Good morning, everyone — and thank you to the Hudson Institute for the chance to say a few words to all of you today.
The United States’ proposal to make an adjustment to the Missile Technology Control Regime (MTCR) Annex as they relate to unmanned aerial systems (UAS) has been the subject of detailed discussion already in the MTCR for many months, and the MTCR’s Technical Experts Meeting (TEM) has explored our proposal extensively from a technical perspective. I would like to say a few words about the reasons why we believe this modest reform of part of the MTCR framework is both necessary today and an important part of keeping the MTCR relevant and effective in the years ahead.
It almost goes without saying that the MTCR is and remains a valuable nonproliferation instrument, and one that we are committed to preserving — but I will say so nonetheless, for I wish there to be no misunderstanding about the U.S. position. We have been steadfast proponents of the MTCR from its beginning, and holding ourselves and international partners to its standards of nonproliferation “best practice” is an important and enduring aspect of our approach to nonproliferation and the preservation of international peace and security against the destabilizing spread of systems capable of delivering weapons of mass destruction (WMD). We remain steadfast in our commitment to the MTCR.
Yet for all its accomplishments in slowing such proliferation and helping underpin peace and security, the MTCR is an ageing regime. It and its Guidelines, in fact, are more than three decades old. For a system setting standards of conduct that are based upon highly specific technological parameters, this is in many ways an extremely long time.
As we consider what specific parameters should continue to be enshrined in the MTCR in the years ahead, we must not forget just how extraordinarily long a time this has been in technological terms. The formulation of the MTCR, for instance, predated the invention of text messaging, and its drafting preceded the introduction of the first crude smart phone by more than a decade. When our predecessors were trying to figure out what technological standards should be written into the MTCR framework people were still a few years from figuring out how to distribute audio and video over the Internet, the number of Internet websites in the entire world was in the low hundreds, the first widespread computer virus had not yet appeared, and the first permanent Internet connection between North America and Europe had not yet been established. Indeed, iconic modern technology-driven or -facilitated firms that are now household names — companies such as Amazon, Yahoo, Netflix, Ebay, Facebook, Tesla, Virgin Galactic, SpaceX, Alibaba, and Baidu — did not exist.
So that was the technological environment of the time, and the world was clearly a very different place. But the world of the MTCR’s birth was also a vastly different place in economic terms. China’s per capita GDP was only a handful of hundreds of U.S. dollars, for instance, and the boulevards of its cities were still crowded with bicycles. (Indeed, in key respects, it is actually hard to say what China’s GDP actually was at that point in the first place, for in those days China still measured its GDP by Soviet-era metrics.) There were no McDonalds restaurants in any country ever ruled by a Communist Party, and South Korea had yet to finish its transition to the democratic and capitalist powerhouse of the Sixth Republic that still exists today. For its part, the Soviet Union was still a monolithic block, still maintained its imperial control over the countries of Eastern Europe, and had not yet begun its efforts at economic restructuring (perestroika) that helped lead to such momentous change in the region.
In technological and economic terms, in other words, the environment in which the MTCR’s technological parameters were established was an entirely different universe from the one we inhabit today.
Make no mistake. Nothing was wrong — nor is anything wrong today — with the animating principle of the MTCR: that nonproliferation principles require restraint and circumspection in transferring systems that could conceivably be used to deliver WMD. This remains as important a principle as ever. What fidelity to this key principle means in practice, however, cannot ignore the whirlwind of technological changes that have been taking place in the world.
Not surprisingly, the MTCR framework is today somewhat outdated. A system that fixed in place technical standards based upon military hardware of the Cold War era, its approach to UAS predates the extraordinary revolution in UAS development that has occurred in recent years. That revolution — which is still underway, and in many respects picking up steam — has seen an explosion in UAS applications and technology that has, among other things, seen the emergence of increasingly broad ranges of systems that technically fall within MTCR Category I standards but that are not as significant in terms of WMD-related threats.
Though not threatening in the way that the MTCR aspired to prevent, however, these emerging UAS are very valuable, and increasingly subject to a great range of diverse uses entirely unrelated to WMD, not just for military purposes — e.g., having become essential in intelligence, surveillance, and reconnaissance applications, and having an emerging roles in areas such as logistics — but also throughout the civilian economy, science, industry, commerce, logistics, safety, environmental management, forestry, agriculture, entertainment, recreation, and more. This is a fast-growing sector, and soon to be quite a huge one.
Not surprisingly, the great value of these systems and their growing diversity has led to a growing demand for UAS, including for systems technically within the Category I framework, and this demand has elicited a growing supply.
