U.S., Britain sign long-delayed military-trade pact

WASHINGTON (Reuters) - U.S. and British leaders have clinched a defense-trade pact designed to stitch long-standing bilateral military and security ties even tighter, the State Department said on Thursday.

If ratified by the U.S. Senate and the British Parliament, the treaty will do away with red tape for most military-related goods, services and information intended for use by the two allies.

The pact "will foster an even closer defense and security relationship between our nations, improve the capabilities of our armed forces to operate together, and make our cooperative research and development programs more efficient and effective," said Julie Reside, a department spokeswoman.

U.S. President George W. Bush wrapped up the signing of documents with Tony Blair on June 26, a day before Blair stepped aside as prime minister, the department said.

The U.S.-UK Defense Trade Cooperation Treaty follows years of tugs-of-war over technology transfer between the United States and Britain, despite their strong alliance in hot spots like Iraq and Afghanistan.

Arms trade is fraught with red tape even though the State Department says it approved 99.9 percent of the more than 13,000 export licenses requested by U.S. companies for British-bound items over the past two years.

Britain-destined defense items accounted for about 20 percent of all such U.S. license requests, a State Department official said.

The treaty therefore would help "unclog" a system that has often frustrated U.S. defense contractors such as Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp., plus their British clients, the official said.

The pact would carve out a kind of "license-free zone" for certain exports within a community of government and trusted contractors on both sides that meet certain requirements.

The United States and Britain still must agree jointly on which companies qualify to be in the community and which projects and operations are to be included, a White House official said.

Exports outside this group will continue to require approvals from the authorities, the official said. A text of the treaty was not released.

Jeff Bialos, who headed the Pentagon's industrial affairs office under former President Bill Clinton, said the pact harked back to waivers for key allies that Clinton and Bush had sought to carve from the U.S. Arms Export Control Act.

Republicans who controlled the House of Representatives until this year had blocked the move for fear that Britain had not done enough to strengthen laws governing re-exports to third countries such as China.

"In effect, this is an effort to do the same thing without seeking House approval," said Bialos, now a Washington lawyer specializing in defense. "The calculus apparently is that it is easier to get Senate approval of a treaty than House approval" of a waiver of rules that control arms traffic.