[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
IMPACTS OF U.S. EXPORT CONTROL
POLICIES ON SCIENCE AND TECHNOLOGY
ACTIVITIES AND COMPETITIVENESS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SCIENCE AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 25, 2009
__________
Serial No. 111- 4
__________
Printed for the use of the Committee on Science and Technology
Available via the World Wide Web: http://www.science.house.gov
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COMMITTEE ON SCIENCE AND TECHNOLOGY
HON. BART GORDON, Tennessee, Chair
JERRY F. COSTELLO, Illinois RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas F. JAMES SENSENBRENNER JR.,
LYNN C. WOOLSEY, California Wisconsin
DAVID WU, Oregon LAMAR S. SMITH, Texas
BRIAN BAIRD, Washington DANA ROHRABACHER, California
BRAD MILLER, North Carolina ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois VERNON J. EHLERS, Michigan
GABRIELLE GIFFORDS, Arizona FRANK D. LUCAS, Oklahoma
DONNA F. EDWARDS, Maryland JUDY BIGGERT, Illinois
MARCIA L. FUDGE, Ohio W. TODD AKIN, Missouri
BEN R. LUJAN, New Mexico RANDY NEUGEBAUER, Texas
PAUL D. TONKO, New York BOB INGLIS, South Carolina
PARKER GRIFFITH, Alabama MICHAEL T. MCCAUL, Texas
STEVEN R. ROTHMAN, New Jersey MARIO DIAZ-BALART, Florida
JIM MATHESON, Utah BRIAN P. BILBRAY, California
LINCOLN DAVIS, Tennessee ADRIAN SMITH, Nebraska
BEN CHANDLER, Kentucky PAUL C. BROUN, Georgia
RUSS CARNAHAN, Missouri PETE OLSON, Texas
BARON P. HILL, Indiana
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
KATHLEEN DAHLKEMPER, Pennsylvania
ALAN GRAYSON, Florida
SUZANNE M. KOSMAS, Florida
GARY C. PETERS, Michigan
VACANCY
C O N T E N T S
February 25, 2009
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Bart Gordon, Chairman, Committee on
Science and Technology, U.S. House of Representatives.......... 22
Written Statement............................................ 23
Statement by Representative Ralph M. Hall, Minority Ranking
Member, Committee on Science and Technology, U.S. House of
Representatives................................................ 24
Written Statement............................................ 25
Prepared Statement by Representative Jerry F. Costello, Member,
Committee on Science and Technology, U.S. House of
Representatives................................................ 28
Prepared Statement by Representative Eddie Bernice Johnson,
Member, Committee on Science and Technology, U.S. House of
Representatives................................................ 28
Prepared Statement by Representative Gabrielle Giffords, Member,
Committee on Science and Technology, U.S. House of
Representatives................................................ 29
Prepared Statement by Representative Harry E. Mitchell, Member,
Committee on Science and Technology, U.S. House of
Representatives................................................ 29
Statement by Representative Dana Rohrabacher, Member, Committee
on Science and Technology, U.S. House of Representatives....... 26
Written Statement............................................ 27
Witnesses:
Lieutenant General Brent Scowcroft (USAF, Ret.), President and
Founder, The Scowcroft Group
Oral Statement............................................... 30
Written Statement............................................ 32
Biography.................................................... 34
Mr. A. Thomas Young, Lockheed Martin Corporation (Ret.); Co-
Chair, Center for Strategic and International Studies (CSIS),
Working Group on the Health of the U.S. Space Industrial Base
and the Impact of Export Controls
Oral Statement............................................... 34
Written Statement............................................ 35
Biography.................................................... 38
Dr. Claude R. Canizares, Vice President for Research and
Associate Provost, Bruno Rossi Professor of Physics,
Massachusetts Institute of Technology
Oral Statement............................................... 39
Written Statement............................................ 40
Biography.................................................... 42
Major General Robert S. Dickman, Executive Director, American
Institute of Aeronautics and Astronautics
Oral Statement............................................... 43
Written Statement............................................ 44
Biography.................................................... 49
Discussion
Executive Order Relating to Relief for Universities............ 50
International Dual-use Technology Balance...................... 51
Differentiating Military Weapons and Dual-use Technology....... 52
Dual-track Export Control Systems.............................. 53
Export Control Dangers With the Chinese........................ 54
Conclusion of Hearing.......................................... 55
Appendix 1: Answers to Post-Hearing Questions
Lieutenant General Brent Scowcroft (USAF, Ret.), President and
Founder, The Scowcroft Group................................... 58
Mr. A. Thomas Young, Lockheed Martin Corporation (Ret.); Co-
Chair, Center for Strategic and International Studies (CSIS),
Working Group on the Health of the U.S. Space Industrial Base
and the Impact of Export Controls.............................. 62
Dr. Claude R. Canizares, Vice President for Research and
Associate Provost, Bruno Rossi Professor of Physics,
Massachusetts Institute of Technology.......................... 65
Major General Robert S. Dickman, Executive Director, American
Institute of Aeronautics and Astronautics...................... 69
Appendix 2: Additional Material for the Record
Briefing of the Working Group on the Health of the U.S. Space
Industrial Base and the Impact of Export Controls, Center for
Strategic & International Studies, February 2008............... 76
IMPACTS OF U.S. EXPORT CONTROL POLICIES ON SCIENCE AND TECHNOLOGY
ACTIVITIES AND COMPETITIVENESS
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WEDNESDAY, FEBRUARY 25, 2009
House of Representatives,
Committee on Science and Technology,
Washington, DC.
