The U.S. space industrial base will continue to erode with foreign competitors swooping in unless the government takes action to modernize satellite export control laws and help enhance satellite trade among its allies, according to a report released Monday.
The Aerospace Industries Association report, Competing for Space: Satellite Export Policy and U.S. National Security, says the United States has lost its competitive edge in space and lost global satellite market share because of misguided legislation. The legislation, intended to protect sensitive space technologies and preserve U.S. space dominance, instead has diminished U.S. commercial satellite market share and fueled the competitiveness and capabilities of competitors abroad.
The National Defense Authorization Act for fiscal year 1999 placed all satellite technologies on the U.S. Munitions List (USML), which severely restricted the transfer of commercial satellite technology and information abroad, even to allies. U.S. global market share of satellite manufacturing then entered a steep decline, the report says.
The report discusses a survey of U.S. satellite systems and components manufacturers about the challenges the space industrial base faces as a result of U.S. export policies. The report says more than 90 percent of respondents indicated a connection between export controls and eroding space industrial base capabilities. It also cites more than 70 percent of respondents claiming International Traffic in Arms Regulations (ITAR) are to blame for lost sales, with many small businesses characterizing losses as “significant.” ITAR imposes government regulations that control the export of defense-related articles.
“Simply put, we have legislated away our nation’s dominance in space,” the report says, citing a figure showing that U.S. satellite exports have declined 48 percent from 1995 to 2005.
The report also claims smaller businesses are hurt more by export control because of the highly specialized items they make for satellites result in a narrow range of customers. The report cites a 2010 National Reconnaissance Office report that finds that challenges that affect larger, first-tier vendors hurt “second and third tier” suppliers more because they have an “insufficiently diverse business to easily accommodate changes in schedule, funding, or requirements for unique, low-production items.”
Among its recommendations, AIA suggests the government “complete and release the review of the space systems and components considered for review from the USML.” AIA also recommends Congress return authority to the president for determining the appropriate agency for export control jurisdiction over satellite and space technologies. AIA also proposes the government use its renewed authority to review and approve the movement of low/no-risk technologies from the USML to the Commerce Control List (CCL), citing the CCL as the “more appropriate” regulator for low-risk commercial technology exports.
But determining which items on the list are low-risk, and who is eligible to receive them, is up for debate.
“I have heard references to bolts earlier and gyroscopes. Let us note that these were pivotal technologies in the development of the Chinese missile system,” House Foreign Affairs oversight and investigations subcommittee Chairman Rep. Dana Rohrabacher (R-Calif) said during a House Foreign Affairs Committee hearing on May 12. “Also, at the same time, we provided them the information they needed to have more than one payload. And, yes, that was for delivering satellites but guess what? It also makes sure their rockets now, their missiles now can deliver more than one nuclear warhead.”
AIA also recommends selected space systems should receive attention under the White House’s National Export Initiative, which set a goal of doubling U.S. exports over the next five years. AIA also suggests the Export-Import Bank consider using credit guarantees for domestic projects to level the competitive playing field against other nations with government-backed guarantees. Increasing Commerce Department funding to help support U.S. firms vying to win in the global satellite marketplace is another AIA recommendation. A fourth suggestion is the Defense Department encouraging allies to utilize U.S. spacecraft and systems.