08 April 1999
EXCERPT: COMMERCE DEPUTY SECRETARY ON SATELLITE LAUNCH POLICY
(Mallett sees export controls hurting U.S. industry) (1830) Washington -- Deputy Secretary of Commerce Robert Mallett has proposed a number of changes in the U.S. export licensing system for satellite launches, which Congress moved from the Commerce Department back to the State Department. In April 7 remarks to the 1999 National Space Symposium in Colorado Springs, Colorado, Mallett said the U.S. government needs a new space commerce policy that balances commercial, national security and foreign policy interests. He recommended an expedited process to approve preliminary discussions between U.S. companies and foreign customers to allow companies to make quick decisions on whether to bid on a project. He also recommended that the State Department seek outside technical expertise for evaluating complex commercial proposals. And he recommended going back to an export license process that considers commercial and technological competitiveness as well as security and foreign policy. "On the issue of satellite export licensing, we have lost the battle," Mallett said. "But if you think the war is over, you'd better think again." He suggested that many people would happily tighten regulation also of launches on any international vehicles, international joint ventures and commercial remote sensing licenses. Congress passed the law giving export licensing authority back to the State Department and treating it as a munition instead of a dual-use item -- an item having both military and civilian applications -- after reports that sensitive information was transferred to China in a satellite launch deal. Mallett said Congress' action will hurt the U.S. satellite industry without question. If the industry waits to act until after the 2000 U.S. elections, he said, it could lose any chance to compete in the global market for years. "We cannot let the innovations pioneered by Americans be captured by the corporations of Europe or the Pacific Rim or anywhere else in the world," Mallett said. (Note: In the text "billion" equals 1,000 million.) (begin excerpt) Remarks by Deputy Secretary of Commerce Robert L. Mallett 1999 National Space Symposium April 7, 1999 Colorado Springs, Colorado [As Prepared For Delivery] To understand the impact of the recent change in jurisdiction in export licensing for satellite launches, you need to know why they were originally moved to Commerce in the first place. First off, President Clinton concluded the transfer of jurisdiction that President Bush began in 1990. Both presidents acted because satellites are a classic case of an originally military technology becoming civilian -- in this case through the growth of a global market for television, cellular phone and now Internet services. Treating satellites as weapons by licensing them at State puts our companies at a competitive disadvantage and makes it harder for them to give their customers certainty even as to the timing of a licensing decision. The transfer to Commerce also occurred because the President felt that exports of these items should be considered in an open, transparent, time-limited process -- that was the best way to ensure our industry's competitiveness without sacrificing national security. The Commerce process was designed to meet that standard. The State process, which deals with weapons systems, is not, and doesn't have to be. Competition in this sector is heating up, and I think there is no question that the Congressionally mandated move will have a significant adverse impact on our companies' ability to market their products. Remember that these are licensed to all destinations, Canada and our NATO allies, not just China, so exports to the other launch sites in Russia or French Guiana will be affected by the shift back to State as well as the Chinese launches. Given that our domestic launch capacity is not sufficient for all the satellites we sell, knocking us out of one of only four or five commercial launch markets will have an adverse impact. Over the next five years the industry reports there are $8 billion and 16,000 jobs tied up in Chinese launches alone. Those are significant figures. As to export policy, frankly, three successive presidents have supported China launches, initially because it was necessary for our satellite industry to remain globally competitive -- and remember, many satellite buyers pick the launch vehicle, not the seller. This helps our national security because it keeps our satellite industry on the cutting edge of technology development -- which goes into our military satellites as well. It also helps our foreign policy by bringing TV, cell phone and Internet services to the Chinese people -- the very exposure to free speech and democracy that is in our interest as well as that of their people. But the fault does not entirely lie with Congress. We all share some of the blame. The blame comes not because the blanket accusations made about this industry are true. They are not. What has the commercial space industry as a whole done during this period? Has there been a concerted effort to talk to the public about the economic realities of global trade and its importance in creating high paying jobs and income for its citizens? The answer is simply ... No. Not nearly enough. Many have suffered from the ostrich syndrome: they have run for cover or stuck heads in the sand, hoping to avoid