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U.S. – E.U. Comsat Export Control Regulatory Divergence: An Economic Impact Assessment in Light of Strategic Effectiveness

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Space Technology Export Controls and International Cooperation in Outer Space

Part of the book series: Space Regulations Library Series ((SPRL,volume 6))

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Abstract

Export controls invariably impose economic costs on a state and its citizens. A state that imposes export control measures is asking its citizens to do without the immediate advantages of unrestricted trade in order to achieve competing national security and foreign policy objectives. The legitimacy of an export control can therefore be challenged on the basis of economic costs and benefits in light of their strategic effectiveness. The U.S. Comsat export control system is currently subject to significant public criticism. Critics are calling for the revocation and/or reform of two Congressional regulatory mandates: (1) The Strom Thurmond Defense Act (STDA) mandatory listing of Comsats on the USML and (2) the boycott of Chinese launch services as established in Foreign Authorizations Act 1990-91 (FAAA). The principal argument is that these export controls negatively impact the U.S. Comsat industrial base without a concomitant benefit to US national security. The underlying logic of this argument is sound because the rational goal of export controls should be to achieve their strategic intent while minimizing unnecessary economic costs to the public. Towards these ends, this chapter assesses the economic impact of the STDA and China Launch Boycott to determine if they should be maintained in light of their strategic effectiveness. Section 5.1 assesses the economic impact of the STDA on the U.S. Satellite Industrial Base. Section 5.2 assesses the economic impact of the China Launch Boycott. Section 5.3 examines the strategic effectiveness of the STDA and Section 5.4 examines the strategic effectiveness of the China Launch Boycott. Finally, conclusions are made as to whether reform and/or repeal of these mandates should be instituted.

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Notes

  1. 1.

    Strom Thurmond Defense Act, 22 U.S.C. §2778, P.L. 105–261 (1998) at §1511–1516.

  2. 2.

    §902 of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (P.L. 101–246; 22 U.S.C. 2151 note).

  3. 3.

    See Council of Europe, Resolution, 4th Space council Sess., Resolution of European Space Policy (EN), 10037/2007, (22 May 2007) at §E(11): “Stresses the need for a targeted approach for the development of strategic components, concentrated on selected critical components, for which dependency of European industry on international suppliers should be avoided, in order to achieve an optimum balance between technological independence, strategic cooperation with international partners and reliance on market forces.” See Benjamin Sutherland, “Why America is Lost in Space” Newsweek Online (9 February 2009), available online at: <http://www.newsweek.com/id/182544>. See Andy Pasztor, “China to Launch Satellite for France’s Eutelsat” Wall Street Journal Asia (25 February 2009), available online at: <http://online.wsj.com/article/SB123550142763361701.html>. See Peter Selding, “China Launches New Communications Satellite” (10 June 2008), available online at: Space.com <http://www.space.com/missionlaunches/080610-chinasat9-longmarch3b.html>.

  4. 4.

    See P.J. Blount, “The ITAR Treaty and Its Implications for U.S. Space Exploration Policy and the Commercial Space Industry” 73 Journal of Air Law and Commerce 705 (2008) at 712. See Mike N. Gold, “Lost in Space: A Practitioner’s First-Hand Perspective on Reforming the U.S.’s Obsolete, Arrogant, and Counterproductive export control regime for space-related systems and technologies” 34(1) Journal of Space Law 163 (2008). See Center for Strategic and International Studies (CSIS), Briefing of the Working Group on the Health of the U.S. Space Industrial Base and the Impact of Export Controls (February 2008), available online at: csis.org <http://csis.org/files/media/csis/pubs/021908_csis_spaceindustryitar_final.pdf>. See Benjamin Sutherland, “Why America is Lost in Space” (31 January 2009), available online at: newsweek.com <http://www.newsweek.com/id/182544>. See Ram Jakhu and Joseph Wilson. “The New United States Export Control Regime: Its Impact on the Communications Satellite Industry” 25 Annals of Air & Space Law 157. (2000)

  5. 5.

    Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 7.

  6. 6.

    Id.

  7. 7.

    Id.

  8. 8.

    Id.

  9. 9.

    Commercial Space Transportation: 2008 Year in Review (Federal Aviation Administration, January 2009), available online at the Federal Aviation Administration: <http://www.faa.gov/about/office_org/headquarters_offices/ast/reports_studies/year_review/>.

