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Interview: Beth McCormick

Deputy Assistant Secretary for Defense Trade, US State Department

Jun. 14, 2013 - 03:45AM   |  
By ZACHARY FRYER-BIGGS   |   Comments
Beth McCormick
Beth McCormick (State Department)
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WASHINGTON — Beth McCormick is the US State Departmentís deputy assistant secretary for defense trade in its Bureau of Political-Military Affairs. She joined the State Department in 2010 after serving as the deputy director of the Defense Security Cooperation Agency and will be the most senior State Department official at the Paris Air Show this year.

Sheíll oversee efforts to strengthen relationships with overseas partners as the US defense industry desperately seeks international growth to offset domestic cuts. Part of that responsibility is working with industry to present a unified message and making sure US officials know theyíre allowed to advocate for industry in some cases, McCormick said.

Q. US companies seem to be focusing on international markets, but, at the same time, US spending issues are causing reductions in the US presence at the show. Does that impact the ability to work with partners and to make deals?

A. I think it is going to have some kind of an impact, but itís not just these air shows where we have engagement with international partners. First off, we have a variety of dialogues that we do with countries, a lot of political-military dialogues, some that we lead here in the Bureau of Political-Military Affairs. So I think that these air shows and trade shows are helpful, but, to me, theyíre an engagement opportunity. Sometimes when I meet with the foreign officials at these shows, it could be a half-hour meeting or something like that. So I find that with these countries itís the long-term relationships that we have that matter, and thatís not built in a half-an-hour meeting. Those are built over time through a variety of meetings.

Q. Has the need to protect the US defense industrial base, helping companies keep unit costs down by increasing international sales, changed the advocacy youíre doing for US companies?

A. I guess it has in the sense that I think we have really tried to do a much more concerted job to make sure that US government officials are knowledgeable about the fact that there is approved advocacy that they can and should be doing.

[This is] where the advocacy has really improved, and I think it will need to because industry is going to say to us that we have to export to remain viable because, hey, Defense Departmentís no longer going to be a captive market to us. This is where weíve had some efforts where weíve raised this issue; weíve talked about it.

I think sometimes officials go to these events, and theyíre actually unaware of the extent to which they are allowed to actually do advocacy. The idea of having a State Department official, but perhaps the director of the Defense Security Cooperation Agency, [Heidi] Grant the undersecretary of the Air Force for international affairs, the three of us are going to be there. Whatís a more compelling situation than to have us all delivering the same message? That can be incredibly powerful.

Thatís the kind of thing that weíve tried to do, and I do believe that we are doing a better job of it. I believe that it will still be something that we can do better. I think itís certainly grown, and I think it will grow because of the pressure from US industry, and I also just personally think that we should do it.

Q. How important is it for US govern-ment officials to work with industry on creating a unified message for other countries?

A. Itís a very important area where we have this partnership between US government and US industry, because we want to make sure that we are synched with US industry in terms of what products they are going to sell, because when a foreign official is speaking to someone from the United States, I donít think that they often make a distinction between speaking with someone from US industry or someone from US government.

So, I donít want a situation where a US industry person has made a comment which is then perceived by that foreign government as some type of a commitment, and then later I come back and have to say, ďweíre not going to be able to give you that capability.Ē That expectation management is something that we must do together, so itís really a partnership with industry so that we are doing this collaboratively.

Q. This year at Paris the composition of attendees and exhibitors is changing, as many large companies have reduced their footprint and smaller companies lower down in the supply chain are picking up the slack. How does that change the dynamic of the show?

A. Given the global nature of the defense industry and the importance of the supply chain, having not only all of these very big companies, and one could argue whether all of the consolidation that has gone on in the defense industry is good; I personally think that diversification is good, and competition is good. I also believe that the big guys are well-known, and they can showcase their products but their products are particularly well-known. I really feel like this is a good opportunity for these smaller companies who perhaps arenít as better known to get out into an international market.

