'Two-way street' still a long way from reality despite NATO's drive to open up US defence market to foreign suppliers
Five years after NATO launched its drive to open up the transatlantic defence market, European industry's long sought-after "two-way street" is even further from becoming a reality, according to defence experts gathered in Brussels last week.
Launched at the Alliance's 50th anniversary summit in 1999, NATO's Defence Capabilities Initiative (DCI) included provisions aimed at ensuring European manufacturers have the same access to the US defence market as US suppliers do Europe's, especially when seeking to meet joint NATO requirements. Yet, in the 2003 financial year, only 1.5% of contracts awarded by the US Department of Defense went to foreign companies, around $1 billion worth of deals.
Bill Giles, director general Europe for BAE Systems, speaking at a New Defence Agenda discussion on the transatlantic defence marketplace in Brussels, said the "buy American" scheme, technology transfer barriers and ownership restrictions are the principal reasons for the imbalance.
"If you look at the [Lockheed Martin F-35] Joint Strike Fighter," he said, "it has been selected by many national governments, and funded in part by national defence industries, but even the governments can't modify the kit without access to US technology licences."
Alexandra Ashbourne, defence analyst with Ashbourne Consulting said there has been "very little progress" on the technology transfer issue. "How can you co-operate with US companies, when you need a licence even to arrange meetings to discuss an agenda?" she asked. Jean-Pierre Maulny, deputy director of French think-tank IRIS, said transatlantic mergers are crucial as programmes get ever-more complex and interoperability becomes key.
However, Pierre Chao, director of defence industrial initiatives at US think-tank Center for Strategic and International Studies (CSIS) said the inequality in defence trade levels is a "staid debate" and no longer relevant. "As you get further away from the political capitals and towards the people on the ground, you'll find lots of foreign equipment, especially when it's the best, much to the horror of the 'buy American' crowd," he adds.
He said there are niche areas where European technology is ahead the USA, and said European companies should exploit these niches rather that aiming for the "impossible goal" of being prime contractors. "When you look at homeland security, or domestic security, you see an area where there is lots of clever European technology because the Europeans have been fighting terrorism for years, so the US government will scour Europe to find the equipment it needs," he said.
JUSTIN WASTNAGE / BRUSSELS
Source: Flight International
