MR BROWN: Hey, everybody. Joining me for the second on-the-record briefing today is Assistant Secretary Clarke Cooper, who heads our Bureau of Political-Military Affairs. We have two primary objectives for this briefing.
First, we want to highlight for you President Trump’s update to the April 2018 United States policy on the export of unmanned aerial systems, or UAS. Signed just this week, this update will impact one of America’s most innovative industries and promote the United States’s long-term national security interests.
Secondly, Assistant Secretary Cooper will discuss recent developments in U.S. defense trade and how the Political-Military – or PM Bureau is working with U.S. industry and our foreign partners to ensure that America remains that global security partner of choice, even amidst the challenges imposed by the coronavirus pandemic.
Assistant Secretary Cooper will provide brief intro remarks and then answer your questions. As a reminder, the content of this briefing is embargoed until the call ends.
Clarke, please go ahead.
ASSISTANT SECRETARY COOPER: Great. Thank you, Cale. Good afternoon, everybody. Appreciate us all being able to get together. I’ll start off first with our update on UAS, on unmanned aerial systems, and what we are working in that space.
Regarding President Trump’s update, Cale mentioned back in April of 2018 the United States policy on export of UAS – this is where we were first looking at what we needed to do to make sure that the changes that we were addressing on one of America’s most innovative industries allows for us to further promote the United States long-term national security interest. And with this revision, what the United States is doing is we are invoking our national discretion on the implementation of the Missile Technology Control Regime, or the MTCR’s “strong presumption of denial” for transfers of Category I systems to treat a carefully selected subset of MTCR Category I UAS – this would be with a maximum airspeed of less than a hundred kilometers per hour, essentially as a Category II. That 800-kilometer-per-hour cap designation allows the United States to export UAS for specific purposes – purposes that I am familiar with from a previous life – to support ISR, intelligence, surveillance, and reconnaissance missions, also to support counterterrorism missions as well as border integrity or border security operations.
All proposed transfers affected by this change will continue to be subject to the same rigorous review criteria that we have outlined in our UAS Export Policy, our Conventional Arms Transfer Policy, and of course, the Arms Export Control Act, as well as the specific nonproliferation criteria that has been identified in the MTCR Guidelines. The United States is going to continue conducting our robust review procedures for exporting UAS technology to support global nonproliferation objectives, and we encourage members of the MTCR, as well as non-members such as China, to do the same.
This policy changes – in effect, modernizes our approach to implementing our MTCR commitments. It makes it more reflective of the technological realities. It helps our allies, it helps our partners – it helps them all meet their urgent national security and commercial requirements, and it also advances the United States’s national security and economic interests. This change is undertaken within consistent – with the MTCR Guidelines, some that I’ve already referenced, which always envisioned the possibility of overcoming the “presumption of denial” for Category I exports, and relied upon partner state governments to exercise discretion in such determinations.
This subset of UAS affected by this change poses no risk for weapons of mass destruction delivery. Higher-speed systems – such as cruise missiles, hypersonic aerial vehicles, and advanced unmanned combat aerial vehicles – are not affected by this revision.
The United States remains a committed member of the MTCR, and we hold it as an important nonproliferation tool to curb the spread of high-end missile technologies to countries such as North Korea and Iran. Preventing the use and spread of WMD and their means of delivery remains a Trump administration priority.
At this point I also want to talk a little bit about other aspects of reform and refinement that we have addressed during the pandemic, and how we have been working with our partners in that space.
When we’re looking at the broader global political-military enterprise as a priority and how we interface with our security partners and their needs, I would like to note, as Secretary Pompeo has noted in several fora, the United States remains and is proud to be the world’s number one provider of humanitarian assistance to countries worldwide. In response to the coronavirus pandemic, the United States has provided more than $1.5 billion in humanitarian, health, economic, and development assistance to more than 120 countries. Essentially, when times are tough, you can rely on a true friend to truly lend a helping hand and be there with you.
