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A different approach to ITAR

It’s no secret that the space industry in general is unhappy with the effect that export controls are having on their ability to sell their products and services to, or even hold discussions with, foreign parties. At the Space Access ’06 conference in Phoenix a few days ago, several people were sporting buttons with the slogan “ITAR delenda est”: ITAR must be destroyed.

However, as I pointed out in my summary of the conference for The Space Review, at least one person believes that a less confrontational approach is needed. In a presentation, Berin Szoka of the Institute for Space Law & Policy said that rhetoric like the above “will undermine efforts for reform.” Instead, what’s needed is to quantify the “perverse national security effects” ITAR is having on the industry by inhibiting innovation and encouraging foreign competitors to develop their own products. and then develop detailed reform alternatives: a process that will take three to five years, he believes. What sort of button would Szoka wear? “An ITAR that works for America.”

21 comments to A different approach to ITAR

  • I think I would wear a button saying, “Yet another gift from the Republican Congress,” ITAR being one of the few economic idiocies that I cannot fairly blame on the Bush Administration.

    – Donald

  • Nemo

    I think I would wear a button saying, “Yet another gift from the Republican Congress,”

    The very last thing that any of us need right now is for ITAR reform to become a partisan issue.

  • Sorry, Nemo, but that happened a long time ago. ITAR started out as a way for Congressional Republicans to hurt the CEO of Loral, who was (is?) one of the largest contributors to the Democratic Party, and to embarrass the Clinton Administration. It is true that Loral’s probable mistake (and Boeing’s as I recall) provided ready excuses, but surely no one thinks that treating civilian comsats as munitions — while we happily sell real munitions to almost all comers, including aerial refueling technology that is far more dangerous to us — was done for apolitical reasons.

    I would love for ITAR to become a non-partisan issue. But for that to happen, the Congressional Republicans who saddled us with this disaster have to be man enough to admit they were wrong, and write legislation withdrawing the rule.

    I don’t expect it to happen and, yes, I am as angry about this as I probably sound. It is hard to imagine a single law that has done more to hurt commercial space in this country while handing other nations to keys to that market.

    – Donald

  • Donald,
    That was a big part of Berin’s point: the politics that happened over 10 years ago do not matter for how you approach reforming those bits of ITAR that need reform. No one in Congress cares about who did what way back when. If you want to make ITAR work well you have to approach it from the politics going on now. What happened with ITAR pre-9/11 has almost zero relevance in a post-9/11 world.

  • Nemo

    Sorry, Nemo, but that happened a long time ago.

    And you think you will increase the odds of reform by perpetuating it, and making it worse?

    Grow up.

  • Michael and Nemo, I wish I didn’t have to, but I stand by my position that to get rid of ITAR, Congressional Republicans (other than Dana Rohrabacher who in essense has already done so) need to “grow up” and admit they made a mistake and take the lead. Democrats can’t do anything: whatever they did, Republicans will only claim it’s partisan politics and react against it. Like Nixon going to China, only Republicans can reverse this terrible law.

    (If either of you have other strategies, I would love to hear them. And, this law is such a bad idea, to a degree I would gladly vote against the interests of my party, and even of myself, to see it go away. The nation’s economic future in space is at stake.)

    – Donald

  • Nemo

    (If either of you have other strategies, I would love to hear them.

    You’ll hear, but will you really listen?

    My strategy (and that of others) is to remove the partisanship from the ITAR issue entirely so that lawmakers of both parties can support it without reservation. Frame it as a national security and competitiveness issue, not a political issue. As for the actual tactics, I’d have some politically savvy alt.spacer (Jim Muncy comes to mind) write an initial draft and then do some behind-the-scenes lobbying to get a moderate Senator from each party to co-sponsor it. The House can come later after some momentum for reform has built up.

    Standing in the corner and whining “But he started it!” is exactly the wrong way to approach the issue, and it shows all the maturity of the average four-year old.

    Donald, you have a choice to make. What is more important to you, reforming ITAR or settling partisan scores? Your posts to date suggests that the latter means more to you. You can make all the noise you want about wanting ITAR reform, but in the end your approach is doomed to failure and you’ll wind up whining “We coulda had ITAR reform if it weren’t for the mean ol’ Republicans.” If that’s going to remain your attitude, the best thing you can do for the cause would be to keep your yap shut while the real reformers do their best to smooth over the partisan divisions.

