Farnborough Airshow: US delegation pushes ‘Buy American’

The White House has sent a high-level trade delegation to this year’s Farnborough International Airshow tasked with boosting the country’s sales of weapons and aircraft. The Manufacturer caught up with Nazak Nikakhtar from the International Trade Administration at the US Department of Commerce, to learn how it plans to boost its ‘Buy American’ initiative.

The US Commerce Department has participated in the Farnborough Airshow for decades.

The official US delegation will reportedly be the highest ranking to attend the Farnborough Airshow – a week-long, biennial event that combines a trade show with a public airshow.

Nazak Nikakhtar, assistant secretary for industry & analysis told The Manufacturer: “The Commerce Department has participated in the Farnborough Airshow for decades.

“As the largest airshow taking place in the world this year, it provides an excellent opportunity to meet with industry representatives, our partners and our allies.”

Earlier this year, the US government announced plans to boost its ‘Buy American’ initiative which aims to speed up arms deal approvals and increase the advocacy role of senior US officials, in closing foreign sales.

Major US defence manufacturers such as Boeing, Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman and its suppliers will reportedly be benefitting from the ‘Buy American’ initiative since the US Department of Defence is the US industry’s single largest customer.

In 2017, President Trump authorised just under US$700bn in defence spending and a 2.4% increase in military pay, the administration also provided oversight for US$42bn in government-to-government (G2G) sales and US$112bn in direct commercial sales.

Government-to-government deals allow governments to procure defence equipment, services, and works from other governments, in a G2G deal, the purchasing government does not deal directly with any defence contractor.

Instead, the sale is made by the other government, either by offering from its own stocks or after having itself procured the equipment for that purpose. Therefore, in military business deals, the government often acts as a business partner on behalf of a company.

G2G deals in the military defence industries are commonplace because the complexity of many of the projects requires that the government works closely with suppliers.

Nikakhtar explained her expectations for Farnborough 2018: “While the relationships are usually long-standing, the issues being addressed to help promote our companies are constantly changing.

“We meet with our companies to learn more about their key concerns and we meet with foreign governments to advocate for US solutions and sales.

“With the president’s new Conventional Arms Transfer (CAT) Policy now in place, the Commerce Department is devoting increasing effort and resources to assisting our defence companies to succeed internationally.”

Government-to-government sales (‘G2G’) is a method that allows governments to procure defence equipment, services, and works from other governments.

The purchasing government does not deal directly with any defence contractor; instead, the sale is made by the other government, either by offering from its own stocks or after having itself procured the equipment for that purpose.

G2G often includes but is not limited to product support, maintenance, training, and infrastructure construction.

The CAT Policy also loosens US export rules on equipment ranging from fighter jets and drones to warships and artillery.

The ‘whole of government’ approach, from Trump and his cabinet down to military attaches and diplomats, is meant to help drum-up billions of dollars of additional arms business.

According to Reuters, Trump himself has pushed weapons sales with foreign heads of state.

Nikakhtar told The Manufacturer: “With the president’s new CAT Policy now in place, the Commerce Department is devoting increasing effort and resources to helping American companies succeed internationally.”

She added that the Trump administration recognises the importance of organising the enterprise for success and ensuring efficient execution of the conventional arms transfer policy.

“For years, US embassies and consulates have been committed to supporting US companies start exporting or grow their global exports. Our diplomats have long worked to ensure that U.S. products and services have the best possible chance competing abroad.

“The Administration’s defence-trade focused initiatives build upon this tradition of economic diplomacy and direct the United States government to support America’s defence industry by strengthening our advocacy for defence sales that are in our national interest.”