Why the Allied Buy approach is important

In the last five years, Americans have heard a lot from two presidential administrations and Congress about the need for land production. In line with the slogans “Buy American” and “Made in America”, the noble concept seeks to restore production and jobs in the United States and reduce the dependence of our economy on foreign suppliers and supply chains.

Apparently, two years of the COVID-19 pandemic and its impact on world trade have confirmed what Presidents Donald Trump and Joe Biden say: America is no longer able to produce many of the products and items that companies and consumers desperately want and need. But the idea that America must completely set out to produce elements such as microchips, vaccines, televisions and critical technologies misses the point. Having and maintaining stable foreign suppliers through the Buy Allies approach is essential to maintaining a strong US economy and will help reduce dependence on Chinese sources.

Take the space and defense industries, for example. This industry is already one of the strongest local manufacturing sectors due to existing Buy America laws and the need to preserve sensitive technologies on American soil. However, having only local sources in American defense items contradicts the way military goods are produced, and is self-destructive when American forces have to act and fight allies and partners.

There are at least four main reasons why making the U.S. aerospace and defense industry exclusively “Made in America” ​​is neither feasible nor desirable:

1. The Trump and Biden administrations have acknowledged that the US defense industry base has become too dependent on suppliers from one source. The Trump Administration’s Supply Chain Vulnerability Report, published nearly four years ago under Executive Order 13806, makes it clear that there are only one or two suppliers in the world that can provide critical materials or components needed to produce military systems. Biden Administration Executive Order 14017 on defense supply chains recognizes such vulnerabilities, especially at the lower ends of the supply chain (eg rare earth elements and microelectronics). Both efforts recognize the importance of engaging with allies and partners to build US industrial resilience.
2. Acquisition officers of the Ministry of Defense are always looking for the best technologies and solutions for their systems; and sometimes this technology does not originate in the United States. In two recent competitions, for example, the Navy chose Italian shipbuilder Fincantieri Marine Group to build its next class of frigates, and the Air Force chose Saab as the main simulator for the TX. In both cases, these companies have partnered with American companies on their offerings and are now building these systems in the United States.
3. The programs have been designed from the outset with foreign partners in mind to help reduce research and development and production costs. They are also designed to ensure interoperability between the United States and its allies. The most famous example is the F-35. From its design, the F-35 was to be a multinational fighter, not only because many nations would fly it, but because many nations would be involved from its earliest days in investing in its capabilities and design. In this way, the American taxpayer did not have to bear so much of the financial burden, and the Allies would bring the best of their own technology to the table to build this common platform.
4. The Buy America approach alone is counterproductive to the priorities of US economic and security cooperation. Most countries around the world do not have an advanced defense industry that can produce on a large scale for their nation’s army. Therefore, most nations buy American, French, British, Israeli or other defense items. However, it is a challenge for US defense officials to argue the benefits of security cooperation from the purchase of US defense systems when the administration publishes a final rule that increases Buy America’s requirements for US systems. from 55% to 75% by 2029.

As it was noted of numerous think tanks and congress panelsthe American defense-industrial base has weakened in the last decade or so. Problems with Congress’ budget and appropriations – such as sequestration and ongoing decisions, useless policies to acquire the Department of Defense, outsourcing to countries where labor is cheap, and theft of intellectual property from China and other countries – among other issues – have introduced such elements of risk and unpredictability for many small and medium-sized companies, so they have decided to leave the market and the larger DoD ecosystem.

This is bad for American competitiveness and innovation.

The current administration is right in its policies to promote the introduction of key technologies and production opportunities. Hundreds of billions of dollars in infrastructure and entertainment to alleviate the pandemic must be used wisely to invest in those areas that America needs to keep the economy strong and modern.

However, adopting policies that discourage or punish U.S. companies from sourcing key products and resources, as well as partnering with allies and friendly countries, will not only harm the U.S. economy but weaken America’s ability to provide a strong national defense. .

Daniel Fata is a non-resident senior advisor at the Center for Strategic and International Studies. He previously served as US Deputy Assistant Secretary of Defense for Europe and NATO Policy during the administration of President George W. Bush. Jerry McGinn is the executive director of the Center for Government Contracts at George Mason School of Business. He is a former senior acquisition officer for the United States Department of Defense.