Similarly, from a posture standpoint, everything – defense trade, security assistance, peacekeeping, humanitarian demining, et cetera – continues be impacted by the virus. Everything is impacted by the virus, but what has not changed is the programmatic need. What has not changed are those security requirements. Of course, supply chains and review streams have been disrupted, budgets for some of our partners remain uncertain, but both the United States Government and American industry continue to honor our commitments to our security partners. We continue to process cases at approximately the same pace and volume as we did before the onset of the coronavirus pandemic. America’s defense industry is fulfilling contracts and timely deliveries continue despite persistent transportation disruptions or challenges. Our security partners have also affirmed they want to continue their spending purchases. Some partners are even pursuing some new or additional requests in response to COVID-related uncertainty. In fact, just this month, July 2020, is shaping up to be our second-largest month ever in the history of foreign military sales notifications to Congress, with more than $32 billion in proposed sales. This includes 23, or a little more than $23 billion in sales of the F-35 Lightning aircraft to Japan.
All the while, industry’s also been very candid about where they need our assistance to keep the processes moving. And in April, early on, the Political-Military Affairs Bureau’s Directorate of Defense Trade Controls responded with a number of temporary changes to ITAR – this is our International Traffic in Arms Regulations – to help industry and make sure that – ensure the continuity of operations, practicing of social distancing, and of course all of us on this call can appreciate maximizing telework, and make sure that we’re at the same time reducing the burden on IT systems while still safeguarding national security and protecting our unique technical data.
Just this week we also sought to extend a temporary suspension on the requirement that regular employees must be on site in order to allow for telework, so long as that employee is not located obviously in Russia or another prohibitive, adversarial country. We have also similarly eased requirements on the sharing of technical data to support remote work. Everybody is appreciative of this, especially the smaller, medium-sized operations. This temporary suspension, while it was set to expire next week, we have now extended it through the end of the calendar year to December 31st.
Since these regulatory changes back in April, DDTC has taken additional measures to support industry and enhance remote work, which includes holding our first-ever Defense Trade Advisory Group virtual meeting with industry representatives in May. I could tell you personally, when we convene the DTAG we actually probably – well, actually, we know we had a higher attendance and participation rate in a virtual format than we did in our traditional in-person format. We’ve also been conducting our semi-annual in-house seminars on defense trade licensing virtually. We’ll be doing more of those as we go further. And again, we are finding opportunity where there’s been adversity. Some of the measures that we have put into place or we’ve consulted with industry, we may seek to actually keep in place well after the pandemic is past.
As to the impacts the coronavirus has in other places, such as security assistance, peacekeeping capacity building, and humanitarian mine action programs, many of these activities continue to be impacted by partner nation lockdowns, closed borders, of course the military do-not-travel order in places, and, which we all can appreciate, limited civilian air travel. However, as noted earlier, the need for these programs remains. Those requirements haven’t gone away. And there are no changes to U.S. Government funding levels. In general, an overall assessment I can share is that our partnerships with the military and law enforcement on the hard security issues are actually the least affected. It’s the pandemic’s secondary effects that are difficult to anticipate or manage at this point – anticipate or mitigate, I would say.
To meet those urgent demands from medical services and some of the domestic needs that have actually grown from the pandemic, the Political-Military Affairs Bureau along with other regional bureaus such as our African Affairs Bureau, have worked with Congress to authorize partner countries to utilize equipment previously delivered for deployments to international peacekeeping missions and to make sure that they can be dual-utilized or temporarily utilized for domestic COVID response. This equipment, including field hospitals and ambulances, and in some cases, as well as personnel trained to utilize the equipment, are working in places like Ghana, Rwanda, Senegal, and Uganda to bolster the global response, treat those infected, and also slow the spread.
