On December 14, 2023, the U.S. Congress passed the National Defense Authorization Act for FY 2024 (NDAA), authorizing $886 billion in defense spending. Amid its numerous provisions, there is the concept of the “national technology and industrial base,” which now includes the United States, Canada, the United Kingdom, Australia, and New Zealand and could potentially serve as the basis for wider industrial cooperation with European and other global partners. This could provide useful synergies with ongoing efforts in Europe to galvanize defense production and help ensure an enduring competitive edge for the wider West over potential adversaries—within NATO and with global partners.

The Global “National Technology and Industrial Base”

The national technology and industrial base (NTIB) is defined in U.S. law as “the persons and organizations that are engaged in research, development, production, integration, services, or information technology activities” in national security and dual-use areas. First established in 1994, NTIB initially included only Canada in addition to the United States. In 2016, however, United Kingdom and Australia were added, followed by New Zealand in 2022. NTIB entities may receive preference for certain limited procurement actions and may be exempted from certain foreign ownership or control/influence requirements.

The logic behind this initial expansion was to foster industrial defense cooperation among the Five Eyes allies, which already had provisions for intelligence sharing potentially required for sophisticated military projects. And the expected benefits were to leverage economies of scale, promote innovation, and increase interoperability.

Given Russia’s large-scale war of aggression against Ukraine and the longer-term challenge from China, the NTIB could be expanded further to ensure that the wider West is able to produce the military materiel required to deter and confront any security challenges. The United States and its NATO Allies have already faced stockpile constraints in providing weapons supply to Ukraine to continue waging its defense. Now, the 2024 NDAA has added Israel and Taiwan to a program started to expedite delivery and replenishment of munitions to Ukraine, which will put further pressure on existing production. The NTIB could also serve as the fulcrum to leverage European defense initiatives in light of Russia’s war of aggression.

European Defense Initiatives

The European defense landscape has long been characterized by severe under-investment and fragmentation among Member States, with less than one-fifth of investments in defense programs conducted in cooperation. In 2009, the European Union expressed its willingness to facilitate joint procurement with the adoption of procurement rules for munitions, arms, and war material in the Defense Procurement Directive. However, implementation was lacking, and most procurement contracts were still awarded without an EU-wide tender.

In recent years, the EU pooled together more resources for common procurement and joint research and development. Moving certain responsibilities held by the Directorate-General for the Internal Market (DG GROW) to a newly established Directorate-General for Defense Industry and Space (DG DEFIS) in January 2021, indicated the EU’s ambition to focus on defense. The European Peace Facility—an off-budget fund adopted in March 2021 and recently updated to €12 billion—has allowed the procurement of military material and large-scale financing of weapons supplies to Ukraine. The European Defense Fund Regulation, adopted in May 2021, further incentivizes joint research and development of defense equipment, notably through pre-commercial procurement.

The invasion of Ukraine radically altered the political willingness in EU capitals to create an internal market for defense products. In April 2023, the U.S. Department of Defense signed an administrative arrangement with the European Defense Agency to provide for stronger transatlantic cooperation in defense, including in the exchange of information. As a direct response to Ukraine’s request for assistance with the supply of 155 mm-caliber artillery rounds, the EU adopted the Act in Support of Ammunition Production (ASAP), in July 2023. Most recently, in October 2023, the EU adopted the European Defense Industry Reinforcement through Common Procurement Act (EDIRPA), with a dedicated €500 million instrument and rules for Member States to procure defense products jointly.

European defense investment and capabilities are now a recurrent topic in the EU political spheres. The question is whether the EU will be able to strengthen, and even to go beyond, common resources for research and joint procurement. In the months preceding the European elections, while the priorities of the next Commission are being discussed, debates include making a “defense department” from the European Defense Agency, or calls for the appointment of an EU Defense Commissioner. Interestingly, the Commission is expected to present two new communications in February 2024: the European Defense Industrial Strategy and the European Defense Investment Program. Both documents will provide valuable insights on the future direction that EU defense might take. Ongoing cooperation will also continue within NATO, which recently launched the Defence Innovation Accelerator for the North Atlantic (DIANA) fund to promote cutting-edge technology and further interoperability of capabilities across the Alliance.

Implications and Next Steps

As the current NDAA is signed into law, deliberations and negotiations on the next NDAA will begin in the new year, providing opportunity for engagement on whether and how the NTIB could be further expanded, for instance, to include Poland, Germany, South Korea, and other key allies responding to Russia’s aggression. An expanded NTIB could serve as a further building block for deeper defense industrial cooperation, alongside NATO initiatives, U.S.-EU channels, and bilateral U.S. programs with specific partners.

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The team at Covington is well placed to advise you on these policy developments, and how to engage with the relevant decision-makers in these areas.

