The American Aerospace Industry Association (AIA), which recently made a strong pitch to improve American math and science education, collects statistics that include annual industry trade balances. While the USA as a whole is running a trade deficit of $708.5 bilion in 2007, the final 2007 trade balance tally for the aerospace industry stands at a record positive figure of $60.4 billion.
US Aerospace Exports were $96.9 billion, up 14% from $85 billion in 2006. Military-related exports were only $13 billion of this total, and civil aircraft dominated growth.
US Aerospace Imports were $36.5 billion, up 19.67% from 30.5 billion in 2006. One-third of that growth was reportedly related to commercial transport aircraft and increased imports of regional jets.
AIA President and CEO Marion Blakey said that “Airlines from around the world are stocking up on U.S. aircraft because of growing demand in both emerging and established markets… This is a very hot market despite economic uncertainty.” Blakey did not discuss what impact rising fuel prices might have on that growth’s rate, direction, and composition. AIA release.
Rumors are flying that India is set to sign a $2.2 billion deal with Boeing for 8 P-8I maritime patrol aircraft, and American companies are competing like never before in critical defense competitions like the $10+ billion medium multi-role fighter bid. The process of working through foreign defense sales is far more complex than simply winning competitions, or even establishing an industrial network within your target market. In societies with accountable governments, the arms trade comes under a number of key regulations, and government to government agreements that lay out key terms are critical in order to lay the framework for industrial cooperation and sales.
One aspect of arms sales regulations that’s quite common at present is restrictions on what a country may do with the equipment it buys. Prohibitions on second-hand sales without approval of the exporting country are routine inclusions, even by regimes that have no political compunctions about selling weapons to anyone. After all, as tech firms like Cisco and Sun found out during the dot-com crash, having your high-end hardware sold on eBay does terrible things to the bottom line. Many accountable governments have also been pushed into offering a second kind of restriction, however: restrictions on what the purchasing country can do with the equipment, even within its own borders. Any machine needs maintenance, which provides sufficient leverage to ensure cooperation. Even so, many countries like Indonesia and Chad are becoming restive. As international equipment options continue to broaden, some countries like Indonesia are even switching suppliers to ensure non-interference.
Indian Navy chief Admiral Sureesh Mehta recently expressed similar sentiments with respect to side agreements the USA is requesting, and whose absence is slowing down the growing military relationship between the 2 countries…
