Lord of War? No

Last week Secretary Gates unveiled a new export strategy to revamp licensing requirements that have existed for dual-use products, sensitive technologies, etc… since the 70s. The proposal was well received by the audience at the Business Executives for National Security (BENS), but there is still a long road ahead for the proposal to become policy. It will require executive and legislative support.

Gates appears to be going in for the kill on this one though. He sighted weaknesses in having both Commerce and State department lists, the economic effects of having to get a license for every ‘latch, wire and lug nut’ in an F-16 when the entire aircraft is already approved, and that the US is losing a brain-drain by not creating incentives to keep MNCs in the US. The Economist reported a couple weeks ago on the growing EU role in defense contracting and arms sales. Gates wants to keep the US safe and update the system.

Overall, Gates’ proposal includes an executive mandate to consolidate the Commerce and State department lists into one, creating a single oversight agency that will have sole enforcement capacity, and funding IT infrastructure to facilitate communication and information flow. In practice the policy will get rid of the flat licensing requirements and institute a tiered policy where the most sensitive technologies are on top and protected comprehensively, but as these technologies become outdated they are downgraded and freed to increase exports.

Apparently some allies think this is a good idea and agree that the old (anti-Soviet) system has damaged US capacity to export defensive capabilities to NATO members and other allies. This is not a new idea however. Bush defense proposals from 2007 with Britain and Australia are still in legislation - let’s not start on the three outstanding FTAs. Trying to get Commerce, State, DoD and Congress together on who gets to oversee what and where the zero-sum will leave them politically is a hard sell. This policy also makes sense in the larger NEI project and the Obama-Gates-Mullen relationship seems united. It will be worth watching how the politics play out.