WASHINGTON-A major satellite export reform bill passed by the GOP-led Congress two years ago has blown up in the face of lawmakers at a time when Republicans and Democrats are frantically scrambling to champion the high-tech agenda.
Since March 1999, when satellite export oversight was transferred from the Commerce Department to the State Department, the satellite industry claims it has lost hundreds of millions of dollars in overseas sales to Europe and other competitors.
The Clinton administration confirms this. Since 1998, according to Census Bureau export statistics, satellite exports dropped 40 percent. In dollar terms, overseas satellite sales declined from $1.06 billion to $637 million in 1999.
In response to industry outcry and congressional pressure, the State Department last week announced plans to expedite U.S. satellite exports.
“We still have work to do but this is a positive step,” said Clayton Mowry, executive director of the Satellite Industry Association. “We don’t want to be disadvantaged in satellite exports vis a vis foreign competitors.”
Globalstar L.P., Ellipso Inc., Teledesic Corp., ICO Global Communications, Lucent Technologies Inc. and Motorola Inc. are among SIA’s members.
The Senate Foreign Relations subcommittee on international economic policy, export and trade promotion will hold a hearing on satellite export problems this Wednesday.
The hearing was to take place May 17, but it was postponed because of a scheduling conflict.
Even with the reforms announced by Secretary of State Madeleine Albright last week in Italy, approvals of satellite exports are not expected to move as fast as they did under the Commerce Department.
The State Department originally had jurisdiction over satellite exports, but that responsibility was moved to the trade-bent Commerce Department by the Clinton administration.
The shift in jurisdiction was prompted by concerns that U.S. satellite firms were transferring American commercial satellite technology to countries, including China and Russia, which-it was feared-could convert it for military purposes.
The Justice Department is investigating whether Loral Corp. and Hughes Electronics Co. engaged in such a breach of security as a result of satellite exports. In addition to halting the sale of a $450 million mobile satellite made by Hughes for a Chinese telecom consortium, the State Department recently accused Lockheed Martin Corp. of helping China improve a satellite motor-a charge that could carry a $15 million fine.
Adding fuel to the technology transfer controversy have been charges by Republicans that Commerce Department oversight of satellite exports was lax and tainted by Democratic political contributions.
In written testimony submitted for the postponed May 17 hearing before the Senate Foreign Relations Committee, Clinton administration officials were outspoken in their disappointment with the transfer of satellite export oversight from Commerce to State.
“The outcome of this experiment, I would say, has not been positive, and it is not one I think we should repeat,”stated William Reinsch, undersecretary of Commerce for export administration.
He added: “The jurisdictional change has affected our foreign relations, our national security and a broad range of U.S. industry … The changed controls on satellites bear much of the responsibility for this.”
In his written testimony, John Holum, the State Department’s senior adviser for arms control and international security, reminded lawmakers that the State Department “neither sought nor welcomed the decision of Congress to return the control of commercial communications satellites to the U.S. munitions list.” But he pledged to make the best of the situation.
Mowry noted that trade sanctions that classify commercial high-tech products as munitions have hurt the satellite and telecommunications industry.