  10. 10.

    Flight Plan 2009: Analysis of the U.S. Aerospace Industry (International Trade Administration, March 2009), available online at the International Trade Administration: <http://www.trade.gov/mas/manufacturing/OAAI/aero_reports.asp>.

  11. 11.

    State of the Industry Report – 2009 (SIA & Futron, June 2009), available online at the Satellite Industry Association: <http://www.sia.org/IndustryReport.htm>.

  12. 12.

    Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007), available online at the U.S. Bureau of Industry and Security: <http://www.bis.doc.gov/defenseindustrialbaseprograms/osies/defmarketresearchrpts/exportcontrolfinalreport08-31-07master___3---bis-net-link-version---101707-receipt-from-afrl.pdf>.

  13. 13.

    Id. at 49.

  14. 14.

    Id. at 17.

  15. 15.

    Commercial Space Transportation: 2008 Year in Review (Federal Aviation Administration, January 2009), available online at the Federal Aviation Administration: <http://www.faa.gov/about/office_org/headquarters_offices/ast/reports_studies/year_review/>.

  16. 16.

    See Commercial Space Launch Act, 49 U.S.C. § 70101 et seq. (2000 & Supp. 2004).

  17. 17.

    See Article VIII, Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, (27 January 1967), 18 U.S.T. 2410, 610 U.N.T.S. 205 [Outer Space Treaty].

  18. 18.

    Flight Plan 2009: Analysis of the U.S. Aerospace Industry (International Trade Administration, March 2009), available online at the International Trade Administration: <http://www.trade.gov/mas/manufacturing/OAAI/aero_reports.asp>.

  19. 19.

    Id. at 19.

  20. 20.

    State of the Industry Reports for 2004, 2007, and 2009 (SIA & Futron), available online at the Satellite Industry Association: <http://www.sia.org/IndustryReport.htm> and <http://www.docstoc.com/docs/20082327/2007-State-of-Satellite-Industry-Report> and available in the Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 16. [Hereafter referred to as the “SIA Report”.]

  21. 21.

    Ryan Zelnio, “Whose Jurisdiction Over the US Commercial Satellite Industry? Factors Affecting International Security and Competition” 23(4) Space Policy 221–233 (2007).

  22. 22.

    Export Controls and the U.S. Defense Industrial Base (Institute for Defense Analyses, January 2007), available online at the Defense Technical Information Center: <http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA465592&Location=U2&doc=GetTRDoc.pdf>.

  23. 23.

    Zelnio, supra n. 283, at 223.

  24. 24.

    Zelnio, supra n. 283, at 223.

  25. 25.

    Zelnio, supra n. 283, at 224.

  26. 26.

    Zelnio, supra n. 283, at 224.

  27. 27.

    See Export Controls and the U.S. Defense Industrial Base (Institute for Defense Analyses, January 2007), available online at the Defense Technical Information Center: <http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA465592&Location=U2&doc=GetTRDoc.pdf> at 67. Provides transporter info for U.S. and EU Comsat models

  28. 28.

    Gunter’s Space Page <http://space.skyrocket.de/>.

  29. 29.

    On February 15th, 2010 I emailed Mr. Zelnio the following inquiry: “I am a researcher at the Institute of Air and Space Law. I am contacting you regarding you 2007 publication on ITARs and Comsats. Your 2007 Space Policy article was extremely well written and is being used as a primary source in my doctoral thesis. However, I did have a question regarding your methodology. Regarding your determination of Comsat contracts and technical characteristics, you cite Gunter’s Space Page as your source. Can you please explain how you used Gunter’s Space Page? Did you, for example, take Gunter’s Space Page information on individual payloads (e.g. name, type, owner-operator, and country of origin) and cross-reference with Comsat manufacturer publications on satellite technical characteristics to test the accuracy of the public data sources relied upon? Your clarification of data set validation is greatly appreciated.”

  30. 30.

    Email from Mr. Ryan Zelnio on 19 February 2010.

  31. 31.

    Richard Van Atta Ed., Export Controls and the U.S. Defense Industrial Base (Institute of Defense Analysis, January 2007).

  32. 32.

    George Abby and Neal Lane, United States Policy: Challenges and Opportunities Gone Astray, (Cambridge: American Academy of Arts and Sciences, 2009) at 5–7

  33. 33.

    Antonella Bini, “Export control of space items: Preserving Europe’s Advantage” 23 Space Policy 70 (2007) at 70.

