ABSTRACT
Traditionally, a nation acquiring a foreign aircraft obtained manufacturing work for its domestic industries through negotiating a contract for licensed production. Competition within the world military aerospace markets has led firms to offer different and new industrial packages designed to win more business. In the context of North Atlantic Treaty Organization weapons standardisation policy, American producers favour international collaboration through sharing production in the form of co-production schemes. American firms distinguished between licensed manufacture and co-production. With licensed production, the foreign nation builds for its own orders only. Co-production contracts allow the foreign nation a share of United States orders, domestic production and third party sales. For example, the General Dynamics F16 European coproduction contract was based on a sharing arrangement on an initial 998 aircraft programme. Policy-makers rarely reveal the valuations which they are placing on the benefits of licensed and co-production.
