Transatlantic Export-Control Initiative Likely to Continue
by
Bruce Odessey
Washington File Staff Writer

Washington -- High-level Defense and State department officials predict that the next administration will continue the Defense Trade Security Initiative (DTSI) aimed at expanding U.S. defense trade with European and other close allies by reducing export-control barriers.

One official, Jeffrey Bialos, deputy under secretary of defense, said DTSI is crucial to the U.S. defense industry.

DTSI is also good defense policy, he said December 7 at the Practising Law Institute conference on "Coping With Export Controls." As future wars will likely feature coalitions, he said, the United States and its allies will need to use compatible technology.

At the same time, he said, the United States wants its defense companies to remain competitive -- to keep costs down and continue innovation -- despite drastic consolidation of defense industries both in the United States and Europe following massive defense spending cutbacks at the end of the Cold War.

DTSI aims to advance make technology transfers for allies easier by reducing the number of export-control licenses required. The initiative applies to countries among NATO, Japan and Australia that meet U.S. security standards.

Bialos said the initiative seeks to keep Europe's defense market open to U.S. companies. Now that their industry has shrunk so much, he said, Europeans are tempted to make defense purchase decisions based on politics rather than economics.

Announced in May, DTSI has aroused some opposition in Congress. The Clinton administration has nevertheless advanced DTSI with the United Kingdom and Australia. Bialos said the next administration should start early scouting candidate countries for DTSI's next round.

"There's a real danger the initiative could wither," Bialos said. "We need a disciplined bureaucracy to carry it out."

At the same program Eric Newsom, assistant secretary of state, said DTSI does not radically depart from existing practice and does not amount to decontrol of defense exports.

Newsom also said he was confident the next administration will continue DTSI. Certain U.S. restrictions, such as "Buy American" legislation, could discourage foreign defense companies and their governments from participating, he added, however. The United States must keep its market open to foreign-built systems just as it seeks to keep foreign markets open to U.S.-built systems, he said.

"Our European allies will pursue this only if it is perceived as a two-way street," Newsom said.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)