South Korea's F-X3

This chapter again aims to explore in detail the offsets demanded, offered and agreed to, this time in connection with South Korea’s F-X3 fighter aircraft competition. While doing so, it provides further support for the liberal-rationalist theory of defence offsets proposed in this book. On the one hand, this chapter confirms that less export-reliant bidders such as Lockheed Martin are more reluctant to (fully) meet the offset demands of the buyer states. On the other hand, it shows how home governments in private governance ecosystems set the agenda when it comes to offset and technology transfer, either supporting or restraining their national champions. In fact, by channelling the F-35 sale through the FMS mechanism and barring the transfer of some key technologies, the United States simultaneously supported and restricted the operations of Lockheed. While the first section tracks the F-X3 competition through a few rounds of negotiations from 2007 to 2014, the second and last sections evaluate the F-35’s offset performance.