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  • Unfinished Business: The U.S.-U.K. Defense Trade Cooperation Treaty

    In an important speech at the Heritage Foundation on Wednesday that demonstrated the new British government’s commitment to standing shoulder to shoulder with the U.S., Dr. Liam Fox, the British Secretary of State for Defense, issued a blunt warning that the U.S., Britain, and its allies in Afghanistan need to “hold our nerve” and “see the job through.”

    But in the question and answer session following his speech, Dr. Fox pointed out that when British Prime Minister David Cameron visits Washington later this month, he will be the third British Prime Minister to come to the U.S. to ask it – among other pressing business – to ratify the U.S.-U.K. Defense Trade Cooperation Treaty. That American failure is a shameful betrayal of Britain’s support in Afghanistan.

    The U.S.-U.K. Treaty was signed on June 21 and 26, 2007. A similar U.S-Australian Treaty followed on September 5, 2007. The treaties permit the U.S. to trade most defense articles with Britain and Australia without an export license or other written authorization, but the treaties do not simply decontrol defense-related trade. Under the treaties, the U.S. has negotiated with the British and Australian governments an approved list of private sector defense and counter-terrorism related entities in these countries that are allowed end-user access to U.S. items. The treaties offer a wide range of advantages to all three countries.

    So far, though, the treaties have been held up by several considerations. Some of these are serious. In keeping with its constitutional duty of providing advice and consent on treaties, the Senate has the right and obligation to consider all relevant factors related to the treaty in question. In this case, that includes the Administration’s proposed regulations for giving domestic enforcement effect to the treaties. The Senate is unlikely to act until it has considered the proposed regulations, though in practice it could ratify the treaty conditional upon the production of satisfactory regulations. But so far, neither the Bush nor the Obama administration has submitted these materials.

    A recent GAO report noted that “State officials told us the U.S. regulatory changes will not be finalized until the treaties are ratified because the ratification process could introduce additional requirements.” In short, the Senate is unlikely to ratify the treaties until it sees the regulations, but State refuses to produce the regulations until the treaties are ratified. This is a ridiculous game of regulatory chicken that can only end when one side or the other blinks. If the Administration, as it asserts, wants the treaties ratified, it is past time for it to accept the legitimacy of the Senate’s concerns and submit what it regards as final regulations, or to work constructively with the Senate to find other ways to satisfy these concerns.

    But the Senate – and, if implementing legislation is necessary, the House – also has an important responsibility: not to use its constitutional duty to provide advice and consent as a cover for delaying consideration of the treaties on fundamentally protectionist grounds. The treaties do not create a free trade area: indeed, they incorporate both existing and new safeguards. But to the extent that they will make it easier for U.S.-based firms to collaborate with their British and Australian counterparts, they will change the U.S. defense market for particular firms in ways that cannot be predicted. U.S. legislators should accept that these changes are in the broader American defense and security interest. Holding up the treaties out of concern for particular manufacturing interests is bad for our relations with our allies, and bad for America’s armed forces.

    As the GAO points out, the treaties are a move towards a “more risk-based approach” in the management of defense trade. That means that the treaties are based on acknowledging that, while trading defense items poses risks, so does restricting their trade – because the restrictions mean foregone commercial and alliance opportunities. Therefore, the U.S. should focus its export scrutiny on countries that pose the most risks. The GAO report notes that the U.S.’s export control officers have to deal with many more applications than officers in allied countries. This inevitably means that they have less time to spend on the more risky transactions. This is exactly the opposite of what the U.S. should do. The treaties, therefore, are an important advance not only in defense relations with the U.K. and Australia, but towards a more focused and rational system of export controls.

    But while that is an important consideration, it is secondary to the basic fact that, when it comes to these treaties, the U.S. is not dealing in good faith with Britain and Australia. That is contrary to our interests, a poor reflection on their support in Afghanistan, and an embarrassment to all Americans concerned. It is past time to wrap up this business and move on.

    Posted in International [slideshow_deploy]

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