I also believe that a lot of the small companies that we see, their products are very interesting because often while they do have a defense aspect to them, many of them are also dual use in nature so that they can satisfy requirements in the commercial and civil sector. Also, with a lot more even with the big companies, thereís a diversification of products and an emphasis on changing the types of security issues that we have to deal with.

In some ways that was prescient with some of these companies because, as we see now with our own Defense Department going to be subject to sequestration and obviously having to make some pretty tough decisions about expenditures on capabilities, these companies are going to be looking for an export market. Obviously, there are going to be countries where we will sell military capability, and obviously thatís where we at the State Department get that final say as to whether those are the right things to sell.

Q. Do you have hopes that with some of the changes to US export rules in the process of being adopted that youíll see a reduction in the ITAR-free [International Traffic in Arms Regulations] advertising that has been a point of concern at past shows?

A. This notion of ITAR-free is kind of an interesting issue; itís kind of a marketing strategy. If I was going to go into my own business I would print T-shirts and mugs that say ĎFear the ITAR,í because people find the ITAR somewhat onerous. I think that the changes that weíre making are good changes, however; having grown up at the Pentagon, you can take the girl out of the Pentagon but not the Pentagon out of the girl. Iím a firm believer that, even though weíre going through this comprehensive review, and itís definitely time to do it, this is a national security review.

And so we are still, when we make decisions about items that must remain on the ITAR, we are making a conscious decision that those technologies still deserve the kind of protection under the jurisdiction of the Department of State that they need. As we are looking at things to move over to the Commerce Department, to their commerce control list, people need to remember that itís not a decontrol either.

This process to me is going to certainly allow us to get some technologies to allies more quickly perhaps, but itís still got to protect US national security, so I think there will still be people who think that the ITAR is perhaps onerous. I personally donít. Itís just the idea that the way the ITAR is written, if itís sort of the way things are designed and developed, if theyíre captured theyíre captured, and theyíre in kind of broad categories. But I think weíre working through this review of really having to take a look at what needs to be controlled and what are the types of parameters that should sort of guide that control. Itís a really good process that weíre going through.

I know people are saying that this is taking a long time. Some of this is really hard, I have to tell you.

Q. So you think thereís enough of a marketing slogan that it wonít matter what you do with reforming US export controls, ITAR-free will still be advertised?

A. I think the prejudice against the ITAR is unfair. I think that sometimes people donít understand it, and I think that they think that itís onerous. My Directorate of Defense Trade Controls reviewed the 86,000 export licenses last year, and we did it with an average processing time of 18 days. So if somebody wants to say that itís onerous, if people come in, and companies come in and we work with companies to help them to do this, if they come in with basically well-written export licenses that clearly define what it is that they want to do, we can move them out relatively quickly. I think the ITAR gets a bit of a bad rap.

I think we certainly will have less items on the ITAR, but the items that remain on the ITAR, itís going to be important that they remain on the ITAR because they are going to be a type of technology that we definitely need to have higher walls around because these are some of the cutting-edge crown jewels of the United States.

Q. What do you think are the strong suits of the US export system?

A. What I like about our system, and I believe this is what really separates us from other countries that are purveyors of weapons systems, is the fact that we do a total package approach. So we not only provide the platform, but we also provide a whole range of capabilities; we talk to them about sustainment; we talk to them about training. I tell countries all the time, I am not interested in giving you something that youíre going to roll out once a year in your national day parade or have set over in the corner as a piece of static display. We want to provide you with capability to allow you to address your legitimate security requirements. And weíre also interested in having you participate in regional security issues, humanitarian assistance operations and perhaps actually participate in a coalition military operation that might be in your region, but it might also be out of [the] area.

With many of these countries that I work with, candidly I want them to buy US products. Itís not just that I want to sell them the product; I want to have a relationship with them. Many of these countries in the world, I would rather have a long-term strategic relationship with the United States, because thatís going to be important to our interests in the region and in the world if weíre engaged in these countries. If we are not actively engaged with some of these countries, unfortunately there will be other countries that theyíll interact with, and I think that there are security issues that come up. When it really comes down to it, yes itís big business, but I think more importantly itís about relationship-building and having the ability to have friends and allies that you can work with around the world.

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