Business: Sold American

At Paris' elegant Hotel Ritz, the champagne flowed until the small hours. Beaming U.S. Air Force generals mingled with aircraft executives and diplomats. The party's host, General Dynamics Corp. of St. Louis, had every reason to splurge. After more than a year of knee-and-gouge competition, Belgium had decided to buy the company's F-16 fighter-interceptor instead of the French Dassault Mirage F1-M53 as a replacement for aging U.S. F-104 Starfighters. That clinched what everyone was calling "the arms deal of the century."

Belgium had been the holdout in a NATO consortium that also includes...

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