WASHINGTON-The Clinton administration, in a controversial move that could undercut sensitive
U.S.-Sino trade talks and disrupt Secretary of State Madeleine Albright’s visit to Beijing this week, last week killed a
$450 million satellite deal between Hughes Electronics Corp. and the Asia-Pacific Mobile Telecommunications
consortium because of fears Communist China might use commercial technology for military purposes.
“The
U.S. government decided the proposed exports are inconsistent with foreign policy and national security interests of the
U.S.,” a State Department spokesman said.
The pro-trade Commerce Department, which lost satellite export
jurisdiction to the State Department after China-related technology transfer allegations surfaced last year, supported the
Hughes satellite sale.
But Commerce was overruled by State, the Pentagon and the Arms Control and Disarmament
Agency. The United States initially approved the Hughes deal in 1996, but officials in recent months became concerned
about Hughes’ ties to China and about heavy representation of Chinese investors-some from the military-in the
Singapore-based mobile phone consortium APMT.
A senior administration official downplayed the satellite
decision, saying it would not be a major issue on Albright’s China trip and that it did not represent a shift in trade policy
with China.
China and the U.S. satellite industry are not so sure.
An Associated Press report from Beijing quoted
Zhang Qiyue, a spokeswoman for the Foreign Ministry, as saying the Hughes ruling “will only have negative
impact on the normal economic and trade relations between the two sides.”
Zhang said the United States
should reverse the decision, which she called “entirely unjustifiable.”
Clayton Mowry, executive
director of the Satellite Industry Association, agrees.
“It’s not a good precedent for the U.S. satellite
industry,” said Mowry. He said it is very difficult to book satellite launches. China and Russia are the top
providers.
Mowry predicted satellite business lost by El Segundo, Calif.-based Hughes likely will be picked up by
European firms.
“We are concerned if this is the beginning of a trend,” said Eric Nelson, vice president
of international affairs for the Telecommunications Industry Association.
The administration insists the Hughes
decision is not a precedent and that applications for satellite export licenses will be judged on a case-by-case
basis.
“We feel the APMT can be used as a model for programs that can protect national security while
expanding access overseas,” said a Commerce Department official who wanted to remain anonymous. “It is
in the U.S. interest to have a strong domestic commercial U.S. satellite industry. If the U.S. cannot get licenses to sell
or launch U.S. satellites in Asia, we’ll quickly lose our advantage to European satellite makers who aren’t under the
same constraints.”
The official said a curb on satellite export licenses could actually hurt the U.S. military
because the loss of commercial satellite business will make it harder for American firms to afford research to make
cutting-edge satellites for military applications.
Last week’s satellite export ruling came at a delicate moment in
U.S.-Sino trade negotiations. Indeed, there was speculation that a major trade agreement between the United States and
China might be reached in April. Such an accord could serve as a prelude to allowing China in the World Trade
Organization. That, in turn, could open colossal opportunities for American wireless firms in China.
