New analysis offers an inside look at defense trade agreements between the US and its allies, with recommendations for enhancing the security of these supply chains

WASHINGTON, D.C. – JULY 28, 2021 – The Atlantic Council’s Scowcroft Center for Strategy and Security today published a new issue brief exploring the security of defense supply chains: The Security of Defense Trade with Allies: Enhancing Contact, Contracts, and Control in Supply Chains. Written by nonresident senior fellow Dr. James Hasik, the paper takes an in-depth look at how government-to-government agreements facilitate the provision of defense goods and services in times of crisis and recommends steps that would enhance the security of defense trade with allies.

Against a backdrop of rising protectionism—as seen with the recent announcement from the US National Reconnaissance Office that it will limit the procurement of commercial imagery to US companies—Hasik’s issue brief finds that the security of supply arrangements between the US and its partners signal how the international relationships underlying these supply chains facilitate their security and reliability, and that they are worth enhancing. Hasik’s analysis draws upon months of primary-source research and interviews with diplomats and defense officials. It also examines several instances in which US security of supply has been tested, including challenges to the production of Joint Direct Attack Munitions (JDAMs) and mine-resistant ambush-protected (MRAP) vehicles during the Iraq War, cases which illustrate how existing arrangements helped align foreign suppliers with US security priorities.

“The close integration of allies’ industrial capabilities is an essential element of the partnerships critical to US defense strategy,” said Atlantic Council senior fellow Steven Grundman, who supervised the preparation of the issue brief. “Jim Hasik’s research fills a void of understanding about how and why these defense-trade relations work to secure these supply chains.”

“The close integration of allies’ industrial capabilities is an essential element of the partnerships critical to US defense strategy.”

Steven Grundman, Senior Fellow, Atlantic Council

The issue brief concludes with an agenda of recommended actions to enhance the security of America’s defense trade, including:

  • The assistant secretaries of defense for acquisition and industrial policy need to facilitate awareness within the acquisition community of how the various agreements undergirding defense trade with allies should be used to secure access to supplies from comparatively advantaged sources.
  • Contracts with foreign sources of supply should exercise opportunities, through stockpiling and licensing, to hedge against the potential for disruptions to supply arising from circumstances beyond the control of allied governments.
  • The US government needs to explore whether security of supply arrangements with still more allies whose industrial bases are important to US defense—Japan, Taiwan, and Mexico—can be undertaken to enhance a conviction that goods and services sourced from these countries are secure.

The Security of Defense Trade with Allies is the latest publication from the Scowcroft Center’s Forward Defense practice area, which shapes the debate around the greatest military and defense challenges facing the United States and its allies. To learn more about Forward Defense’s work on defense industry and acquisitions, please visit here. Follow the latest on Twitter via #ForwardDefense, and sign up to our mailing list here.

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Related Experts: Steven Grundman and James Hasik