defence offset agreements

A while back (early yesterday) Schiffhead raised an interesting topic that sorta got lost under another heading without being taken up by the forum. This was the matter of Defence Offset Agreements. I wasn't aware of this apparently normal impost on defence suppliers - and a potentially massive impost it is too. I would be surprised if others weren't also in the dark on this.

So I have taken the liberty to paste in Schiffhead's previous post in full again - I hope he doesn't mind. The wikipedia link is quite good to read the full story of how this works in basically horse trading before many overseas defence sales can be made. I haven't fully digested this yet - but it seems to have the potential to be another hurdle in the case of a cash strapped outfit like MST? I'm learning here - but logically this might be one area where a defence 'free trade agreement' between Aus and USA would in fact avoid this Offset Agreements impost. Am I right?

Meanwhile - for those that missed it - here is Schiffhead's original post that provides the material to become informed on the 'protocols' with this. (The political comments are his, of course).
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why Australian DOD is made to buy junk by politicians imo;

'Offsets'

An unbiased definition of these trade practices is arduous, but it can generally be assumed that offsets are additional compensations given to a buyer by a seller.

Defense offset agreements are legal trade practices in the aerospace and military industries. (probably considered a bribe in other industries!!!)

http://en.wikipedia.org/wiki/Offset_agreement

This is worth a read imo. It gives you a sense of why politicians like to buy things that need to be fixed, changed, modified and need extra maintenance. It creates jobs politicians can point at and say we made this job. (its voodoo economics imo. breaking an asset and wasting resources fixing it somehow results in macro economic expansion!)

- The fact AU DOD doesn't buy Maul, is imo more evidence of what's wrong with defence procurement in Australia. Along with 100's of other stories in the local media.... in other words, the fact AU DOD doesn't buy Maul is not evidence there is something wrong with maul. But, Maybe the problem with Maul is it doesn't have defects that require repair in Bendigo???!

Obama's Buy America Act is probably the reason Colt is needed to build Maul in America.

Under the new US-AU defence trade agreement, MST can sell (license) tech to the Prime Contractors to manufacture MPM/Firestorm in the US. Although anyone of the prime contractors could buy MST outright.

One of the largest US government contractors (across all industries) thinks the news about Force Protection is worth talking about. Ironic the market thinks it means nothing for MST!!!!!!!!!!!!!

http://www.globenewswire.com/newsroom/news.html?d=230700

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