A transatlantic defence market, forever elusive? By Clara Marina O’Donnell ★ EU member-states and the US would benefit from more open defence markets across the Atlantic. Military forces would find it easier to co-operate in the field, governments could pay less for defence goods, and the transatlantic relationship would be strengthened. ★ But markets remain fragmented. States are often more concerned with creating jobs than with buying the most cost-effective equipment. And they are reluctant to rely on each other to supply defence goods or to protect their military technologies from falling into the wrong hands. ★ Commendably, Washington and the EU are taking steps to loosen their excessive export controls. But to be effective the reforms must be more ambitious and co-ordinated. In addition, European governments must use the economic crisis as an opportunity to stop shielding unsustainable national defence industries. The US and most countries in Europe have had close political and military ties for decades. Through NATO, they are committed to their mutual security and they have often fought side by side, including in Kosovo, Iraq and Afghanistan. For years many experts, industry leaders and politicians have been highlighting the potential benefits for transatlantic allies of more open defence markets. Greater competition would allow for cheaper defence goods and promote cutting-edge technological development. Fewer bureaucratic barriers between national markets would make it easier and more cost-effective for governments to buy and develop weapons together. Their armed forces would use more common equipment, improving their ability to fight side by side. Currently, multinational deployments are often hampered by countries using incompatible hardware – for example, different radios have made it hard for troops from various nations to communicate on the battlefield. Finally, an integrated market would help cement the transatlantic alliance. Yet defence markets across the Atlantic remain hamstrung by heavy restrictions on technology transfer, burdensome export controls and government reluctance to buy equipment from abroad. For the US, which alone accounts for half of the world spending on defence, the current state of affairs is sustainable, although very inefficient. But in Europe defence budgets have become too small to maintain national industries and the survival of the European industrial base is at risk.
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Guns and jobs For decades the US and European countries with large national defence industries have relied mostly on domestic suppliers. And when contracts have been awarded to foreign firms, states – including those in Europe without their own defence industry – have generally required that a certain amount of the production take place on national soil. Governments have preferred equipment to be made at home partly because they want to ensure access to, and control over, sensitive weapons systems and technologies. But buying defence goods has often also been seen as a way to support the national economy. Politicians, particularly those with constituencies that employ people in the defence sector, have been reluctant to spend taxpayers’ money abroad. A recent study by the Center for Transatlantic Relations, commissioned by the US Department of Defence (DOD), discerns a trend since 2006 towards more openness in defence markets across the Atlantic 1 Jeffrey Bialos, Christine and ‘somewhat “better value” buying habits’.1 But there is a long Fisher and Stuart Koehl, way to go. The report ‘Fortresses and icebergs’, Center for Transatlantic acknowledges that the Pentagon Relations, Johns Hopkins still awards around 98 per cent of University, 2009. its procurement budget to US companies and that various European countries still rely mostly on domestic suppliers. For example, between 2006 and 2008, the Italian government awarded 60 per
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