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U.S. Department of State

Diplomacy in Action

Global Economic Statecraft Day: Defense Trade Builds Diplomatic Partnerships

Fact Sheet
Bureau of Political-Military Affairs
June 14, 2012


Promoting U.S. business abroad and expanding U.S. exports are top priorities for the U.S. Department of State. The Bureau of Political-Military Affairs actively engages with allies and partners to expand the defense trade that is critical to our national security and is an important part of the Department’s larger economic statecraft efforts.

Senior Department officials, including U.S. Ambassadors, actively advocate on behalf of U.S. bidders on foreign government and foreign military procurements. We do so when we meet with officials on our travels abroad, on the margins of international conferences, and in regular diplomatic encounters and correspondence with foreign government officials.

These efforts are having an impact. Despite the global economic strain, demand for U.S. defense products and services remain strong. Government-to-government transfers through Foreign Military Sales (FMS) have exceeded $30 billion annually for four consecutive years. Foreign military sales increased by approximately nine percent last year, making FY 2011 the biggest year to date. Meanwhile, demand remains robust for the other major component of U.S. defense trade, Direct Commercial Sales (DCS), which involve countries purchasing systems directly from U.S. companies. Last year, the State Department received and reviewed more than 83,000 DCS cases, the most ever, authorizing exports valued at $44.3 billion.

We increasingly reach out to new partners and emerging markets. U.S. defense sales in India, for example, have grown from virtually zero to more than $8 billion over the past decade. We also actively engage Brazil, which is modernizing and expanding its military capabilities. Supporting these efforts and building on these ties is a major agenda item in political-military talks with both countries, as well as in recent exchanges with Indonesia, Malaysia, and Singapore, which are also working to modernize their defense sectors.

Our efforts to expand defense trade also create and sustain jobs here at home. For example, our agreement in December to expand our security cooperation with Saudi Arabia is projected to have a significant impact on the U.S. economy. According to industry experts, this agreement will support more than 50,000 American jobs. It will engage 600 suppliers in 44 states, and provide $3.5 billion in annual economic impact to the U.S. economy. This will support jobs not only in the aerospace sector, but also in our manufacturing base and support chain, which are all crucial for sustaining our national defense.

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