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Photo of Michele Pearce Michele Pearce

Michele Pearce has wide-ranging experience working on national security issues throughout her two decades of military and government service. She provides advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.
Before joining Covington…

Michele Pearce has wide-ranging experience working on national security issues throughout her two decades of military and government service. She provides advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.
Before joining Covington, Michele held several senior staff positions within the Department of Defense (DoD) and Congress. Most recently, she served as General Counsel (Acting) of the Department of the Army, providing legal and policy advice to the Secretary of the Army and other service leadership. In this role, Michele was responsible for legal matters related to modernizing acquisition and contracting practices to meet emerging threats, implementing AI and hypersonic systems, and reforming ethics and diversity and inclusion programs.

Prior to her role in the Army, Michele served as Deputy General Counsel (Legislation) at DoD. She was the principal legal advisor to DoD officials, including the Secretary of Defense, Deputy Secretary of Defense, and General Counsel on matters concerning legislation, investigations, and the Department’s Legislative Review Program, which considers more than 400 legislative proposals annually.

Michele also has significant Capitol Hill experience. She was a Senior Defense Advisor to Senator Susan Collins (R-ME), advising on legal and budgetary matters related to authorizations and appropriations for the Departments of Defense, Homeland Security, and Veterans Affairs. Michele also served as Staff Lead/Counsel on the House Armed Services Committee, where she managed one of the largest subcommittees in Congress with a multi-billion dollar budget focused on operations and maintenance activities across DoD. She also served as Staff Lead of the Oversight and Investigations Subcommittee and as Counsel and Professional Staff of the Military Personnel Subcommittee.

Michele also previously served as an Advisor to Andrew Effron, Chief Judge of the U.S. Court of Appeals for the Armed Forces; Military Assistant to the Secretary of the Air Force; Associate Deputy General Counsel for Personnel and Health Policy at DoD; and as an Air Force Judge Advocate General.

Photo of Stephanie Barna Stephanie Barna

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior…

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior leader on Capitol Hill and in the U.S. Department of Defense (DoD). Most recently, she was General Counsel of the Senate Armed Services Committee, where she was responsible for the annual $740 billion National Defense Authorization Act (NDAA). Additionally, she managed the Senate confirmation of three- and four-star military officers and civilians nominated by the President for appointment to senior political positions in DoD and the Department of Energy’s national security nuclear enterprise, and was the Committee’s lead for investigations.

Previously, as a senior executive in the Office of the Army General Counsel, Stephanie served as a legal advisor to three Army Secretaries. In 2014, Secretary of Defense Chuck Hagel appointed her to be the Principal Deputy Assistant Secretary of Defense for Manpower and Reserve Affairs. In that role, she was a principal advisor to the Secretary of Defense on all matters relating to civilian and military personnel, reserve integration, military community and family policy, and Total Force manpower and resources. Stephanie was later appointed by Secretary of Defense Jim Mattis to perform the duties of the Under Secretary of Defense for Personnel and Readiness, responsible for programs and funding of more than $35 billion.

Stephanie was also previously the Deputy General Counsel for Operations and Personnel in the Office of the Army General Counsel. She led a team of senior lawyers in resolving the full spectrum of issues arising from Army wartime operations and the life cycle of Army military and civilian personnel. Stephanie was also a personal advisor to the Army Secretary on his institutional reorganization and business transformation initiatives and acted for the Secretary in investigating irregularities in fielding of the Multiple Launch Rocket System and classified contracts. She also played a key role in a number of high-profile personnel investigations, including the WikiLeaks breach. Prior to her appointment as Deputy, she was Associate Deputy General Counsel (Operations and Personnel) and Acting Deputy General Counsel.

Stephanie is a retired Colonel in the U.S. Army and served in the U.S. Army Judge Advocate General’s Corps as an Assistant to the General Counsel, Office of the Army General Counsel; Deputy Staff Judge Advocate, U.S. Army Special Forces Command (Airborne); Special Assistant to the Assistant Secretary of the Army (Manpower & Reserve Affairs); and General Law Attorney, Administrative Law Division.

Stephanie was selected by the National Academy of Public Administration for inclusion in its 2022 Class of Academy Fellows, in recognition of her years of public administration service and expertise.

Photo of Elżbieta Bieńkowska Elżbieta Bieńkowska

Elżbieta Bieńkowska is a senior advisor in the firm’s Brussels office. Elżbieta, a non-lawyer, served as European Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs in Jean-Claude Juncker’s team from 2014 to 2019. In that capacity, she was responsible for much of…

Elżbieta Bieńkowska is a senior advisor in the firm’s Brussels office. Elżbieta, a non-lawyer, served as European Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs in Jean-Claude Juncker’s team from 2014 to 2019. In that capacity, she was responsible for much of the European Commission’s regulatory activity that affects the EU’s 450 million citizens, and all companies doing business in the EU. Elżbieta oversaw all product regulation in the EU, setting the rules for goods and services in sectors as diverse as chemicals, cars, electronics, IT infrastructure, machines, medical devices, and hydrogen. She managed the EU’s treatment of IP, led the Commission’s extensive work on standardization, and ran the EU’s industrial policy.

