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Monday, June 12, 2006

ITAR Has Hamstrung the US Space Industry

The fledgling commercial space firms and the larger government contractors alike are struggling to either enter the commercial space market or regain global satellite market share while, at the same time, endeavoring to comply with the complex legal regime imposed by the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) promulgated by the U.S. Department of State. It is a complex niche issue having a profound impact on American economic security.

ITAR regulated elements include rockets, launch vehicles, ablative materials, parts, spacecraft, satellites, components, propellants, inertial navigation systems, and space suits. Firms can not export for sale any of the foregoing space technology without first a State Department application and conditional license. The process is viewed both cumbersome and costly by the aerospace industry.

Furthermore, no foreign national may be employed for which technical information about the space technology may be viewed unless an express waiver is provided. The American civil space programs are also facing ITAR challenges in such things as conference invitee lists about the Hubble Space Telescope, Mars exploration spacecraft, or the orbiting ISS.

The result of the federal restrictions has been a significant loss of global commercial market for U.S.-made commercial satellites, loss of foreign national corporate joint-ventures, inability to collaborate with foreign nationals working or studying within the United States or off-shore foreign institutions on space-related technology. ITAR has created a higher barrier of entry for smaller commercial space firms proving difficult to engage without expensive expert Washington law firms. Moreover, the loss of American corporate knowledge of developing off-shore space technologies may actually be producing the national security risk that the ITAR regulations have sought to curb.

Yet the regulatory regime is difficult to analyze. While commercial space firms are afforded judicial review of license denials, the proceeding are conducted outside public scrutiny (Word.Doc) to what amounts to a body of secret law within the United States. The practice adds "additional layers of complexity," according to space law expert Glenn H. Reynolds of the University of Tennessee.

An ITAR commercial space technology isolationist policy actually is incongruous to the globalized free trade regime espoused by the United States in the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT) international laws. Clearly, ITAR-reform is in order as a part of a national space policy. Congress needs to update the Arms Export Control Act and the ITAR regs. The international space business environment has changed. The regulations need to change so as to ensure American space industry remains competitive and innovative.

Washington attorney Berin M.Szoka and Ann K. Ganzer of the Department of State comment on ITAR in separate interviews on The Space Show (audio).

1 comment:

EA said...

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