Since the end of the Cold War, economic and defense industrial-base concerns have become increasingly pervasive in U.S. arms export policy. The sale of sophisticated weapons by U.S. defense companies to countries around the world may adversely affect national security, encourage arms and capacity proliferation, and set off an expensive arms race among allies. The potential for transnational mergers that will create mega-firms complicates the arms export discussion in this era. This study group assembled a broad range of individuals, from policymakers and academics to peace and human rights activists, to investigate the phenomenon and debate policy responses. Through monthly meetings over the last year, including three in Europe, study group participants addressed the following questions: What security concerns should drive arms export policy? Have arms exports in fact kept production and R&D lines "hot," available for next generation systems? If so, is this necessary? Have arms exports lowered the cost of weapons to the Pentagon? How much do arms exports contribute to the U.S. trade balance, net of subsidies and offsets? Are exports creating pressure for arms innovation that would not otherwise exist? What policies can be recommended for U.S. arms export regulation and conventional arms trade negotiations? In addition this year, the study group will investigate the causes and consequences of growing transnational cooperation and merging among major defense contractors, linking arms export policy with industrial base regulatory initiatives. The final products will be a series of on-line background papers, a journal article, and shorter policy and op-ed pieces.