President Biden last week issued new guidance for U.S. weapons transfers and sales to allies and partners, highlighting that the strength of the U.S. defense industrial base and related supply chain is an important objective of the policy in furthering the nation’s foreign policy and national security.
Calling out the importance of the defense industrial base and the supply chain is “very welcome language” in the Conventional Arms transfer (CAT) policy, Dak Hardwick, vice president of international affairs for the Aerospace Industries Association (AIA), told Defense Daily last Thursday.
Hardwick said the language about the health of the defense industrial base and need to address global supply challenges is “a recognition that the industry is a critical component of U.S. national security policy.”
The CAT policy is outlined in National Security Memorandum-18, which was issued by the White House on Feb. 23. The new policy supersedes the previous CAT policy, which was issued by former President Trump in April 2018 and is contained within National Security Presidential Memorandum-10.
Mention of the supply chain in Biden’s CAT policy is new, although the language around a strong defense industrial base is similar to the previous guidance under Trump, who also emphasized job creation.
Trump said his policy would “increase trade opportunities for United States companies, including by supporting the United States industry with appropriate advocacy and trade promotion activities by simplifying the United States regulatory environment [and] strengthen the manufacturing and defense industrial base and lower unit costs for the United States and our allies and partners, including by improving financing options and increasing contract flexibility.”
An objective of Biden’s policy is to “Strengthen the United States manufacturing and defense industrial base and ensure resiliency in global supply chains.”
The COVID-19 pandemic wreaked havoc on global supply chains, creating a shortage of microelectronics used in myriad consumer and defense products and also impacted labor forces that in turn have hindered productivity. The challenges around computer chips led the Biden administration and Congress to craft bipartisan legislation to begin an effort onshore and near-shore more of the supply and manufacturing of these microelectronic products.
Coinciding with the release of the new CAT policy is a new report by AIA and two other defense and government industry organizations that responds to a Defense Department “tiger team” request last summer for ways to modernize the process by which the U.S. sells weapons and related systems to its international partners and allies. The industry groups in November 2022 answered with a 14-page report outlining current challenges with the process and recommendations for improvement.
“The current U.S. defense trade’s legal, regulatory, and technology security framework was built around the notion of preventing rogue or unintended transfers of critical technologies, rather than encouraging technological integration and interoperability with allies and partners,” says the 14-page report, FMS Modernization: U.S. Industry Feedback to the Department of Defense Foreign Military Sales Tiger Team, which was publicly released on Feb. 23. “Integrated Deterrence requires a U.S. defense trade framework that is flexible and able to deliver critical capabilities to international partners at pace with the current and foreseeable threat environment.”
The new CAT policy recognizes the need to “enhance interoperability with our allies and partners.”
AIA and its sister organizations, the National Defense Industrial Association and the Professional Services Council, also point out that the FMS process was designed to sell legacy programs of record, noting that that is still the expectation. However, they said U.S. allies want the latest equipment.
“Like DoD, our foreign partners are looking for high-end equipment to meet the current threat environment and expect a modern FMS system that can respond accordingly,” the report says.
The report also said that in addition to FMS, Integrated Deterrence must include direct commercial sales of weapons and industry participation. The Biden administration describes Integrated Deterrence as the integration of all elements of national power and across all domains and theaters, including allies and partners.
AIA’s Hardwick said the report on modernizing the FMS process is “an attempt to bring a sense of urgency” because the current system “is a peacetime process,” yet the “strategic environment is getting worse, not better. And speed is of the essence.”