The Bush Administration is expected within a few months to launch a second push to reform the licensing process for controlled exports after a first attempt initiated in 2002 failed in Congress.
The two-month-old Coalition for Security and Competitiveness, a partnership of 18 industry lobbying groups focused on export control "modernisation", presented 19 recommendations focused on non-legislative changes to the National Security Council (NSC) in April.
The recommendations seek to hire more licensing agents at the US State Department to clear a backlog that reached 10,000 cases last year. The industry also wants the agents to publish a notice of intent to approve or deny an application, rather than force companies to react only after a final decision is issued.
The group received "very good feedback" from the NSC's staff and anticipates a formal response within a few months in the form of a new policy statement, a coalition official tells Flight International.
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A study into Chinese industrial involvement in the F-22A is being sought |
The industry's goals are markedly toned down from the previous attempt in 2002, which was dropped. The industry is being careful this time to keep Congress informed, despite the fact that none of the recommendations from the coalition require direct legislative action. The coalition is working with the newly formed Congressional Export Control Working Group.
The second round is a major priority for the growing coalition of advocacy groups representing industries from aerospace to high technology. Each group agrees the current licensing process needs to be streamlined and made more reliable for US industry to continue to compete in an age of increasingly globalised supply chains.
"I don't suggest that we don't need to control" exports of military-related technologies, one industry source says. "But over time we will suffer a competitive disadvantage. "
The importance of the rule is highlighted by potential arms deals with India. The Bush Administration issued a new policy in 2005 allowing US companies to compete for weapons contracts in that previously off-limits country. With contract tenders pending for fighters, surveillance aircraft and aerial transports, industry is concerned export restrictions may hurt US competitiveness.
However, the export reform push comes amid the rise to power of an opposition party in Congress and a growing backlash against globalisation for equipment purchased by the US Department of Defense. There is special concern being raised about the potential rise of China as both a strategic competitor and supplier of high technology to the DoD.
For example, the US-China Economic and Security Review Commission, which was chartered by Congress, is seeking to study Chinese industrial involvement in three major DoD acquisition programmes: the F-22A Raptor stealth fighter, the DDG-1000 stealth destroyer and the UH-60M Black Hawk cargo helicopter.
"If in fact [the study] finds that there's a substantial presence of components in critical systems and, in particular, if they are things that could not be easily replicated from other sourceI would not be surprised to see a recommendation to Congress that this be examined and some steps taken to reduce the vulnerability," T Scott Bunton, chairman of the commission, says.
Meanwhile, the USA has moved to tighten controls on exports of commercial technology products, amid concerns that the Chinese military may evade an arms embargo by using commercial items for military purposes. A proposed rule would restrict exports of 47 previously uncontrolled categories of goods to China, with a review process still ongoing within the US export bureaucracy.
A few weeks after the coalition first unveiled its recommendations in March, the Department of Justice announced it was taking criminal actions against two US defence contractors.
On 27 March, ITT Corporation pleaded guilty to illegally outsourcing components of a night-vision goggle to suppliers in China, Singapore and the UK without an export licence. Two days later, the DoJ indicted Alabama-based Axion Corporation for allegedly seeking to export data on a component of the UH-60 Black Hawk to a European supplier.
Coalition officials shrug off the potential impact on the second round of export reform proposals. Even if all the coalition's proposals are adopted by the NSC, none would have made it legal for a defence contractor to exchange data or technology with a foreign partner without an export license.
Yet, at the same time, the backlash against the DoD's increasingly globalised portfolio of suppliers and lower-tier subcontractors strikes at industry's motivation.
"Supply chains are reaching into the industries of our allies," the source says. "The presumption you have to overcome is the sense that we [the US industry] make all the best products. Some good things are manufactured overseas that we may be able to share. That's where we need to talk."
Source: Flight International
