Offsets Revisited

Competitiveness is the degree to which a nation can, under free market conditions, produce goods and services that meet the test of international markets while simultaneously maintaining or expanding real incomes of its citizens. Global Competition, The Report of the Presidents Commission on Industrial Competitiveness, January 1985. Offsets are an increasingly controversial subject in international trade. The Spring, 1988 issue of The DISAM Journal contained a report by the Office of Management and Budget OMB which reviewed the 1987 direct commercial sale of Boeing AWACS Airborne Warning and Control System aircraft to the United Kingdom and France. The OMB study represented an essentially neutral perspective regarding the major offset sales requirements associated with these transactions. A more positive view of the offset features of these sales is presented in the article by Boeing Spokesman R. Lee Hessler in this issue of The DISAM Journal. Also, the Summer 1988 issue of The DISAM Journal reported testimony presented by the American League for Exports and Security Assistance ALESA before Congress in which the offset issue was seen as generally harmless to U.S. industry and labor. Finally, in December 1987, the OMB published a report summarizing three years of offsets which again reflected a generally neutral attitude. A much different view will be presented in the discussion which follows.