So as the global response evolves across the whole kit or tools of implementation for security assistance and foreign assistance, we are continuing to seek opportunities to temporarily repurpose previously delivered U.S. peacekeeping and security sector building assistance so that we can enable U.S. partners to meet the domestic needs as required. And again, as travel restrictions have delayed many of our training activities, we are continuing to move forward with – in placing peacekeeping training and advisory contracts to support our country – our partners, and we want to make sure that we are prepared to immediately execute this assistance as soon as the conditions allow for us to do so.
And then elsewhere, our crucial work to protect civilians from unexploded ordnance, IEDs, and landmines continues. Again, the need is still there. The requirements are still there. And while many of our demining programs did take an operational pause briefly between the April-May timeframe, we have been able to resume work in a majority of the countries where we are present.
Our humanitarian mine action programs are among the most publicly visible in countries where they operate, and our continued assistance is prominently displaying America’s role not only as a reliable security partner, but the partner of choice.
And lastly, let me close with an admonition many of you have heard me declare in different fora: caveat emptor. There are unscrupulous state actors and their proxies seeking to take unfair advantage of this coronavirus-stricken planet. And so our partners should ask: Are these altruistic measures? Assistance that comes along with the loss of sovereignty, assistance that comes along with resource extraction or debt-trap diplomacy or the signing away of rights to critical physical or IT infrastructure, or the exploitation of intellectual property due to espionage or outright theft is not aid at all, and should rightly be refused. America will continue to offer assistance to allies and partners in need, and we will always do so without those harmful strings attached.
So with that, I’m happy to carry on the conversation and answer your questions.
MR BROWN: Okay. If you want to get into the question queue, just dial 1 then 0.
OPERATOR: And ladies and gentlemen, as a reminder, if you are using a speakerphone, you may need to pick up the handset before pressing the numbers. Again, you will press 1 then 0 for the question queue. Thank you.
MR BROWN: Great. For our first question, let’s go to the line of Tony Capaccio from Bloomberg. Tony, you there?
OPERATOR: One moment. We’re getting his line open. Thank you. Please, go ahead, Tony.
QUESTION: Can you hear me?
MR BROWN: Yeah.
MR BROWN: Got you now. You’re good, Tony.
QUESTION: Okay. I just want to double – I want to double-check your – the new policy today allows the sale in FMS cases to – of armed Reapers. Is that accurate?
ASSISTANT SECRETARY COOPER: Yes, Tony, that’s accurate.
QUESTION: And will that also allow the sale of the ground stations needed to command and control the Reapers while on flight?
ASSISTANT SECRETARY COOPER: We can get back with you on the details on scoping.
QUESTION: Okay. Can I ask you one other follow-up? Do you have —
ASSISTANT SECRETARY COOPER: Yeah, sure.
QUESTION: Do you have a lot of countries in the queue right now asking for price and availability data for armed UAVs or are we talking very sporadic interest at the moment?
ASSISTANT SECRETARY COOPER: I could tell you generally they’re of varying interest. At the top of the call, I was talking about some of the applications that partners are looking at, right. So ISR is a common one, border security operations, and there’s also some commercial interest as well. So there are a number of partners that are looking at it for varying degrees. As I said, the need for us to address this was to be better apace at where the technology is and what could be made available.
But yeah, the interest is bespoke. And of course, no different than any other foreign military sale, these are all case-by-case determinations, based on not only where the partner requirement may be, but how that aligns with U.S. interest.
MR BROWN: Okay. Next question, let’s go to the line of Mike Stone, Reuters.
QUESTION: (Inaudible) a lot for doing this.
OPERATOR: Your line is open.
QUESTION: Thank you. Thanks for doing this. I’ve got four very quick housekeeping questions, please. What was the instrument? Was it like an EO or a cabinet memo? That’s one.
Who signed it? Was it the President? That’s two.
On what day? That’s three.
And is it effective immediately? That’s four. Sorry about that.
ASSISTANT SECRETARY COOPER: It’s a – this is Assistant Secretary Cooper. It’s a policy determination, and it was signed by the President. As far as effective, I don’t have the mechanics on exact date, but I would say – I would say probably effective prior to announcement, so this week, essentially. If you need a date stamp on that, you’re going to have to – we’ll have to follow up on that.
