PARIS AIR SHOW–U.S. officials have raised the possibility of blocking European defense companies from U.S. competitions, if the European Union does not relax the proposed rules of the $14 billion European Defense Fund (EDF) and Permanent Structured Competition (PESCO)–an initiative to build an EU defense force.
“European countries enjoy a lot of business in the U.S.,” Ellen Lord, U.S. undersecretary of defense for acquisition and sustainment, told reporters during a briefing here on June 17. “We want to make sure U.S. companies have the same opportunities.”
In addition, a change in the rules would help ensure that U.S. defense forces are interoperable with their European counterparts, Lord suggested. Lord and Andrea Thompson, undersecretary for arms control and international security at the U.S. State Department, wrote of their concerns on the draft EDF and PESCO language in a May 1 letter to the EU in which they wrote that intellectual property and export control restrictions would act as “poison pills” to “effectively preclude participation by any company that uses U.S.-origin technology.”
Lord said on June 17 that her office’s interpretation of the proposed EDF and PESCO language would mean that European subsidiaries of U.S. companies would not be allowed to participate in intellectual property exchange except as it relates to EDF and PESCO.
U.S. Secretary of Commerce Wilbur Ross and U.S. Ambassador to the EU Gordon Sondland have also expressed concerns about the draft EDF and PESCO language. The 28-country EU could vote on the language as early as this month. On June 17, Lord said that the most significant areas for U.S. technology sharing with European nations include “what we can export in intelligence, surveillance, and reconnaissance…where we can push limits there,” munitions effects, and communications systems.
In a whirlwind 48-hour visit to the Paris Air Show, Lord is meeting with a number of U.S. and European companies, including Airbus and Thales, and with her counterparts in seven European nations and Canada. She said that her meeting with Thales was “productive” and that company representatives told her they were unaware of the U.S. concerns with the draft EDF and PESCO language.
On another matter of interest to the U.S. defense industry, Lord said that her office is exploring ways to reduce the cost per flight hour of the Lockheed Martin [LMT] F-35 Lightning II, possibly through a multi-year buy. The F-35 is not at the show this year, and the aircraft on display and in flight are heavily European.
The Air Force and Navy sixth-generation fighter has “an enormous amount of potential,” Lord said. In response to a question on the German-French-Spanish Future Combat Air System (FCAS) program and the potential for cooperation with the U.S., Lord said that wasn’t on her agenda during her Paris visit, though other defense officials may be discussing such possibilities with European countries.
As a punctuation mark on the competitive strains between the U.S. and Europe, a Dassault Aviation Rafale fighter boomed overhead and muffled the sound of Lord’s briefing.