US arms makers may enjoy the home field advantage in the world's biggest defence market, but they are increasingly concerned that their competitive position in the increasingly important international market is being hampered by what they regard as an archaic and overly restrictive US export control regime. However, many of them are hoping for change with November's election and a new administration in Washington next year.
A panel of executives from leading US manufacturers met earlier this month at the ComDef conference in Washington. They stressed that while changes in recent years have significantly improved the processing of export licence applications, broader changes are needed for US companies to be able to beat foreign rivals in competitions critical to their long-term survival.
FOREIGN THREATS
US contractors insist they need to increase their export business to offset cuts in US defence spending but they are finding it difficult to compete with overseas competitors. Raytheon International president Torkel Patterson said: "I'm not worried about Lockheed Martin or Boeing. We can whip them on a level playing field. I'm really worried about Thales and EADS internationally. I'm worried about the Israeli companies.
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© Lockheed MartinThe US government is reluctant to share F-35 technology |
"That's today. Tomorrow I'm worried about the Chinese and Russian companies."
Patterson added that for US defence contractors to be competitive abroad - and, ultimately, at home - overseas export restrictions "left over from the Cold War era" need to be dropped.
Boeing Integrated Defence Systems senior vice-president international strategy Jeff Kohler agreed, saying the government has been "nibbling away" at the Cold War era framework rather than introducing totally new regulations: "We've made tremendous improvements but we've done it to the old framework. What we really need is a whole new framework."
But speaking at another panel at the ComDef conference, US State and Defense department officials said wholesale changes to the framework could be difficult to pursue. Frank Ruggiero, the deputy assistant secretary for defence for trade and regional security at the Bureau of Political-Military Affairs, said government officials are "spending a lot of their day dealing with the crisis of the day and clearing their inbox. Spending time on the bigger picture is difficult to do."
But Ruggiero pointed out the State Department has improved the processing time for munitions licences by 60% in recent years from an average of 38 days to only 15 and promised "there will be more reforms". Ruggiero also pointed out that about $150 million in foreign defence deals will be approved this year: "I think that shows our willingness to export in the defence sector."
Beth McCormick, the deputy undersecretary of defence for technology security policy and national disclosure policy and director of the Defence Technology Security Administration, said the Department of Defense had approved 1,000 munitions licences over the past few months and is now turning applications around in an average of 10 days. "It's not like we won't export. We need to do it in a responsible manner," she said. "We want to share as much technology as possible, but we have to make sure it stays protective."
Patterson applauded the efforts at the Defense and State departments: "We've all seen significant improvements". But, he added, so far a lot of time has been spent looking at various pieces of export controls and "it's time to take a look at the entirety of it".
But US manufacturers are not alone in pressing for export control reforms. Brig Gen Mirco Zuliani, defence attaché at the Italian embassy in Washington, told the ComDef conference it is "hard to believe" there was still no framework at NATO level providing blanket permission to exchange materials and weapon systems. Zuliani said without such an agreement NATO coalition participants "are unable to provide what fighters need on the ground".
His Dutch counterpart, Gertie Arts, added that coalition governments need to abandon the existing export control framework and be more forward-thinking. "We need to start thinking of the world of tomorrow," she said. "We need to know where we are heading and how do we get there."
Source: Flight International
