European Affairs

Winter 2001

 

Special Report: NATO Industrial Cooperation
Atlantic Partners Must Collaborate on Defense Equipment
Steven McCarthy
Counselor, Defense Supply, British Ministry of Defense

 

Despite the doubts that surfaced at the end of the Cold War, the North Atlantic Treaty Organization's importance as an international security organ appears to be increasing rather than decreasing. It is therefore appropriate that Europeans and Americans step back and look at our ability to cooperate across the Atlantic.

The need for such cooperation is obvious. But, at the technological level, there are concerns about how we can best cooperate in order to expand the Alliance's effectiveness.

Indeed, it is perhaps appropriate to ask whether we are able to cooperate at all. While the issue of Transatlantic equipment cooperation has been on NATO's agenda for many years, even the most fervent Atlanticist would find it hard to claim that there has been a track record of shining success.

Of course, there are some areas where interoperability between the United States and its partners has been achieved. One needs only to look at the widespread use of various models of F-16 fighters and Hercules transport aircraft, Chinook helicopters, and the AMRAAM air-to-air missile. The NATO E-3 AWACS force is another good example.

In Britain, we are about to take further, significant steps in the same direction, as Apache helicopters, C-17 transport aircraft, and Maverick missiles enter into service. There are many other British examples, from jungle boots to Trident submarine-launched nuclear missiles.

The latter are perhaps the ultimate example of interoperability in defense equipment because of the "mingled stock" arrangements that provide for the same individual missiles to sail on U.S. Navy, as well as Royal Navy, submarines.

Achieving interoperability in such areas, however, has meant buying American. Unfortunately, there is no equivalent U.S. purchasing list of European items. The AV-8B Harrier combat aircraft, and now, the XM777 Lightweight 155mm howitzer, are examples that come to mind with respect to U.S. purchases of UK products, but there are few others. Although such an imbalance may sound attractive to Americans, from a European perspective it is neither politically practicable nor sustainable.

But reciprocal trade - even if it can be made rather more reciprocal - cannot, in any case, be the only way forward for Transatlantic interoperability. Frankly, one reason is that the idea of routinely buying foreign - of having genuinely open international competition for defense requirements - will probably always be too big a hurdle for the United States.

Other approaches must also be used - including genuine collaboration. Better ways must be found to pool our research and development efforts, and to harmonize our requirements in order to develop more programs together. We may be on the verge of a breakthrough in this area.

Certainly from the UK's perspective, two major U.S./UK collaborative projects seem to point toward a positive future of collaborative technological developments across the Atlantic. These are the Joint Strike Fighter for the U.S. Navy, Air Force and Marines, and Britain's Royal Navy, and the TRACER/ Future Scout army reconnaissance vehicle. It must be acknowledged, however, that neither of these programs is without detractors in America, and my impression is that the international nature of such programs tends to increase, rather than decrease, opposition to them from some parts of the U.S. governmental machinery.

A further approach is to allow cooperation to be led primarily at the industrial level. We welcome the great strides the U.S. Department of Defense has made in this field in recent years.

One lesson from years of collaborative programs in Europe is that governments are not well placed to determine industrial alignments between contending companies. The learning of that lesson, coupled with the significant, recent realignments of the defense industry, has markedly improved the opportunity for Transatlantic interoperability by the industrial route. If allowed to develop naturally, this may also help overcome some of the political difficulties that arise in other areas of cooperation.

"Developing naturally" does not imply that governments take an entirely hands-off approach. Given the nature of the business, such a stance would be incorrect. But governments do need to adopt the lightest possible touch. Market attitudes to defense stock, for example, remain sufficiently fragile that we must recognize our responsibilities to complete regulatory processes quickly.

In addition, it is necessary for governments that wish to encourage industrial cooperation to relieve industry from the unnecessary bureaucracy that stops it from operating efficiently, blocks imaginative arrangements, and costs money.

All of these issues have been high on the UK government's agenda during the last few years. In Europe, where international defense industries are now the norm, our agenda has been the so-called Letter of Intent between the six leading European defense industrial nations.

We have pursued a parallel agenda with the United States. About two years ago, the U.S. and the UK defense ministries started a dialogue that led to the signing of the Declaration of Principles (DoP) on February 5, 2000. We believe this to be a milestone document, which aims to address all areas in which improvements could sensibly be made.

The DoP seeks to promote cooperation on a wide range of issues, from the harmonization of requirements to reciprocal market access, through corporate governance to industrial security, and from security of supply to export regulation. Provided the principles can be implemented in a practical manner, the agreement will transform U.S.-British relations in the field of defense equipment.

Much hard work is being devoted to a proposed granting of a limited waiver for the UK of certain export licensing requirements under the U.S. International Traffic in Armaments Regulations (ITAR). We hope this will soon result in an agreement. Reducing the bureaucracy involved in defense transfers between two extremely close allies such as the United States and the UK is essential in order to focus our export control resources where they will really make a difference to world security. But the DoP is not just an "export pact" any more than international defense cooperation is just about export controls.

We now are trying to match the political will that lay behind the DoP with practical steps to implement the vision, in the hope of assembling a package of detailed measures by the anniversary of the signature.

With DoP implementation, significant strides will have been taken toward improving our "cooperability." The prospects for transferring technology between us safely and successfully, and not just in one direction, will be improved.

The UK is the only participant in both the Letter of Intent process in Europe and the Declaration of Principles initiative with the United States. Both efforts are designed to foster the further internationalization of the defense industry within the Alliance.

We believe that it is through this continued merging of our defense industrial bases that opportunities will be opened for future, successful, collaboration based on an efficient and effective Transatlantic defense industry. Such efficiency and effectiveness will be critical if we are to sustain and enhance our mutual security.