But MTCR Partners are to an important extent shut out of much of this exploding market, unable to participate fully in the commercial benefits of this booming sector — because of the high hurdle imposed by the MTCR’s reflexive presumption of denial for all Category I systems — and with their governments unable to reap the full benefits of the relationships that UAS engagement can bring as countries around the world seek to expand their capabilities into these diverse new, non-WMD-related areas.
But other suppliers — and in particular those outside the MTCR framework, who are not bound by its strictures and who may feel no special obligation to scrutinize proposed transfers from a rigorous nonproliferation perspective as we do — are not shut out in this way. Indeed, for them the MTCR is a tool of competitive advantage against MTCR Partners. Against all of us. Such other suppliers are increasingly stepping in where MTCR Partners find it difficult to tread because even non-WMD-relevant UAS systems are covered by strict Category I rules with their associated presumption of denial. Under the right circumstances and with appropriate nonproliferation assurances, of course, it is not impossible to overcome a presumption of denial, but having to overcome such hurdles for the modest subset of Category I UAS that are in reality not a WMD-related threat represents a considerable impediment — and, we think, an unnecessary one.
This situation harms not just the competitiveness of MTCR Partners, but also the MTCR itself — and the cause of nonproliferation. It puts needless pressure upon the MTCR and could threaten its long-term integrity, for institutions that do not know how to be appropriately flexible in a changing world risk shattering. Nor does continuing this rigidity stop the spread of UAS, because non-MTCR supplies are stepping into this market.
Indeed, the system’s current rigidity fails to provide real nonproliferation benefits either, because the growing sources of foreign supply for increasingly capable UAS mean that these systems are spreading anyway. And because non-MTCR suppliers of such equipment seldom feel the need to approach their transfer-related decision-making with the nonproliferation-focused scrupulousness that we and other MTCR Partners display, even for non-Category-I systems, allowing such non-MCTR suppliers to occupy this competitive terrain essentially uncontested means that nonproliferation equities will get less and less respect over time — unless, that is, we do something to fix this problem.
In reaction to all this, the United States has proposed a way out of the trap caused by the MTCR’s rigidity in the face of UAS-related technological change.
We have proposed to carve out a carefully-selected subset of Category I UAS for treatment as if they were Category II systems. This subset is based upon a maximum speed value — which would, in effect, update the MTCR framework to allow more permissive treatment of run-of-the-mill, basically non-WMD-related modern UAS that are useful, and indeed in today’s world all but essential, for a range of non-WMD military and an exploding universe of peaceful civilian applications.
This change, however, is carefully limited, and would avoid relaxing MTCR rules on the sorts of WMD-related systems that it has always been the great virtue of the MTCR to restrict. Things such as ordinary, slow, fixed-wing UAS — along with rotary wing systems and lighter-than-air craft — would be subject to somewhat more flexible Category II rules. But cruise missiles, advanced unmanned combat aerial vehicles, and hypersonic aerial vehicles would still be covered as Category I items, as they should be.
Our proposed MTCR reform would continue to ensure that transfers of any covered UAS — including the ones for which we propose to relax some Category I restrictions — remain subject to careful nonproliferation considerations, pursuant to well-established MTCR principles. They would also be covered by the new standards of international conduct that are currently being negotiated to cover the uses of UAS, an important additional project that is important to the future of the nonproliferation regime, and that I hope all of you will also support.
Under the new approach, however, the MTCR would no longer rigidly apply its strong presumption of denial under the strictest, Category I rules to a subset of UAS that in reality have essentially nothing to do with WMD but a great deal of potential in the growing global UAS market. This would facilitate commerce in less threatening systems, and ease the worrying pressure that is building upon the MTCR regime, but it would do so without causing proliferation harm — and indeed while helping preserve the MTCR’s integrity.
In fact, by helping preserve or increase the market share and international engagements of MTCR partners who do approach all such questions with real nonproliferation integrity — at the expense of unscrupulous suppliers who have hitherto been benefiting from overly rigid MTCR rules and unless the system is reformed will continue to do so — the more flexible approach we propose would likely have net nonproliferation benefits rather than costs.
The United States first suggested this approach in a concept paper over a year ago, and we have presented technical explanatory papers on multiple occasions to walk our MTCR partners through the details. We have also modified our proposal on the basis of these very helpful discussions.
It is now time, we believe, to move this proposal forward, before the damage done by the MTCR’s UAS-related rigidity gets any worse. A regime that sets its standards on the basis of technological parameters cannot long ignore whirlwinds of technological change, and the bough that does not flex in such a gale risks breaking.
This is a reasonable idea, and a prudent one, and we believe its time has come. We will continue to work to seek MTCR Partners’ support to modernize controls on UAVs.