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During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
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Get Four
|  | MAY 25, 2005
By Stan Crock Buy America Can Hurt AmericaCurbs on buying foreign-made arms or exporting weapons easily available from other nations can harm U.S. security and businessesOne of these days, Washington will figure out how to reconcile globalization and national security. But it hasn't yet. Tension exists between the two imperatives: You don't want to sell gear abroad that could be used against you. Similarly, qualms over buying weapons abroad from a supplier you don't control may be justified. Yet export controls on products that are readily available from other countries deny nothing to a potential adversary and hurt U.S. companies. If you deny the Pentagon the best product available because it's foreign-made, you undermine American interests. Given that more and more products are global, made of parts manufactured throughout the world, the difference between a foreign-made and domestic product is shrinking by the day. CONCERNS IN CONGRESS. Washington's ambivalence toward the issue is evident if you look at what happened with Marine One, the Presidential helicopter. In January, the Navy chose a chopper made by AgustaWestland, a British-Italian firm, over a competing model made by Connecticut-based Sikorsky, a unit of United Technologies (UTX ), which has provided Presidential copters since the 1950s. There were two basic reasons: The cabin was larger, and AgustaWestland and its partner, Lockheed Martin (LMT ), could deliver the bird sooner than Sikorsky. But the decision in favor of a foreign-made aircraft raised some interesting questions. Was this break in precedent only because Prime Ministers Tony Blair of Britain and Silvio Berlusconi of Italy are two of President Bush's staunchest allies in Iraq? Or is Uncle Sam now willing to take a truly global approach and buy the best gear wherever Washington finds it? The answer may depend on which side of Pennsylvania Avenue you ask. By all accounts, the White House didn't have a problem with the chopper being bought abroad. On Capitol Hill, it was a different story. In early April, Senator Chris Dodd (D-Conn.) won unanimous Senate consent for an amendment to the State Dept. authorization bill that would bar the Pentagon from buying any parts for the Marine One program from a company that does business with a state sponsor of terrorism. Sounds uncontroversial, but its target was clear: AgustaWestland. Its parent company, Finmecannica, had attended a trade fair in Iran, though it insists it has no intention of making any sales to Tehran. BIPARTISAN SENTIMENT. Dodd insists national security, not parochial constituent interest, was his concern. "We cannot afford to let America's enemies gain access to any of this critically important technology," Dodd told his colleagues. Senator Chuck Schumer, a fellow Democrat from New York, where much of the work on the Lockheed Martin-AgustaWestland chopper will be done, struck back quickly, denouncing Dodd's move. "I'm not going to let a legislative sneak attack reverse the careful, merit-based decision by the Navy to grant Lockheed this contract," he declared. Schumer and Senate Armed Services Committee Chairman John Warner (R-Va.) have joined forces to kill the Dodd proposal. It appears that they have succeeded, but the Buy America sentiment that lies behind the proposal is hardly dead -- and it's bipartisan. In the House, Armed Services Committee Chairman Duncan Hunter (R-Calif.) won committee approval on May 18 of an amendment that would bar the Pentagon from buying anything from a foreign company that provides China with arms that are on the State Dept.'s munitions list. OPPORTUNITY FOR COMPETITORS. If this amendment were aimed at China rather than foreign manufacturers, it would have included U.S. businesses, which have been selling satellite, engine, and nuclear technology to Beijing. "In terms of sales of advanced technology to China, the U.S. is the world leader," gripes Stephen Bryen, president of Finmeccanica Inc., the Italian company's U.S. unit. Bryen, a former undersecretary of defense for trade security policy in the Reagan Administration, thinks Hunter's target is European companies like his. Some policymakers are reluctant not only to buy abroad, but to sell abroad as well. Export controls helped drive the flat-panel and machine-tool industries overseas. Now the thermal-imaging industry is worried it may suffer the same fate. Industry officials say five years ago, the U.S. had a lock on the world market for thermal-imaging products, which are used to detect heat changes in such activities as fighting fires and monitoring industrial processes. The military uses high-end versions for night vision and to detect the exhaust from an enemy plane. But U.S. licensing requirements for exports encouraged foreign competitors to jump in. Foreign buyers of U.S. products can't have their purchases fixed on site. They must send the gear back to the U.S. and get another export license for a loaner until the original is repaired. Foreign competitors use their lack of red tape as a selling point. NEED TO GO GLOBAL. All of this makes the U.S. look like King Canute, the monarch of legend who tried to stop the tides. We should not try to limit sales of products that are easily available elsewhere. Such an effort undermines, rather than protects, national security because U.S. companies will be denied the revenues and profits needed for research and development that can preserve America's technological edge. The only exports that should be scrutinized are those things that are of paramount importance only to the military, from stealth technology to nuclear submarines. There aren't many such items. On the purchasing side, I'm hoping Marine One is a precedent, not an exception. For decades, Uncle Sam looked down on foreign products, but as Pentagon budget constraints limit the scope of what the Defense Dept. can afford to develop, the U.S. could find itself needing to buy abroad more and more. When John Hamre, president of the Center for Strategic & International Studies, was deputy defense secretary in the Clinton Administration, he used to say he had no idea where the chips in major weapons systems were made. When the Army decides on a new battlefield cargo-transport plane this summer, it will be choosing between an Italian and a Spanish aircraft because no one in the U.S. makes what the Army wants. NATIVISM IS WORSE. Industry officials say the aerospace industry is particularly globalized because manufacturers buy parts from around the world. The cargo-transport deal "may be more typical of the future than it is of the past," says Ralph Crosby, president of EADS North America, the U.S. subsidiary of a French-German concern that wants to sell the Air Force refueling tankers. That's simply the world as we find it today. It's neither good nor bad, it just is -- and Washington has to wake up to that fact. Globalization and national security can be reconciled. Trade-offs will always have to be made, and nothing will be perfect. But nativism is worse. The sooner Congress and the export-control bureaucracy see that, the better off we all will be.  Crock is senior diplomatic correspondent for BusinessWeek, in Washington. Follow his views in Affairs of State, only on BusinessWeek Online Get BusinessWeek directly on your desktop with our RSS feeds.  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