  34. 34.

    Health of the U.S. Space Industrial Base and the Impact of Export Controls, (Center for Strategic and International Studies, Washington D.C., February 2008) at 50. Available online at: CSIS <http://www.csis.org/files/media/csis/pubs/021908_csis_spaceindustryitar_final.pdf>.

  35. 35.

    Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007), available online at the U.S. Bureau of Industry and Security: <http://www.bis.doc.gov/defenseindustrialbaseprograms/osies/defmarketresearchrpts/exportcontrolfinalreport08-31-07master___3___bis-net-link-version___101707-receipt-from-afrl.pdf> at 16.

  36. 36.

    See Mike N. Gold, “Lost in Space: A Practitioner’s First-Hand Perspective on Reforming the U.S.’s Obsolete, Arrogant, and Counterproductive export control regime for space-related systems and technologies” 34(1) Journal of Space Law 163 (2008) at 167. See P.J. Blount, “The ITAR Trety and Its Implications for U.S. Space Exploration Policy and the Commercial Space Industry” 73 Journal of Air Law and Commerce 705 (2008) at 712.

  37. 37.

    Ryan Zelnio, “The Effects of Export Control on the Space Industry” (16 January 2006) on the website The Space Review: <http://www.thespacereview.com/article/533/1>.

  38. 38.

    Zelnio, supra n. 283, at 227.

  39. 39.

    See Richard Van Atta Ed., Export Controls and the U.S. Defense Industrial Base (Alexandria, VA: Institute of Defense Analysis, January 2007) at A-34.

  40. 40.

    Van Atta, supra n. 301, at A-101. See also, Arabsat Fleet information at Arabsat Homepage: <http://www.arabsat.com/Pages/Fleet.aspx>. See also, Eutelsat Fleet information at Eutelsat Homepage: <http://www.eutelsat.com/satellites/satellite-fleet.html>.

  41. 41.

    Van Atta, supra n. 301, at A-101. See also, SES fleet information at the SES Website: <http://www.ses-astra.com/business/en/satellite-fleet/index.php>. See also, Inmarsat fleet information at the Inmarsat Website: <http://www.inmarsat.com/Services/Maritime/Fleet/default.aspx?language=EN%26textonly=False>.

  42. 42.

    Id.

  43. 43.

    See Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 14–15.

  44. 44.

    Van Atta, supra n. 301, at A-97.

  45. 45.

    Van Atta, supra n. 301, at A-99. See also Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 14–15.

  46. 46.

    Van Atta, supra n. 301, at A-99. See also, Thaicom Fleet information on Thaicom Website: <http://www.thaicom.net/eng/satellite_thaicom5.aspx>.

  47. 47.

    See SIA Reports.

  48. 48.

    See SIA Reports.

  49. 49.

    Charts were created by Michael C. Mineiro on 16 February 2009. The data for these charts was derived from the 1996–2008 SIA Reports.

  50. 50.

    See Patricia Cooper, Written Testimony for Patricia Cooper- SIA President – Before the House Foreign Affairs Committee (HFAC) – subcommittee on Terrorism, Non-Proliferation, and Trade (Hearing on Export Controls and Satellites, 2 April 2009), available online at: http://www.sia.org/PDF/HFAC-STNT_SIA_Written_Testimony__3_31_09_FINAL.pdf>. See also, Hearing Before the Subcommittee Terrorism, Non-proliferation, and Trade (Serial No.111-14, 2 April 2009).

  51. 51.

    See Richard Van Atta Ed., Export Controls and the U.S. Defense Industrial Base (Alexandria, VA: Institute of Defense Analysis, January 2007) at A-93.

  52. 52.

    See “Satellite Executives Look Ahead to a Booming New Year” Mobile Satellite News (11 January 1996) 1.

  53. 53.

    See Christopher Price, “Falling Prices Hit Operators: Telecommunication Satellites” Financial Times (London, UK, 10th December 1999) at 2. See “Short-Term Prospects for Financing Are Bleak” 25(35) Satellite News 1 (16 September 2002). “Satellite industry analysts and top executives agreed that the overall global economic slowdown and telecom bubble burst has had a deep and dramatic impact on companies offering communications satellite services and products. Attendees at the annual World Summit on Satellite Financing held here in early September were left to draw their consolation from the facts that, as one speaker put it, “satellites are here to stay and bad times always come to an end.” See also, “Loral Fallout Tops 2003 Stories” 26(48) Satellite News 1 (22 December 2003). “The war in Iraq spurred use of satellite capacity by the U.S. military and broadcasters worldwide. However, that increased demand was insufficient to compensate for an overall sluggishness in demand for satellite capacity.”

