ANNEX
1. The Government welcomes the interest shown
by the Committee in this Agreement and, in particular, its conclusion
that "the intended effects of the Agreement should bring
overdue improvements in the European defence markets". The
Committee, in its report, has drawn particular attention to a
number of key issues, which are highlighted below. The Government's
views on these issues follow the highlighted text.
2. Paragraph 7. "¼For
the moment, the Framework Agreement is mainly confined to commitments
to speedy consultations to resolve any difficulties over supplies¼"
The Government shares the Committee's view that the
main commitment in Part 2 of the Agreement is to consult on a
wide range of situations that may threaten Security of Supply.
Each Party will need confidence that they will have secure lines
of supply for defence material produced in the other five countries.
The Committee noted that this Agreement would reassure nations
by committing the Parties to not unnecessarily hinder the supply
of defence material to each other. Moreover, the Parties are also
committed to work together on providing supplies from national
stocks; priority and allocation of supplies; and reconstitution
of supply facilities.
3. Paragraph 10. "The main value
of the Framework Agreement in seeking to ensure security of supply
will be by providing a means to apply political pressure to those
countries not following the spirit of the Agreement."
The Government agrees with the Committee.
4. Paragraph 21. "Given the decades
it has taken to put collaborative procurement programmes
on to a sounder footing under OCCAR, there cannot but be
grounds for a degree of scepticism about the hopes for open, competitive
and well-managed collaborative research programmes being advanced
by the rather imprecise provisions of the Framework Agreement."
The Government acknowledges that the Framework Agreement
limits itself to general statements about the conduct of co-operative
Research and Technology (R&T). However, it does contain the
key principles identified by the six nations for the effective
conduct of collaborative R&T. It has always been the intention
that these principles should be translated into a more detailed
system for the conduct of actual R&T programmes by the development
of a suitable Memorandum of Understanding (MoU) amongst the six
nations. Other European partners who were willing and able to
embrace the same working practices could possibly join this MoU.
The EUROPA MoU and its subsidiary documents are intended to be
such an instrument. It should also be noted that the six nations
already have considerable experience of successful R&T co-operation
amongst themselves, through other existing bilateral and multilateral
fora.
5. Paragraph 22. "We nevertheless
welcome the Framework Agreement's stipulation that competition
should be the preferred method for managing collaborative research."
The Government welcomes the Committee's support.
6. Paragraph 23. "The UK will
continue to have to balance carefully the relative industrial
and technological benefits it derives from collaborating with
Europe and with the US."
The Government agrees with the Committee. The UK
enjoys strong collaborative research relationships with both the
US and our European partners, and wishes to sustain both.
7. Paragraph 23. "Access to US
technology developed and matured in US research programmes must
remain a vital part of the UK's research strategy."
The Government agrees with the Committee's view.
8. Paragraph 27. "It is clear,
however, that the anxieties within industry about transfer and
protection of intellectual property will have to be allayed as
work on the Framework Agreement is taken forward. As far as the
use of technical information is concerned, that requirement will
best be served by industry's close involvement in that process."
The Government recognises the importance of allaying
industry's anxieties about the transfer and protection of intellectual
property. It intends to do this by ensuring that the relevant
Integrated Project Teams will manage the transfer of the information
and ensure that disclosure does not breach the rights of third
parties. The procedures on the Protection of Commercially Sensitive
Information in Part 8 of the Treaty will apply to any such transfer.
Discussions are currently taking place to establish
harmonised contractual and legal arrangements for the necessary
protection of information. Such discussions will be based upon
Article 44 and Part 8 of the Framework Agreement. Industry will
be fully consulted during the negotiations. The objective will
be to develop a common strategy within the six nations to ensure
the protection of industry's commercial information but without
unnecessary bureaucracy.
The working group dealing with the treatment of technical
information is currently engaged in formulating legal and contractual
measures which will secure the protection of industry's commercial
information. Such measures will also include a commitment to enter
into direct confidentiality arrangements with industry where appropriate.
