Summary: GAO discussed the Korean Fighter Program (KFP), specifically Korea's aerospace industrial goals and plans. GAO found that: (1) Korea's coproduction program was intended to meet Korea's military modernization requirements and play an important role in Korea's aerospace industrial development goals; (2) the Department of Defense (DOD) inhibited Korea's negotiating position and took steps to make certain technologies unavailable for licensed production; (3) the Korean aircraft industry had limited experience compared to the level of manufacture and production management comtemplated under KFP; and (4) the production arrangement negotiated between Korean and U.S. contractors was intended to maximize technology transfer and the industry's control over KFP. GAO also found that: (1) Korea has attempted to maximize the quantity of aircraft it can produce under license and minimize the quantity of aircraft it purchases directly from the United States; (2) DOD provided the Korean government with a list of items that Korea could not produce, but had to purchase through foreign military sales; and (3) the Korean government imposed special offset guidelines for fighter aircraft competition, but it could not determine the technology transfer and economic effects of the offsets.