The Committee met, pursuant to call, at 10:09 a.m., in Room
2318 of the Rayburn House Office Building, Hon. Bart Gordon
[Chair of the Committee] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
hearing charter
COMMITTEE ON SCIENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
Impacts of U.S. Export Control
Policies on Science and Technology
Activities and Competitiveness
wednesday, february 25, 2009
10:00 a.m.-12:00 p.m.
2318 rayburn house office building
Purpose
On Wednesday, February 25, 2009 at 10:00 a.m. in Room 2318, Rayburn
House Office Building, the Committee on Science and Technology will
hold a hearing to review the impacts of current export control policies
on U.S. science and technology activities and competitiveness and to
examine the findings and recommendations of the National Academies
study, Beyond ``Fortress America'': National Security Controls on
Science and Technology in a Globalized World.
Witnesses
Lt. General Brent Scowcroft (Ret.), Co-Chair, National Academies
Committee on Science, Security and Prosperity, and President and
Founder, The Scowcroft Group
Mr. A. Thomas Young, Co-Chair, Center for Strategic and International
Studies Working Group on the Health of the U.S. Space Industrial Base
and the Impact of Export Controls, and Lockheed Martin Corporation
(Ret.)
Dr. Claude R. Canizares, Vice President for Research and Associate
Provost, Massachusetts Institute of Technology
Maj. General Robert Dickman (Ret.), Executive Director, American
Institute of Aeronautics and Astronautics
Issues
Some of the issues the hearing will explore include:
What are the implications and unintended consequences
of current export control policies for the conduct of United
States Government and commercial science and technology
activities and national security?
How does U.S. export control policy affect U.S.
scientific and technological competitiveness?
What are the principal findings and recommendations
of the National Academies report, Beyond ``Fortress America'':
National Security Controls on Science and Technology in a
Globalized World, as they relate to the conduct of U.S.
Government and commercial science and technology activities and
U.S. global science and technology competitiveness?
What is required to implement the National Academies'
report recommendations and what are the most significant
challenges in doing so?
U.S. export control policies have an impact on the
conduct of the U.S. commercial space industry and government
civil space activities. What particular issues and unintended
consequences do the current export control policies present for
U.S. civil and commercial space activities, including space-
based research and human space flight activities? How serious
are those issues and what must be done to address the
unintended consequences?
What are the most critical issues relevant to U.S.
civil government and commercial space activities that should be
considered in any potential review of U.S. export control
policies?
What effect, if any, do the unintended consequences
of U.S. export control policies have on U.S. leadership in
space in the near-term and long-term?
INTRODUCTION
The Cold War sparked the United States to make historic investments
in scientific research and development that could serve our national
security needs, including the support of university, government, and
industrial research institutions. Those Cold War investments created a
robust science and engineering workforce, drove innovation, fueled
economic growth, and established the United States' preeminence in
science and technology.
The Soviets, however, sought access to U.S. technologies for
potential military applications. In response, the U.S. instituted
mechanisms aimed at preventing the transfer of certain U.S.-developed
components, systems, and information to the Soviet Union and other
adversaries. These national security controls include the
classification system, export controls, limitations on the transfer of
knowledge about technologies, visa controls, and measures to restrict
the dissemination of certain government-funded research that could
threaten national security.
