U.S. Military Allies Seek to Block New ‘Buy American’ Initiatives
By: Tony Bertuca/Inside Defense
A group of foreign military attachés representing some of the United States’ closest allies is asking Senate lawmakers to oppose House defense legislation that would strengthen “Buy American” requirements for some of the Pentagon’s largest weapons programs, according to a letter obtained by Inside Defense.
Pieter-Henk Schroor, a Dutch defense cooperation attaché who chairs the 25-nation Defense Memorandum of Understanding Attachés Group, or DMAG, sent a letter Aug. 5 to Senate Armed Services Committee Chairman Jim Inhofe (R-OK) and Ranking Member Sen. Jack Reed (D-RI), asking them to oppose specific “Buy American” provisions in the House’s fiscal 2021 defense authorization and appropriations bills.
Schroor tells Inhofe and Reed in the letter he would be “most grateful” if they would oppose the Buy American provisions as DMAG believes they would “erode the letter and spirit of reciprocal defense procurement agreements that benefit the American defense industry and its workers.”
The provisions, if enacted, “will greatly impair the reciprocal defense procurement agreements, which promote defense equipment cooperation and defense trade, that the United States has with numerous allies and partners,” the letter states.
One of the provisions causing DMAG concern was added as an amendment to the House’s defense authorization bill by Rep. Donald Norcross (D-NJ). The measure requires that 75% of the Pentagon’s new major defense acquisition programs be manufactured and sourced within the United States by October 2021, eventually moving to 100% by 2026.
The provision has been criticized by the U.S. defense industry, but Norcross has pointed out the defense secretary would have waiver authority and the measure would only apply to future programs, not the F-35 Joint Strike Fighter, for example. There are also exemptions for trade agreements, non-domestic availability, unreasonable cost and public interest.
"If we have not learned our lesson during this pandemic, when are we going to learn it?" Norcross asked in July. "The idea of off-shoring more of our work, particularly in the defense industry, is insane."
He contends the provision is “Swiss cheese” so long as the Pentagon has waiver authority.
Still, the White House, despite pushing for increased trade protectionism, opposes the provision, writing in a statement of administration policy the measure would “have a significant and detrimental effect in weakening the integration of contracting process, driving increases to acquisition lead times, adding to project costs, and impacting delivery of critical MDAP capabilities to the warfighter."
Meanwhile, DMAG also opposes a provision in the House’s defense authorization bill requiring domestic manufacturing of certain ship components on the grounds it would “considerably limit international competition and narrow industrial supply choices for shipbuilding,” according to the letter.
Additionally, DMAG wants Inhofe and Reed to “engage” with lawmakers on a section in the House’s defense appropriations bill that would impose Buy American requirements “on all 'hull, mechanical, and electrical components' for virtually all of the Navy manned ships currently in development: AS(X) Submarine Tender; T-ARC(X) Cable Laying and Repair Ship; T-AGOS(X) Oceanographic Surveillance Ship; Light Amphibious Warship; and Next-Generation Medium Logistics Ship,” according to the letter.
Schroor, who notes the United States had an aerospace and defense trade surplus of $89.6 billion in 2018, says the three provisions “may inhibit industrial cooperation and innovation exchange in the U.S. defense programs and impair the global competitiveness of U.S. defense companies."
Bill Greenwalt, a former Senate Armed Services Committee staffer who now works as fellow at the American Enterprise Institute and as a defense company consultant, wants to loosen trade restrictions for U.S. allies when it comes to weapon systems, but he said “protectionist spirits have been released on many fronts in the last few years.”
“Buy American is good domestic politics, but really dumb economics and national security -- if that is, you think you need allies, which we do now more than ever,” he said. “Given this pending legislation and the likelihood of the U.S. not buying anything from foreign suppliers in the future, why would the governments of Canada, Finland or Singapore -- all now considering the F-35 -- buy American? We have a $90 billion surplus in defense and aerospace trade that will likely evaporate if this becomes law.”
Greenwalt argued Congress should tailor its focus to China.
“The real issue is China and we should be focused on the issues raised in the Govini report of China’s infiltration of our defense supply chain, not punishing what few allies we still have left for selling us better equipment that our forces need,” he said.
Earlier this month, data firm Govini released a report finding the number of Chinese companies in the U.S. defense industrial base has significantly increased since 2010.
There were 655 Chinese companies supplying the Pentagon in 2019, a 420% increase from 2010, according to the report. Meanwhile, the number of U.S. companies totaled 2,219, a boost of 97% from 2010.
The Senate Armed Services Committee, meanwhile, has authored a defense authorization bill that offers provisions aimed at countering China, but does not include the robust Buy American requirements in the House’s version.
Lawmakers from both chambers are set to enter conference committee negotiations when Congress returns from summer recess in September.