The Obama administration has chosen a key moment to rewrite defence export control policies.

US defence spending will not grow fast enough any more to satisfy the shareholders of the Pentagon's contractors. These firms will look to increase sales abroad as part of their plan to sustain growth.

Overseas, US defence companies have plenty of room to grow. Israeli arms makers enjoy an 80-20 exports-domestic sales split. In the USA that ratio is inverted - at least.

US defence companies face different challenges. When Boeing defence and space executives speak of bringing 25% of all annual revenues from the export market in the future, they are really saying they can collect $10 billion a year on the foreign arms market.

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The USA is open for business

According to figures released by the US Department of Commerce, that $10 billion is equal to the entire value of US military equipment exported in 2009 by any company - not just Boeing.

If anyone thinks the world's defence industry is overly globalised today, wait another five years. To sustain that kind of growth on the export market, US industry must flood over the limited pool of new business that comes available every year, crowding out national industries and less powerful third parties.

It is no wonder, then, that US industry is focused on reforming a laborious and perhaps overly cautious export control system.

It appears the time has finally come for Congress and the administration to make dramatic progress on correcting some of the more obvious quirks in the process. Government and industry seem unusually aligned on a common objective of reform.

Some of the more ambitious proposals, such as creating a single licensing agency, remain controversial and are not likely to be accepted by Congress. Even so, the administration should be able to reshape the existing process into a more coherent and efficient system even without consolidating oversight into one agency.

As US officials make it easier for their own firms to compete in foreign lands, it would also behove them to reconsider the barriers placed on their overseas counterparts from competing fairly in the USA.

Foreign defence contractors are easy targets for politicians but, sometimes, foreign technology is the Pentagon's only option.

If the export system can be rationalised, is it not too much to address the inequities of the import market?

Source: Flight International