Examination of Witnesses (Questions 60
WEDNESDAY 10 JANUARY 2001
60. There have been examples where we have had
to hold information back on, for example, UK collaborative projects
with the United States.
(Mr Gould) Sure.
61. Some areas where it was thought the Americans
would not be happy about that being transferred to other European
(Mr Gould) Yes.
62. Are the Americans really content with our
involvement in this European R&T initiative when it might,
on the one hand, create competitors to American industry and,
on the other hand, might involve what they perceive as transferred
technology or capabilities from their defence industry through
Britain to other countries?
(Mr Gould) Quite separate issues of competitors to
US companies and transfer of technology. US sourced information,
which is transferred to us under government to government arrangements,
will be, and will continue to be, protected. We will not, because
of this, transfer information to the other five LOI nations, that
is governed by a US/UK Government technology transfer government
to government arrangement. Similarly, US technology which comes
into UK firms as a result of US/UK co-operative programmes and
is protected by US regulations, US requirements, will continue
to be protected. There is no way around that. We do not want there
to be a way around that. That is an absolute undertaking we give
to the US Government and we are not going to breach it.
63. What about the impact of the privatisation
of DERA. Is that going to affect the MoD's obligations to share
research and development information with our Framework Agreement
partners in Europe?
(Mr Gould) The privatisation of DERA does not affect
our obligation under the Treaty, it does affect the information
generated by DERA. What will happen post DERA privatisation is
that DERA is a private sector company.
64. Part of it is.
(Mr Gould) I am coming to that. DERA privatised will
be a private sector company. There will be a quite separate different
organisation, called the Defence Science & Technology Laboratories,
which remains part of Government and which will be what is now
what we call DERA. That will be the recipient of bilateral research
programmes and so forth with the United States, not the new DERA,
the privatised company. The situation does change quite considerably.
65. You think it is possible you can have this
Chinese wall between the two?
(Mr Gould) I can tell you that when this happens it
will not be a Chinese wall. There is no way the United States
Government will allow it to be a Chinese wall. It will be a very,
very solid wall.
Mr Gapes: Okay. We will see.
66. That is very reassuring. If I could go back
a little to an earlier section of questioning initiated by Mr
Cohen. I cannot remember - I should rememberwhen the Ministry
of Defence actually gave us the list of what capabilities must
be retained in this country. Could you perhaps check with your
colleagues in the Ministry of Defence and we will be most interested
(Mr Gould) I am not even sure that we have given you
such a list.
67. That is why I did not want to trick you
into telling us what is classified.
(Mr Gould) That is right. I am not sure that the list
would be constant over time. I am pretty sure it would not be
constant over time.
68. It is a pretty small list. Check it out.
(Mr Gould) I will have to come back to you on that
69. Please do.
(Mr Gould) Yes.
70. Will each country declare its strategic
assets on an ad hoc basis or will there be some across the board
assessment to ensure that all play by the same rules in the assessment
of strategic assets? How will any disagreement be resolved?
(Mr Gould) Again, I come back, the first port of call
in dispute resolution is the Executive Committee always in this
Treaty. I do not think it will work that way but I am predicting
how the Executive Committee is going to behave now and I am not
absolutely sure. What this really boils down to is where a company
feels that it is being somehow leant on to retain uneconomic capacity
under the guise of national security, then it now has a way of
resolving that concern, actually going to a country and saying
"Look, we want to close this down but because you have got
a security of supply agreement, it does not matter that the remaining
plant is in country Y" or wherever it might be. This is slightly
more delicate but I will get into it anyway. Very often the security
of supply argument is used as a pretext for saying "Well,
we do not really want to compete this, we will keep this within
national boundaries, we will not even compete it on a European
level". I do not think this is a formal undertaking in the
Treaty but I think, again, there is a mechanism here for people
to actually challenge and say "Come on, you can open your
market a bit more, can you not, because you do not have to worry
about security of supply", but that will take longer to develop.