  • Nemo, I’m not opposed to your strategy, and I think in general I do a pretty good job of keeping my yap shut on this issue (today being a notable exception). However, I have not seen much wavering among the pro-ITAR folks and I’m not sure they’re ready for meaningful compromise. Nor have I seen a “Jim Muncy,” with the conservative credentials required to take this on, step forward to take it on.

    I sincerely hope I am wrong and you are correct.

    – Donald

  • Bill White

    The GOP needs to take the lead on ITAR. Democrats can “go along” and refrain from partisan attack but since ITAR arose from a desire to bash Clinton a Democratic initiated move to modify ITAR would be attacked as partisan by the GOP.

    Best avenue? Work out bi-partisan reform “behind closed doors” and have a joint press conference where Democrats and the GOP share the credit & blame equally.

  • Bill White

    The GOP needs to take the lead on ITAR. Democrats can “go along” and refrain from partisan attack but since ITAR arose from a desire to bash Clinton a Democratic initiated move to modify ITAR would be attacked as partisan by the GOP.

    Best avenue? Work out bi-partisan reform “behind closed doors” and have a joint press conference where Democrats and the GOP share the credit & blame equally.

  • Nemo

    I should hasten to add that I don’t intend to put Jim Muncy on the spot to work this issue, just using him as an example of the type of politically aware space activist (and a former congressional staffer) who would have both the competence to do the job and enough credibility to be taken seriously by the folks who need to be sold on this.

  • Bill White

    On further reflection, until the K Street Project is shut down, Democratic support is utterly irrelevant. You guys don’t need no stiking Democrats to reform ITAR remember?

    The GOP controls The White House and both houses of Congress. Got a beef? Take it there.

  • America – Ship of Fools.

    A nation of fools, represented by … fools.

    What more did you expect?

  • Al Fansome

    I generally agree with Nemo’s general strategy of finding a “Jim Muncy-like” strategist to manage/work the issues, and putting together a legislative plan that involves moderates from both sides of the aisle. I think a lot of interested parties in the space industry would support such an initiative. But something is missing.

    The credible & capable political players of the world (in the Jim Muncy-class) are quite limited in number, and they don’t work for free. At any given time, they have a dozen or more issues & priorities they could work on that also align with their personal philosophies, and (to state the obvious) they tend to focus on those projects that their clients are willing to pay for.

    Although I hear lots of complaining out of the various advocacy groups, and out of both very big, medium and small aerospace companies about the damage, I see very little evidence of any companies “putting their money where their mouth is”.

    So the Aerospace Industries Association, and the US Space Foundation, and the Space Access Society, and the Space Frontier Foundation can keep on complaining about the ITAR problem. Until somebody pays real money to execute the “Nemo Strategy” nothing is going to happen.

    - Al

  • Dave Huntsman

    Jeff and I have talked off-line about this: But, at FAA/AST’s annual commercial space launch conference two months ago I got up to the mic and challenged AIA and the Chamber of Commerce – both were in the hall – to actually do something, since from what I had seen both had had ITAR as a ‘top priority’ for a couple of years–and done essentially nothing of substance. In fact, I mentioned that (as of that week, anyway) AIA had actually downgraded the importance of ITAR; something the AIA rep got up and challenged a few minutes later. But my whole point is, business has more pull with this Administration and Congress (arguably) than with most others in history; and if their ‘top priority’ isn’t being solved, it’s because in reality they ain’t tryin’.

    Fast forward to today: Aerospace Daily for today (26 April) has a piece on AIA’s push on the Hill for “..The top three legislative priorities being pushed by AIA….”. To read the whole piece, see AD; the short version is:

    #1.”Reforms to a law that requires suppliers to certify that 100 percent of specialty metal used in military hardware was smelted domestically.”

    #2. “..Ward…off efforts to impose new “Buy America” restrictions on military hardware purchased by the Pentagon…”.

