The ITAR waiver
200. Our predecessor Committees commented upon, and
supported, the "ITAR waiver" in their reports. Terms
for the waiver were agreed with the US Administration in May 2003
under which the UK would have a waiver from the US International
Traffic in Arms Regulations (ITAR). Our predecessor Committees
noted in their 2004 Report that:
such a waiver would permit the transfer without a
US export licence of most unclassified defence items, technology,
and services to the British Government and qualified companies
in the United Kingdom. In the Government's view a waiver 'would
make a significant contribution to transatlantic defence industry
cooperation and promote Alliance interoperability. At the same
time it would ensure that comparable export controls were maintained
on US and UK defence items'.
In the face of continued refusal of the US Congress
to enact the ITAR waiver the Committees in their final Report
of the last Parliament were of the view that "the only way
forward we see is continued diplomacy, but there is no promise
201. Our predecessors' pessimism has proved, unfortunately,
to be prescient. The US Congress has not enacted the waiver and
we see little prospect that it will.
202. Faced with the obduracy of the US Congress we
accept that the most sensible course is to explore alternative
courses. Those who gave us evidence cast doubt on the value of
the waiver and were examining alternative arrangements. EGAD told
us when they appeared before the Quadripartite Committee on 31
whilst we fully [recognise] the political symbolism
] of the ITAR waiver, the reality is that the waiver was
so limited in scope that it would actually have been of minimal
benefit, particularly in the context of a high-technology programme
like the Joint Strike Fighter. [
as to what possible alternatives there may be to
the ITAR waiver [
] EGAD is working on that at the moment.
There was a meeting this morning to kick off that piece of work
so it is in its very early stages.
David Hayes from EGAD did not consider "that
the lack of an ITAR waiver in the form in which it is drafted
is holding back the JSF programme".
203. The evidence we received from EGAD begs the
question: was the attempt to secure the ITAR waiver worth the
effort invested by the Government and, we assume with Government
encouragement, by UK industry
From the evidence we heard the answer appears to be that the value
of the waiver was of limited benefit for the JSF. If it has value,
it may have been for smaller businesses for whom exports of unclassified
defence items, technology, and services might have been of use
and as a symbol of the close alliance between the US and the UK
since the start of the Second Gulf War when in a phrase of the
former Foreign Secretary "we have been [an ally] for the
United States through thick and thin."
We conclude that there are grounds for deep concern about the
protectionist tendencies of elements within the US Congress.
204. Where does the UK go from here? As noted, EGAD
told us that alternatives are being examined and, in relation
to the Joint Strike Aircraft programme, said, "we are having
to deal with issues but we are dealing with the issues, and we
are working within the existing licensing systems to make the
EGAD also considered "it is very important that we take a
co-ordinated approach and that the Government, Parliament and
the industry speaks with one voice and seeks the same thing".
With the loss of the ITAR waiver, we conclude that the Government's
priorities should now be to put in place arrangements which will
allow the transfer of goods and technologies from the US to ensure
that not only the Joint Strike Aircraft programme is not impeded
but also to assist those companies that would have benefited from
the transfer of unclassified defence items, technology and services.
We request that the Government explain its policy and approach
to securing the expeditious transfer of goods and technologies
from the US to the UK.