Export controls, which are the focus of this hearing, are directed
by the Arms Export Control Act of 1968 and the Export Administration
Act of 1979. The Arms Export Control Act governs the export of
components and systems that are listed as defense articles; the
Department of State administers the International Traffic in Arms
Regulations (ITAR), which are the regulations to implement the Act. The
U.S. Munitions List (USML) comprises the list of defense articles
regulated under the ITAR; and that list includes such categories of
items as tanks and military vehicles, aircraft and associated
equipment, military electronics, optical and guidance and control
equipment, toxicological agents, and spacecraft systems and associated
equipment. ITAR also controls technical data, including data for the
design and development of defense articles, and defense services, which
are ``The furnishing of assistance (including training) to foreign
persons, whether in the United States or abroad in the design,
development, engineering, manufacture, production, assembly, testing,
repair, maintenance, modification, operation, demilitarization,
destruction, processing or use of defense articles'' [International
Traffic in Arms Regulations, Section 120.9(a)(1)].
The Export Administration Act governs the export of dual-use
items--those that have military and as well commercial applications--
including software and technology. The Act is implemented through the
Export Administration Regulations (EAR), which are administered by the
Department of Commerce. The EAR controls the export of dual-use items
on the Commerce Control List, including software, hardware, and other
systems subject to the EAR. The EAR also controls ``Any release of
technology or source code subject to the EAR to a foreign nation. Such
release is deemed to be an export to the home country or countries of
the foreign national.'' [EAR Part 734] These ``deemed exports'' include
technology or software released through
``(i) visual inspection by foreign nationals of U.S.-origin
equipment and facilities;
(ii) oral exchanges of information in the United States and
abroad; or
(iii) the application to situations abroad of personal
knowledge or technical experience acquired in the United
States.'' [EAR Part 734]
The Export Administration Act has ``lapsed several times,''
according to the National Academies report, Beyond ``Fortress
America,'' and presidential authorities have sustained EAR requirements
by using the International Economic Emergency Powers Act of 1977, ``on
the grounds that the expiration of the act poses an `unusual and
extraordinary threat to the national security, foreign policy and
economy of the United States','' according to the report.
What these controls mean in practice is that an institution such as
a company or university may need to apply for an export control license
to export controlled hardware or software (for example as part of an
international space research mission or sale of a product or components
abroad). The institution may also need to obtain a license to share
designs, conduct training related to the controlled item, or discuss
information about the item with a non-U.S. citizen who is abroad or
working in the U.S. Export control licenses, especially ITAR licenses,
require a significant review and interagency approval process that may
take months.
During the late 1990s, the implementation of export control
policies tightened in response to findings about the unintentional
transfer of controlled defense technologies and information to China.
Since those changes, the time required to approve ITAR licenses, in
particular, has put stress on the federal agency systems for processing
licenses and on the applicants for those licenses. In 2007, the
Government Accountability Office (GAO) commented that the time required
for processing export licenses ``increased from a median of 13 days in
2002 to 26 days in 2006.'' And by late 2006, ``State's backlog of
applications reached its highest level of more than 10,000 open
cases.'' The time involved in obtaining Technical Assistance Agreements
(TAAs), which are required to discuss ITAR-controlled technologies, has
also increased.
These delays mean that commercial companies may lose the
opportunity to respond to a bid while waiting for a license, and that
government projects may be delayed and incur cost increases. Other
impacts of export controls pertain to researchers who may not be able
to discuss ideas or research equipment with foreign colleagues at an
international conference for fear of inadvertently transmitting
controlled information. Failure to comply with the ITAR and EAR can
carry fines and criminal penalties. The later sections of this charter
provide additional examples of the unintended consequences of the
policies and the challenges in implementing them.
A large number of organizations have made statements, released
positions, led studies, and issued recommendations for improvements to
the export control system. Some of those institutions include The
Aerospace Industries Association, the Space Enterprise Council of the
U.S. Chamber of Commerce, the Universities Space Research Association
[an association of 102 universities], the Space Foundation, the
Association of American Universities, the Council on Governmental
Relations, the Center for Strategic and International Studies, and the
Coalition for Security and Competitiveness [which includes the
Aerospace Industries Association, American Association of Exporters and
Importers, American Electronics Association, The Association for
Manufacturing Technology, Business Roundtable, Chamber of Commerce
Space Enterprise Council, Coalition for Employment Through Exports,
Electronic Industries Alliance, General Aviation Manufacturing
Association, Government Electronics and Information Technology
Association, Industrial Fasteners Institute, Information Technology
Industry Council, National Association of Manufacturers, National
Defense Industrial Association, National Foreign Trade Council,
Satellite Industries Association, Space Foundation and U.S. Chamber of
Commerce.]