accusations and quaking with dread that this political unpleasantness would just go away. Many seem to be waiting for the smoke to clear after the 2000 elections. Folks, I'm here to tell you, if that is our strategy, we may not be globally competitive well beyond 2000. Ten years after the end of the Cold War, we now have a congressionally legislated policy that declares a communications satellite to be a munition -- a weapon -- and treats it as such for purposes of examining whether it can be launched overseas. It does not treat a basic TV satellite as a dual-use item, which it clearly is. It treats it as a munition. If a telecommunications satellite in 1999 is not a dual use item, what is? What's next? GPS receivers? Satellite phones? Super computing laptops? In this present political climate, any number of dual-use items can be declared a munition for export purposes. Why not require the licensing of engineering professors before they can teach graduate courses on satellite design? In the immortal words or Garrison Keilor, "I'm not making this up!" People are talking about this right now. On the issue of satellite export licensing, we have lost the battle. There are no ifs, ands, or buts about it. But if you think the war is over, you'd better think again. Having lost this bunker, there are plenty of bunkers right behind us that could easily fall. Launches on any international vehicles. International joint ventures. Commercial remote sensing licenses. If you think these policies are immune to change, just ask your satellite colleagues about their export licenses. Make no mistake. Our national security must be preserved. If highly sensitive technology is stolen or inadvertently transferred, this should be dealt with according to the law. And we have laws in place to deal with that. But what is going on here should not only be about enhancing our national security in the narrowest sense in which we have come to understand it. But national security can and should also encompass our economic security. This industry can and does create high-wage, high-skill jobs and products and services we can only dream of today. By 2007, this $40-50 billion industry could approach $200 billion in annual revenues. It will create new jobs. Introduce exciting new services. Develop new technologies. Ensure our economic prosperity and national security well into the 21st century. My friends, we are on the verge of realizing the true promise of space. That is -- bettering the lives of everyday people here on Earth. Therefore, we must develop a new model for space. A new framework for conceptualizing and solving the very real and very new challenges we will face in space in the 21st century. It must balance our commercial, national security, and foreign policy interests. It must recognize the changes in the world since the end of the Cold War. And it must anticipate the direction space, business and the world is taking so that we in this country can be the beneficiary. There are three ways I believe that we can begin to do this: 1. We can institute an expedited process to approve preliminary discussions between U.S. companies and foreign customers, especially if they are allies. This will allow us to make bid/no-bid decisions in a timely fashion. 2. We can tap the tremendous technical knowledge that exists outside the State Department to evaluate these often complex commercial proposals. 3. And we can reintroduce commercial and technology competitiveness considerations into the export licensing process. You know, Robert Goddard's life offers us more than just a reminder about how inventive minds must wait for recognition. In 1939, when he had been launching his rockets for over a decade, he visited the Pentagon, and showed them films of his work. The rockets of course, were going straight up. At one point Goddard turned to some army officials and said, "We could slant it a little and do some real damage." They patted him on the head and sent him home. Another indignity suffered by Dr. Goddard. It was the Germans who developed the V-2, and after the war -- when our military was questioning the captured German rocket scientists about how they did it -- one of them said, "Why don't you ask your own Dr. Goddard? He knows better than any of us." We cannot let the innovations pioneered by Americans be captured by the corporations of Europe or the Pacific Rim or anywhere else in the world. This space history of the U.S. has been a dazzling history, this eight decades since Goddard put a 10-foot rocket in a car, drove out to a cabbage field, lit its fuse and watched it explode into the sky for 41 feet. It's been a history of Explorer I, and Saturn V, and Apollo 11 landing men on the moon. It's been a history of space shuttles and weather satellites. An age when because of equipment in space most of us don't understand, we can stand on a street corner here in Colorado Springs, pick a cell phone out of our jacket pocket here and call the office back in Washington, Atlanta, Montreal, Seattle, Butte, or wherever. So we honor this remarkable and checkered history of innovation, not by retreat, but by forward movement and challenges to the current orthodoxy. We must then stand up for what we believe, for if we can fight for what we know is right for our vision of the future it will be a spectacular launch for the United States in the 21st Century. (end excerpt)
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