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UAV Firms Seek Easier Exports

Jul. 13, 2014 - 01:59PM   |  
By AARON MEHTA   |   Comments
US companies want the State Department to loosen its interpretation of the Missile Technology Control Regime, which governs UAV exports. A US-built Reaper, above, flies with the UK Royal Air Force. Officials from US-based Insitu, which makes the ScanEagle, right, are pushing for more exports.
US companies want the State Department to loosen its interpretation of the Missile Technology Control Regime, which governs UAV exports. A US-built Reaper, above, flies with the UK Royal Air Force. Officials from US-based Insitu, which makes the ScanEagle, right, are pushing for more exports. (UK Ministry of Defence)
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WASHINGTON — For years, the United States has maintained a technological edge in the world of unmanned systems. But with more nations taking the plunge on indigenous drone capabilities, industry and experts alike are looking to the US government to change a longstanding policy that restricts overseas sales.

The policy in question is the application of the Missile Technology Control Regime (MTCR) on drone exports. The MTCR agreement, now signed by 34 nations, was established in 1987 to prevent the spread of unmanned systems that could carry nuclear weapons. Anything carrying a payload of 500 kilograms that could travel more than 300 kilometers is considered a “category 1” item under the regime.

Category 1 items are given a “presumption of denial” for potential export. That can be overruled, but it throws up roadblocks industry and analysts say are an unintended consequence of an otherwise useful ballistic missile anti-proliferation treaty.

“The issue is, was the MTCR actually intended to cover this technology we have today?” asked Rachel Stohl of the Stimson Center. “I think as we’re trying to look at a holistic export control reform, export rules for UAVs, we have to put [it] in context while not undermining the important nonproliferation tool that is the MTCR.”

It’s not just armed systems that are affected by the MTCR. The 500-kilogram payload restriction involves any sort of payload, such as ISR sensors that have no weaponized capability.

Industry executives argue that trade regulations are hurting US companies’ ability to compete on the world market.

“Unmanned systems are not the easiest things to export,” Ryan Hartman, senior vice president of programs at Insitu, told journalists during a Boeing-funded tour of the company’s facilities in Washington State. “It’s impacted our business. From an industry perspective we’d like to see MTCR policy that enables us to be on par with the rest of the international market.”

Insitu, which manufactures the ScanEagle and Integrator unmanned systems, says the restrictions hurt its efforts to expand sales abroad.

“If you look at the capabilities and technologies available to an international market, you look at the restrictions we have with MTCR, it is the fact that we are falling behind on the international market,” Hartman said.

Frank Pace, president of General Atomics’ aircraft systems group, agreed.

“It could end up costing us $30 to 50 billion over the next 20 years because we didn’t seize the day and sell to our allies, so they are off trying to develop their own and getting money to develop them,” he said.

Pace holds up his company’s inability to sell Predator B UAVs, which the US Air Force flies as the MQ-9 Reaper, to the United Arab Emirates as an example of why the policy doesn’t make sense. He notes that the UAE has been allowed to procure a fleet of advanced F-16 Block 60 fighters — significantly deadlier than a Reaper.

“There is nobody in the world that would rather go into a fight with a Predator B than an F-16,” Pace said. “It’s hurting us … it’s hurting any significant [unmanned] program.”

Lack of Clarity

Several people compared the situation to the satellite industry.

For years, the US maintained a critical technological edge in satellite technologies, but restrictions prevented industry from most potential sales. Eventually, the rest of the world caught up and, in some cases, passed US companies.

If that happens, the US could lose not just an industrial edge, but a strategic one, said Michael Horowitz, a professor at the University of Pennsylvania who studies drones.

“The proliferation of capable drones is inevitable. There’s nothing we can do to stop that. The question is, what systems specifically will people have, and who is going to teach them to use these systems?” Horowitz said.

“The US has the safest and best record of safety when using drones, an established set of procedures that allows us to use them in accordance with international rules and regulations,” Horowitz added. “The worst thing that can happen is the US doesn’t export even to very close allies and partners, and then those countries either build their own or import them from other sellers like China and Israel.”

The MTCR “puts export into an uncertain environment,” Pace said. He expressed frustration with the lack of clarity as to whether an export will or won’t be approved, with no real set guidelines.

“They’re just basically going around the treaty based on the policy of the day,” Pace said.

Asked what the biggest change to US policy on drone exports should be, Pace said “one thing would just be to know for certain what you can or can’t do. Then you could market around that and you could strategically run your company that way.”

Indeed, talking with stakeholders on this issue, phrases such as “clarity” and “uncertainty” get thrown around a lot. But those involved were also quick to say they don’t think the MTCR needs to be ignored, just clarified.

“Industry is not looking for decontrol here. We’re looking for smart control,” said Remy Nathan, vice president of international affairs with the Aerospace Industries Association. “What we lack in industry is a sense of clarity and consistency across the interagency review process that will allow us to make intelligent decisions in a timely fashion about trying to pursue the approval of certain exports.”

“People like to know what the rules are,” said Stohl, who was project director on a recent Stimson report on unmanned system exports. “I think if there was more clarity, that would be helpful and have specific licensing guidelines that represent MTCR categories 1 and 2, but also in general, what are the guiding provisions for exporting this technology?”

Horowitz added: “The argument isn’t that the US should be selling armed Reapers to everyone around the world. That’s ridiculous.”

So what can be done? For now, the US State Department expects to largely stay the course.

“All arms sales are conducted according to the framework laid out in PPD-27, the Conventional Arms Transfer [CAT] policy,” a State Department official wrote in a statement. “However, we recognize that unmanned aerial systems present a unique capability that is deserving of even deeper assessment prior to export.

“In reviewing any future requests from partners we will continue to operate on a case-by-case basis, using not only the framework required by the CAT, which includes human rights considerations, but also in accordance with our relevant international commitments, such as under the Missile Technology Control Regime.”

Pace, however, said industry hopes the White House is considering changes to how it handles these exports.

“It looks like now there is some sort of agreement that the president has made about exporting certain things,” Pace said. “We [aren’t] privy to the information, as industry. All we have is, in the blind try to test it out to see what they’re going to approve.”

A White House spokeswoman declined to comment, pointing to the comment from state.

“It’s a level of clarity and consistency that benefits everybody,” Nathan agreed.

Horowitz said the US simply cannot afford to try to keep unmanned exports to a small trickle when the rest of the world is rushing to flood the marketplace.

“If the US chooses to take itself out of that market, we risk an outcome where not only have drones proliferated anyway, but US systems end up being less capable because our producers haven’t had to compete for international market share,” he said. “We have the world’s best technology when it comes to drones, so we have the ability to shape the market and influence the way people use these technologies.” ■


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