    #3. ” Passage of bills that would help small companies lower health care costs…”

    If AIA isn’t putting ITAR in even its top 3 list this year,we certainly can’t expect anyone else on the hill — or in the Executive Branch — to have it on their own list, can we? Even if AST tried to jawbone the powers that be on this subject to move, they’d get it thrown back in their face by every entity since “even industry itself isn’t making it a top issue, so why should you, or we?……”.

    As Jeff has mentioned, ITAR is, in effect, to the domestic competitive advantage of The Big Guys over The Little Guys. They will never–ever– do anything about it, for that reason. (Other than promise to). So we need another strategy, folks.

    Perhaps….can our space lawyer friend that Jeff mentions get the Trial Lawyers Association to come out- publicly and loudly- in favor of absolutely no changes to ITAR? That, in their opinion, ITAR is perfect, as it is?
    (Now, you know, and I know, that this isn’t a Trial Lawyers issue per se; but politically…this could work….)

    Such a loud declaration by the Trial Lawyers might just be enough leverage for Rohrbacher to use to stoke up the House enough to pass a reform ‘to stop ‘em”.

    Dave
    (best I could think of on the spur of the moment)

  • The bottom line, I think, is that the people who made this decision are still in power and they have no political incentive to change their minds. For most politicians, especially of the current persuasions, party politics clearly trumps the national interest. Spaceflight remains a tiny issue, and that is not likely to change. There is little or no political benefit to them to change the law.

    The political price for changing the law, however, could be very high indeed. The people in power would have to admit they were wrong and that they made a decision that hurts the national interest for the benefit of their political party. No one wants to admit that.

    I’m afraid we do have to chalk this up as one more price for the senseless and unreasoning political attacks on the Clinton Administration. Sure, Clinton left in disgrace and his ideological enemies got into power, but the price to the national economic interest — not least to commercial space — was very, very high.

    We desperately need some relatively rational, relatively non-ideological leadership in this nation. Unless we get it, our future is very dark.

    – Donald

  • Al Fansome

    Donald,

    You do state some valid points (“no political incentive to change their minds” and “people in power would have to admit they were wrong”), but I have to disagree with you on other points, and (most importantly) you don’t propose any way to get out of this mess.

    The driving force behind ITAR is no longer partisanship. The fundamental political problem now is that senior hawkish pro-defense Republican leaders REALLY BELIEVE that the current ITAR system is a good thing, and really do not want it to change. There is a real substance issue in the way of reform. (Duncan Hunter, the Chairman of the House Armed Services Committee comes immediately to mind as a representative example. A lot of other members listen to him.)

    The hawkish senior Republicans WILL attack and resist proposed changes to the law, and are likely to attack the proponents of ITAR change as “weak on defense & national security”, no matter which party that person is in. The other congressional leaders know this.

    These same hawkish Republicans who believe that ITAR is good are the same ones who think it is good idea to enforce “buy America” provisions. They are the same ones who are forcing the defense industry to *certify* (e.g., show the paper trail) that every nut & bolt is made of metal smelted in the U.S. Their world-view is consistent across all these issues. (These same people thought INA was a good idea too.)

    Just like INA, the first problem is winning the substantive debate on the Hill with the majority of members, AND in the minds of the 4th estate (media). The linked (and next) problem is that in the next election, the opponents of that Senator or Congressperson may turn this issue into a campaign issue. Considering the times, one good way to lose the next election is to be pigeon-hole as “weak no defense/national security.” (Remember the vietnam veteran Senator from Georgia who was pigeonholed as weak on defense, and lost.)

    It really does NOT matter much which party you are. If I was a Democrat, and a Republican had introduced a bill for ITAR reform, and other Republicans had attacked that ITAR-reform Republican as doing something that hurt national security, I might use it in my campaign against him or her. If ITAR was not hurting the local industry in the State/district, I would seriously consider picking this up as an issue.

    The only way to win this fight is to change the politics FIRST, by turning this substance of the issue on its head. We need to make the case that the “pro-ITAR reform” politicians are pro-national-security, and (of course) that the anti-ITAR reform politicians are “weak on defense”, and are destroying our high-tech industries and key part of our economy.

