[Satellite News 08-30-10] The Obama administration has completed a Category 7 U.S. Munitions List review of tanks and military vehicles, which determined that about 74 percent of the 12,000 military items licensed last year could have been processed under the United States’ less restrictive Commerce Control List.
    The review generated a positive response from the Aerospace Industries Association (AIA), which has worked to ease U.S. export controls and expand business opportunities for space-related U.S. exporters. AIA CEO Marion Blakey said the restructured list shows “great promise” in assigning appropriate protection to technology exports across various levels of risk and is a significant step in solving International Traffic in Arms Regulations (ITAR) and other export control-related problems faced by the industry.
    “The clarification and eventual consolidation of the Munitions and Commerce Control lists will have a dramatic impact on small- and medium-sized companies. These companies rarely have the resources to ensure compliance with the current export control regime. Simplifying the system offers them the opportunity to be more competitive in the international marketplace,” Blakey said in a statement.
    For several years, AIA, along with several satellite and aerospace companies serving military and commercial markets, have urged Congress to address the impact that strict export laws have had on business. The general consensus is that export laws, which were enacted to protect U.S. security interests, have had the opposite effect by driving launch and other space-related services to foreign competitors.
    In 2009, the United States enjoyed a $9.2 billion trade surplus in defense equipment, with $14.2 billion in exports supporting 818,800 high-skill, high-wage domestic jobs. According to AIA, major U.S. defense companies have been working to expand their international sales opportunities anywhere from 6 percent to 10 percent over the next five years to offset any future cuts in the U.S. defense budget.
     However, Blakey said Obama’s new initiatives, which include consolidating licensing policies, export enforcement and information technology systems, will help make the export control licensing system more efficient and cut costs for aerospace companies. “These initiatives will greatly improve our national security. Enhanced interoperability with friends and allies will increase our ability to defend our common interests, and better controls for truly sensitive items will help keep them out of the hands of our adversaries,” said Blakey.
     The Munitions List review follows another study released earlier this month by the U.S. Center for Strategic and International Studies (CSIS), which urged U.S. lawmakers to address certain policies that may hamper U.S. business interests — including export control. Intelsat Executive Vice President and General Counsel Phillip Spector told Satellite News that his company strongly supports the initiatives outlined in the report.
    The CSIS “report claims that U.S. export control policy has been counter-productive. This is a point that Intelsat and other operators strongly agree with. In fact, U.S. export control has had the opposite effect and has encouraged the growth of the foreign space sector in China and in Europe,” Spector said. “Thales, for example, has designed satellites without U.S. components to create ITAR-free spacecraft that can be launched on Chinese vehicles. It is a classic example of unintended consequences where the U.S. government set out to protect its space industrial base and, in fact, has eroded that industrial base. The report contains a good suggestion in that the U.S. presidential administration should use its existing waiver authority to permit launches of U.S.-built satellites on launch vehicles.”
    However, despite winning positive reaction from the commercial space industry every time export policy reforms are suggested, President Obama must deal with the industry’s lingering pessimism over the reality of real export reform. In March, panelists on a SATELLITE 2010 trade show SWOT forum identified U.S. ITAR laws as one of the main obstacles for the development of the United States’ educational and professional programs, but were resistant the idea that Congress would budge on the issue.
    Brian Weimer, a partner of the Sheppard Mullin law firm, which specializes in policy and acquisition law, said the U.S. government is unlikely to change its views on ITAR laws. “I don’t think we’re going to see ITAR changes, because nobody in Congress will want to be the one that publicly justifies a lax on national security. It’s not politically correct, whether you agree with national security or not. It’s the same situation for [U.S. Federal Communications Commission] FCC indecency rules. Nobody in Congress will stand up and say ‘I’m for indecency.’ However, the consequences of not changing these standards are also the same. Both the FCC and ITAR regulations have driven business to other countries,” said Weimer.
    While policy may not move forward, President Obama has appeared steady in his support for changes to export laws. In his first State of the Union address to the U.S. Congress in January, Obama made promises to double U.S. exports over the next five years. “The more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support 2 million jobs in America. To help meet this goal, we’re launching a national export initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security,” Obama said.