Defense Trade: European Initiatives to Integrate the Defense Market

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Defense Trade: European Initiatives to Integrate the Defense Market

With decreasing U.S. defense procurement budgets since the end of the Cold War, U.S. defense companies have been looking for sales in foreign markets, and the Department of Defense (DOD) has been attempting to increase cooperative programs with its major European allies. At the same time, partly in response to their own reduced defense budgets, many European countries have taken steps to develop a common armament policy and consolidate their defense industrial base to become more efficient and competitive in world markets. To provide some insights and perspective on the implications these European efforts have on future U.S. military procurement options, we have reviewed the changes that have taken place in the European defense market over the past 5 years. Specifically, our objectives were to examine (1) what actions European governments and industry have taken to unify the European defense market, (2) how key European countries' defense procurement practices have affected U.S. defense companies' ability to compete on major weapon competitions in Europe, and (3) how the U.S. government and industry have adapted their policies or practices to the changing European defense environment. Our review focused on the buying practices of five European countries--France, Germany, Italy, the Netherlands, and the United Kingdom.