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NSA bungle costs U.S. industry plenty: Brazil goes with Saab, over Boeing

By Catholic Online (NEWS CONSORTIUM)
December 19th, 2013
Catholic Online (www.catholic.org)

The revelation that the national Security Agency was deeply surveying allies, as well as perceived terrorists of the United States cost the U.S. much credibility abroad. It's now hit U.S. industry as well: Brazil has awarded a $4.5 billion contract to Saab AB in lieu of Boeing on account of the incident.

LOS ANGELES, CA (Catholic Online) - Negotiated over the course of three presidencies, the contract will supply Brazil's air force with 36 new Gripen NG fighters by 2020. The agreement is expected to generate billions of additional dollars in future contracts.

It was a stinging rebuke to U.S. covert policy. Choosing the Sweden-based Saab over U.S. Boeing was a direct result of U.S. spying on Brazilians on the part of the NSA.

Saab had no immediate comment on the purchase. Swedish Defense Minister Karin Enstrom, said in an interview that the contract, "is a sign that the Gripen is a well-functioning system which is cost efficient."

Following more than a decade of off-and-on negotiations, caught both companies by surprise. Brazil's top air force commander Juniti Saito says that he only heard of the decision the previous day in a meeting with President Dilma Rousseff.

Brazilian officials says the agreement to Saab was because the company provided the most affordable option for the new jets, as well as the best conditions for technology transfer to local partners.

The agreement "took into account performance, the effective transfer of technology and costs - not just of acquisition but of maintenance," Defense Minister Celso Amorim said.

Boeing's F/A-18 Super Hornet had been considered the front runner until revelations of the NSA spying on Brazilian President Dilma Rousseff. This in turn led Brazil to believe it could not trust a U.S. company. "The NSA problem ruined it for the Americans," a Brazilian government source said on condition of anonymity.

In response, a U.S. source close to the negotiations said that whatever intelligence the spying had delivered for the American government was unlikely to outweigh the commercial cost of the revelations. "Was that worth $4 billion dollars?" the source asked.

Cisco Systems Inc. likewise said in November that a backlash against U.S. government spying contributed to lower demand for its products in China.

In a statement, Boeing called Brazil's decision a "disappointment," but added that it would continue to work with Brazil to meet its defense requirements.

Brazil maintains good relations with all of its South American neighbors and has no enemies elsewhere. The country, however, is eager to fortify its military as it considers the long-term defense of its vast borders and abundant natural resources, including the Amazon rainforest and offshore oil discoveries.



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