WASHINGTON -- When William Destler received a small purchase order from NASA for a research project he was working on with the agency, he thought it was going to be a simple task. Instead, he was faced with a bureaucratic nightmare of endless paperwork "that was much longer than the actual purchase order."
Destler, vice president of research at the University of Maryland in College Park, isn’t alone in his frustration. Research Universities and aerospace companies have been wading through reams of paperwork since Congress transferred authority over export licensing from the Commerce Department to the State Department over a year ago.
Congress enacted the switch following reports alleging two U.S. satellite manufacturers, Loral Corp [
LOR] and Hughes Electronics [GMH], may have given China valuable information to improve missile technology.
But while
export laws can be an effective tool of foreign policy to curb the proliferation of weapons of mass destruction and combat terrorism, critics say they are too often overly complex and take too much time to process. As a result, U.S. aerospace industry officials complain that they have lost business to their European competitors.
Exports of satellite components dropped nearly 40 percent in 1999, partly because of licensing control of those exports.
On Capitol Hill this week, Aerospace industry leaders warned that if the legislative gridlock on the issue of export licensing for satellites doesn't change soon, the damage to the satellite industry will be irreversible.
"If we don’t change the problem soon, we are going to become a second-class country," said Dave Garner, retired Air Force colonel and former division chief at the Defense Threat Reduction Agency.
Other critics agreed, citing evidence of foreign firms that have surpassed U.S. aerospace companies in market share.
"Arianespace exists because the U.S. didn’t want to launch a French military satellite," said Jim Muncy, a space policy consultant and former Hill staffer.
The European launch consortium is the world’s top launch company. Though 1999 wasn’t a good year for the world launch market, Arianespace still won 80 percent of the launch contracts by booking 12 orders and recording launch revenues of just under $1 billion.
"The U.S. risks losing one of the greatest frontiers that humanity has ever known," Muncy said. "Literally, the solar system is at stake."
Arianespace Chairman Douglas Heydon agreed that changes needed to be made because globally all launch companies are affected.
"Over half of our satellites are U.S. built," Heydon said. "We would all be better off with a clean-sheet approach."
Not long ago, export sanctions applied to just a small number of blacklisted countries such as Cuba, Libya and Iran.
But during the past five years, the list broadened. Different levels of restrictions have been imposed for about 50 countries, including China, Yugoslavia and Rwanda. India and Pakistan were added after they conducted nuclear tests in 1998.
Industry officials also touted the trade rules announced in May by Secretary of State Madeleine Albright.
The 17-point trade initiative would remove 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.
"Madeleine Albright’s reforms are going in the right direction," said Jefferson Hofgard, director of export policy and strategy at Boeing, the world’s largest satellite company.
Hofgard pointed out that aerospace business contributes $40 billion to U.S. trade. "The message here is we need to move forward because it is a big part of the national economy."
The issue of export control stems from a group of rules called the International Tariff in Arms Regulations, or ITAR. These export-control laws developed in the mid 1970s during the Cold War. Originally designed to monitor sales of military equipment around the world, the laws have grown to cover space-related products such as satellites and rocket parts.
Industry officials claim that these rules are too stringent. "To quote Werner von Braun, ‘We can lick gravity, it’s the paperwork that is overwhelming,’" Muncy said.
Since the crackdown on export-control, the list of export violators reads like a "who's who" in the business world: IBM, Dell Computers, Compaq, Lockheed, Loral, and Gateway.
In fact, over the past five years, more than 200 companies or individuals have been slapped with civil or criminal penalties for violating export laws.
Congress has tried to stem these numbers with several proposed bills that would help U.S. satellite manufacturers hanging in limbo, but that are unlikely to pass before the 106th Congress ends next month.
"We need a sustained commitment from Congress and the administration," Hofgard said. "We need to give them the tools to do their jobs."
Other industry officials agreed.
"We need to look at the technology and decide quite clearly what needs a license and what doesn’t," said Clayton Mowry of the Satellite Industry Association. The group represents some of the industry’s top commercial satellite firms, including Lockheed and Boeing.
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