A window of opportunity for export control reform

One of the biggest complaints that the space industry has about policy is the current state of export control regulations, which place satellite and launch vehicles, and their key components, on the Munitions List, requiring companies to go through a licensing process that is lengthy, cumbersome, and expensive. As I note in an article in this week’s issue of The Space Review, some believe that there’s a chance now to enact reform, taking advantage of the change in party control of Congress and growing evidence that US companies have been unduly hurt by the regulations, losing business to foreign (primarily European) competitors.

The strategy proposed by David Garner, a retired Air Force colonel responsible in part for the current regulations, is to have a presidential commission study the issue and propose solutions; this would provide some political cover for members of Congress who might otherwise be less willing to back reform. Otherwise, Garner warns, “If we don’t take the opportunity, politics is going to eat us alive and, frankly, my good friends across the Atlantic will take advantage, as they have for the last seven years, of the legislation we created and they’re just going to continue to beat the crap out of us.”

9 comments to A window of opportunity for export control reform

  • Great article! And as much as I wish the window for reform was opening, I fear it is not. The reasons why not you actually covered fairly well in your essay, the foremost being the position of many hawks in congress. There are many people in government like Sen. John Kyl and Rep. Duncan Hunter who are adamantly opposed to reform (except in cases to make it even more strict).

    One of the greatest problems in making this issue is showing the quantifiable impact of ITAR on US business. This is very difficult as there are multiple causes beside ITAR that can be attributed to the decline of the US aerospace industry. This is not to say that ITAR is not a large contributor, but until it can be substantially quantified, it will be very difficult to push through reform in congress over the hawkish protests.

    This problem has been stymieing reform for a long time and addressing it is one of the goals of the DSB report due out later this year. Hopefully their tact of quantifying the impact of ITAR on second- and third-tier parties proves successful.

    On a tangential thought, can Congress really push through reform like this? If one looks at the history of ITAR reform, its liberalization was only done through executive orders (both by Bush Sr. and Clinton). As your article notes, it is very difficult to get Congress attention on such an issue. This is due in part to their reluctance to put out their neck on an issue that really doesn’t win them votes, though it may win them campaign contributions. Though even on the money side, the largest contributors to campaigns tend to be companies that can afford a large enough staff to deal with ITAR and may even like the additional barrier to entry into their turf that ITAR provides. All this raises to mind that ITAR reform will not gain much traction in Congress and only through executive leadership can it be reformed like it has in the past. If this is true, then it will take a change of executive leadership, not legislative leadership, to a less hawkish administration for export reform.

  • …it will take a change of executive leadership, not legislative leadership, to a less hawkish administration for export reform.

    I disagree. I think that, just as only Nixon could go to China, only the Republicans can undo this mess. A Democrat president who attempted it would be accused of undermining national security. Recall that the current draconian regime was imposed by Republicans as a result of the Loral (whose chairman was a huge Clinton supporter) helping (or at least being perceived as helping) China with their satellite technology, during the Clinton administration. I’m hoping that the fact that Hunter’s now in the minority, and busy running for president, might open a window here.

  • Another thing to keep in mind is that while quantifying the business impact is important, quantifying the negative national security impact is even more important. In the current environment, anyone seen as trying to help business at the expense of national security is going to get their head handed to them. On the other hand, if it can be shown quantifiably (which I think it can) that the way ITAR is currently being handled is negatively impacting national security, the situation is different.


  • I fully agree with Rand, both his view of the history and his sense of the outcome. However, one key problem is that ITAR as applied to satellites is often confused with the wider controls on aerospace exports. (In fact, I would oppose any relaxation of controls on the explorts of true weapons, and indeed, would like them dramatically strengthened.) But, satellites are not weapons any more than commercial air transports which can be used to transport material and toops, not to speak of being modified to refuel strike aircraft, are weapons. If the space community can clarify the distinction between civilian satellites and weapons to the people in Congress who have no real understanding of either, I think we’d have a much better chance at turning things around.

    — Donald

  • A Democrat president who attempted it would be accused of undermining national security.

    We’ll have to agree to disagree on this issue. You are assuming that Republicans are the only ones who seem to have the moral authority to make changes in national security. Besides which, my contention was a less hawkish administration, which in theory could also be a Republican. It was Bush Sr.’s administration who was the one that started liberalizing export policy with China in the first place. I have yet to really study the presidential candidates’ stance on foreign policy so at this point I don’t know if either party is putting forth a candidate that believes more in multilateral controls on space technology over unilateral controls.

    I think there is some confusion by many over what exactly it means to reform (liberalize) export control for space technology. What many mean is redefining satellite technology to be considered a dual-use export and not a munition. Dual-use means it falls under Commerce control who in turn follows the multilateral export control program as defined by the Wassenaar Arrangement. If it is a munition (as it is now) it falls the unilateral export control of ITAR administered by State. Either way there are still National Security controls that can be applied to its export.

    George Zapphirou in 1992 created a good litmus test for whether a technology should be under more restrictive controls:
    1) evaluation of the importance of the technological information on national security,
    2) On whether it is already known outside the United States,
    3) On whether it will in any event be known within a short period of time,
    4) on the effect of the limitation on the United States economy.
    When applying this test to satellites, one could argue on the first point but the other 3 points clearly point satellite technology to NOT be under the more restrictive controls.

    The argument made by many is that right now we are operating in a system where we are trying to put more restrictive controls on a technology that other nations are already restricting under Wassenaar. To address Jon Goff’s point, it is because of this situation that groups like CSIS (which Foust’s article quotes in the form of its one of the coauthors of the report Rep. Ellen Tauscher) have put forth that this unilateral control of satellite technology is harming our national security interests. If your interested in this argument, you can read my previous review of that report.

    As for interpreting the history of satellite export controls, while there may be some truth that part of Rep. Cox’s motivation could be attributed to him wanting to get at Bernard Schwartz of Loral, it was both Hughes (now Boeing) and Loral that were being investigated. Both of which settled with the government without admitting guilt and paid fines of $32M and $20M respectively. While many focus on Loral’s role, one has to also take into account that Boeing’s violation was in fact the greater of the two as measured in size of penalty.

  • A quick modification to my post (i miss the old days when you could preview your post before it is saved!). “You are assuming that Republicans” should be “You seem to be assuming that Republicans”. I don’t want to put words in Rand’s mouth that he never said.

  • Ferris Valyn

    A question – there has been considerable discussion about point to point travel using sub-orbitals. Assuming we are talking about point to point from the US to outside the US, would ITAR right now impact that?

  • ITAR would definitely impact it in multiple ways. First, presumably the vehicle has technology that is on the ITAR list. Any time this technology controlled under ITAR leaves the US, a license is needed. Assuming they will need to perform maintenance in the foreign country, a TAA will also be needed. Then there is insurance and qualifying the craft to fly in the other country’s airspace. These are just a few of the issues. Pretty much anything that requires exchanging technical information with a different partner will require ITAR approval. You even need an ITAR license to begin talking with someone about what types of technical information needs to be exchanged!

  • Adrasteia

    One of the greatest problems in making this issue is showing the quantifiable impact of ITAR on US business. This is very difficult as there are multiple causes beside ITAR that can be attributed to the decline of the US aerospace industry

    There’s are a number of very good examples of the negative unintended consequences from ITAR. ITAR restrictions on the release of source codes was why the Australian government chose EADS MRH-90’s over Sikorsky S-70M. We’re about to dump the F-35 for many of the same reasons.

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