§ 1242. FINDINGS AND DECLARATION OF POLICY.
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Findings .— Congress makes the following findings: A fair business environment is necessary to advance international trade, economic stability, and development worldwide, is beneficial for American workers and businesses, and is in the United States national interest. In some cases, mandated offset requirements can cause economic distortions in international defense trade and undermine fairness and competitiveness, and may cause particular harm to small- and medium-sized businesses.
The use of offsets may lead to increasing dependence on foreign suppliers for the production of United States weapons systems. The offset demands required by some purchasing countries, including some close allies of the United States, equal or exceed the value of the base contract they are intended to offset, mitigating much of the potential economic benefit of the exports. Offset demands often unduly distort the prices of defense contracts. In some cases, United States contractors are required to provide indirect offsets which can negatively impact nondefense industrial sectors.
Unilateral efforts by the United States to prohibit offsets may be impractical in the current era of globalization and would severely hinder the competitiveness of the United States defense industry in the global market. The development of global standards to manage and restrict demands for offsets would enhance United States efforts to mitigate the negative impact of offsets. Declaration of Policy .— It is the policy of the United States to monitor the use of offsets in international defense trade, to promote fairness in such trade, and to ensure that foreign participation in the production of United States weapons systems does not harm the economy of the United States.