Trump’s Push to Boost Lethal Drone Exports Reaps Few Rewards

More than six months after the Trump administration rolled out a new set of regulations promising to make it easier to sell American-made military drones abroad, no new sales have been made, and drone-makers are frustrated by the lack of concrete results.

Experts agree the administration has a genuine desire to ease the restrictions as part of a broader initiative to boost the competitiveness of U.S. products in a booming international market increasingly dominated by the Chinese. The challenge, according to observers and industry sources, is enforcing the new policy across a government bureaucracy that is both spread thin and stubbornly averse to change.

“I know senior Commerce and Defense Department leadership want to see change, but we’ve seen little to none thus far in actual exports of advanced UAS,” said Ben Schwartz, the executive director of the Defense and Aerospace Export Council at the U.S. Chamber of Commerce, referring to unmanned aerial systems.

The difficulty the Trump administration has had putting the new policy into practice reflects yet another example of a government agency deliberately trying to slow-walk the president. Industry sources said the Department of Defense, particularly the U.S. Air Force, has stubbornly resisted the change.

“The Air Force has made the determination for national security reasons that certain airframes can only be transferred under the foreign military sales rule set,” rather than through commercial channels, one industry source said.

Global sales of military drones are rising rapidly, but U.S. export policy has not kept up with demand. A 2017 Rand Corp. study concluded that previous administrations’ restrictive regulations on shipping armed and unarmed drones to foreign customers has left U.S. manufacturers at a disadvantage, effectively ceding the market to China.

The Obama administration also sought to ease the drone export process, but the Trump administration went further, rolling out the new policy in April. The new rules for the first time allow direct commercial sales of large, armed drones, meaning the customer can potentially buy the product directly from the manufacturer, bypassing the clunkier foreign military sales process through the U.S. government. The new policy also reclassifies drones with strike-enabling technology, like laser target designators, as unarmed, which will make them easier to export.

But Heidi Grant, the deputy undersecretary of the Air Force for international affairs, noted that despite the administration’s changes to drone export policies, “there are still going to be some systems that need to be protected.”

Defense Department spokesman Lt. Col. Mike Andrews said the department is “fully supportive of implementing all aspects of this Administration’s updated UAS policy.” But he stressed that “particularly sensitive components and subsystems must be sold via Foreign Military Sales (FMS), as is the case for sensitive components and subsystems for manned aircraft sales.”

“The Department is maximizing the [direct commercial sale] portion of the UAS system sale, where appropriate,” Andrews said.

Grant blamed industry for causing delays in exporting drones to allies by not building exportability—namely, protections of sensitive U.S. technology—into systems on the front end of the development process.

“What happens now is things are built for the U.S., then when there is a customer demand then they start reconfiguring for export,” Grant said. “This puts us two years behind and allows the competition to get in front of us.”

But the biggest obstacle to change, according to another industry source, is that easing drone exports is not a priority for the Pentagon, and no one has taken the lead in working out the gritty details.

“I don’t think DoD is organized with the juice to get this done,” the source said. “Everyone’s got the message, but they don’t have the bench. [Defense Secretary James] Mattis can only call [National Security Advisor John] Bolton so many times a day.”

The State Department is trying to implement a new policy approving marketing licenses that would allow companies to pitch prospective customers to buy their products, the industry source said. But right now, they have no license approvals that could not have been obtained under the old policy, the person noted.

A State Department spokesperson pushed back on claims that the policy change is not yielding results, saying the administration is making “strong progress” in implementing the new regulations. The spokesperson pointed to several recent milestones—including Japan’s agreement to proceed with a nearly $500 million sale of Northrop Grumman’s Global Hawk drones—as proof the policy is working.

“As other nations begin to employ military Unmanned Aerial Systems (UAS) more regularly and as the commercial UAS market emerges, the United States has a responsibility to ensure that sales, transfers, and subsequent use of all U.S.-origin UAS are responsible and consistent with U.S. national security and foreign policy interests,” the spokesperson said.

The spokesperson also pointed out that the Netherlands recently signed off on the sale of four General Atomics MQ-9 Reapers valued at up to $339 million. This year, the State Department has also notified Congress of proposed sales of up to four Northrop MQ-4C Triton drone systems to Germany, valued at up to $2.5 billion, and two General Atomics RQ-7B Shadow 200 drone systems to Australia, valued at up to $218 million.

However, Congress was formally notified of all of the sales the State Department cited as evidence of change before the Trump administration’s new policy was imposed. No new drone sales have been made since the rollout.

“It is important to reiterate that the Department of Defense continues to work closely with the Department of State on all DCS [direct commercial sales] and FMS [foreign military sales] actions,” a defense official said.

In another attempt to boost sales, the Trump administration is also pursuing changes to the Missile Technology Control Regime (MTCR), a 35-member export control body created in 1987 to prevent the spread of cruise and ballistic missiles that could carry weapons of mass destruction. At the time the control regime was set up, drones had a lot in common with one-way missiles—they were generally either used as target practice to test missile accuracy or as very short-range surveillance platforms, explains Michael Horowitz, an associate professor of political science and the associate director of Perry World House at the University of Pennsylvania, in the Bulletin of the Atomic Scientists. So the body was set up to control them, too, holding drones that can travel more than 300 km (about 180 miles) and carry a payload of more than 500 kg (about 1,100 pounds) to the same “strong presumption of denial” for export. The MTCR does not cover crewed aircraft.

But today, Horowitz argues, drones are much more akin to crewed aircraft—a recoverable platform designed to fly out, perform a particular mission, and return to base—than missiles, and they should be regulated as such.

“Regulating the export of drones and drone parts using range and payload standards relevant for missiles represents a mismatch between technology and reality, which could have negative effects,” Horowitz writes. “Placing drones in the same exempt category as crewed aircraft would reflect the technological reality and help preserve the integrity of the regime.”

Keith Webster, the president of the U.S. Chamber of Commerce’s Defense and Aerospace Export Council, also disputed the argument that selling more U.S. drones abroad will lead to the proliferation of WMD. Allowing China to control the market is where the true danger lies, he said.

“Actually, the best way to manage the risk of [drones] being used for WMD is for the United States to be the one that exports it to partners, because when we export things we partner with the country that’s receiving it to ensure they are using it in a safe way,” Webster argued. “When the Chinese sell these things, we have no visibility into how the user is going to use it.”

Experts are increasingly concerned that traditional U.S. allies are now turning to China for their drone needs. The Obama administration denied requests for armed or advanced unarmed drones from Jordan, the United Arab Emirates, and Iraq. Subsequently, these countries, along with Saudi Arabia, bought armed drones from China.

“You’ve got to balance the competing priorities, but in this instance actually changing our policy to allow more commercial sales serves both a commercial imperative and a nonproliferation imperative,” Webster said.

The administration submitted a proposal in March to add a speed criteria to the MTCR, a short-term fix that would exempt most drones, as they generally fly at slower speeds than missiles. Ultimately, the goal is to place drones in the same exempt category as crewed aircraft.

But the administration faces several obstacles, including the fact that Russia is a member and could veto any proposed change. Webster was not hopeful any proposed changes would be approved.

“It’s surprising that on things like the [Intermediate-Range Nuclear Forces] Treaty the administration is willing to take quite dramatic unilateral actions, but on something where we are in direct competition with the Chinese and we don’t even need to pull out of MTCR there is hesitation to take unilateral moves,” Schwartz said.

Update, Dec. 7, 2018: This story has been updated with comment from a Defense Department spokesman and a defense official.