Emerging Trends and Prospects for Future U.S.-European Competition and Collaboration
RAND CORP SANTA MONICA CA
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In the years following World War II, the United States was the NATO defense markets principal supplier. This arrangement served both U.S. and NATO interests in rapid European rearmament, interoperability and standardization of weapon systems, and efficient production. The European market was also a source of profit for U.S. firms. Over time, Europe rebuilt its own design and production capability, first through licensed production of U.S. systems and offsets, then gradually, under growing nationalist sentiments and a strengthening European economy, through the rebuilding of an indigenous industry. Today, the larger NATO European allies rely primarily on domestic or European systems, while the smaller countries are still heavily dependent on U. S.-designed systems. National independence brought Europeans such benefits as security of supply, access to leading-edge technology, improved balance of payments, and increased employment, but at a price higher unit costs, duplicative research and manufacturing capabilities, and declining standardization in NATO. In the late 1970s and early 1980s there was as effort to overcome some of these problems through an emphasis on transatlantic collaborative programs, but many of the more visible efforts, such as NFR-90, MSOW, and APGM, have now been abandoned. Increasingly, Europeans have turned to European collaboration as an answer to the limitations of national defense markets.
- Economics and Cost Analysis