In the US, growth in overseas demand has outpaced domestic demand. Although US markets have dominated, the main growth is now occurring overseas. International collaboration and subcontracting has increased the globalization of the industry. US industry accounts for about one half of worldwide arms transfer deliveries. So, although important, the impact of offsets has been dwarfed by these larger factors.
Defense companies undertake a broad array of activities to satisfy offset requirements.
Negotiating offset credit is an important part of implementing offset agreements. Countries can grant additional offset credit to encourage companies to undertake highly desirable offset activities. Under offset programs, US contractors commonly award subcontracts for components and subsystems to firms in purchasing countries, and in a few cases, have made longer term commitments covering foreign firm participation in the event of future sales of weapon systems. Some countries, such as the United Kingdom and the Netherlands, cite restrictions in the US and other defense markets and note that their offset policies are needed to ensure that their defense industries are given an opportunity to compete. The Defense Production Act restricts purchases of critical items from foreign sources.