MR BROWN: Yeah, you might also look for a statement to come out from the White House press secretary. It should be out by – by now.
Okay. Let’s move on to our next question. Let’s go to Gavin Bade with Politico.
OPERATOR: And please, go ahead.
QUESTION: Hi. Thanks, all for doing this briefing. A question on a different subject here, the closure of the Chinese consulate in Houston. I wonder if you have a status update on what’s going on there. They had said that they might simply continue to be operating, offering consular services to Chinese in the U.S. Is there anything that the U.S. is prepared to do to stop them if they say, “We’re simply going to continue doing our virtual services”?
MR BROWN: Hi, Gavin, outside the scope of this briefing. Assistant Secretary Cooper, for all his knowledge, this wouldn’t be his purview to speak on, but I would refer you to a transcript from a briefing we held earlier today on background, which should be released very soon.
All right, for our next question let’s go to the line of Ed Wong, New York Times.
QUESTION: (Inaudible) for the call.
OPERATOR: Your line is open. Please, go ahead.
QUESTION: Hi. I was just wondering what measures you might take to prevent proliferation of this technology once these sales start and are – become more robust, and in theory there will be a lot more of these drones out there and in the hands of various parties. How do you intend to prevent the proliferation of technology to the people in those countries or to other parties?
And what about potential human rights abuses and countries that have engaged in wars or conflicts that – where there have been documented human rights abuses? How would you prevent selling these drones to them, or would you take those – that into account?
ASSISTANT SECRETARY COOPER: Yes, I’ll work backwards on the question. So I’ll start with – and kind of touched upon this earlier – case-by-case analysis on any of our foreign military sales still applies here. So when we’re looking at particular on UAS, we’re not only looking at it from the frame of the statutory Arms Export Control Act review applications, but we’ve got the Conventional Arms Transfer Policy as well as UAS export policy. And yes, it is case by case. So it’s not just a matter of addressing the requirements, because while UAS systems vary widely in their sophistication application, we also – it’s incumbent upon the United States that we ensure that the systems we sell are used responsibly and will not threaten our interests or those of our allies. So it is – if one looks at what is being provided or offered or sold for UAS, it doesn’t mean that we have precluded what we already apply on FMS.
And then on the proliferation question that you asked, is that – apart from announcing our reform in export flexibility under a revised UAS export policy, the United States is not changing how we implement the “strong presumption of denial” for other MTCR-controlled systems such as hypersonic aerial vehicles, ballistic missiles, rockets, and cruise missiles. These types of systems that pose the greatest risk from a WMD delivery perspective certainly are still going to fall within that space and that control.
So what’s been reformed, what’s been revised has been able to take what is more viable and available in applications that we’ve already addressed regardless of its ISR border security or commercial applications. But we certainly – the announcement does not change how we implement the “strong presumption of denial” on other MTCR-controlled systems.
MR BROWN: Okay. Next question let’s go to the line of Marcus Weisgerber, Defense One.
QUESTION: Hey, guys, thanks for doing this. I have an economic question. Do you have an estimate on how much money this can generate for American companies looking to sell overseas and how many jobs this would create or keep?
ASSISTANT SECRETARY COOPER: If we look at – if you’re looking at industry and not just the industries that work or have components on UAS – so if you look at dollar figures and look at it from an estimate – so if we say a billion dollars in sales, that is near to, equivalent about 5,700 jobs. So if one looks at what that aggregates to, one could definitely tie an increase to additional jobs in the aerospace defense industries, yes. But yes, I mean, so a general – and the figure I’m giving you is a Department of Commerce figure that one would ascribe. Again, it’s about 5,700 jobs to about – per billion dollars.
MR BROWN: Okay, let’s go to Toby Burns with NHK.
QUESTION: Hi, there. Can you hear me?