  54. 54.

    Zelnio, supra n. 283, at 228.

  55. 55.

    Zelnio, supra n. 283, at 228.

  56. 56.

    Zelnio, supra n. 283, at 228.

  57. 57.

    Zelnio, supra n. 283, at 228.

  58. 58.

    Van Atta, supra n. 301, at A-56 and A-67. “European capabilities and presence have grown since mid-1990s”. “U.S. and European Satellite Buses are comparable” and “US and EU primes have offered similar GEO bus models since at least 1998.” See also Zelnio, supra n. 283, at 230–231.

  59. 59.

    Van Atta, supra n. 301, at A-68. See also Zelnio, supra n. 283, at 230–231.

  60. 60.

    Globstar has a 46-satelltie constellation, thirty eight of which were launched between 1998 and 2000. See Peter B. Selding, “Globalstar’s 2nd-Generation System Slated to Begin Launching this Fall” 21(5) Space News (1 February 2010). Iridium has a 66 satellite constellation that was launched between 1997–2002. See Manual for ICAO Aeronatuical Mobile Satellite Services Part-2 Iridium Draft 4.0 (21 March 2007) at 2, available online at: <http://www.icao.int/anb/panels/acp/wg/m/iridium_swg/ird-08/ird-swg08-ip05%20-%20ams%28r%29s%20manual%20part%20ii%20v4.0.pdf>. See also Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 10.

  61. 61.

    See Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 10.

  62. 62.

    Van Atta, supra n. 301, at A-34.

  63. 63.

    Id. at A-93.

  64. 64.

    These charts were created by the author, Michael C. Mineiro, on February 18th, 2010, using data from the SIA and IDA Reports.

  65. 65.

    Van Atta, supra n. 301, at A-93.

  66. 66.

    Id. at A-34.

  67. 67.

    See Peter B. Selding, “Globalstar’s 2nd-Generation System Slated to Begin Launching This Fall” 21(5) Space News (1 February 2010).

  68. 68.

    Van Atta, supra n. 301, at A-38.

  69. 69.

    These charts were created by the author, Michael C. Mineiro, on February 18th, 2010, using data from the IDA Report.

  70. 70.

    Van Atta, supra n. 301, at A-40.

  71. 71.

    Van Atta, supra n. 301, at A-3.

  72. 72.

    M. Taverna and D. Barrie, “Sea of Red Tape”, Aviation Week & Space Technology (26 May 2003) at 72. Telesat CEO Larry Boisvert is quoted as saying that “The ITAR situation varies somewhat depending on the U.S. contractor involved – better at Lockheed Martin, worse at Boeing – but on balance the situation is getting worse,” and that “Without access to information, it will be hard to buy U.S.”

  73. 73.

    See Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007).

  74. 74.

    Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 37.

  75. 75.

    Id. at 14.

  76. 76.

    Id. at 34.

  77. 77.

    Id. at 34.

  78. 78.

    Id. at 36.

  79. 79.

    Id. at 36.

  80. 80.

    Defense Industrial Base Assessment: U.S. Space Industry (U.S. National Security Space Office, 31 August 2007) at 36.

  81. 81.

    Id. at 48.

  82. 82.

    See Chapter 4 of this thesis.

  83. 83.

    Black’s Law Dictionary, 8th ed., s.v. “transportation”.

  84. 84.

    See Klaus Iserland, “Ten Years of Arianespace” 6(4) Space Policy 341 (1990).

  85. 85.

    Commercial Space Launch Act of 1984 (as amended), Pub. L. No. 98-575, 49 U.S.C. § 70101 et seq. (2009). See also, Commercial Space Transportation Regulations, 14 C.F.R. §§ 401 et seq. (2009).

  86. 86.

    See U.S., Federal Aviation Administration, 2009 Commercial Space Transportation Forecasts (Washington, DC, 2009), available online at: <http://www.faa.gov/about/office_org/headquarters_offices/ast/media/NGSO%20GSO%20Forecast%20June%203%202009%20lowres.pdf>.

  87. 87.

