New drone export rules could give foreign firms an edge over U.S. industry

U.S. companies are often subject to higher standards than their international competitors with drone exports. (AP Photo/Eileen Ng)

 “Soft language” in a new agreement governing international armed drone exports could give foreign companies an advantage over U.S. industry, according to analysts.

The administration on Wednesday announced that 44 nations had signed a joint declaration overseeing the sale and use of armed unmanned aerial vehicles. The new document requires the countries to commit to the “responsible export” of armed UAVs and continue conversations about standards for drone use and sales, the use of drone strikes in accordance with “international law” and the effort to increase transparency.

Rachel Stohl, a senior associate at the Stimson Center, said U.S. companies are often subject to higher standards than their international competitors with respect to drone exports.

“This declaration could continue [to] result in other countries and foreign companies having an edge over U.S. companies for drone exports,” Stohl said via email. “If the standards in the joint declaration are lower than those regulating U.S. companies, then yes, there could be an adverse impact on U.S. exports.”

Further discussions to work out specifics of each of these proposals are expected next spring, according to a State Department fact sheet.

A representative from the National Defense Industrial Association said that soft language in the agreement, which says none of the requirements in the document “should be construed to undermine the legitimate interest of any state to indigenously produce, export, or acquire such systems for legitimate purposes,” will not help U.S. industry.

“Our sense is that it won’t aid U.S. UAV manufacturers due to the soft language that permits various low thresholds compared to existing U.S. policies and, at present, major drone producing countries like China, Israel and Russia are not signed on,” the representative said.

U.S. companies looking to export drones, such as the General Atomics MQ-9 Reaper, to foreign entities are already governed by a policy set up in February 2015 that requires the sale of drones goes through the same foreign military sales process required for the sales of all military equipment.

But Stohl wrote in a Defense News op-ed that the restrictions in the joint declaration that will govern industry in all the partner countries is “less robust” than those already placed upon U.S. companies. While many of the details of the new document are still to be ironed out, Stohl said more restrictive policies on U.S. companies than on international peers could hurt business.

“A lot of uncertainty remains, as we do not yet know what the future negotiated standards will look like. As with everything else in respect to this declaration, in theory it sounds great, but the devil’s in the details,” she said.