Before joining the European Commission, Elżbieta served as Minister for Infrastructure and Development of Poland as well as Deputy Prime Minister. In this role, she was in charge of the allocation of European Union funding and responsible for significant investments in Poland’s transport infrastructure.

Photo of Bart Szewczyk Bart Szewczyk

Having served in senior advisory positions in the U.S. government, Bart Szewczyk advises on European and global public policy, particularly on technology, trade and foreign investment, business and human rights, and environmental, social, and governance issues, as well as conducts international arbitration. He…

Having served in senior advisory positions in the U.S. government, Bart Szewczyk advises on European and global public policy, particularly on technology, trade and foreign investment, business and human rights, and environmental, social, and governance issues, as well as conducts international arbitration. He also teaches grand strategy as an Adjunct Professor at Sciences Po in Paris and is a Nonresident Senior Fellow at the German Marshall Fund.

Bart recently worked as Advisor on Global Affairs at the European Commission’s think-tank, where he covered a wide range of foreign policy issues, including international order, defense, geoeconomics, transatlantic relations, Russia and Eastern Europe, Middle East and North Africa, and China and Asia. Previously, between 2014 and 2017, he served as Member of Secretary John Kerry’s Policy Planning Staff at the U.S. Department of State, where he covered Europe, Eurasia, and global economic affairs. From 2016 to 2017, he also concurrently served as Senior Policy Advisor to the U.S. Ambassador to the United Nations, Samantha Power, where he worked on refugee policy. He joined the U.S. government from teaching at Columbia Law School, as one of two academics selected nationwide for the Council on Foreign Relations International Affairs Fellowship. He has also consulted for the World Bank and Rasmussen Global.

Prior to government, Bart was an Associate Research Scholar and Lecturer-in-Law at Columbia Law School, where he worked on international law and U.S. foreign relations law. Before academia, he taught international law and international organizations at George Washington University Law School, and served as a visiting fellow at the EU Institute for Security Studies. He also clerked at the International Court of Justice for Judges Peter Tomka and Christopher Greenwood and at the U.S. Court of Appeals for the Third Circuit for the late Judge Leonard Garth..

Bart holds a Ph.D. from Cambridge University where he studied as a Gates Scholar, a J.D. from Yale Law School, an M.P.A. from Princeton University, and a B.S. in economics (summa cum laude) from The Wharton School at the University of Pennsylvania. He has published in Foreign AffairsForeign PolicyHarvard International Law JournalColumbia Journal of European LawAmerican Journal of International LawGeorge Washington Law ReviewSurvival, and elsewhere. He is the author of three books: Europe’s Grand Strategy: Navigating a New World Order (Palgrave Macmillan 2021); with David McKean, Partners of First Resort: America, Europe, and the Future of the West (Brookings Institution Press 2021); and European Sovereignty, Legitimacy, and Power (Routledge 2021).

Pauline Agius

Pauline Agius is an associate in the firm’s Public Policy Practice group. With extensive work experience across the EU and APAC regions, Pauline helps clients navigate complex regulatory issues internationally. Her practice focuses on pharmaceutical and medical devices, energy, and infrastructure sectors.

  • Pharmaceutical

Pauline Agius is an associate in the firm’s Public Policy Practice group. With extensive work experience across the EU and APAC regions, Pauline helps clients navigate complex regulatory issues internationally. Her practice focuses on pharmaceutical and medical devices, energy, and infrastructure sectors.

  • Pharmaceutical and medical devices: Pauline has helped clients raise Japanese Diet members’ awareness of the benefits of cannabis-derived medicine for people with severe Autism Spectrum Disorder and of the importance of access to non-invasive prenatal testing. Pauline counsels clients on the regulation of medical devices in the EU.
  • Energy: Pauline provided regulatory advice and assisted with a bid submission to the first ever offshore wind project off the coast of Japan. Pauline has project finance and project development experience, as part of which she advised on a number of solar, LNG and hydropower transactions across Southeast Asia, Africa and South America.
  • Infrastructure: Pauline provided regulatory advice and assisted with a bid submission for a prospective integrated resort – a first in Japan.

Pauline has an MBA from INSEAD, a degree in Accounting and Finance from LSE, and speaks fluent Mandarin and Japanese.

Photo of Matthieu Coget Matthieu Coget

Matthieu Coget advises multinational companies and governments on EU public policy, trade, and regulatory environmental, social, and governance (ESG) matters.

Matthieu has particular experience advising clients on the European Union’s Green Deal, EU trade law and economic security measures. He also assists Covington’s…

Matthieu Coget advises multinational companies and governments on EU public policy, trade, and regulatory environmental, social, and governance (ESG) matters.

Matthieu has particular experience advising clients on the European Union’s Green Deal, EU trade law and economic security measures. He also assists Covington’s clients in drafting their EU engagement strategies.