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ICG Risk Blog - [ At what point does a decision maker bound the system that describes options with the least destructive outcomes? ]



Just as customers had to "take either the horse nearest the stable door or none at all" from Thomas Hobson's livery stable, so must Microsoft decide between stopping piracy revenue loss or driving clients elsewhere or indirectly propagating vulnerable installs; and the US must decide between US-EU cooperative agreements that permit transatlantic technology transfer underlying cooperative programs such as the Joint Strike Fighter (JSF) or accelerated EU, principally French and German, arms exports to China.

Choices in complex systems are increasingly maddening, and in geopolitical systems those choices can have disastrous consequences. Many have written on the short term thinking of certain political elites that lead to an endless string of unintended consequences, so I am not the first to suggest that setting width of scope and length of timeline is essential in defining a solution space with the least damaging outlines. (Whenever clients task us for a solution to an especially vexing problem, we find that the solution space is not large enough to define a solution and that we have to widen the solution space, i.e., reset scope, in order to define one or more solutions that can be presented to the client for evaluation.)

The F-35 JSF is a potential casualty in US-EU tensions over lifting an arms embargo upon China if the US does not approve the "International Traffic in Arms Regulations (ITAR) waiver that would give blanket approval for exporting moderately sensitive technology [seen] as essential to the JSF programme":

From the point of view of many in the EU, US fears if a lifting of the embargo, which went into effect after China's crackdown on pro-democracy protesters in Tiananmen Square in 1989, alarmist. Not only will the embargo be replaced by the code of conduct, but there are still controls from the national governments.

In Washington there are fears that the EU's dropping of the embargo against China will lead to a large volume of advanced European weapons and sensor technology going to the country, upsetting the balance of power between China and Taiwan.

The JSF is an extremely expensive system that needs international offset agreements to improve the price/volume production costs across many nations, most of whom also want to share in design as well as production. I can sympathize with US fears of diversion of its technology. One has only to reflect on the diversion of US technology by Israel to Pakistan, India, and China.

European defense executives are said to be uninterested "in selling advanced weapons to China" for fear that they would "lose their US business if they were to sell to China" compounded by "China's reputation for reverse engineering and poor record in preserving intellectual property rights [that would see their technology copied] to compete in China and on export markets." I submit that the French are not so restrained. France has gone so far as "claiming that it would be better to sell arms to China than to force the Chinese to develop their own weapons technology":

The driving force behind the proposed scrapping of the embargo comes from European powerhouses Germany and France. If the arms ban were to be lifted, it would open up a whole new defense market, particularly for Germany with its stealth submarines and France with its Mirage fighter jets -- two pieces of military hardware much coveted by the Chinese defense department.

In China, the commencing "year of the monkey" is expected to be a prosperous one in terms of economic success and France seems to be interested in getting in on the action. France's 2003 trade volume with China amounted to $13 billion (€10.4 billion), about a third of the Chinese-German total.

In France, with Germany in tow, seeks to use China to outflank both the EU and the US, I noted that:

French and German motivations are strongly tied to their countries' economic weaknesses while they join with China is seeking to create a multi-polar world that checks US power. China, already the EU's number two trading partner after the US, will reciprocate as it attempt to gain entry to military and commercial purchases within the EU. Expect to see a flurry of new Sino-French initiatives...

France and Germany, as well as the UK, look on with envy at Russian arms sales to China and India. The US faces difficult choices. If it withholds the ITAR, it could see more expensive (lower volume) JSF production and thus a smaller US inventory, similar effects upon other joint weapons systems, more independent EU arms production (witness Airbus advances upon Boeing), "nothing to lose" Franco-German arms exports, while still seeing its intellectual property harvested elsewhere so that it has no upside at all.

Microsoft another day.

Dropping EU embargo may jeopardise JSF
Date Posted: 25-Feb-2005

EU China arms ban 'to be lifted'
BBC News
12 January, 2005

EU Proposes End To China Arms Embargo
Deutsche Well
15 April, 2004

Gordon Housworth

InfoT Public  Strategic Risk Public  


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