The Department of State has taken some steps to increase the
efficiency of processing export control licenses. However, a 2007 GAO
report commented that ``Despite efforts to improve efficiency, State's
median processing times of license applications have been increasing
since 2003.'' In January 2008, the Bush Administration issued U.S.
Export Control Reform Directives to ``ensure the United States' export
control policies and practices support the National Security Strategy
of 2006, while facilitating the United States' continued international
economic and technological leadership,'' according to a release issued
by the White House Office of the Press Secretary. A fact sheet released
by the State Department's Bureau of Political-Military Affairs noted
that the directives included making additional resources available to
handle defense trade licenses, upgrading an electronic licensing
system, and improving dispute resolution and enforcement.
During the 110th Congress, the House passed H.R. 5916, the Security
Assistance and Arms Export Control Reform Act, which directed the
President ``to conduct a comprehensive and systematic review and
assessment of the United States arms export controls system in the
context of the national security interests and strategic foreign policy
objectives of the United States,'' among other provisions. However, the
bill never became law. During the 110th Congress, the House also passed
H.R. 6063, the NASA Authorization Act of 2008, which was introduced by
Rep. Mark Udall, chairman of the Subcommittee on Space and Aeronautics,
Committee on Science and Technology. H.R. 6063 directed the Office of
Science and Technology Policy to carry out a study of export control
policies related to civil and commercial space activities. The House-
passed provision did not make it into law. Other legislation on export
controls was introduced during the 110th Congress but was not acted
upon.
In addition, during his campaign, then-candidate Barack Obama
issued a white paper, ``Advancing the Frontiers of Space Exploration,''
in which he stated that he would ``direct a review of the ITAR to
reevaluate restrictions imposed on American companies, with a special
focus on space hardware that is currently restricted from commercial
export.'' His paper also stated that he would revise the licensing
process, without impact to American national security, to ensure that
American aerospace supplier companies are competitive in the global
market.
THE CHANGING ENVIRONMENT
The geopolitical landscape has changed dramatically since national
security controls were put into place. Advances in communications
technologies have facilitated the growth of a global marketplace of
goods and ideas. In addition, science and technology, which is
increasingly international, has become a primary agent of the Nation's
national and economic security. Recently, studies sponsored by both
government and non-government institutions have called for reexamining
national security controls in light of their impacts on our global
scientific, technological, and economic competitiveness.
In its January 2007 report, the GAO identified the export control
system as a new high risk area. In July 2007 the GAO released a report
in which it found that ``Given the importance of the system in
protecting U.S. national security, foreign policy, and economic
interests, it is necessary to assess and rethink what type of system is
needed to best protect these interests in a changing environment.'' And
in January 2009 the GAO reported on the status of the government's
progress in implementing GAO recommendations. Their report, Ensuring
the Effective Protection of Technologies Critical to U.S. National
Security Interests, found that
``Over the years, GAO has identified weaknesses in the
effectiveness and efficiency of government programs designed to
protect critical technologies while advancing U.S. interests.
Since this area was designated high risk in 2007, the agencies
responsible for administering these programs, including the
Departments of Commerce, Defense, Justice, State and the
Treasury, have made improvements in several areas. However,
vulnerabilities continue to exist, and agencies have yet to
take action to address GAO's major underlying concern, which is
the need for a fundamental re-examination of current government
programs to determine how they can collectively achieve their
mission and to evaluate the need for alternative approaches.''
The need for new approaches to the export control system was the
thrust of the recently released National Academies report, Beyond
``Fortress America'': National Security Controls on Science and
Technology in a Globalized World. The report considered the multiple
dimensions of national security controls including ``the changing
requirements of national security from the Cold War era, the impact of
economic globalization on the U.S. economy, the impact of the
globalization of science and technology on the U.S. economy and on its
S&T leadership . . ..''
The National Academies report took a broad look at dual-use export
controls--those technologies that may have both commercial and military
applications--and science and technology competitiveness. The National
Academies committee also considered visa policies given the importance,
as discussed in the report, of the U.S. being engaged in science and
technology internationally and learning from the best and brightest
outside the U.S. The report did not address the classification system,
existing statutes, or policies that may prohibit technology transfers
to a particular nation. In addition, the committee did not make
recommendations on multilateral export control regimes or consider how
individual agencies manage and administer export control regulations.
