Opportunity Knocks

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A full decade after the U.S. Congress put a legal stranglehold on international trade in U.S. satellite technology, export reform finally appears to be gaining traction on Capitol Hill. At least three pieces of pending legislation contain provisions addressing the matter in some shape or form.

Most significantly, the House of Representatives on June 10 passed a foreign relations authorization bill for 2010 and 2011 that would give the president limited discretion to remove selected satellite components from the U.S. Munitions List, a registry of militarily sensitive technologies whose exports are regulated by the U.S. Department of State. Two other bills request studies on the national security implications of U.S. satellite export policies: The House intelligence authorization bill requires the director of national intelligence to determine the extent to which U.S. export rules encourage other countries to develop space technology; and the House version of the defense authorization act, which passed the full House June 25, would require the U.S. Defense and State departments to prepare a report on the national security impact of removing various satellite components from the Munitions List.

Meanwhile, Ellen Tauscher, U.S. undersecretary of state for arms control and international security, told Senate lawmakers during her June 25 confirmation hearing she supports export reform in general and would “consider supporting the transfer of commercial communications satellites” from State to Commerce Department regulatory purview. Her words were cautious and noncommittal, to be sure, but it’s another indication that Washington’s decision-makers are finally getting the message: the current satellite technology export control regime, in place since a congressionally imposed crackdown that took effect in 1999, is doing more harm than good to U.S. national security, not to mention putting a drag on legitimate international space commerce.

It was in the name of national security — although there clearly were political motivations as well — that Congress in 1998 passed legislation transferring export jurisdiction for all commercial communications satellites and components from the Commerce Department’s control list to the tightly restricted Munitions List. The law was a response to allegations that China was getting access to sensitive technology via launches of U.S.-built commercial satellites and using it to improve its missile capabilities. China’s entry into the commercial launch market was part of a gradual loosening of U.S. satellite technology export controls that began in the late 1980s and continued into the late 1990s.

A congressional probe did turn up instances where U.S. satellite firms improperly transferred data to China in the course of a pair of rocket failure investigations, but the impact this had on national security was far from clear. And while some carefully calibrated measures to prevent future unauthorized technology transfers were certainly warranted, Congress’ remedy — clamping down on an entire industry — was akin to swatting flies with a sledgehammer. China, the intended target, hardly missed a beat, amassing an impressive record of successful launches in the decade since the restrictions were put in place. The collateral damage to U.S. satellite and satellite component makers, meanwhile, has reached a point that even U.S. national security officials have been voicing concern to Congress about the erosion of a critical U.S. industrial base.

One of the most stunning aspects of the whole satellite export saga is how quickly Congress acted to impose the current regime — the law transferring satellites from Commerce to State passed roughly six months after the technology-transfer allegations first made headlines — compared to how slowly lawmakers have been to correct their mistake. Even the reforms now being proposed are modest: The president would have to justify to the relevant House and Senate committees the removal of any items from the Munitions List, for example. Moreover, because even the most low-tech commercial communications satellites are tailored to individual customer requirements, the impact of the new law likely would be restricted to components, as opposed to completed satellites. Anything bound for China, meanwhile, would still be subject to State Department approval in addition to requiring a presidential waiver.

The reform legislation would nonetheless provide some welcome, if limited, relief to an industry that has struggled under the current rules. Passage into law is a big if, however; the measure’s prospects in the Senate are at best uncertain for a variety of reasons, including a busy agenda and a ticking legislative clock. Unless the bill’s supporters in the House, industry and elsewhere can rally key senators to get behind the cause — and do so quickly — a rare opportunity for meaningful reform that will aid an industry, and in doing so benefit national security, will have been missed.