Industry's proposals have been sought in this area and full discussions
with industry on the protective measures to be implemented are
intended to take place in the near future.
9. Paragraph 31. "We share the
Defence Industries Council's concern about the risk of duplication
and overlap if the Framework Agreement results in the creation
of any new bodies in this already overcrowded world of European
defence requirements harmonisation. OCCAR is a promising candidate
to take on the harmonisation role, but if it were used care would
be needed to insulate its existing procurement programmes
from the inevitably complex and difficult negotiations that there
would be to secure common requirements for new capabilities. It
would be regrettable if the momentum now achieved for OCCAR in
its existing role were lost because it was required to assume
additional new roles."
The OCCAR Convention envisages a role for OCCAR to
identify harmonised solutions to future operational requirements.
However, the Government agrees that, at this early stage of its
development, OCCAR should focus on providing effective management
for the equipment procurement programmes which have already been
assigned to it, and prepare itself to manage the new programmes
which have been earmarked for future OCCAR management. It is important
that the momentum on this primary activity is not disrupted by
other tasks placed upon OCCAR.
10. Paragraph 33. "We too are
sceptical about the Framework Agreement giving the necessary impetus
for harmonising military requirements, when other initiatives
in this area have not been particularly successful. To minimise
the risk that seeking to harmonise military requirements could
prove over-ambitious, and jeopardise the implementation of the
other aspects of the Framework Agreement, caution is needed in
developing this aspect of the Agreement alongside work on its
other themes. The UK must ensure that equipment requirements are
not contrived to support particular national industries rather
than to meet genuine military requirements."
The Government notes the Committee's concern, and
fully agrees that acquisition programmes should focus on meeting
the military need.
11. Paragraph 35. "The US authorities
have not raised objections to the UK's involvement in the Framework
Agreement and it seems to us that their continued acceptance will
hinge on the UK's continued protection of US technology. From
the UK's perspective, we see much merit in the MoD's approach
of establishing parallel arrangements along the lines of the Framework
Agreement both with our European partners and with the US. In
the end, it may be our European partners who will have more difficulty
accommodating the UK's bi-polar approach to defence collaboration."
The Government fully acknowledges the initial importance
of the continued protection of sensitive US technology. The Government
agrees with the Committee on the merits of establishing parallel
arrangements with the US and our European partners. We are aware
that most of our European partners in the Framework Agreement
have also discussed with the US Government ways to improve transatlantic
co-operation.
12. Paragraph 39. "Although now
on a treaty basis, therefore, the effectiveness of the Framework
Agreement and its future development depend on the political (rather
than legal) commitment of its signatories."
The Government agrees that strong and sustained political
commitment will be essential to the success of the Framework Agreement.
13. Paragraph 40. "As the MoD
takes the work of the Framework Agreement forward, it must ensure
UK industry is not unduly circumscribed."
The Government agrees with the Committee's view.
As before, industry will continue to be consulted on a regular
basis on Framework Agreement developments.
14. Paragraph 42. "Care will be
needed to develop the provisions of the Framework Agreement at
a pace which maintains the commitment of all the parties, and
the US, to the changes being introduced. The intended effects
of the Agreement should bring overdue improvements in the European
defence market. Ratification of the Framework Agreement is the
essential next step, which should not be delayed."
The Government agrees and welcomes the Committee's
conclusion that the Agreement should bring improvements in the
effectiveness of the European defence market.
After publication of the Committee's Report on 14
February 2001, the Government started the final procedures for
ratification of the Agreement culminating in the Secretary of
State for Foreign and Commonwealth Affairs signing the instrument
of ratification on 28 February 2001. The UK was the first nation
to deposit its instrument of ratification. Germany informed us
on 12 March that the ratification process has been completed.
Their instrument of ratification is expected to be deposited shortly.
The Agreement will come into force thirty days after the second
nation deposits its instrument.
Ministry of Defence
16 March 2001
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