The report specifically focused on issues that could be addressed
through Executive authority.
In general, the report recommends significant changes to foster
``openness and engagement'' and that would require the government to
provide a ``rational basis'' for restrictions on dual-use items planned
to be exported. The report recommends that the President make some
structural and policy changes by issuing an Executive Order under the
authority of the International Economic Emergency Powers Act of 1977.
According to the report, the Act allows the President to ``structure
the regulatory framework of the dual-use export controls system.''
The National Academies committee, co-chaired by John L. Hennessy,
President, Stanford University and Lt. General Brent Scowcroft
(ret.),former National Security Advisor, concluded:
``As a nation, we cannot, and should not abandon well-
conceived efforts to keep dangerous technology and scientific
know-how out of the hands of those who would use this knowledge
to create weapons of mass destruction and other, equally
dangerous military systems. However, these represent a very
narrow and limited set of goods, technology, and knowledge. Our
former unilateral strategy of containment and isolation of our
adversaries is, under current conditions, a self-destructive
strategy for obsolescence and declining economic
competitiveness. A strategy of international engagement is a
path to prosperity that can be coupled with a smarter approach
to security using an adaptive system of government regulation
and incentives. The committee recommends the issuance of an
Executive Order that implements the recommendations it has
outlined as one of the first orders of business in January
2009.''
Some of the elements of the Order would include:
Establishing a process for removing every item on a
control list after 12 months unless there is a strong case for
keeping it;
An economic competitiveness exemption that
``eliminates export controls on dual-use technologies where
they, or their functional equivalents, are available without
restriction in open markets outside the United States'';
Establishing a coordinating center for export
controls that would receive license applications, determine the
appropriate jurisdiction for those licenses (i.e., Commerce or
State), ensure the efficient processing of licenses, and manage
an appeals process;
Creating an independent export license appeals panel;
and
Ensuring support for excluding fundamental research
from export controls.
The complete list of report recommendations is included in
Attachment A and a list of the members of the study committee is
provided in Attachment B.
While the National Academies report addressed the broad and
interrelated issues of national security controls, economic security,
and science and technology competitiveness, certain sectors of
scientific research and commercial activity are particularly affected
by the export control system. All satellites are export-controlled by
the ITAR, and the implications of the regulations has been a matter of
concern for the industries, universities, and other institutions that
are involved in commercial and civil space activities. A number of
studies have examined the unintended consequences of export controls on
the U.S. civil and commercial space sectors, and the results of those
studies and the issues they raise are detailed in later sections of
this charter.
Questions related to the National Academies report include such
things as what, in specific terms, would be involved in implementing
the National Academies' recommendations? At what point after an
Executive Order is in place should we expect to see improvements in the
export control system? What, specifically, does the recommended
Executive Order address? What, if anything, is missing from the Order?
What areas does Congress need to address? How would implementing the
recommendations mitigate the impacts raised in specific sectors such as
civil and commercial space? What is the outlook if the National
Academies' recommendations are not implemented?
NATIONAL SECURITY
The National Academies report, ``Beyond ``Fortress America'':
National Security Controls on Science and Technology in a Globalized
World,'' stated in the first finding of the report:
``Designed for the Cold War when the U.S. had global dominance
in most areas of science and technology, the current system of
export controls now harms our national and homeland security,
as well as our ability to compete economically.''
The report also states:
``. . . the export control system enforced in the U.S. today
has failed to evolve with changing global conditions, and now
produces significant harm to U.S. military capability, to
homeland security, and to the Nation's economic
competitiveness.''
The Department of Defense (DOD) examined the impact of export
control policies on the health of the U.S. space industrial base and
issued a report in 2007. The report, Defense Industrial Base
Assessment: U.S. Space Industry Final Report, which will be discussed
in later sections of this charter, states that ``The National Security
Space Industrial Base (NSSIB) is critical to U.S. success in developing
and deploying national security space assets.'' As part of the
conclusions, the report states that: ``To maintain and enhance the U.S.
competitive position in the global market, ITAR processes need to be
frequently reviewed and adjusted, as appropriate.''
