No Easy Choice

The United States has a conflict between its desire for increased NATO collaboration to standardize weapons and the need to maintain control over weapons systems made from U.S. technology. The administration has been willing to compromise to some extent on third country sales to achieve cooperation. These compromises may allow foreign producers using U.S. technology to sell to countries the United States opposes for political and foreign policy reasons or may prohibit the United States from selling to its usual customers. GAO analyzed the trading patterns of the major producers and did case studies of ongoing collaborative weapons projects at both the production and development stages. GAO assessed the competitiveness of European producers who get a license to produce U.S. systems to determine if they would be willing to accept restrictive U.S. export controls. GAO also reviewed the handling of third country sales in new codevelopment programs.

GAO found major differences in the customers considered acceptable by the different producers, particularly between the United States and France, which explains French reluctance to accept U.S. restrictions in collaborative projects. Because of smaller quantitative requirements and less efficient production practices, the United Kingdom, France, and the Federal Republic of Germany generally cannot compete with the United States in markets. Thus, they are reluctant to adopt U.S. systems. This limits the potential for NATO collaboration using dual production. GAO found that diminishing U.S. controls for the sake of cooperation with the largest concessions reduced U.S. control where the potential standardization benefits and European contributions are the greatest. The United States has modified U.S. sales policy for the sake of collaboration. Congressional participation is limited in these policy decisions because authorization legislation covering arms exports is not designed to deal with the new forms of collaboration. Congress may want to expand its prerogatives in establishing where the line should be drawn on making concessions. The administration needs flexibility to negotiate international agreements; thus, GAO proposes a range of legislative alternatives. Under present law, Congress has disapproval rights over third country transfers of systems made with U.S. technology if Government foreign military sales channels are used. There is no congressional right to disapprove the transfer of technology through commercial licensing.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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