The United Kingdom is not only Spain’s biggest investment destination and the country that provides it with the largest number of tourists; it is also the main customer of the Spanish defense industry. In 2016, Spain sold Britain arms to the tune of €1.3 billion, equivalent to 33.2% of total military sales, according to a report by the Spanish Secretary of State for Trade.
Defense sales to the United Kingdom are part of European Union (EU) arms programs that will be affected by Brexit. Last year, Spain increased its weapons sales by 8.9% on 2015, to just over €4 billion, contributing 1.6% of the €254.5 billion total of Spanish exports.
The report presented to Congress on defense material and dual-use goods – products and technologies normally used for civilian purposes but that may have military applications – notes that 62.1% of Spanish arms sales in 2016 went to EU members, chief among them the United Kingdom. For the last decade, Britain has been among the top four customers of Spain’s defense industry.
Spain’s defense industry could lose valuable business when the UK leaves the EU
In 2016, the United Kingdom bought four Airbus A400M transport planes and two Airbus Multi Role Transport Tanker (MRTT) air-to-air refueling aircraft, along with spare parts for the Eurofighter 2000, all of them part of EU arms programs. Britain is expected to remain part of these programs after it leaves the EU, but will find it harder to join future projects, which could deprive the Spanish defense industry of its main market.
Two-thirds of Spanish arms sales went to EU members or NATO partners, with a third spread out among 52 countries, chief among them Egypt, Oman, Malaysia and Saudi Arabia. Sales linked to multinational programs amounted to €1.9 billion, or 48% of the total, while the aeronautical sector made up 78.5%.
However, the biggest customers of Spain’s ammunition manufacturing industry – most closely linked to conflicts – are in the Middle East. Saudi Arabia was the biggest purchaser last year, spending €75.9 million, followed by Iraq, with €38 million, and Morocco with €29.9 million. These three countries make up half of Spanish exports of ammunition, bombs, projectiles, missiles and explosives.
English version by Nick Lyne.