Memorandum from Dr Alexandra Ashbourne
THE BUILD-UP
TO THE
DEFENCE TRADE
CO -OPERATION
TREATY FROM
2000
The State Department and the Department of Defense
(DoD) have traditionally been at odds over the best way to ensure
America's security. The DoD believes that sharing some technology
with its closest allies is a benefit, whereas in general, the
State Department believes that such a policy can only threaten
America's national interest.
But enabling more effective and efficient transatlantic
[especially US-UK] defence industrial co-operation and technology
transfer was a key objective in the final year of the Clinton
administration.
In January 2000, a Declaration of Principles
was signed between the US and UK to facilitate technology transfer,
among other matters. Its weakness, however, was that it was Department
of Defense-only agreement, and it is the State Department which
retains overall control technology transfer policy and in particular
of the US Munitions List, the list of all goods and services which
require an export license.
Mindful of the weakness of the Declaration of
Principles, the Defense Trade Security Initiative was announced
in May 2000. This was a joint State Department and DoD initiative,
which contained 17 key points, one of which was the promise of
an ITAR waiver (the International Traffic in Arms Regulations
—ITAR—covers the transfer of certain defence products
which need export licenses, and the waiver would have eliminated
the need for such a license in a variety of cases.) But the DTSI
met with strong objections from an inherently protectionist US
Congress, which was reluctant to endorse it in the run up to an
election, principally out of the fear that a liberalised export
control regime would in some way threaten US security and jobs.
After the inevitable period of limbo following
the election of George Bush, the Pentagon raised the issue again,
with support from the White House and a reasonably enthusiastic
Secretary of State, Colin Powell. National Security Presidential
Directive 19 (NSPD 19) was drafted in 2002 by the Under Secretary
of Defense (AT&L: International Technology Security), Dr John
Shaw. This advocated the granting of an ITAR waiver to the UK
as a first step towards relaxing some export controls.
But the Bush Presidency's effort to drive through
this policy came up—yet again—against a particularly
protectionist Congress: typified by the attitude of the Senate
Armed Services Committee and the House International Relations
Committee. Congressman Duncan Hunter (the son of a famed US protectionist)
and Senator Joe Biden are two of the most outspoken advocates
of blocking any attempt to liberalise defence trade. Their staffers
are equally protectionist.
Nonetheless, in this penultimate year of the
Bush Presidency, a further effort to facilitate US-UK defence
trade has been made with the signing of the Defence Trade Co-operation
Treaty. I firmly believe that in the last seven years the senior
figures of the US Administration (whether Clinton's or Bush's)
have all been supportive of measures designed to liberalise export
controls with the UK (if not necessarily with other European countries),
but time and again have seen their efforts thwarted by Congress,
which inevitably has different concerns and priorities.
THE DEFENCE
TRADE COOPERATION
TREATY—CURRENT
STATUS AND
PROGNOSIS
There is widespread scepticism in Washington
DC over whether the US-UK Defence Trade Co-operation Treaty will
deliver concrete results. A number of senior analysts believe
that it is unlikely to be ratified by Congress within the lifetime
of this Administration (ie until next November). They think that
the current administration is in limbo, that the President's endorsement
of the Treaty to the Senate is actually a liability, because of
the enmity towards him held by many members of the US Congress,
and that support for the Treaty carries no votes in next year's
election.
The Assistant Secretary of State, the Hon John
Rood, who tried in vain to explain and defend the Treaty at a
briefing in September at the Royal United Services Institute,
is very new in post (he has only been in the job for a little
over one month). Furthermore, his priority at the moment is the
delicate US-Russian negotiations on missile defence, ahead of
defence trade controls reform.
The Treaty's success or failure will be down
to a combination of two key factors: the content of the so-called
Implementation Agreements (the substance of the Treaty) and the
willingness of the Senate to ratify it.