71. Have you yet identified the broad areas
of research and development in which the UK would have most to
gain from collaborative work, that is those areas in which the
expense of us seeking a national solution would be most prohibitive?
If you have, can you outline them for us?
(Mr Gould) I can give you a very brief sketch but
it will not be complete because I would have to look more carefully
to give you a complete answer. I would say that the most obvious
and direct area that I can think of would be in military aero
engines, I would say in composite structures for use primarily
in aero systems in aircraft and other air system manufacture but
not exclusively so. I would think a lot of very deep research
to be done in unmanned vehicles in the future, the use of unmanned
vehicles, and a whole range of electronic areas: seekers, missile
seekers, guidance systems, rocket motors, those sorts of areas.
I am sure that list I have given you is not a comprehensive one.
If I have badly misled you I will let you know.
72. If you think of anything further.
(Mr Gould) I will let you know.
73. Drop us a note, please. Do you envisage
these provisions enabling there to be a degree of role specialisation
amongst the Europeans on certain specific areas of research and
(Mr Gould) Certainly I would see it, yes, not so much
role specialisation. I tend to use that phrase to mean military
roles rather than technological roles. In terms of building centres
of excellence, which are likely to be centred in different parts
of Europe rather than spread across it, yes, I do see that link.
It is already happening to some extent. In terms of aircraft technology,
if you take the Airbus company, Airbus consortium, it tends to
work on the basis of centres of excellence where it has developed
the excellence in different parts of Europe, both in economic
and in technological terms and sources its work there. I do see
that being an inevitable consequence of this and a good consequence
74. I am interested in the treatment of technical,
classified and commercially-sensitive information. There is a
distinction, of course, between Government owned technical information
and commercially owned, privately owned technical information.
(Mr Gould) Yes.
75. I understand the Defence Manufacturers Association
have some misgivings about whether the provisions will protect
industry owned information. The Framework Agreement requires countries
to have access to technical information to facilitate transnational
rationalisations of defence firms and to allow such firms to tender
for defence contracts. Who decides what information must be disclosed?
In other words, how would all the parties involved know what it
is that they do not know?
(Mr Gould) That refers to Government information,
of course, making Government information available. I think there
are really two sources of what is it that we do not know or what
is it that we feel is not being disclosed. One source is the recipient
of that information, that is industry, who are trying to make
a bid or put together a proposal for an armaments system, they
would probably know areas of technology where they had been co-operating
with Government research laboratories that ought to be able to
be exploited. They would know if obstacles were being put in their
way and be exploiting that information that they work with. The
other area would be because we have an obligation in the Treaty
to co-operate on where we put our research and development effort,
we have a pretty good idea of what products of those research
and technology programmes are. Clearly if it is a programme that
we are not involved in and not participating in we will be less
well placed to do that.
76. Articles 39 and 44 govern the provision
of transfer of information.
(Mr Gould) Yes.
77. Countries are obliged to share Government
owned technical information with other countries and their firms
for information purposes but not for exploitation. Then there
are two huge caveats, except when third party rights or national
security would be infringed. Who decides on the scale of these
potentially very large loopholes, third party rights or national
(Mr Gould) Third party rights is specifically in there
to deal with the point raised by your colleague, Mr Gapes, about
overwhelmingly US sourced information. We have to have that provision
in there to protect that information.
78. Turning to the concern of industry, do you
sense that UK industry is satisfied that the Framework Agreement
will not jeopardise intellectual property or commercial interest?
(Mr Gould) If it did not protect their intellectual
property it certainly would damage their commercial interest.
The Framework Agreement itself does not damage them. The practice
of sharing commercially sensitive information for information
purposes only but not to be exploited is something which will
have to be tested over time. I imagine that we will take this
reasonably cautiously to begin with to make sure that the procedures
in the Treaty are actually working. The obligations are there
but the real test will be the practice.
79. Fair enough.
(Mr Gould) I think the real sanction is that if there
is commercially sensitive information and our industry does not
think that it is adequate then it will not share it with us. We
have a real interest in making sure we do protect it and that
our colleagues do, but time will tell.
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