Transatlantic Security Task Force Series
98 percent o its procurement budget to U.S. companies.
Between 2011 and the spring o 2013, France, Germany, and Italy awarded 2 percent or less o their contracts to oreign ﬁrms when using new EU rules on deense procurement — despite the act that the new rules are designed to increase the amount o intra-EU competition.
Governments preer equipment to be made at home partly because they want to ensure access to, and control over, sensitive weapons systems and technologies. But or many transatlantic allies, buying deense capabilities is also a way to support the national economy. Te procurement choices o ministries o deense are ofen inﬂuenced by the number o jobs a deense company can create or the amount o technology it transers to the country. As a result, even when a government does buy military equipment rom a company based in a transatlantic ally, the kit is not always the most cost-eﬀective. Americans and Europeans also curtail the economic bene-ﬁts o transatlantic deense trade through their complex and mostly uncoordinated regulations — be it in relation to export controls or rules governing oreign investments. Governments must ensure that sensitive equipment and inormation do not all into the wrong hands. But given the closeness o military ties amongst transatlantic allies and the globalized nature o today’s deense industry, some o the current checks are disproportionate — notwithstanding recent eﬀorts by both the EU and the United States to streamline their export controls. In some European countries, controls on oreign invest-ment are so heavy that it is hard or deense companies based there to accept benign investments rom transat-lantic allies. Deense ﬁrms with plants in countries on both sides o the Atlantic ofen need to request time-consuming authorizations to move a relatively non-sensitive compo-nent between plants. Similarly, when a U.S. and European deense company merge, their home governments ofen ask or security ﬁrewalls that are so extensive that the merged company needs to maintain separate research departments and production lines or their U.S. and European markets.
1 Jeffrey Bialos, Christine Fisher, and Stuart Koehl, “Fortresses and icebergs,” Center for Transatlantic Relations, Johns Hopkins University, 2009.2 European Commission, “Commission staff working document on defence, Accompa-
nying the document: Communication, towards a more competitive and efcient defence
and security sector,” July 24, 2013.
Missed Military Opportunities
Te limited integration o the transatlantic deense market also hampers allied orces in combat operations. o begin, armed orces rom across Europe and the United States miss out on the technological breakthroughs in military equipment that could have occurred i large U.S. and European suppliers had been able to take advantage o the market’s economies o scale. In addition, because o the importance many governments attribute to job creation when buying military capabilities, some armed orces operate equipment that is less eﬀective than the kit used by their allies. Finally, because transatlantic allies ofen do not consult each other when buying their military equip-ment rom their national suppliers, they sometimes use diﬀerent technical standards. As a result, their armed orces can struggle to communicate on the battleﬁeld, or cannot provide each other with spare parts. ransatlantic military cooperation is also hamstrung by the complex web o export controls upheld by allies. As discussed above, a certain amount o export controls is essential. And even within the transatlantic alliance there is signiﬁcant mistrust amongst countries. Some worry that their allies lack the technical capacity to stop mili-tary equipment illegally leaving their territory. Others are uneasy about the willingness o certain allies to export to countries the ormer consider unsae, such as Russia and China. But in the same way that Europeans and Ameri-cans maintain excessive export controls on their deense companies, they impose too many checks on their transat-lantic allies. For example, when a European country buys sophisticated U.S.-made equipment or its armed orces, Washington requently does not share the technical inor-
Because transatlantic allies often do not consult each other when buying their military equipment from their national suppliers, they sometimes use different technical standards.