In the late 1980s, the United States, along with more than 30 countries, signed an agreement called the Missile Technology Control Regime, or MTCR. The goal of the agreement was to control the Cold War-era proliferation of weapons of mass destruction, or WMD.
However, the MTCR also stifled foreign sales of unmanned aircraft because of what’s called “presumption of denial.” Basically, that’s when a company decides not to compete for a foreign arms contract because it knows it’ll be denied under the terms of the MTCR. But if the Obama administration is successful with its Export Control Reform initiative, the rules that govern the sale of unmanned aircraft systems, or UASes, could be re-examined. That’s potentially great news for Northrop Grumman (NYSE: NOC ) and General Atomics.