US Offset Policy
In this paper we review in detail the evolution of US offset policy. While this history is complicated it may be characterized broadly by two observations. First, the United States, through the activities of its defense contractors, is largely in the role of offset provider because its firms are net international suppliers of military systems. This means that the US government has not had to develop much in the way of an offset policy covering its own defense procurement, though we argue that there is such a policy in implicit terms. More importantly, US policy has been aimed at regulating international conditions for providing offsets and at either helping or not interfering with American firms. Second, there is significant uncertainty, even in theoretical terms, about whether foreign offset demands have damaged US military, economic, or political interests. This fact has led to an ambivalent US policy, which might fairly be described as benign, albeit somewhat confused, neglect. We describe how political concerns are mounting in the United States about offsets, suggesting that additional efforts will be mounted to place restrictions on their use.