Select Committee on Defence Written Evidence

Memorandum from Dr Alexandra Ashbourne


  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.


  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.


  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.


  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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