Political headwinds in foreign arms market.

• Author: Erwin, Sandra I.
• Position: Defense Watch

* The nation's top defense companies have huge stakes in foreign military sales. Some of the most auspicious markets for U.S. weapon systems have been the Middle East and Turkey, and although there is so far no clear evidence that this will change, there could be cause for concern.

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Industry watchers have begun to raise questions about the ramifications of political unrest in Turkey on big-ticket weapons deals. "I know there's been a lot of churn in Turkey recently, but it still remains a very valued NATO partner for us and it's an essential security partner in that region for the United States and for our allies," Lockheed Martin CEO Marillyn Hewson told industry analysts in July.

Turkey is one of the company's largest non-U.S. buyers of the F-35 fifth-generation fighter. "We have not seen any indication that it will impact the F-35 or any of our other programs," she said. Lockheed-owned Sikorsky Aircraft recently signed a deal with Turkey to manufacture an indigenous version of the Black Hawk helicopter.

Bloomberg Government estimated that since 2012, Turkey has sought $1.1 billion worth of U.S. military hardware through the foreign military sales program.

Although Lockheed's and other U.S. defense companies' business in Turkey is not in jeopardy, foreign policy experts see headwinds. One concern is the state of the Turkish armed forces--currently deeply divided and demoralized following a failed attempt to oust democratically elected President Erdogan. A distracted military and rising anti-Americanism are issues to watch, said Aaron Stein, senior fellow at the Atlantic Council's Rafik Hariri Center for the Middle East.

To be sure, there is almost no chance that Turkey will drop out of the F-35 program or scale back its plan to buy 100 aircraft, Stein said in an interview. But there are other reasons for U.S. companies to worry. One is the likely pushback from U.S. lawmakers who may increasingly frown on arms sales to a country that, despite being a NATO ally and a home of U.S. nuclear weapons, is showing increasing anti-Americanism.

Another hurdle for U.S. industry are Turkey's growing demands for technology sharing and intellectual property as conditions for weapons sales. Aside from the current political situation, "U.S. companies are always at a disadvantage because of our strict export control laws," says Stein. "Turkey wants to buy American but also wants American intellectual property." U.S. restrictions on...