AMERICA’S ECONOMIC WAR AGAINST ITSELF: TAYLOR DINERMAN
America’s Economic War Against Itself
US Export Controls
http://www.stonegateinstitute.org/2717/us-export-controls
In an important milestone for both China and for Europe, a few weeks ago was the first time a Western commercial satellite had ever been launched with no — repeat: no — US made components. On October 7th, 2011, a Chinese “LMarch 3B” rocket thrust a European commercial communications satellite into orbit — the first time a Western spacecraft had ridden on a Chinese rocket in well over a decade — and it was a triumph for America’s International Trade in Arms Regulation s (ITAR).
So long as the US government makes it extremely difficult and costly to get export permission for communications satellites and for communications satellite technology American industry will continue to fall behind in this critical area. It is sad to note that for more than a decade Washington has been conducting a highly effective economic war against its own US space industry.
Over the years there has been little rhyme or reason to US export control policy. Efforts to stop China from getting US military technology may or may not have succeeded but they certainly have helped the Europeans to sell their technology — which is as good if not better than US technology — to China and just about everyone else.
The last major revision of the ITAR regulations occurred in 1999 and was the result of a minor Clinton-era scandal involving Chinese-originated campaign contributions, and the Chinese hijacking of US satellite technology. Not only did a Chinese commercial “Long March launch” vehicle explode, but the wreckage of the US communications satellite it was to carry into orbit was stolen. As a result, Congress decreed that Communications satellites, and their components, would be regulated as if they were munitions. They also ordered the State Department, rather than the Commerce Department, to assume authority over providing or withholding these export permits.
This ruling had the immediate effect of tearing the guts out of an important part of the US space industry’s export market. European firms were all too happy to jump into an area which the US had previously dominated. The cost in US jobs h as been in the thousands, and even worse, the US has now fallen behind in certain critical aspects of space technology.
It is ironic that an administration which claims to be devoted to supporting the US photovoltaic industry has failed to take some simple actions which could dramatically improve the export of high-quality US-made solar power systems for spacecraft.
The Obama administration has promised to use existing legal authority to move certain items from the State Department controlled munitions list to the less tightly regulated Commerce Department’s controlled list. Unfortunately for US industry, this has not yet happened. In spite of a Commerce Department spokesperson’s statement that the items involved “do not have an inherent military function,” nothing has been done.
In the past, efforts to reform the export control system have floundered on the rocks of Congressional mistrust. There is a feeling on Capitol Hill that the State Department wants to reform ITAR to undermine the US embargo on weapons sales to Beijing Congressmen such as Frank Wolf (R VA) , for example, realize there is a faction inside the State Department known as the “Panda Huggers,” who have long felt that the post-Tiananmen Square Massacre arms embargo is an embarrassing distraction from their efforts to improve Sino-US relations. Wolf therefore tries to block export control reform efforts, without regard to the price paid by US exporters. Meanwhile the US has been losing market share in the communications satellite industry; even nations that are close to the US, such as Israel, are buying their communications satellites elsewhere
The cost in time, money of complying with ITAR regulations, when added to the already difficult job of financing, building launching and operating communications satellites, has prevented most smaller Satellite telecommunications companies from buying American products.
Although the George W. Bush administration promised to fix the problem, it was incapable of making a serious effort. Export control reform requires that the President make a sustained and politically difficult effort to convince Congress to agree to change parts of the legislation. After the 9/11 attacks in 2001, George W. Bush and his team may have felt they did not have the time or energy to engage in what they may have seen as a less than significant project.
Obama’s team, who claim to be devoted to increasing US exports, said they have a plan to alleviate the harm done in 1999, but after three years of promises, nothing has been done. Apparently, for the US government, supporting American jobs and helping US companies regain their once-dominant market position in the communications satellite industry are not a high priority.
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