Summary

Defense trade impacts many issues of importance to the Department of Defense (DOD), including maintaining a healthy supplier base, protecting critical technologies, ensuring access to a secure supply of defense-related items and services, managing technology transfers, and increasing interoperability with allies. A critical element to guide decision makers is access to comprehensive and reliable data. The Committee on Armed Services, through its report on the National Defense Authorization Act for Fiscal Year 2006, directed GAO to identify and assess defense trade data. In response, we (1) identified defense trade data available from U.S. government sources and their limitations, and (2) determined defense trade balances as indicated by the data for years 2000 through 2004.

We found that several agencies collect data that can be used as indicators of defense trade, such as the Census Bureau's data on U.S. imports and exports and DOD's foreign military sales and prime contracts data. While there are other related data sources, such as the State Department's export licensing data, Bureau of Economic Analysis' defense service data, and DOD's foreign subcontractor data, we found them to be of limited use as defense trade indicators. However, data from Census and DOD sources were sufficient to assess defense trade at an aggregate level. Based on the data we analyzed from these agencies, we found that for each of the years 2000 through 2004, the United States sold significantly more defense articles and services to foreign entities than it bought from them.