Special to the JTA Israel-u.s. Competition for Mexican Jet Sale

Felix Galvan, Mexico’s Secretary of Defense, said that his government is “dealing with various countries,” among them Israel, “to improve the organic structure” of the Mexican armed forces.

The specific steps, according to Galvan, that will be taken in 1981 include “drastically” modernizing the Mexican army, the production of remote-controlled guided missiles and the purchase of either Israeli Kfir or American FI5-E fighter jets.

The modernization of the armed forces will refinanced by a budget of $1,085,000,000, a 38 percent increase over Mexico’s 1980 military budget. In real terms the increase in spending will amount to quite a bit less, as Mexico’s inflation rate this year has hovered at 28 percent, Galvan said.

In January, he will travel to Israel “with presidential authorization, to look at the new planes, the Kfir,” Galvan said. He indicated that the acquisition of Israeli light-armored cars would also be discussed. It is widely known that Mexico would like to buy a squadron of American FI5-E jets and that the U.S. government is disturbed at the prospects of a small arms race of increasingly sophisticated weaponry in Central America. Oil will further complicate the potentially lucrative Mexican jet sale.

After the fall of the Shah of Iran’s regime and the return of Sinai oil fields to Egypt, Mexico become Israel’s chief supplier of crude oil. Both Vice President Walter Mondale and Secretory of State Edmund Muskie have failed in their attempts to negotiate a preferential contract with the Mexicans for the purchase of their oil and propane gas,

The U.S. would like on assured and constant supply of oil from a non-OPEC, non-Arab country Israel, suspicious about the U.S. resolve to supply with oil, should that need arise, will be courting the Mexican military delegation when it visits Israel next month at least as avidly as its chief ally, the U.S., observers said. The competition, they noted, promises to be intense.