Leveraging Industry to Support U.S. Security Cooperation Objectives: Opportunities and Challenges
By: Andrew Hunter
The increasingly global nature of industry, including firms focused on the defense sector, presents opportunities for the United States to deepen its relationships with allies and partners in areas of common security interests. However, significant challenges to capitalizing on these opportunities exist. This was the conclusion reached at a recent panel discussion at the CSIS 2014 Global Security Forum, which explored how industry can support deeper security cooperation. While almost all nations rely to some extent on national champions in their indigenous industry to produce some or all of their most high-profile defense systems, it is already the case at the subsystem and component level that most technology is globally sourced. This is particularly true where technologies originate in the commercial realm, something that is increasingly the case even in the most sophisticated defense systems.
The single biggest challenge to U.S. industry in managing the reality of a global value chain for defense products may be U.S. International Trafficking in Arms Regulations (ITAR), which have in some areas become a significant factor in other nations’ decisions on whether or not to source critical components in the United States. A second major challenge is the need to keep multiple governments closely aligned over time. Events such as sequestration, and similar budget shocks that have affected other nations’ defense budgets, significantly challenge governments’ ability to keep their international commitments and have confidence that partners will do likewise. Not least among the challenges to deeper cooperation is the potential for renewed application of strict domestic content requirements as defense budgets decline and financial pressures build on domestic industries.
It is notable that these challenges have and will continue to be addressed by the largest international cooperative program in the world, the F-35. The program required a first-of-its-kind global agreement for the F-35 program office even to market the aircraft to partner nations, and the digital design tool for the F-35 had to be shared with suppliers in multiple countries—no easy task. The F-35 program was high profile enough to work through these issues, but the question remains whether the United States and its partners can effectively extend this level of cooperation to multinational programs with lower profiles.