but a project that both China and the UAE can benefit from. 

The completion of the port will promote closer economic and political ties between China and the UAE. But it has become a “security concern” for the US. Under US pressure, the UAE stopped construction of the port facilities, but it stressed repeatedly: The UAE does not consider the port to be a military facility and the port does not pose any security risks. This is purely a decision made in response to the strong concerns of US allies.

The US’ accusation that Huawei’s 5G will affect the secrecy of the F-35 is groundless. Unless a pilot shoots selfie videos with a Huawei 5G mobile phone on the F-35, Huawei 5G will not be able to touch any F-35. 

How can it steal any secrets? It is noteworthy that there is no Huawei 5G clause in the UAE’s F-35 agreement approved by Trump. Even when then US Secretary of State Mike Pompeo was flying around the world saying “Huawei is stealing secrets” and calling for “clean networks,” Trump did not link the F-35 deal with Huawei 5G. 

Now Joe Biden has pulled these two unrelated issues together, with only one purpose: to cut off the economic, technological and political ties between the UAE and China.

But the UAE has refused to comply. 

The US is still dominant, but the momentum of China’s rise cannot be concealed by the European and American media through demonization. The US military is still number one in the world, but the UAE does not need a US military escort for the foreseeable future. 

The future of the UAE lies in peace and sustainable development, and China is the best provider. The US dollar economy still dominates the world, but the US debt is high while an inflation crisis is about to unfold in the US. The Fed has emptied its ammunition in the pandemic, bringing uncertainties to the US economic outlook for the coming period of time.

In contrast, China is the UAE’s largest trading partner and has economically outperformed other countries in the pandemic. The People’s Bank of China did not exhaust its tools during the epidemic. Instead, it is operating in a reverse cycle. 

The Chinese economy is not without its problems, but compared with the US, Europe and Japan, it is definitely not the worst. On a macro level, China’s rise is unstoppable, and China’s influence in the world can only grow. 

In the past, the UAE had allies in China and the US. But now the US wants to force the UAE to dump China, putting the UAE in a difficult position.

The UAE does not want to go with one or the other, but reserves its right to be friends with both. After the UAE stopped the F-35 arms deal, it said the US was still its preferred supplier of military equipment. This was to appease the US.

US Department of Defense spokesman John Kirby said, “The US is willing to work with the UAE to solve problems. The US-UAE partnership is more strategic and deeper than any arms sales. However, the US will continue to decide the end user conditions in accordance with legal and policy requirements. These conditions are not specific to the UAE, but to all countries, and they cannot be changed.” 

Kirby seemed to be warning the UAE that the US’ conditions cannot be changed.

But US State Department Spokesperson Ned Price said: “We need to confirm that both parties have clear expectations and consensus on the responsibilities of pre-sales, in-sales and after-sales.” 

Price’s stance is a bit loose, and perhaps the conditions in the US may not be so firm.

The US is trying to downplay its setbacks in the UAE. It may be guessing: Is the UAE bargaining, or is it serious about canceling the F-35 deal? If it is canceled, it will not only be a huge loss of income for the US, but also a loss of reputation. 

The UAE is bargaining, but such bargaining is not like that of India, which only wants to cut prices. Money is not the UAE’s concern. The UAE also did not say it faced any financial constraints after it ordered 80 Rafale jets. The UAE can afford it. It is urging the US to remove the terms that forbid the UAE from using Huawei’s 5G and form economic, political and technological ties with China.

A week before the UAE’s withdrawal, Anwar Gargash, the top diplomatic adviser to the UAE government, said in an interview at the Arabian Gulf Institute in Washington: “What we worry about is how to distinguish between an extreme competition and a Cold War (between China and the US). We are a small country. We will be negatively affected (by an extreme competition) while we are unable to exert any positive influence on (China-US) competition.”

This is not an exclusive idea of the UAE. Many countries – especially in Southeast Asia and some in Europe – are unwilling to take sides between China and the US. They are disgusted with the US, which has forced them to take sides. 

The Trump-Pompeo administration publicly forced countries to take sides, but faced strong opposition. The Biden-Blinken administration claimed the US would no longer require countries to take sides, but in fact, forced them to do so by every means.

The UAE’s withdrawal from the F-35 purchase deal may be a strong warning to the US. But the US’ policy options are limited. The US has to force countries to take sides, but China successfully forms ties with each of them. 

The US wants to contain China, but actually contains itself. It is embarrassing. The US has tried to say that China’s dominance is hegemony, and that the US’ hegemony is doctrine. It thinks it can blind everyone with its discourse power. But it is the one who is blind.

During the interview at the Arabian Gulf Institute, Gargash confirmed that the UAE had halted the construction of China’s port facilities. But Gargash also made it clear: “The UAE believes that these facilities cannot be used for military purposes. As the US has expressed concern, we can only consider and stop construction. But our view remains the same: These facilities are not for military use.” 

This is a signal to the US: face-giving is not a must. Even if the US insists on forcing the UAE to take sides, the UAE will still maintain its friendship with China.

For China, the most important thing is that the UAE’s decision is not the result of China’s diplomatic mediation. China has nothing to do with this whole process. It won while “lying flat.” This is actually a more dangerous signal to the US: the US’ anti-China high pressure is ineffective, and China has won. Is this the new world trend?

A high-level UAE military delegation arrived in Washington on December 15. The F-35 issue was originally not the topic of the talks, but it had surely become a key topic. Whether the US and the UAE can resolve their differences remains to be seen. 

If the UAE expects to negotiate with the US to withdraw the terms related to Huawei’s 5G, it will not have withdrawn the F-35 deal. Since it has done so, it is ready to quit negotiations. Historically, the UAE’s decision-making has never been impulsive. 

The US must choose between giving up revenue of $23 billion or allowing the UAE to use Huawei 5G. Losing such a huge sum of money is not only a direct economic loss but also a chance for Trump and the Republican Party to attack: The incompetent Biden lost a $23 billion deal, should people count on him? 

The loss of a “reliable” ally like the UAE is also a great failure for the US. However, if the US compromises on Huawei’s 5G issue, it will suffer a greater loss of credibility, while its previous pressure on allies will lose all its moral and technological grounds.

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