CANBERRA, Australia --- U.S. allies are embarking on a naval shopping spree as territorial standoffs intensify in the Pacific.
Contracts valued at about $70 billion are up for grabs from Australia to Canada, as governments update aging fleets to protect shipping lanes and their territorial waters.
While defense spending globally had fallen over the past decade, the Stockholm International Peace Research Institute expects spending this year to be the highest since the close of the Cold War. Nations in Asia and the Middle East are leading the charge.
That is a potential windfall for companies such as Lockheed Martin Corp. and Huntington Ingalls Industries Inc. in the U.S., Britain’s BAE Systems PLC and Europe’s biggest shipbuilder, Fincantieri SpA. The new contracts could secure thousands of jobs and guarantee a pipeline of work for at least a decade.
Western navies are rebuilding their Pacific fleets as China and Russia challenge their dominance in the region. China is asserting more dominance over the South China Sea, tensions on the Korean Peninsula are high, and Russia is showing renewed interest in Asia. Late last year, a Russian navy ship docked in Papua New Guinea for training and Russian bombers visited Indonesia.
The U.S. has urged its allies to spend more on defense. President Donald Trump has called for a U.S. naval fleet of 350 ships. The current fleet of 273 ships is the smallest since 1916. Last year collisions between U.S. guided-missile destroyers and merchant ships that left 17 sailors dead prompted criticism that the fleet is stretched too thin, resulting in cutbacks on training and certifications. (end of excerpt)
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