REMARKS ON INTERNATIONAL ARMAMENTS COOPERATION

		Mr. Alfred Volkman Director of International Cooperation U.S. Department of Defense
U.S. Dir of International Cooperation Alfred Volkman (right), with Alenia Aeronautica CEO Ing. Giovanni Bertolone, Lockheed Martin Senior VP Dr. Robert Trice, Thales Senior VP Dr. Edgar Buckley, Swedish National Armaments Dir Jan-Olof Lind, and EPA Deputy CEO Dr. Hilmar Linnenkamp (from left to right).

"...offsets are unlikely to go away in the near future, but...they increase the costs of defense equipment and
make it more difficult to give the warfighter the tools he needs and deserves to prevail against our
adversaries...nations need to find ways to limit the adverse effects of offsets."

It is an honor for me to introduce this panel on International Armaments Cooperation. When Roger Weissinger-Baylon asked me to chair this panel, he requested that I choose the title. I have always been a fan of Clint Eastwood movies and my first thought was to give the topic the title “Globalization: The Good, the Bad, and the Ugly”—not such a bad title when you consider that the movie was an Italian language movie about the American West with an Italian and American cast and that it was filmed in Spain. Also, globalization has all the characteristics of being good, bad, and ugly.

THE GOOD

            I must confess that in my personal opinion globalization is mainly good. It brings our world closer together. It provides a basis for closer cooperation. The Joint Strike Fighter Program is an example of this cooperation—the governments and industries of nine nations are cooperating in the development of this aircraft. When the first aircraft was assembled in Fort Worth, Texas, components from all over the globe fit together perfectly. The global industrial base works.

            Globalization results in greater competition with all the benefits in costs and quality that competition produces. The U.S. warfighter benefits from access to the best technologies and equipment produced outside the United States. The president of the United States will soon fly to Camp David in a helicopter of foreign origin. Recently the Department of Defense selected for its Joint Cargo Aircraft a product produced outside the United States. Globalization is making it possible to provide our warfighters with equipment that serves them well in combat and they get that equipment quicker and cheaper. However, not all the consequences of globalization are good.

 THE BAD

            Globalization costs many people their jobs. If you have ever lost a job, you know that all the arguments about the benefits of globalization will not convince a displaced worker that it is a good thing. Globalization results in a loss of expertise and pride. For example, Philadelphia and Baltimore were once proud shipbuilding cities. Now apartment buildings are going up where shipyards once stood. Globalization results in a loss of self-sufficiency. The interdependence that globalization creates also creates the uneasy feeling that we are no longer completely independent.  This is especially troubling for many nations when they realize they are dependent on others for the equipment necessary for their national defense. Globalization is both good and bad, and, unfortunately, the way governments react to it is often ugly.

 THE UGLY

            Governments often react to the bad aspects of globalization by resorting to protectionism, which can take many forms. In the U.S., it frequently shows itself in legislation designed to prop up threatened industries, so we have laws that protect manufacturers of textiles and anchor chain and stainless-steel flatware. Laws like these are the equivalent of keeping a hopeless patient on life support.

            In Europe, frequent calls are made to protect industry from foreign competition by restricting purchases to European sources. Of course, this is usually presented as a temporary measure in order to strengthen the European industrial base so it can stand as an equal against its American competitors—but it is still protectionism. Calls for protectionist legislation in the U.S. and for an industrial fortress in Europe are more talked about than practiced, but these are dangerous sentiments and they need to be confronted.

            However, there is one pervasive practice that is growing: demands for offsets. I realize that offsets are unlikely to go away in the near future, but we should recognize that they increase the costs of defense equipment and make it more difficult to give the warfighter the tools he needs and deserves to prevail against our adversaries. At the very least, nations need to find ways to limit the adverse effects of offsets.

CONCLUDING REMARKS

            Globalization is not without its difficulties, but it is a reality of life in the 21^st century. We need to find ways to take maximum advantage of its good qualities and to minimize the bad and eliminate the ugly.