Introduction to Offsets

This book explores where U.S. law allows the American president to help defense exporters with problematic offsets. Defense industry offsets are negotiated benefits that exporters add to arms deals to meet importer demands beyond basic transactions. Estimated at 30–40% of the global arms trade, offsets are essential for exporter success. Even so, prohibitions in America’s “hands off” policy are often misunderstood as universally preventing government support for American companies dealing with offsets. In reality, the president can authorize exceptions for national security. This book asks why and in what circumstances the president goes “hands on” for offsets as a foreign policy tool. Zero-sum dynamics – driven by relative gains concerns with other defense exporters and weak burden-sharing allies – can override domestic constraints and prompt presidential intervention. However, U.S. Government support clashes with anti-offset stakeholders concerned about job losses, technology transfers, and loss of political support. Research examines the evolution of U.S. policy, theoretical frameworks, and prominent examples for government encouragement through case studies covering engagement with the United Arab Emirates, Poland, and India. By challenging misperceptions, results expand foreign policy options and highlight a government role with offsets for national interests, the defense industrial base, and security alliances.