The content of the Implementation Agreements
is supposed to be released imminently. In theory, it should cover
some or all of the issues which were raised at the RUSI briefing
(for example how supposedly "foreign" companies based
in the UK, such as MBDA or Thales UK, will be incorporated into
the British "Approved Community"). What also needs to
be clarified is the qualifications which will be necessary for
companies to be included in the Approved Community and whether
those will impose unmanageable restrictions on doing business
with non-US firms for the companies concerned. But this is all
still unknown.
It is clear that the passage of the Treaty through
the US Congress would be aided by concrete, high-level support
from the UK. Some senior officials in the Pentagon and State Departments
would like Prime Minister Gordon Brown to make a public statement
in support of the Treaty. At the very least, they would like publicly-stated
approval to come from figures such as the MinDES (perhaps if he
visits in December, as he is currently scheduled to do), the Permanent
Secretary or the Chairman of the HCDC.
There is a strong perception in Washington DC
that the Treaty is taken for granted in the UK. That is, to some
extent, correct. There is strong support in the UK's defence community
for easing transatlantic defence industrial co-operation and,
unlike in the USA, there is certainly no obvious lobby in Parliament
advocating making it even more difficult to conduct defence trade
business with the US.
But on the other hand, some other Pentagon and
State Department officials warn that the British defence community
must not "frighten the horses" by lobbying too hard
for the Treaty's ratification, or Congress will panic. There is
a fear within Congress (both the members of the Senate/House of
Representatives and among their staffs) that this Treaty will
mark the beginning of the slippery slope towards a widespread
relaxation of US export controls. This would be unpalatable to
Congress, either now or in the next Administration. America is
not ready to totally abandon protectionism, especially in the
defence sector.
A leading analyst in Washington has raised a
further obstacle to the ratification of the Treaty: the probability
that the Treaty could fall victim to "inevitability":
everyone automatically assumes it will fail, therefore it will.
I am certainly not the only analyst examining this issue who is
sceptical about its likely success, but in some ways that is a
vicious circle.
Another obstacle to the ratification of the
US-UK Treaty is the US-Australian Defence Trade Co-operation Treaty
which is also being negotiated at the same time as that between
the US-UK. That could exacerbate the "don't frighten the
horses" feeling within Congress. There is a strong sense
that it would be easier to ratify the US-UK Treaty if it were
perceived to be a deal between the US and its closest ally rather
than one of a series of worldwide negotiations with all the concomitant
"risks" that could create for America's national security.
SUMMARY
I am supportive of the Treaty in principle,
but I am extremely sceptical that ratification will happen in
the short term. This is due in part to the stage of the electoral
cycle in the US (with a year to go, Washington DC is already firmly
in election mode) but also because I have found no evidence of
the seismic shift which would need to occur in Congress to ensure
ratification. Pork-barrel politics—local not global (and
a certain degree of protectionism) remains the dominant influence
in both the Senate and House of Representatives. One should also
bear in mind the growing hostility in Congress towards the President.
There is a sense that if the President endorses something (in
this case the Treaty), Congress will block it out of spite. None
of the above is conducive to the ratification of what would be
a ground-breaking Treaty. But I would be delighted to be proved
wrong.
ABOUT DR
ALEX ASHBOURNE
Alex has spent the past decade studying transatlantic
defence industrial co-operation and in particular the debate surrounding
the issue of technology transfer to the UK, firstly as the defence
analyst at the Centre for European Reform and latterly as a defence
consultant running her own company. She is the author of "Europe's
Defence Industry: a Transatlantic Future?" (CER 2000), as
well as part of a Stimson Center report for the US Congress on
multi-lateral export controls (2001) and numerous articles and
conference papers on the subject. A dual citizen (UK-US), Alex
travels frequently to Washington DC to discuss the subject with
Pentagon and State Department officials, as well as Congressional
staffers and analysts.
This submission is analysis based on a combination
of 10 years' experience, coupled with a fortnight's visit in October
2007 to Washington DC. Any part of this submission may be used
as admissible evidence for the Committee.
5 November 2007
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