The Playbook

This chapter unpacks “encouragement” in U.S. offset policy, defining it through two legal lenses – as government subsidies (reimbursing industry offset expenses) and advisory actions (officials praising projects or facilitating deals). Despite prohibitions against supporting American defense exporters dealing with offsets, the presidential exception for national security in the Declaration of Offset Policy allows encouragement. A three-step theoretical framework explains encouragement emerging from (1) international causation, where U.S. exporters face problematic offsets; (2) industry lobbying the president, Congress, and the executive branch; and (3) a presidential decision when government and industry interests converge, driven by relative gains concerns with arms trade competitions and burden-sharing with weak security partners. Robert Putnam’s two-level game explains how U.S. Government actors engage international counterparts to resolve problematic offsets on behalf of domestic constituents. Research methods such as process tracing, archival analysis, and interviews identify encouragement, often hidden due to policy norms. Evidence in case studies for the United Arab Emirates, Poland, and India shows how zero-sum dynamics override social and legal constraints, demonstrating offsets employed as a foreign policy tool. Results challenge assumptions of an ironclad “hands off” policy without exceptions, revealing strategic flexibility in arms deals.