Remarks to the AIA Annual Spring Board of Governors Meeting

Puneet Talwar
Assistant Secretary, Bureau of Political-Military Affairs
Williamsburg, VA
May 21, 2015

Good morning, everyone. It’s a privilege to be here and let me thank David Joyce and Marilyn Hewson for inviting me here today.

As all of you know, at the State Department – in the Political-Military Affairs Bureau and the Economic and Business Affairs Bureau – we have re-energized our outreach to industry, and as part of that push we are glad to have such a strong presence here today.

It’s also a real pleasure to be here with my colleagues, Admiral Rixey and Assistant Secretary Jadotte – we work closely together on defense trade and so many other issues as well.

In the face of multiple crises around the world, today I’d like to speak about how America is leading in the context of today’s security environment, and how government and industry can work together – particularly in the arena of defense trade advocacy.

As President Obama has said, the question we face given the array of threats and opportunities across the globe, “is not whether America leads in the world, but how.”

There are two fundamental facts in today’s geostrategic environment that, I think, drive our leadership today.

The first is that the world’s greatest challenges do not affect any one nation alone. Terrorism; climate change; public health; territorial aggression – these are issues that affect many, if not all countries.

And the second truth is that no single nation can solve these problems alone. Of course, the United States has a unique leadership position in the world, and people look to us to step up. But we also have to recognize that even if we did everything perfectly on terrorism; even if we reduced our greenhouse gas emissions to zero… it wouldn’t be enough.

That’s why President Obama has put so much emphasis on strengthening our alliances and partnerships around the globe. Because we need our partners to step up so we can solve these problems together, in a durable and lasting way.

Defense trade is an important tool for us to be able to do that… whether it’s building the capabilities of the Israeli Defense Forces or the Iraqi Security Forces; whether it’s empowering our partners in South America or Southeast Asia.

That’s why our work together – between government and industry – is so critical. The fact is, we benefit from the American brand that you help build overseas. American companies create the most innovative, most effective solutions to meet our partners’ needs. And you have all made American products the gold standard in the defense industry. As Secretary Kerry said this week at Boeing, “the world wants what America makes.” We in government would be foolish if we did not use that to our advantage as we press forward on our national security interests.

And likewise, you in industry benefit from having U.S. leadership that’s trusted and strong, clear and coherent. The truth is that we each have a stake in each other’s success.

So when we decide that security cooperation with a foreign partner will further our national security, it’s deeply in our interest to work in an organized, collaborative, and proactive way to advocate for American interests and yes, American industry.

Now, many of you know that there are serious challenges in today’s defense trade market. It’s a competitive marketplace with other technology. The defense budget is tight here at home. Other governments can be more aggressive and often have fewer restrictions on what they are willing to sell and to whom.

We also realize that our licensing and regulatory system is imperfect… that sometimes the waits are too long or the process too opaque. And that’s exactly why we are implementing Export Control Reform – to unshackle ourselves from Cold War regulations and adapt to the 21st century… to focus our efforts on a narrower set of items that really matter… and to provide greater clarity and transparency to you in industry.

But Export Control Reform is not a panacea. Which is why we’re also refining other tools at our disposal.

Today, I’d like to discuss three objectives we have outlined in this area – and three specific actions we are taking to improve our defense trade advocacy.

First, when we in government work together, we are much more effective and powerful. It’s true that there are many players in the security cooperation enterprise and we do a lot to coordinate. I could throw so many acronyms and names at you: the Arms Transfer Technology Steering Group; the Security Cooperation Enterprise Group; the Senior Warfighter Integration Group’s work to expedite procurement.

But there are instances – specific sales – that require a tailored, unified effort to advocacy. That’s why we are building a single group, the Defense Advocacy Working Group, to identify areas that require heightened communication and an extra advocacy effort. At our different agencies, we share the same goals, but we don’t always synchronize our actions as well as we should. One central list and one central advocacy working group will lock in coordination from start to finish.

I’ll give you an example. Over the past year, we’ve piloted this process for our advocacy with Poland, which as many of you know is engaged in a historic $45 billion defense modernization program. Across every agency, we supported and advocated for U.S. solutions to Poland’s missile defense needs. Deputy Assistant Secretary Greg Kausner and Admiral Rixey travelled to Warsaw. You may have seen in the press that the Defense Department put PATRIOTs on display at a strategic time. And we had senior-level engagement to help move the ball forward. And as a result, the successful sale means supporting American jobs at home, deepening interoperability, and strengthening the security of Poland, a stalwart NATO ally.

This approach is proven – and we are now working to build on the success we saw with Poland elsewhere around the world.

Second, we in government need to project power in a more coordinated way at trade shows. Running into each other for the first time at the pavilions just doesn’t cut it. We need to do a better job coordinating our meetings, delivering consistent messages, and identifying areas we want to target. Some of you have likely seen progress already, as we are getting more in sync with each other. We want to build on this progress and are establishing an interagency working group to ensure that this coordination becomes institutionalized. Admiral Rixey’s deputy, Jenn Zakriski and I will be going to the Paris Air Show next month, and we’re looking forward to arriving ready with a common strategy for targeted outreach and advocacy.

Third, we need to be more transparent and responsive to industry. As our partners in the private sector, you should be able to ask us any time about our objectives. And you shouldn’t have to go agency to agency to agency to get answers.

That’s why, starting in July, we are launching a senior-level, quarterly industry outreach forum to have a two-way conversation with you. This quarterly forum will allow us to get input from you, assess upcoming sales, and build an advocacy strategy rooted in unity.

I know these three changes may not seem earth-shattering. But as leaders of large companies, you know that sometimes different arms of your organizations don’t talk to each other as well as they should. You’ve probably spent a lot of time on breaking down stovepipes, and you know it can have a huge impact. When we have all the oars in the water, rowing at the same time, we improve the outcome for all of us.

Yes, these are targeted actions, but we think their impact can be quite significant. Coordinating earlier and more often. Projecting our power, together, at trade shows. And continuing to deepen our engagements with industry.

Again, we have to do these things because it’s in our interest. Because the demands for our leadership are growing. Because we are more engaged in more places than ever before. You can see it in the headlines – whether it’s in the GCC or talks with Iran – but you can also see it in the trendlines that we’re so focused on, in the Asia-Pacific, where 60 percent of the world’s population is… where half of all GDP growth outside the U.S. is expected to come from in the next four years… where over half the world’s maritime commerce flows. And it’s security that underpins the economic growth – and the tremendous potential – that we are seeing in that region.

I could go on, but I’ll turn it over to Admiral Rixey and am happy to take any questions in the Q&A.