December 3, 2009 / 11:21 PM / 10 years ago

US aerospace seeks pact change to spur drone sales

 * Industry urges overhaul of U.S. export controls
 * More than 100 chief executives sign letter to Obama
 By Jim Wolf
 WASHINGTON, Dec 3 (Reuters) - The U.S. aerospace industry urged President Barack Obama on Thursday to press for changes to an international pact to spur the multibillion-dollar market for remotely piloted aircraft.
 In a letter to Obama signed by more than 100 chief executives, the Aerospace Industries Association (AIA), the industry’s chief trade and lobbying group, also urged a broad overhaul of the U.S. export control system.
 “An effective export control system must safeguard critical technologies, as well as facilitate collaboration with our closest allies and international partners,” AIA wrote.
 Worldwide spending on remotely piloted aircraft will more than double to $7.3 billion from $3.4 billion annually within a decade and total nearly $55 billion in the next 10 years, Teal Group, an aerospace consultancy, estimated in a 2008 market study.
 The chief U.S. producers of the systems at issue, which have an ability to stay aloft for extended periods and range significant distances, are Northrop Grumman Corp (NOC.N), which makes the Global Hawk, and closely held General Atomics, which makes the Predator.
 “It’s a big business,” said Steve Zaloga, a Teal Group expert.
 Companies such as Lockheed Martin Corp (LMT.N) and Boeing Co (BA.N), the Pentagon’s No. 1 and 2 suppliers, respectively, would like to get into the business, he said.
 The industry wants to change the Missile Technology Control Regime, or MTCR, a pact among at least 34 countries aimed at curbing the spread of unmanned delivery systems that could be used for weapons of mass destruction.
 “In short, subjecting slow, unarmed UAS (unmanned aerial systems) with limited maneuverability and performance capability to the same restrictions as cruise missiles is unnecessary and inappropriate,” AIA said in a piece accompanying the letter to Obama.
 The MTCR was created in 1987 by seven countries: Canada, France, West Germany, Italy, Japan, Britain and the United States. Membership had grown to 34 countries by February 2008, according to a list on the State Department’s website. China and Israel are among a handful of others that profess to adhere to MTCR guidelines.
 Tweaking the MTCR, as proposed by the industry, would be a mistake, said Richard Speier, a retired Pentagon official who helped draft and negotiate the pact.
 “It’s not only unnecessary but dangerous for us to fiddle with the MTCR restriction,” he said. “We can promote international security by sharing the information provided by unmanned aerial vehicles, rather than the hardware itself.”
 Northrop Grumman’s Global Hawk is equipped to provide intelligence, surveillance and reconnaissance over a broad area. It has drawn interest from South Korea, Japan, Singapore and Australia as well as Britain, Spain and Canada, said Gemma Loochkartt, a Northrop spokeswoman.
 Defense Secretary Robert Gates said in October 2008 that the United States was “very sympathetic” to South Korea’s interest in the system but added there were MTCR issues to overcome.
 Under the MTCR, systems capable of delivering a payload of at least 500 kgs to a range of at least 300 km are subject to a “strong presumption” of denial for export.
 AIA recommended establishing performance and survivability criteria that would lift this presumption for export of systems deemed not suitable to deliver deadly weapons.
 The United States already has approved Australia to buy Global Hawk and Italy was cleared to buy the Predator under the pact’s “national discretion” option.
 Marion Blakey, the trade group president and chief executive, said in a teleconference that Israel, Japan, Australia were among those “clamoring” for such systems, including for border control and other security benefits.
 Among the letter signers were top executives from Lockheed, Boeing, United Technologies Corp (UTX.N), BAE Systems Inc (BAES.L), Textron (TXT.N), Rolls-Royce North America Inc (RR.L) and Science Applications International Corp [SAICI.UL].  (Reporting by Jim Wolf, editing by Matthew Lewis)  ((jim.wolf@thomsonreuters.com; + 1 202-898-8402; Reuters Messaging: jim.wolf.reuters.com@reuters.net)) 

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