Despite months of negotiations and strong political desire for success, Britain and the United States so far have been unable to hammer out mutually agreeable terms for the participation of British industry in the Strategic Defense Initiative research program.
In an unusual display of transatlantic stubbornness, Washington and London have dug in their heels on crucial points and refused to budge, according to officials of both governments.
One of two major sticking points is Britain's insistence that it be allocated a specific portion -- about $1.5 billion -- of the estimated $26 billion in SDI research funds as part of the agreement, for example through the prior identification of "single source" contracts on which only British firms will be allowed to bid.
The other obstacle is that Britain also wants terms spelled out for transfer and ownership of technology developed under SDI contracts.
"They would like to have carte blanche access to SDI technology before they will participate," said a U.S. official close to the negotiations.
The United States repeatedly has maintained that congressional budget procedures do not permit such prior guarantees. At the same time, the official said, Defense Department regulations do not allow blanket patent and technology transfer guarantees and require consideration on a case-by-case basis.
The British, the U.S. official said, are being "greedy" and, for domestic economic and political reasons, insist on an "incorrect" understanding of applicable U.S. laws and procedures.
Even if it could find a procedural way to agree to Britain's terms, the official said, the Reagan administration believes the cost of persuading Congress would be too high. "We've got other fish to fry up on the Hill," he said. "We're in enough trouble up there as it is."
British officials, however, have spent the past several months conducting their own study of the laws and regulations, and they disagree. "It's not true," one British official said. "It can be done, provided people are prepared to do it." The government here has provided Washington with documentation of its case.
"Nobody is concealing the fact that the U.S. administration was a little taken aback by the British approach to this," he said. Acknowledging that the negotiations have been "pretty rough at times, not dissimilar to a commercial negotiation," the official said that "a lot of people in Washington feel we're pushing our luck, . . . that any European country ought to be proud to participate" in the SDI program.
"I don't want to be brutal," he said, capsulizing the British position, "but the U.S. has said we'd like your support. And we're very keen to support SDI, as the prime minister has said many times . . . . But we can't live on fine words alone. There's a lot of money involved."
Of the western allies, Prime Minister Margaret Thatcher has been most supportive of SDI research, calling it a necessary countermeasure to Soviet efforts in space-based defense systems and emphasizing Britain's willingness to participate.
At the same time, however, Thatcher feels under heavy pressure to lower Britain's high unemployment rate and prove that she has made a "good deal" for British industry. Although a number of British defense contractors and researchers have been approached by U.S. officials involved in the SDI program, the government has asked them to wait for an overall government-to-government agreement that will guarantee them, and Britain, the best possible terms.
In major negotiations several years ago over the British purchase of four U.S. Trident submarines, industry and trade unions complained that the government was less than forceful in insisting that much of the construction work be done by British contractors.
"There is a lot of bad feeling in this country over the way Trident arrangements were made," the British official said. "The argument was to get in on the ground floor this time. Don't let them rip you off."
There have been some successes during the past three months of talks between teams of defense officials and diplomats. A tentative accord has been reached on a broad outline of about 18 areas in which British scientists have particular SDI-related expertise, including electromagnetic or rail guns, particle beam weapons and optics.
The two sides also have drawn up a draft memorandum of understanding for top-level signature that would give British participants the imprimatur of their government. But according to officials of both governments, agreement on the terms has remained elusive and in some ways has become more difficult than when substantive negotiations began last summer.
Defense Secretary Michael Heseltine will travel to Brussels following a Cabinet-level meeting here Monday to discuss final terms with his U.S. counterpart, Caspar W. Weinberger. British officials said they hoped to gain some leverage because of U.S. desire for at least one of the western allies to sign up for SDI before the summit between President Reagan and Soviet leader Mikhail Gorbachev Nov. 19 and 20 in Geneva.
U.S. officials, while expressing optimism that an accord eventually will be reached, said they did not expect it next week.
"We would like an agreement before the summit," said one. "But we're not going to give away the farm."
The U.S. view, this official said, is that any agreement reached for British participation in SDI will serve as a model for accords with other governments. "Everybody is watching this," he said. "It's a precedent, and the West Germans and the Japanese say, 'We want the same deal as the British have.' "
West German Chancellor Helmut Kohl has said that he does not expect a government-to-government agreement on SDI participation to be completed until after the first of the year.
Britain insists that the comparison is weak because it has much more to offer in terms of SDI-related research capability than either West Germany or Japan. But in any case, an official said, "it's a rather pathetic argument to have to say they'd have to do the same for everybody else . . . . If the Japanese or the Germans feel they can make a deal, good luck to them."