The United States is selling more weapons than ever before despite global arms sales falling in 2003 to $25.6 billion from a peak of $41 billion in 2000.
Asia displaced the Middle East as the biggest customer for arms, the US Congressional Research Service found
The United States and Russia dominate the global arms market, with Washington maintaining its lead in weapons sales with deals valued at more than $14.5 billion, up from $13.6 billion in 2002.
Russia ranked second with deals worth $4.3 billion, according to the annual unclassified report on conventional arms sales. Germany ranked as third, signing deals worth $1.4 billion, it said.
The report said arms sales had declined globally due to economic factors and dampening demand for expensive new weapons systems - and that this decline had prompted even wealthy countries to focus on upgrades and modernisation rather than replacement of arms.
For years, the Middle East has been the largest arms market in the developing world, but in the period from 2000-2003 China led Asia into the top position with the region signing deals worth $33.8 billion or 50.8 percent of all arms deals, the report found.
During that three-year period China concluded arms agreements valued at $9.3 billion, followed by the United Arab Emirates with deals valued at $8.1 billion. In 2003, Egypt ranked first with deals valued at $1.8 billion, followed by China with $1.6 billion and Malaysia with $1.5 billion.