The guarantee of reciprocity is one of the central objectives of both trade and defence agreements. Both require national treatment of the protected goods they cover, which are stipulated in the agreement as a waiver of „national“ restrictions. In order to provide national treatment, the United States must waive the 1933 Buy American Act (BAA) and the balance-of-payments program for purchases covered by the agreements, although it relies on different legal powers to repeal defence and trade agreements. If the Ministry of Defence were to enter into an agreement with Japan, U.S. products would be exempt from all „Buy Japan“ laws or directives applicable to the acquisition by the Japanese Ministry of Defense or the armed forces. In addition, the two countries would also waive tariffs, taxes and tariffs on public defence contracts. A defense agreement with Japan would be the first for an Asian country. The GAO found that (1) Mou companies are required to evaluate bids without taking into account national tariff cost laws and regulations and strive to eliminate national buy-national laws and tariffs related to defence purchases; (2) The DOD method to meet MOU`s obligations by renouncing the Buy American Act has allowed European companies to compete with US companies for costly defence contracts; (3) Although DOD estimated that in the 1990 fiscal year it had opened at least 44% of its market to foreign competition, European governments stated that the United States had restricted its access to the US defence market; (4) the allies stated that they were trying to maximise opportunities for competition, but reserved the right to limit competition or award contracts to national or European sources; (5) U.S. industry representatives stated that factors such as the reduction of technology transfer controls in the United States, an understanding of foreign defence procurement practices and the maintenance of a significant presence in the country are necessary to be able to compete successfully for defence-related contracts in Europe; (6) Although DOD has added to the tendering process to existing soft annexes, in order to promote equal treatment between PUBLIC MARKETS in the United States and to promote greater openness and accountability in European public defence procurement, DOD has not acted on other soft-related initiatives. (7) Although European countries pay tariffs on defence imports to the United States, most concerned believe that tariffs are a negligible factor in the choice of contracts. and (8) U.S.
contractors rarely turn to European contracts, as appeal procedures have been cumbersome in many countries and contractors fear losing future contractual opportunities. While DoD evaluates laws and regulations in this area, DoD printed page 48806 would benefit from the experience of the U.S. industry in participating in public procurement in these countries. DoD therefore asks U.S. companies that have participated in purchases by or on behalf of the British Ministry of Defence or the Finnish Ministry of Defence, or who have attempted to tell us whether the purchases were made with transparency, integrity, fairness and due process, in accordance with published procedures and, if not, , the nature of the problems encountered.