That's the way I remember it - the F-5G re-engine was intended for countries that wanted F-16s, but couldn't meet the export requirements. Then Reagan softened the export rules and nobody wanted the F-5G/F-20 when they could buy F-16s, which effecively killed the program.

I recall that similarly.
Add in a crash or two during development at particularly bad times (wasn't one at an airshow?) and the buyers looked elsewhere.

The first was in 1985 during a demonstration in South Korea, the second less than a year later during a Goose Bay layover doing practice for the upcoming Paris Airshow. Both attributed to G-LOC. The timing surely did not help, The US had finally given the program some lukewarm support for export.

Rathet macabre, the Goose bay museum had the F-20 pilots helmet on display..

I remember discussions / articles in Aviation Week back in the mid 80's about how the F-5G / F-20 moving forward helped SecDef Weinberger browbeat General Dynamics into lowering the price of an F-16 by about 4 million a copy. (Details hazy, it's been a long time).

L_50 Probably either the Navy DACT buy or the ANG 'Defense of CONUS' buy, the National Guard Association lobbied congress to buy F-20 in 1985 connected to early ANG adoption of radar guided AAMs - another proposal was an F-4 upgrade while waiting on F-16 + AMRAAM.

October 1984 in Korea and May '85 at Goose. Darrell Cornell provided a scintillating display at Farnborough in September '84 as I recall it (possibly outshone by Bill Loverseed's inadvertent demonstration of the DHC-5's ruggedness) and he was gone a month later.