Georgetown Debate Seminar 2011 ITAR Reform CP 1.

RBDD Lab

1NCITAR REFORM COUNTERPLAN

The United States federal government should streamline the International Traffic in Arms Regulations so that controls are focused at the product level instead of the individual component level. Commercial space enterprises and their products, services, and technical data that do not implicate national security concerns should be exempted from ITAR regulations. Well clarify. The counterplan solves their space leadership advantage: First, export controls uniquely undermine the U.S. space industryempirical data. Ryan Zelnio, Ph.D. Candidate at George Mason's School of Public Policy working on his dissertation
modeling the effect of international cooperation in science and technology on a nation's access to a highly skilled workforce and in modeling the flow of tacit knowledge globally, 2006 (The effects of export control on the space industry, The Space Review, January 16th, Available Online at http://www.thespacereview.com/article/533/1, Accessed 06-27-2011) Prior to the change in export controls in 1999, the US dominated the commercial satellite-manufacturing field with an average market share of 83 percent. Since that time, market share has declined to 50 percent (see the figure below). While this cannot be blamed entirely on changes in export regulation, they have played a significant part in the decline. However, since the change in export policy, no Chinese satellite operator has chosen to purchase any satellite that is subject to US export regulations and have instead selected European and Israeli suppliers with over six satellite orders to date since 1999. This comes out to a loss estimated anywhere from $1.5 to $3.0 billion to the US economy. Additionally, China has made a commitment to building up their commercial satellite bus, the DFH-4 by the China Academy of Space Technology. This bus has been successfully marketed to other countries fearing US export policies, including Nigeria and Venezuela. In addition to the expected movement of Chinese satellite orders from US manufacturers, other operators are increasingly becoming wary of dealing with the US. In 2003, Arabsat decided to award two new satellites to Astrium over its traditional builder, Lockheed Martin, due primarily to their fear of export regulations in holding up delivery. Telesat Canada has also tired of the red tape associated with having to deal with ITAR approval and chose to award the Anik F1R satellite to Astrium. Intelsat awarded the contract of Intelsat-10 (originally a two-satellite contract, although one of the two was later cancelled) in 2000 to Astrium fearing the effects ITAR, though they later awarded Intelsat Americas 9 to the US manufacturer Space Systems/Loral in 2004 as part of a deal in purchasing Lorals North American satellite fleet. In addition, US manufacturers are increasingly being weary of bidding on certain foreign contracts. If they anticipate a certain level of ITAR problems, such as was seen on Koreasat 5 with its combined military and civil uses, US companies choose to not even put together competitive bids to win these contracts. In talking with various satellite executives, this is estimated to be around three-to-six non-Chinese contracts since 1999 that have been avoided. Taken in with the losses in the Chinese market described previously, US satellite manufacturers have loss somewhere between $2.5 and $6.0 billion since 1999 due primarily to ITAR regulations. By far the greatest benefactor to US export policies has been Alcatel Alenia Space, a joint venture formed in 2005 by combining the space businesses of Alcatel and Finmeccanica. In the early 2000s, Alcatel announced that they would create an ITAR-free spacecraft. By 2004, Alcatel had been able to double their market share from around 10% in 1998 to over 20% in 2004. There has also been a major downturn in the economy, particularly affecting the telecommunications industry, over this same period. This downturn has decreased the number of orders going into the industry in general. However, the downturn and subsequent recovery has been worse for the US. The last three-year average (20012003) is down 35% for US manufacturers from the previous years (19962000). In the near future, this trend will only get worse as revenue lags contract awards by 2030 months: revenue is added the year a satellite is launched, typically two to three years after the contract award.

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Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

Second, the counterplan solvesstreamlines ITAR and frees the commercial space sector. Peter J. Brown, freelance writer specializing in satellite issues, 2006 (US firms tired of being shut out,
The Asia Times, December 4th, Available Online at http://www.atimes.com/atimes/China/JL04Ad01.html, Accessed 06-27-2011) Scarlott recommends that the incoming Obama administration should make ITAR more user-friendly by directing the State Department to work with Congress in developing appropriate legislation and ultimately revised regulations that focus the ITAR on military hardware, technology and services that truly have military applications and impact on national security concerns. "Administrative action alone cannot fix ITAR, rather appropriately choreographed legislative and regulatory change is required. The effort should be to streamline the ITAR so that controls are focused at the product level, as opposed to at the individual component level," said Scarlott. "Appropriate legislation, and ultimately regulation, that entirely frees commercial space enterprises and their products, services and technical data from ITAR control, provided that the products, services and tech data are not specifically identified as implicating national security concerns [would be even better]." *** ITAR expert Kerry Scarlott, a partner of Posternak Blankstein and Lund LLP

Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

EXPORT CONTROLS BADGENERAL

ITAR regulations thwart innovation and undermine U.S. competitiveness. Peter J. Brown, freelance writer specializing in satellite issues, 2006 (US firms tired of being shut out,
The Asia Times, December 4th, Available Online at http://www.atimes.com/atimes/China/JL04Ad01.html, Accessed 06-27-2011) A white paper entitled "ITAR and the US Space Industry", issued by The Space Foundation in September, identified a number of longstanding problems with ITAR: "The export licensing process is lengthy, unpredictable, and inefficient. The expertise required to understand the technical details often lies outside the State Department and consultation is timeconsuming. "ITAR restricts the ability of US firms to compete because foreign companies do not operate under equal restrictions. Technology remains on the United States Munitions List, even when it is commercially available in other countries, because lists of critical US military technologies are seldom updated. "Small firms do not have sufficient resources to comply with ITAR so the cost of compliance is a barrier to entry; this is a concern since lower-tier companies are a major source of innovation. Regulations also deter or delay collaboration with foreign partners, increasing the financial burden on a sole firm," The Space Foundation declared.

ITAR restrictions undermine U.S. competitiveness. George Abbey, Baker Botts Senior Fellow in Space Policy at the James A. Baker III Institute for Public
Policy at Rice University where he directs the Space Policy Program, former Director of the Johnson Space Center in Houston, holds the NASA Distinguished Service and the Outstanding Leadership and Exceptional Service Medals, and Neal Lane, Malcolm Gillis University Professor at Rice University and Senior Fellow of the James A. Baker III Institute for Public Policy, 2009 (United States Space Policy: Challenges and Opportunities Gone Astray, Published by the American Academy of Arts and Sciences, ISBN 0877240817, Available Online at http://carnegie.org/fileadmin/Media/Publications/PDF/spaceUS.pdf, Accessed 06-27-2011, p. 4-5) The U.S. policy on export controls in 2009 is basically the same policy that existed in 2005, and it is deeply flawed. The policy, known as ITAR (for U.S. International Traffic in Arms Regulations), governs all space-related matters and requires State Department licensing through a process that is both cumbersome and ambiguous. This bureaucracy also confounds U.S. efforts to conduct space research and operations in cooperation with international partners. Although the problems have significantly worsened since our 2005 paper, recognition of the magnitude of the problem is more widespread today than it was four years ago. In 2005 we emphasized that the success of the U.S. space science and exploration programs is closely related to the success of the commercial space industry. We noted that revision of ITAR was essential for the United States to improve its competitiveness in space commerce, particularly in the satellite industry. [end page 4] Since then, European aerospace companies have continued to encounter problems with U.S. trade restrictions. In response, they are choosing to avoid dealing with U.S. export controls by not using American-made parts, by becoming ITAR-freemeaning that their products are not subject to ITARs numerous restrictions and the U.S. governments licensing requirements. Indeed, non-U.S. aerospace companies are advertising ITAR-free as a major selling point.

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Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

EXPORT CONTROLS BADLICENSING DELAYS

Export controls cause licensing delays that drive customers to non-U.S. manufacturers. Ryan Zelnio, Ph.D. Candidate at George Mason's School of Public Policy working on his dissertation
modeling the effect of international cooperation in science and technology on a nation's access to a highly skilled workforce and in modeling the flow of tacit knowledge globally, 2006 (The effects of export control on the space industry, The Space Review, January 16th, Available Online at http://www.thespacereview.com/article/533/1, Accessed 06-27-2011) Another effect that has hindered commercial manufacturers is the length of time it takes to get an ITAR approval. This approval is needed for a variety of reasons including being able to discuss technical performance details with the customer, obtaining insurance for a satellite (most insurers for spacecraft are based out of London), exporting a satellite to a launch base, and being able to talk to ground operators for help with flying the spacecraft. There are many factors that affect the length of time for an approval, including the types of technologies on a satellite as well as the country of export. Due to the large cost of satellites, Congressional approval is also required for export. By law, Congress must either approve or reject any contract within 30 days of its submittal. However, in practice what often happens is that a satellite is not submitted for approval until all questions pertaining to its export license are already answered, a process that can hold it up for months. There has also been some added length as the State Department continues to adjust to the volume associated with satellites and their technologies. As the following figure taken from a report published by the United States General Accounting Office shows, the Commerce Department is generally quicker in approving systems and technologies associated with the space industry. This increase in approval cycles has angered many customers from friendly countries and, as previously stated, driven traditional US foreign customers like Telesat to European manufacturers.

Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

EXPORT CONTROLS BADSMALL BUSINESSES

ITAR crowds out small businesses and individual researcherstanks U.S. competitiveness. Taylor Dinerman, Columnist for The Space Review, Senior Editor at the Hudson Institute, 2006
(ITARs failure, The Space Review, March 17th, Available Online at http://www.thespacereview.com/article/1086/1, Accessed 06-27-2011) ITAR (International Traffic in Arms Regulations), which since 1999 has included not only weapons but communications satellites and virtually all spacecraft and most detailed information about them, has been one of the most spectacular own goals, as they say in soccer, in US history. Reduced to its essentials, it was a declaration of economic and technological war by the US government against the US national interest. ITAR handed over control of an important part of the US high tech economy to a set of hyper-cautious, hyper-legalistic, and slow-moving bureaucrats. In response to a critical GAO report in January of this year, the late Congressman Tom Lantos (D-CA) complained about years and years of fundamental mismanagement at the Directorate of Defense Trade Controls (DDTC). He was right: the problem goes back to 1999, when Congress passed the regulatory power from the Department of Commerce to the State Department. Big companies, large organizations such as NASA, and the big universities have the time and the resources to overcome these obstacles. However, small companies or individual researchers do not. Even large companies have seen their profit margins reduced by the need to waste their resources coping with these regulations.

