Brexit Provides Opportunities for U.S. Companies.

Author:Lee, Kat

Britain's separation from the European Union on Jan. 1, 2021 will have rippling effects on the U.S. defense industrial base. If Congress acts now, it can solidify defense trade and security cooperation with the United Kingdom, garnering significant gains for U.S. defense manufacturing.

Brexit presents an opportunity for the United States to improve integration of the national technology industrial base, making defense trade less burdensome for allies, expanding coproduction to increase joint military preparedness and ensuring access to critical defense technologies and materials from trusted nations.

Since the end of World War II, the United States has remained the dominant leader in defense technology. But in recent years its lead has considerably diminished, as is illustrated by the National Defense Industrial Association's recently released assessment of the defense industrial base, "Vital Signs 2020." U.S. technology acquisition processes have grown cumbersome, which has allowed other nations to narrow the gap.

The problem in part lies with too-strict defense trade controls. A similar report published in April 2019 by the Adantic Council--"Leveraging the National Technology Industrial Base to Address Great-Power Competition--critiqued the current defense trade controls regime, stating that "the current technology-control process is now counterproductive to meeting national security needs, and requires a massive overhaul." The large costs that partners incur to simply navigate U.S. regulations and remain compliant prevents the nation from importing defense technologies important for sustaining its global leadership.

Brexit offers an opportunity to pilot new reforms of U.S. technology control processes with a trusted ally and trading partner. Brexit has cast the U.K.'s defense cooperation and trade with the European Union into an uncertain transition. British defense companies could seek out more trade with the United States, but burdensome trade controls make the cost of doing business prohibitive.

Although the United Kingdom's membership in the industrial base means its companies should already benefit from fewer regulatory restrictions on defense trade, they still face compliance with the International Traffic in Arms Regulations, the outdated heart of the U.S. defense trade controls system.

Brexit means the United States has a new incentive to reform the regulations. Reforming them will enable British companies to use the national...

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