European Initiatives

Pursuant to a congressional request, GAO examined European initiatives toward forming a single integrated market, focusing on the: (1) activities and initiatives of the European Community (EC) and the Independent European Program Group (IEPG) and their effect on U.S. defense trade and cooperation; (2) defense trade agreements with the European allies of the North Atlantic Treaty Organization (NATO); and (3) roles of the Departments of State, Defense (DOD), and Commerce and the Office of the U.S. Trade Representative in monitoring, assessing, and managing U.S.-European defense trade and cooperation issues.

GAO found that: (1) EC initiatives for U.S. defense trade and technology transfer policy have important implications for defense tariffs, rules of origin, product standards, mergers and acquisitions, and export controls; (2) IEPG was implementing a plan to integrate the European defense market and industry to better coordinate European defense research and development among the member countries, which could eventually exclude the U.S. industry; (3) since the U.S. defense trade advantage with European allies had significantly declined, the continued usefulness of reciprocal defense procurement agreements were questionable; (4) U.S. government and industry officials perceive an increase for European firms in defense contract awards and new programs; and (5) no State or DOD office fully addressed the defense trade implications of EC or IEPG initiatives.

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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