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July 29, 2004 

U.K. Threatens to Retaliate Against U.S. Defense Contractors

The Financial Times reported today that British Defense Secretary, Geoff Hoon, has sent a letter to U.S. Secretary of Defense Donald Rumsfeld advising that the U.K. may retaliate against U.S. defense companies by steering military contracts away from them if protectionist U.S. policies in the defense sector are not eliminated. The letter claims that recent protectionist policies, including pending legislation in the 2005 defense authorization bill that would restrict the Department of Defense's ability to buy from foreign companies, are "a potentially serious blow to US-UK relations."

The article notes that the U.K. Ministry of Defense's recent decision to choose a French firm over a U.S. company to build the British army's new unmanned drone aircraft may have been "motivated partly by anger over American intransigence on defence trade."

The article notes that U.K. is also displeased by the continuing failure of the U.S. to give Britain an exemption, similar to the Canadian exemption, from the International Traffic in Arms Regulations (ITAR).

The full story can be viewed at the following link:

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