The administration on Sept. 20 submitted to the Senate Foreign Relations Committee an agreement to loosen trade restrictions on military equipment between the U.S. and the U.K.
The agreement would create an exemption International Traffic in Arms Regulations for military hardware and software being used to facilitate cooperation between the U.S. and U.K. companies. That essentially means it will allow the export of military equipment without a license under certain circumstances.
The question is how it will be implemented. That aspect of the treaty has yet to be worked out and is expected to create the rules for devising a list of companies approved that can trade with the exemption.
Jerimiah Gertler, acting vice president of defense and international affairs at the Aerospace Industries Association of America, said the organization sees two primary benefits to the agreement.
First, because the United Kingdom is such a close ally, it amounts to about 20 percent of all licenses in the system, 99.9 percent of which are approved, he said. Taking that number of applications out of the export control system would free up resources to monitor other applications and streamline the process.
Second, because so many companies do business on both continents, it would help with international transfers of information--even within companies like Boeing [BA] or Lockheed Martin [LMT], he said.
One primary concern about loosening the rules of trade for military equipment is that secrets could leak into the hands of unfriendly nations.
What makes this treaty more palatable than past agreements is that it applies Britain's official secrets act to potential leaks of information, which is a very rigorous law to punish violators, Gertler said.
Early opposition to this agreement was largely procedural, he said, focusing on the fact that because it is a treaty, only the Senate would have jurisdiction.
The office of Foreign Relations Committee Chairman Joe Biden (D-Del.) did not respond to a request for comment.
Sen. Dick Lugar (R-Ind.), the ranking member, is reviewing the treaty and asking for information about implementation, said his spokesman Andy Fisher.