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What Are the "Rules of the Road?"
U.S. Begins Talks on New Rocket 'Rules of the Road'
By Frank Sietzen
Special to space.com
posted: 12:46 pm ET
26 January 2000

foreign_rockets_000126

WASHINGTON The Clinton Administration has taken the first steps toward negotiating a series of new trade agreements covering sales of commercial space boosters by Russia, Ukraine and China, space.com was told Tuesday.

The existing agreements with Russia and Ukraine expire at years end. The Chinese launch agreement lapses in December 2001.

"We have started the first informal discussions with one of the countries," John Barker, deputy assistant secretary of state told space.com. "And we have been in touch with representatives of the other two. Theres been some discussions on how to approach them."

That first nation was Russia, Jack D. Segal, director for export controls at the White House National Security Council, said.

The Bush Administration had started the agreements, and they were completed in the early 1990s under a Clinton Trade Representative. They control how many commercial rocket launches the nations can sell internationally, the number and conditions under which U.S. satellites can fly on the rockets and the prices each country can charge for the rocket launching services.

Without such agreements, the United States would not allow American-made satellites or space products to be launched on the foreign vehicles. Such a ban would make commercial sales of the rockets much more difficult, since the U.S. manufactures the bulk of the satellites and related systems sold on the world space market.

'Rules of the road'

The agreements, nicknamed by space industry analysts the "Rules of the Road," were considered crucial early steps in allowing the three former Communist nations into the commercial space business. Since taking effect, all three countries have established extensive space business operations.

Russia has developed commercial space projects, such as cargo-launching rockets, or in partnership with Western firms like Lockheed Martin.

Ukrainian rockets are sold under a sea-launching project in which Boeing is a major shareholder.

China has sought to establish itself as a supplier of rockets for such projects as Iridium, as well as with other telecommunications businesses. But the country has also been accused of transferring commercial rocket technology into its military missile projects, an accusation it has denied.

Waiting for the Russian elections

While the original agreements contained quotas on the numbers of rockets that the countries could sell commercially, it was not clear if the Clinton Administration would seek to include such number limits in the new talks about to start up.

Segal said that there was no consensus on how to structure the talks, what to include in a draft agreement or, in the case of the Russians, even whom to negotiate with. "We dont yet have someone in Russia to talk to," Segal said.

He said the Administration was waiting for the Russian elections this spring in which a new president would be chosen to determine the course of the discussions. "We dont have a timetable in mind for this, but we are starting to develop our plans now," Segal said.

The question of quotas

While some in the U.S. commercial space industry believe that the quotas on foreign launch sales are needed to protect the American launch industry from unfair competition, European space leaders are critical of the agreements which they say shield U.S. companies from the uncertainties of the commercial marketplace.

"A really open commercial launch services market is a market with competition on equal terms, something to strive for," Fredrik Engstroem, director of launches for the European Space Agency, said Tuesday. Engstroem spoke to space.com during a Washington, D.C. symposium on commercial space.

"These quotas and pricing rules have been used with the objective of avoiding disruption of [the] market by unfair competition from non-market economy competitors," said Engstroem, "but the terms quotas and minimum pricing in these agreements has a ring of yesterday, and not [the] 21st century."

But Engstroem said that while rocket quotas might be undesirable, there was a need for some form of protection against unfair competition. "Perhaps a code of conduct," he said, "or an international association of launch operators."

 

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