Clinton Administration Eases Arms Export Process for Allies

June 2000

By Wade Boese

Claiming the goal of bolstering U.S. defense trade, interoperability, and cooperation with foreign allies, the Clinton administration unveiled 17 initiatives on May 24 that will make it easier to ship U.S. weapons and technology to NATO members, Japan, and Australia. Collectively referred to as the Defense Trade Security Initiative, the agreed proposals expedite arms export decisions, relax or waive export licensing requirements, and reduce the number of U.S. government-approved licenses needed for exporting weapons.

Spurred, in part, by U.S. arms industry and foreign arms customer complaints that U.S. export control procedures were too burdensome, the Defense Department moved to speed up and simplify the export process in early 1999. The Pentagon effort gathered momentum after NATO's 78-day air war against Yugoslavia revealed a growing capability gap between the U.S. and European militaries and procedural barriers to their timely sharing of weapons and technology.

Additional industry and Pentagon concerns that European countries may increasingly rely on domestic suppliers, thereby cutting U.S. companies out of the European market, also helped drive the Pentagon initiative. The European Union's December 1999 decision to create an autonomous military force separable from NATO and Britain's May 16 decision to buy a European-built air-to-air missile rather than a similar U.S. model, despite intense lobbying by President Bill Clinton, appeared to confirm these fears to some.

An initially reluctant State Department, which has final authority in arms export decisions, endorsed the Pentagon initiative following months of interdepartmental negotiations. Clinton approved the completed package just two days before Secretary of State Madeleine Albright announced it on May 24 at the NATO foreign ministers meeting in Florence, Italy.

Most of the 17 initiatives will apply solely to direct commercial sales by private U.S. companies to foreign firms and governments. The U.S. government authorizes some $20 billion in commercial sales a year in addition to its Pentagon arms sales, which totaled more than $12 billion in fiscal year 1999.

Easing Exports

Washington created four new types of "blanket" licenses. Rather than licensing each component or company that is party to an arms export deal, the U.S. government may now issue one license to cover an entire program or project. For example, in the case of a so-called major project authorization, a single license could cover a fighter jet, including its engine, avionics, and weapons systems. Previously, individual licenses would have been required for the separate components.

The State Department annually reviews some 45,000 cases, of which 12,000 are referred to the Pentagon for its input. In a May 23 briefing, senior administration officials argued that by reducing export licenses involving trusted customers, limited staff will be freed to devote more attention to higher-risk exports. Both the Defense Department and the State Department have pledged 50 percent increases in their licensing staffs.

Both departments further promised to complete their license reviews in 10 days for weapons or technology aimed at improving NATO member military capabilities and interoperability. The same turnaround time was promised for licenses submitted electronically by foreign embassies. On average, license reviews in fiscal year 1999 took 24 days if examined solely by the State Department, while those that needed to be referred to other agencies, including the Defense Department, took nearly 100 days.

Long-standing U.S. policy requires importers to obtain Washington's approval to retransfer U.S.-origin arms and technology to third parties. Under the new initiative, the U.S. government said it would be willing to provide advance consent to retransfers among countries that sign blanket end-use assurances.

To encourage European companies to team with U.S. firms, the administration relaxed restrictions on companies sharing technical data. The U.S. government will also preapprove countries to which a final product can likely be exported once completed. Previously, foreign companies entering into joint ventures with U.S. companies had no guarantees of being allowed to export to third parties.

Several exemptions will be made to the International Traffic in Arms Regulations (ITAR), which governs U.S. arms exports. For example, licensing will no longer be required for maintenance and training associated with U.S. arms exports, or for activities to boost interoperability and coalition war-fighting capabilities.

Countries may also negotiate bilateral agreements with Washington so that specified foreign firms can import unclassified U.S. arms and data without any license. In order to qualify, countries would need to raise their export controls to match U.S. standards, according to senior administration officials. Only Australia and Britain have been invited to begin such negotiations.

Periodic reviews of the munitions list, which identifies weapons systems and technologies controlled by the U.S. government, are also called for by the initiative. Revision of the list would require congressional notification.

Except for an initiative that requires $30 million over four years to improve the electronic sharing of information between the State and Defense Departments, none of the 17 initiatives requires congressional action. Yet the ranking members of the House International Relations Committee and the Senate Foreign Relations Committee warned the administration in a March 16 letter about the necessity of consulting with Congress when amending U.S. arms export practices.

U.S. arms manufacturers welcomed the initiative with a wait-and-see attitude. The Aerospace Industries Association (AIA), which represents 57 companies, termed the changes a "first step." Joel Johnson, vice president for international affairs at AIA, noted the initiatives are changes the industry has sought for years.