    WHEN substantive change in the debate has taken place (which will take hard work), the conditions will be set for a legislative fix.

    Donald — if you really want to solve this issue, you need to let go of the past, and deal with the substantive reality of issue right now.

    - Al

  • Al, I agree with much of what you say, above, but, unfortunately, the past is intimately tied to this issue. The past is why moderate Republicans will not bring the issue up, and why Democrats cannot. (Also, if we “reward” this kind of behavior, there will only be new ITARs going forward.)

    However, I do have an idea. A lot of the problem with ITAR is that it is way too broad. I don’t want to sell military technologies to China (and Iran, et al) any more than the Republican “hawks” do. But, the idea that we cannot sell comsats to Britain without treating them as munitians is, quite literally, insane.

    One way out of this may be for a bi-partisan group to introduce replacement legislation that is far more carefully targeted. How about a complete ban on launching out satellites and those with American components on Chinese (and future Iranian, et al) launch vehicles?

    Target the problem (launch vehicle technology) and not the victim (civilian satellites whose wider distribution makes war less likely).

    Such legislation would give both sides cover. Republicans can say they won what they wanted all along; Democrats should have little trouble signing such legislation.

    – Donald

  • Al Fansome

    Donald,

    What you propose above is similar to what Berin Szoka, Nemo, and others are proposing. A number of people have suggested that we need limited amendments to ITAR that deal with the issue that we are imposing rules (designed for enemies of the U.S.) on those darned Brits, Canadians, and Australians.

    This fight is completely winnable, but it will still take a lot of hard work by smart politically-astute lobbyists to push the rock up the Hill, to overcome intertia (and the fact that thee hawks don’t trust even our closest allies).

    Which gets back to the original point from several posts ago. The industry that is most affected does not appear to be willing to make the financial commitment to pay for fixing this legislative problem.

    I beleive this is for many reasons.

    One reason is that this is a version of “tragedy of the commons”. Every business looks at the work to be done, and asks “Why should my company pay the entire bill to fix a problem that hurts all companies some?”

    At the same time I assert, by observation, that ITAR reform is NOT a top priority at any company in the industry with deep pockets. If it was a top priority, then where is the draft legislation that has been introduced? It just happens to fall lower on the list of priorities of almost every deep-pockets company in the industry.

    Why is this?

    The most significant problem is that, because of the time value of money, most businesses rationally focus on shorter term strategic priorities.

    Meanwhile, the most signficant damage from ITAR is encurred in the long-term as other countries incrementally replace and eliminate their dependence on U.S. suppliers. Other countries are doing this right now. This process takes place over the long-term.

    Another reason is the existence of an off-setting disincentive to big companies to invest in reform — ITAR creates a barrier to entry to new players. Established companies have already figured out how to deal with and manage ITAR, and take it into account into their business plans. It is now part of the “cost of doing business”. They understand that ITAR is a bigger problem to new companies which have a steeper learning curve. This “advantage” partly offsets the ITAR pain felt by these established players. (This is not news. Many studies have been done on the fact that “regulation” creates barriers to entry to new players, and significantly benefits the established providers by reducing competition.)

    In summary — what is missing is somebody (or some company) who is willing to put up the funds necessary to execute on this legislative objective.

    - Al

  • One correction, my suggestion was to replace ITAR, not to modify it. I suspect that the former would be politically easier since there is too much political baggage associated with ITAR for anyone to want to touch it.

    I would add to your list of problems the fact that most of the big players are too busy feeding at the military teet to worry about the tiny commercial divisions — Boeing being the most obvious case in point. They are not going to want to piss off the Congress people who vote for the military budget to defend a relatively tiny civilian industry.

    – Donald

  • Al Fansome

    Donald,

    Why do you suspect that it would be politically easier? The evidence suggests otherwise.

    Laws are amended all the time — well over a hundred times a year by Congress. How many times a year do you think Congress totally replaces an existing law?

    Remember, there is an influential group on the Hill who thinks this is a good law. We need a political laser here, that gets everybody to focus on problems that at least 51% can agree on. A meat axe approach will confuse the issues, and take attention off the substantive issues where we are strong. This is what Berin Szoka was talking about.

    - Al