Regulatory Friendly Fire: How ITAR Undermines the Alliance It Was Built to Protect

For nearly a century, America’s defense industrial strength yielded a subtle benefit: influence as the world’s security guarantor of choice. But the system that once anchored partner access to U.S. Modern statecraft — the interplay of industry, diplomacy, and defense — requires a fresh approach to regulating defense trade.

While the American arsenal accounts for more than 40 percent of global arms transfers , that share largely comprises exquisite systems for which the United States is unable to meet its own demand, let alone the needs of other nations. Arab partners expended hundreds of high-end interceptors to combat low-cost drones during Operation Epic Fury. Japan and Taiwan await billions of dollars’ worth of backlogged conventional U.S. And even as European defense requirements multiply , they increasingly look inward. Why hasn’t America risen to the challenge? Compounding an already diminished industrial base, U.S. regulations governing defense exports mute international demand and exacerbate the consequences of the Pentagon’s monopsony. American companies are disincentivized from entering the defense market or from manufacturing to meet global requirements, taxpayers pay higher costs, the industrial base stagnates, and warfighters are left with fewer choices. Cold War-era regulations created to protect conventional American military superiority now hinder the timely delivery of capability to allies in need. International Traffic in Arms Regulations and Export Administration Regulations are a maze of rules originally developed when existential concern about Soviet exploitation of American military capability dictated national policy. The shape of technological progress has changed in the past half-century. Commercial technology now outpaces defense research .

Key points

• While the American arsenal accounts for more than 40 percent of global arms transfers , that share largely comprises exquisite systems for which the United States is unable to meet its own demand,…
• Arab partners expended hundreds of high-end interceptors to combat low-cost drones during Operation Epic Fury.
• Japan and Taiwan await billions of dollars’ worth of backlogged conventional U.S.
• And even as European defense requirements multiply , they increasingly look inward.
• Why hasn’t America risen to the challenge?