    See Joel Greensberg, “Competiveness of Commercial Space Transportation Services” 9(3) Space Policy 220–232 (1993).

  88. 88.

    Commercial Space Transportation: 2008 Year in Review (Federal Aviation Administration, January 2009), available online at the Federal Aviation Administration: <http://www.faa.gov/about/office_org/headquarters_offices/ast/reports_studies/year_review/>.

  89. 89.

    Id. at 11.

  90. 90.

    Jay Lightfoot, “Competitive Pricing for Multiple Payload Launch Services: The Road to Commercial Space” 10(2) Space Policy 121 (1994).

  91. 91.

    See Peter Van Fenema, The International Trade in Launch Services (The Netherlands: Leiden Faculty of Law, 1999) at 183–240.

  92. 92.

    Barry D. Watts, The Military Use of Space: A Diagnostic Assessment (Center for Budgetary Assessment, Washington, DC, 2001) at 143, available online at <http://www.CSBAonline.org>.

  93. 93.

    Stephen Clark, “Eutelsat Swaps Rockets for Satellite Launch this Summer” SpaceflightNow.Com (19 February 2010), available online at: <http://spaceflightnow.com/news/n1002/19eutelsatw3b/>.

  94. 94.

    Bruce Crumley, “China’s Takeoff in the Space Industry” Time (12 March 2009), available online at: time.com <http://www.time.com/time/world/article/0,8599,1881966,00.html>.

  95. 95.

    Stephen Clark, “Eutelsat Swaps Rockets for Satellite Launch This Summer” SpaceflightNow.Com (19 February 2010), available online at: <http://spaceflightnow.com/news/n1002/19eutelsatw3b/>.

  96. 96.

    Chris Forrester, “Eutelsat Picks Chinese Launch,” RapidTVNews (26 February 2009), available online at: <http://www.rapidtvnews.com/index.php/200902263244/eutelsat-picks-chinese-launch.html>.

  97. 97.

    James A. Lewis, Preserving America’s Strength in Satellite Technology (CSIS Satellite Commission Report, Washington, DC, April 2002) at 27.

  98. 98.

    Strom Thurmond Defense Act, 22 U.S.C. §2778, P.L. 105–261 (1998) at §1511(1).

  99. 99.

    Id. at §1511(4).

  100. 100.

    Strom Thurmond Defense Act, 22 U.S.C. §2778, P.L. 105–261 (1998) at §1511(5).

  101. 101.

    §902(b) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (P.L. 101–246; 22 U.S.C. 2151 note).

  102. 102.

    Strom Thurmond Defense Act, 22 U.S.C. §2778, P.L. 105–261 (1998) at §1511(7).

  103. 103.

    Id. at §1511(8).

  104. 104.

    This is because the boycott is limited to export controls and does not prohibit U.S. licensed satellite operators with non-U.S. satellites from launching on Chinese vehicles (However, export control restrictions on launch may arise in the form of technical information exchange regarding post-launch Comsat operations if the operations involve U.S. origin ‘technical knowledge.’). See §902(a) (5) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (P.L. 101–246; 22 U.S.C. 2151 note). “Exports of any satellite of United States origin that is intended for launch from a launch vehicle owned by the People’s republic of China shall remain suspended, unless the President makes a report under subsection (b) (1) or (2) of this section.”

  105. 105.

    M. May Ed., The Cox Committee Report: An Assessment (Stanford: CISAC, 1999) at 92, available online at: <http://fsi.stanford.edu/publications/cox_committee_report_the_an_assessment/>.

  106. 106.

    See Declassified Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China (Submitted by Rep. Cox, U.S.G.P.O, Washington, DC; January 3rd, 1999 – declassified May 25th, 1999).

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Authors and Affiliations

  1. McGill University, Montreal, QC, Canada

    Michael C. Mineiro

  2. 815 Thayer Ave, Suite 510, Silver Springs, MD, 20910, USA

    Michael C. Mineiro

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  1. Michael C. Mineiro
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Correspondence to Michael C. Mineiro .

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© 2012 Springer Science+Business Media B.V.

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Mineiro, M.C. (2012). U.S. – E.U. Comsat Export Control Regulatory Divergence: An Economic Impact Assessment in Light of Strategic Effectiveness. In: Space Technology Export Controls and International Cooperation in Outer Space. Space Regulations Library Series, vol 6. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2567-6_5

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