California Space Authority Backs Export Reforms

The California Space Authority, an industry trade group, lobbied this week on behalf of President Barack Obama’s effort to reform restrictive export laws that industry officials are costing Americans jobs and destroying U.S. competitiveness in the lucrative high-tech markets, including satellites.

CSA led its annual California Space Week Washington DC this week. Representatives of the Golden State’s space community visited Congressional and other DC offices in support of a broad agenda that also included NASA, DoD, and education.

With four of the five major U.S. satellite makers in California, CSA has a strong interest in reforming laws limiting the ability of those companies to export their technology overseas. California accounts for 22 percent of the global space market in all categories.

The ITAR exports regulations, intended to prevent hostile foreign powers from obtaining dual use technologies, have been criticized as too restrictive, resulting in lost jobs at home and stronger competition overseas. According to CSA, the U.S. share of global satellite market has fallen from 65 percent in 1998 when ITAR was enacted to 29 percent in 2008.

The Obama Administration has began an effort to simplify the laws to find a better balance between security and commerce. The CSA strongly supports those measures.

Below is a CSA issues paper covering the export control reform effort.

March 2011

Why This is a California Issue:

  • Four of five major U.S. satellite manufacturers build satellites in California – Boeing, Lockheed Martin, Northrop Grumman, Space Systems/Loral – and dozens of smaller companies provide satellite components
  • Satellite industry provides more than 75,000 high-skill, high-wage jobs
  • Space tourism industry, created in California, could also be affected; export control process could prevent foreign citizens from engaging in U.S. based space tourism

Why This is a U.S. Issue:

  • Contributes to $14.2 billion annually in exports, $9.2 billion trade surplus in defense equipment
  • Supports more than 818,000 high-skill, high wage defense industry jobs

Background Information:

  • Export control process created to support national security by preventing the transfer of “critical U.S. technology” to non-friendly nations
  • President announced implementation of first step of new U.S. export control system — Dec 2010
    • CA space industry supports proposed modernization of U.S. export control system
    • Specific legislation required to allow executive branch authority to make determinations regarding satellite products

Adverse Effects of Current Export Licensing Process:

  • Significantly harms national security by eroding industrial base
    • Adverse effects formally recognized and addressed in National Security Space Strategy – Feb 2011
    • As a result of constrained U.S. export competitiveness, other nations (e.g., France, Italy, Germany, India, Russia) have increased their capabilities to produce satellites without U.S. content and now sell them to international customers.
  • Decreases global competitiveness of U.S.
    • U.S. share of global market has fallen from 65 percent in 1998 to 29 percent in 2008
    • Small and medium sized businesses significantly harmed due to export licensing

Suggested Congressional Actions:

  • Support Congressional action to return to the Executive Branch determination of export jurisdiction of satellites products consistent with that provided for all other product categories
  • Support Administration’s efforts to revise U.S. export control system by reforming components into the “Four Singles”:
    • Single Control List (harmonize USML and CCL dual use items; merge into single tiered list)
    • Single Enforcement Coordination Center (improve interagency coordination)
    • Single Information Technology (IT) System (reduce multiple databases, more efficient licensing)
    • Single Licensing Agency (independent agency appointed by President with Oversight board)
  • Support draft legislation proposed by the Satellite Industry Association and Aerospace Industries Association of America