MR BROWN: Yep, hear you fine.
QUESTION: Okay, great. So yesterday the spokesman for China’s ministry of foreign affairs said that the State Department has been, quote, “smearing China’s military-civilian integration policy,” and then goes on to sort of say that – talk about the ways in which U.S. universities, private companies, institutions are involved in the military industry – I mean, in the – the military in the United States. Can you – this is a more general question, obviously. Can you talk about the structural differences between the military-civilian integration process in the U.S. and in China, and kind of talk about, like, broad strokes why – how are they structurally and administratively different? Thank you.
ASSISTANT SECRETARY COOPER: Yeah, we’ll start with in a structure of the PRC being a centralized communist socialist state. There is not an open society; there is not freedom of expression. There isn’t civil society that we would recognize. And there’s also not a free and open economy or free and open trade. So where there is collaboration in the United States or there’s collaboration in other free, open, and capitalist economies, that is by choice. It is – one could say that the big broad stroke difference is one of a free, open – the liberty of affiliation and the liberty of association in say the United States, versus in China where there are coercive measures and not a choice of affiliation or association regardless if one is serving in an industrial or academic capacity.
I would also offer another difference is that when we, the United States, are working with other states and other foreign partners and industries, it is of a shared and collaborative nature. It is not one of an exploitive nature or one where theft is involved. And so I had mentioned this earlier is that we desire all partners to be responsible, to be supportive of free and open trade. But what we don’t expect of partners is to be in a coercive posture or one where they are seeking to steal or exploit our data or our technology.
MR BROWN: All right. Let’s go to the line of Amanda Macias from CNBC.
QUESTION: Hi, thank you. So just given the global economic havoc that has followed in the wake of the coronavirus, are you concerned at all about logistics, production, or even partners being able to finance and being able to continue to buy American? Is there any concern there or do you think that these are more short-term concerns?
ASSISTANT SECRETARY COOPER: Yeah, I, again, broadly can say that macro overall – not just the Department of State but our colleagues at the Department of Defense have been monitoring very closely our partners’ ability to maintain readiness of their forces and also to be able to pursue their defense requirements. It does vary state by state. I think the general theme or trend is that all states, as I mentioned earlier, are impacted by the pandemic, and so that means that some resources may be reapplied or offset in other areas. What has it done? It has forced a number of security partners to prioritize where they are going to pursue particular procurements.
Another I would say overall general assessment that I can share is that anything that’s currently in place or in pursuit, we have not seen that abate or truncate. I think the bigger question is further down the line of broader long-term modernization programs, how those may be affected. But anything that was a near-term pursuit by a partner is in train. Anything that was already contracted or at least near contracted is also online for production.
Earlier in the pandemic, the Department of State and the Department of Defense had to work very closely to not only identify, assess, and address where there might have been potential disruptions in some of the global supply chain. And what do I mean by that is that some states had not yet determined or did not know that they needed to look at their defense industrial base as necessary or essential for people to be back at work as soon as possible. And so there was a tight collaboration there early on, and I’m talking about – this was like the March-April time frame – so that certain suppliers could continue to meet their requirements and deadlines so that it wouldn’t —
MR BROWN: Clarke, you still on?
OPERATOR: We are not hearing the speaker. One moment.
Okay, show the line for Clarke Cooper has disconnected and may be calling back in.
MR BROWN: Okay. Let’s give it a minute and see if he can jump back on. I think we have time for maybe one – finish that question and –
MR BROWN: – and take one more.
MR BROWN: All right, moderator, are we seeing him rejoining the call?
OPERATOR: I am not seeing any line dial in right now. We have no lines dialing in right now.
MR BROWN: Okay. Well, I apologize for that technical problem, but we were at 30 minutes, so we were about to cut it off anyway. Thanks to everyone for joining on the call, and since this is the end of the call, the embargo on the – or the embargo on the contents of the call is lifted. Everybody have a great Friday, great weekend. All right, take care.