ABSTRACT
This chapter aims to exhaustively explore the many offsets that were demanded, offered, and agreed to in connection to Brazil’s F-X(2) fighter aircraft competition. In doing so, it provides ample support for the liberal-rationalist theory of defence offsets developed in this book: Brazil’s offset demands respond to societal preferences, particularly to those of domestic defence firms; foreign suppliers are both market- and asset-seeking actors, but both the competition and export-reliance of firms’ increases the scale and scope of offsets; and while home states support arms export, firms operating in private governance ecosystems are less capable of imposing their preferences on these states than those which operate in public ones. More specifically, the first section of this chapter tracks the F-X(2) competition from tender to final agreement, covering several rounds of negotiations from 2001 to 2015, before evaluating offset performance between 2016 and 2023. The last section then focuses specifically on the Saab-Embraer strategic partnership through the lens of Tucker’s ‘Partners and Rivals’ model. The findings show that, contrary to spontaneous strategic partnerships, which are virtually always ‘optimal’ from the perspective of the original equipment manufacturer, the strategic partnerships that have evolved from offsets are likely to be ‘sub-optimal’.
