Select Committee on Defence Written Evidence

Memorandum from the Aerospace Industries Association

  I write on behalf of the 275 member companies of the Aerospace Industries Association of America (ALA). Our association is the premier trade association in the United States representing major aerospace and defense manufacturers. ALA is pleased to support the signature and implementation of the Defense Trade Cooperation Treaty between the United Kingdom and the United States. We believe the treaty is an important step in strengthening bilateral defence cooperation between our two countries.

  Please find enclosed the formal prepared testimony (Annex) of Dr Jerry McGinn to the House of Commons Defence Committee hearing on Treaty scheduled for 21 November. Dr McGinn is the Chairman of AlA's U.S.-UK Defense Treaty Working Group and currently serves as Director of U.S.-UK International Traffic in Arms Regulations (ITAR) Policy for Northrop Grumman Corporation.

  We hope that Dr. McGinn's testimony will facilitate the completion of the Defence Committee's inquiry into the Treaty.

19 November 2007


Testimony to the House of Commons Defence Committee Dr John G (Jerry) McGinn, Northrop Grumman Corporation Chair, AIA U.S.-UK Defense Treaty Working Group 21 November 2007

  Good morning. My name is Dr Jerry McGinn. I am a U.S.-based executive with Northrop Grumman Corporation and I am pleased to appear before you today as the designated representative of the Aerospace Industries Association of America (AIA). On behalf of the member companies of AIA, I am pleased to express U.S. industry's support for the signature and implementation of the Defense Trade Cooperation Treaty between the Governments of the United Kingdom and the United States. This Treaty is an important step in strengthening bilateral defense co-operation between two extremely close allies and defense partners. The Treaty would reduce the barriers to the exchange of defense goods, services and information-sharing, which will speed response to operational requirements. In short, the Treaty could go a long way towards fundamentally reshaping bilateral military collaboration in the coming years.

  The partnership between the United States and the United Kingdom will always occupy an important and unique strategic role as we confront together the security challenges of today and tomorrow. This "special relationship" is central to stated U.S. national security objectives as articulated in the U.S. National Security Strategy and the 2006 Quadrennial Defense Review and in UK strategy documents.

  U.S. and UK forces are operating together in Iraq, Afghanistan, and many other theaters, and it is essential that they operate together seamlessly. Commanders in the field require export control systems that facilitate cooperation at the tactical level. On a more strategic basis, both of our countries have, and will continue to have, an enduring need for effective and efficient technology sharing to better support our war-fighters with the best technology for the best price. Such cooperation also ensures a secure environment for strategic industrial partnerships that support the competitiveness of the industrial base of both of our countries.

  The United Kingdom and the United States have a long tradition of sharing extremely sensitive information in areas such as nuclear weapons, intelligence, operations, and technology development. This collaboration has extended from the Manhattan Project and the development of anti-aircraft radars in the Second World War to the current Trident submarine program and the sharing of imagery and signals intelligence in Iraq and Afghanistan. The Treaty would apply a similar collaborative environment to arguably less sensitive defense articles and services.

  The Treaty signals the fundamental recognition in the U.S. government that the U.S. export control system must be more predictable, efficient, and transparent in order to enhance U.S. national security. UK export licenses are almost universally approved, but the process is cumbersome and certainly not reflective of the close bilateral relationship. In 2005 and 2006, for example, U.S. companies submitted 13,000 license applications for defense articles destined for the United Kingdom. 84% of these applications were for unclassified items. 99.9% of all these applications were eventually approved after weeks and months of processing. We have underscored with our government the need to conform our export controls to the nature of the bilateral relationship. In addition, the Treaty structure would enable the United States Government to better focus on the prevention of sensitive exports to potential adversaries by reducing the State Department export license caseload.

  An important breakthrough here is the application of the Official Secrets Act in the context of the Treaty. By doing so, the Treaty establishes strong protections against improper diversion of U.S. and UK technology. The provisions of the Treaty creating approved communities of companies, restriction of Treaty treatment to approved programs and end uses relating to U.S. and UK defense, and strict record-keeping and auditing requirements also will play critical roles in safeguarding sensitive technology.

  U.S. industry is encouraged by the progress to date on developing the Treaty's implementing arrangements. We have had numerous interactions with U.S and UK officials about the Treaty and its implementing arrangements and it is clear that the Governments desire to make the Treaty as practical and usable as possible. To that end, we believe it is critical to develop clearly understood and appropriate rules and requirements to achieve the Treaty's objectives, particularly in areas such as research and development, technology exclusions and compliance requirements. This will enable U.S. and UK companies to employ the Treaty provisions to great effect for the benefit of our militaries in the months and years to come. We understand that traditional licensing systems will always be open to us, but we are committed to the development of a Treaty that represents a more predictable, efficient, and transparent alternative for governing technology exchange.

  Assuming that the Treaty is approved by Parliament and ratified by the U.S. Senate, we foresee a number of positive changes for both of our countries. There will no longer be a need for an export license for the transfer of most defense articles and services (hardware, technical data, defense services, etc) between the U.S. and the UK approved communities. This Treaty regime will enable true collaboration—going in both directions—across the Atlantic. A partnership between designated U.S. and UK entities, for example, would create more opportunities for U.S. companies to work together with our UK partners (as well as with UK branches of our own companies) to rapidly address some of our most persistent operational challenges such as IED defeat and counter-terrorism. The Treaty will also reduce requirements that delay the deployment of systems and related parts and components to our warfighters. As this makes clear, a Treaty regime will lead to more innovation and to the development of more effective systems for both US and UK forces.

  In summary, the U.S. defense industry is strongly supportive of the Treaty and its potential contributions to our national security. AIA's US-UK Treaty Working Group will continue to remain engaged with the U.S. government on this important national security priority and we are keen for its favorable consideration and implementation in both countries in the coming months. We very much look forward to your Committee's report and thank you very much for the opportunity to present a US perspective on the Treaty.

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Prepared 11 December 2007