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The Working Group on the Health of the U.S. Space Industrial Base and the Impact of Export Controls, which was tasked to assess the health of the U.S. space industrial base and determine the impact of export controls on the U.S. satellite and space industry, held a briefing today at the Center for Strategic and International Studies (CSIS) in Washington, DC to report on their key findings and recommendations.

The Working Group, which was co-chaired by Mr. Tom Young (former EVP, Lockheed Martin Corporation), Dr. William Ballhaus (The Aerospace Corporation) and Mr. Pierre Chao (Senior Associate, CSIS), announced the following findings and recommendations:

Findings:

1. Overall financial health of the top tier manufacturers in the space industrial base is “good”, but there are areas of concern within the broader health of the industry.

2. As earlier studies have documented, the ability of the government and industry to meet program execution commitments remains inadequate.

3. The U.S. space industrial base is largely dependent on the U.S. defense/national security budget.

4. There are rapidly emerging foreign space capabilities and the U.S. does not control their proliferation.

5. U.S. preeminence in space is under challenge in many areas.

6. The current export control policy has not prevented the rise of foreign space capabilities and in some cases has encouraged it (ITAR-free space products).

7. U.S. leadership in space benefits significantly from access to foreign innovation and human capital. That access is becoming increasingly difficult.

8. The current export control policy is constricting U.S. engagement and partnership with the rest of the global space community, and is feeding a growing separation between the U.S. space community and an emerging non-U.S. space community.

9. Some elements of the export controls laws are in conflict with U.S. National Space Policy, which has as one of its goals to “encourage international cooperation with foreign nations on space activities that are of mutual benefit” and states that “space-related exports that are currently available or are planned to be available in the global marketplace shall be considered favorably”.

10. The U.S. share of the global space markets is steadily declining, and U.S. companies are finding it increasingly difficult to participate in foreign space markets.

11. Export controls are adversely affecting U.S. companies’ ability to compete for foreign space business, particularly the 2nd and 3rd tier. And it is the 2nd/3rd tier of the industry that is the source of much innovation, and is normally the most engaged in the global market place in the aerospace/defense sector.

12. A U.S. export control policy that protects sensitive security space capabilities is important.

13. There is unanimous agreement that the export control process can be improved without adversely affecting national security.

Recommendations:

1. The Administration and Congress should review and reconcile the strategic intent of space export controls.

2. Critical space technologies should be identified and should remain on the Munitions List and under the State Department ITAR process.

3. Remove from the Munitions List commercial communications satellite systems, dedicated subsystems, and components specifically designed for commercial use; provide safeguards by having Defense Department identify critical space components and technologies that should always require licensing and referral. Have the appropriate executive branch departments conduct a study to see if other space technologies should be removed from the USML (e.g., weather satellites).

4. Annually review the appropriateness of designating specific satellite and other space systems, components, and capabilities as Munitions List items based on criticality of items and on their availability outside the U.S.

5. Additionally, Congress could amend the legislation related to satellite export licensing and adopt some of the best practices being used in other processes – set timelines, technology thresholds, de minimus rules, and special licensing vehicles.

6. The Secretary of Defense and NASA Administrator, in addition to the Secretary of State, should have the authority to grant real-time, case-by-case, specific time period exemptions for anomaly resolutions deemed to be in the national interest based on criteria from the National Space Policy.

7. Create a special program authority to permit timely engagement of U.S. participants in multinational space projects.

8. Increase the dollar threshold for satellite exports Congressional notification and establish a mechanism to allow the threshold to adjust with inflation.

9. Relevant space-related government agencies should collaboratively undertake an annual assessment of their industrial base.

The PDF version of the Working Group's briefing can be found here. The document contains a wide range of data and useful information.

The audio recording of today's briefing held at CSIS can be found here (interestingly, it was pointed out during the briefing that there are currently 18 different export control reform-related studies underway in Washington, DC right now).

The statement by the Aerospace Industries Association (AIA) on the Working Group's study can be found here.

Labels: Export Controls