Procurement: <b>December 4, 2004</b>

December 4, 2004

Rather than the traditional "engagement for engagement's sake" when working with other nations' militaries, the U.S. now intends to have specific goals to increase allies' capabilities and to build relationships with key countries. This effort will concentrate on the "arch of instability" that stretches from North Africa, through the Middle East and South Asia, and into South-East Asia.

Part of the "carrot" of working with the U.S. has been sales of military hardware to allies. Over the next year, the U.S. expects to sell just over $13 billion of equipment through the Foreign Military Sales program, with roughly the same amount expected in future years. Some spikes may occur as partners look to buy equipment proven successful in combat during recent military operations, such as night vision gear and precision-guided munitions.

Selling arms to friendly nations can help bring countries together through training, joint exercises, logistics, and the development of doctrine and tactics required when common equipment. Foreign sales also help offset the cost of development of gear and can help lower the cost of a production run by creating economies of scale when large lots are ordered. These motivations drive other countries such as France and Russia to push foreign sales of their own weapons.

Pentagon officials are in favor of duplicating the model used for the Joint Strike Fighter (JSF) for closer allies. Participants are invited in early on and get a say in the development of the weapons program, depending on their level of commitment. They also get the opportunity to bid on production and support of the program to generate business in their home countries, but are not guaranteed any sort of financial offsets.

However, more stringent restrictions are limiting technology transfers out of the U.S. to overseas partners and Pentagon officials have warned that there may be little or no access to sophisticated technologies in new weapons systems or the ability to co-produce such systems outside of the U.S. The UK is angry that they are not getting full access to JSF technologies, such as stealth, despite their long-standing political and military support of the U.S. over the past four years.

European defense industry executives view tighter U.S. technology controls as a larger sales opportunity. If the U.S. is unwilling to enter into overseas co-production deals that create jobs and transfer technology, European firms expect to fill the gap with their own systems.

In 2003, the U.S. sold around $7.4 billion in equipment to allies, with Egypt ($1.29 billion), Saudi Arabia ($1.23 billion), Taiwan ($775 million), Jordan ($651 million), and the Czech Republic ($650 million) the biggest customers for American weapons. Egypt bought Sidewinder missiles (over 400), two electronic warfare suites pallets designed to roll onto C-130 aircraft, and lots of tank ammunition and Hummers while Jordan and the Czech Republic were both acquiring F-16s or upgrade kits for F-16s. Doug Mohney

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