ITAR drives out small companies and decimates the U.S. space industry. Peter J. Brown, freelance writer specializing in satellite issues, 2006 (US firms tired of being shut out,
The Asia Times, December 4th, Available Online at http://www.atimes.com/atimes/China/JL04Ad01.html, Accessed 06-27-2011) American companies involved in the export of satellites and related products and services are tired of the burden of ITAR, and of the millions of dollars continually lost as one satellite-related business opportunity after another slips away. Small to medium-sized US companies in particular cringe each time something like Palapa-D leaves the launch pad. Last year, the US Air Force Research Lab (AFRL) and US Department of Commerce issued a report "Defense Industrial Base Assessment- US Space Industry", which found that export control compliance costs averaged $49 million per year industry-wide. Compliance costs grew 37% during the 2003-2006 period with the burden of compliance significantly higher for smaller companies. US companies are increasingly shut out of what would otherwise be deemed as viable joint ventures in space as overseas firms seek to avoid cumbersome US controls. According to the AFRL report, medium-sized US companies are not so inclined to follow up on proposal requests let alone subsequently sell products in foreign markets. ITAR is also driving small companies out of the space sector altogether due to a lack of profitability, "and a refusal of some foreign customers to procure equipment that requires US ITAR licensing", according to the report.

Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

EXPORT CONTROLS BADBIGGEST INTERNAL LINK

The counterplan solves the biggest internal link to space leadership comparative evidence. Ryan Zelnio, Ph.D. Candidate at George Mason's School of Public Policy working on his dissertation
modeling the effect of international cooperation in science and technology on a nation's access to a highly skilled workforce and in modeling the flow of tacit knowledge globally, 2006 (The effects of export control on the space industry, The Space Review, January 16th, Available Online at http://www.thespacereview.com/article/533/1, Accessed 06-27-2011) Current export policy has increased the cost associated with doing business for US satellite manufacturers while at the same time decreasing their ability to compete in the global marketplace. Furthermore, it has given an edge to foreign manufacturers, most notably Alcatel Alenia Space. As a result, the US market share in the commercial satellite manufacturing sector has declined and may continue to do so for years to come. In space, the US still has the world leadership in experience in satellite manufacturing. In less than one generation, however, that will be gone, in large part due to the effects of export control.

Georgetown Debate Seminar 2011 ITAR Reform CP 1.0

RBDD Lab

THEY SAY: CP HURTS NATIONAL SECURITY

Overhauling ITAR protects natural security better than the status quo competitiveness outweighs control. George Abbey, Baker Botts Senior Fellow in Space Policy at the James A. Baker III Institute for Public
Policy at Rice University where he directs the Space Policy Program, former Director of the Johnson Space Center in Houston, holds the NASA Distinguished Service and the Outstanding Leadership and Exceptional Service Medals, and Neal Lane, Malcolm Gillis University Professor at Rice University and Senior Fellow of the James A. Baker III Institute for Public Policy, 2009 (United States Space Policy: Challenges and Opportunities Gone Astray, Published by the American Academy of Arts and Sciences, ISBN 0877240817, Available Online at http://carnegie.org/fileadmin/Media/Publications/PDF/spaceUS.pdf, Accessed 06-27-2011, p. 8-9) Retired U.S. Air Force Col. David Garner, former chief of the Defense Threat Reduction Agency and one of the architects of ITAR restricting the export of U.S. satellites and components, now says the rules need a thorough [end page 8] overhaul because they are damaging U.S. industry with no corresponding benefit to U.S. national security. Garner, speaking at the Satellite 2007 industry conference, said those who helped update the ITAR regulations had no intention of placing almost all satellite systems and components on the State Department-controlled U.S. Munitions List of material to be considered equivalent to arms for export purposes. Garner said the ITAR rules today constitute a minefield for companies seeking licenses to deal with non-U.S. entities to export satellites or related components.11 Many believe that a clean-slate approach is needed to fix the fundamental disconnect between ITAR as it is being applied to space science research and the needs of the U.S. space science community as it endeavors to maintain world leadership. In short, the rules need to be changed. Controlling critical space technology exports that would put the nation at risk is indisputably important. But equally important is to be competitive on the world market and to encourage cooperative scientific research when such commerce and research does not compromise critical technology. An export control regime and regulatory environment that protects critical military technologies and technical expertise while still allowing commerce and international scientific partnerships to flourish and the U.S. space industry to prosper and grow should be possible to implement. The ISS is an example of a cooperative space exploration program that benefits all partners.