WASHINGTON -- Federal officials and the commercial satellite industry converged on Capitol Hill Wednesday to say that the trade rules introduced last month by the State Department were good news for the U.S. aerospace industry. But some added they aren’t a panacea for what ails the industry.

"The new State Department regulations are a positive step in the right direction," said Clayton Mowry of the Satellite Industry Association, which represents some of the industry’s top commercial satellite firms, including Lockheed and Boeing. "But they clearly don’t solve all the problems."

On May 24, the State Department introduced a 17-point trade initiative that removes some of the obstacles to joint ventures by U.S. and European companies that are seeking aerospace and defense contracts from Washington or other NATO governments.

"There are friendly nations such as Brazil, Malaysia, Mexico, the Philippines, Taiwan and the United Arab Emirates," he said. In addition there are five active members of the European Space Agency that are not covered by the agency’s ruling.

Under the State Department initiative, the U.S. government seeks to negotiate agreements with countries that pass certain security measures. Then selected aerospace companies in those countries would be allowed to bypass export-licensing rules for unclassified weapons munitions.

Another measure would require only a single eight-year license to cover an entire weapons program that involves several subcontractors.

These measures may be a positive move for the industry, but they don’t go far enough, said William Reinsch, under secretary at the Commerce Department.

Since Congress transferred export-licensing control for commercial communications satellites from the Commerce Department to the State Department a year ago, the U.S. share in the global market has dropped from 73 percent in 1998 to 62 percent in 1999, Reinsch said.

While the U.S. should treat the export of tanks, fighters and submarines in a more restrained manner, "regulating commercial goods as if they were weapons harms our technological lead," Reinsch said.

The Department of Defense’s deputy under secretary said that the shift in market share for the U.S. was not solely the fault of export-control policy. "There were other reasons," James Bodner said.

He cited business cycles in the commercial satellite industry, hard times in the Asian financial markets and several launch vehicle failures last year.

"Congress needs to focus more broadly on national security by closing the gap with adversaries and opening the gap with allies," Bodner said.

State Department adviser John Holum also defended the agency’s new rules. "The State Department didn’t ask for this role and we are trying to make the best of the circumstances," he said.

The State Department is "committed to administer…policies and practices that characterize the strong control our government has always exercised over the international export or transfer of defense articles" to protect national security interests, he said.

The State Department’s new rules ended a yearlong battle between those who favor tight export rules in the name of national security and those in an industry fighting to keep ahead of foreign competitors who have no such restrictions from their governments.

At the time of the announcement, the aerospace industry applauded the effort, but called it just the first step in overcoming the industry's trade obstacles.

"Even if these initiatives are implemented as well as everyone wants, we have done no more than streamline a system devised for an age that no longer exists," said John Douglass, president of Washington, D.C.-based Aerospace Industries Association.

"The next president and the next Congress need to look at the legal and philosophical underpinnings of our export control system which dates back to the Cold War environment of the 70s," he said.

NATO countries, along with Australia and Japan, account for more than $17 billion -- or 68 percent -- of U.S. export licenses.