Pentagon fears U.S. companies being shut out of European arms deals

The Pentagon’s top weapons buyer is expressing concerns over the European Union’s new strategy to build up its defense spending, saying the EU plan could ultimately freeze out American arms makers from lucrative European markets.

The concern lies mainly with the EU’s European Defense Fund (EDF) and the Permanent Structured Cooperation (PESCO) group, Undersecretary of Defense for Acquisition Ellen Lord told reporters Thursday evening during a briefing in Washington.

The fund is designed to increase defense spending across Europe to $6.23 billion annually after 2020. PESCO is seeking to lock in legal commitments with up to 25 European nations to finance a slew of major defense projects.

All those efforts, according to Mrs. Lord, could create an economic firewall blocking U.S. weapons makers looking to sell more American-made arms to their European allies.

“I am concerned about EDF and PESCO and the opportunity for U.S. industry to participate in Europe, as European industry has the opportunity to participate in the U.S.,” Mrs. Lord said.

InsideDefense.com first reported the concerns by the top Pentagon official.

The Pentagon is engaged in “active discussions” with European counterparts about ways to alleviate concerns over both EU efforts, Mrs. Lord said.

“I am very much in favor of making sure that they consider what we have for technology,” she added.

The Trump White House has repeatedly pressured NATO allies to meet a commitment to devote a minimum of 2 percent of GDP for defense.