In response to direction in P.L. 109-364, the John Warner National
Defense Authorization Act for Fiscal Year 2007, the Institute for
Defense Analyses produced a report, Leadership, Management, and
Organization for National Security Space. The report, which was
prepared by an Independent Assessment Panel chaired by Mr. A. Thomas
Young, was accompanied by a letter to the Honorable Carl Levin,
Chairman, Senate Committee on Armed Services that in part stated:
``Today, U.S. leadership in space provides a vital national
advantage across the scientific, commercial, and national
security realms. In particular, space is of critical importance
to our national intelligence and war-fighting capabilities. The
panel members nevertheless are unanimous in our conviction
that, without significant improvements in the leadership and
management of NSS [national security space] programs, U.S.
space preeminence will erode to the extent that space ceases to
provide a competitive national security advantage.''
The Independent Assessment Panel (IAP) referenced a study by the
Center for Strategic and International Studies (CSIS) on the health of
the U.S. space industrial base, and noted that ``The IAP supports the
recommendations of the CSIS panel to revisit the ITAR and relax those
aspects that are counterproductive to U.S. competitiveness.'' The
findings of the CSIS study are discussed in later sections of this
charter.
CONTROVERSIES ABOUT EXPORT CONTROL REFORM
According to the Congressional Research Service report, The Export
Administration Act: Evolution, Provisions, and Debate, as updated on
January 15, 2009, debate on export administration legislation tends to
involve a conflict between national security and commercial concerns:
``These concerns are not mutually exclusive . . .. For
example, nearly everyone favors reform of the current system,
yet no one considers themselves opposed to national security.
Generally, however, many who favor reform of the current export
control accept the business perspective that such reform would
assist U.S. business to compete in the global marketplace.
Others view the issue more from a national security
perspective. To this group, reform should be concerned less
with the abilities of U.S. industry to export and more with the
effective controls placed on potential exports to countries
that threaten the security of the United States, terrorists,
violators of human rights, and proliferators of weapons of mass
destruction. From these different perspectives, controversies
arise regarding the controllability of technology, the
effectiveness of multinational regimes, the bureaucratic
structure of the licensing process and the impact of export
controls on the U.S. economy.''
ISSUES AND UNINTENDED CONSEQUENCES RELATED TO SCIENCE AND TECHNOLOGY
COMPETITIVENESS
Overarching Findings of National Academies Report
The National Academies report identifies a number of specific
findings that argue for revamping the current export control systems:
``U.S. national security, including the protection of
the homeland, is not well served by the current controls.
The single technology base that today supports both
U.S. commercial and military capabilities is constrained from
expanding into new fields and from applying new scientific
developments.
Entire international markets are denied to U.S.
companies because they are forbidden to ship their
technologically sophisticated products to foreign countries.
Obsolete lists of controlled components prevent U.S.
companies from exporting products built from prior generation
technologies not likely to harm national security.
U.S. scientists are hobbled by rules that prevent
them from working with world-class foreign scientists and with
advanced laboratories located overseas, making it less likely
that valuable discoveries and inventions will occur in the U.S.
The government's rules are driving jobs abroad--
knowledge-intensive jobs critical to the future of the U.S.
economy.
The government's rules are accelerating the
development of technologies in capable research centers outside
the U.S.''
Impeding the Exchange of People and Ideas
The health of the U.S. science and technology depends on the free
exchange and transport of ``people, ideas, materials, and equipment,''
as described in the National Academies report. Increasingly, science
and technology competitiveness is dependent on having the ability to
draw on the talent and capabilities of non-U.S. persons.
According to the report,
``. . . with increasing frequency, important
discoveries are made by scientists who work in teams and who
have access to the best work going on in scientific centers
around the world and state-of-the-art instrumentation.''
``Similarly, in a world in which breakthroughs can
happen anywhere, being competitive requires being aware of--and
capitalizing on--developments in other places . . .''
``A new scientific breakthrough, or a newly developed
technological capability, can stimulate additional research in
laboratories around the world. Although science does depend on
the ability of researchers to validate previously published
results, the scientific reward system--and the allocation of
competitively awarded resources--strongly favors the first to
publish. Speed is equally critical in bringing high-technology
products to market.''
U.S. visa policy governs our ability to benefit from non-U.S.
scientific talent. The policy uses lists that identify certain areas of
academic research, particular countries of concern, and specific
research activities that require applicants to undergo special review.
Visa policies were tightened after 9-11. Although ``the most draconian
rules affecting graduate students were ameliorated'' the report notes,
``significant barriers still remain for scholars and researchers
seeking visas to attend conferences or for other short-term
professional trips in the United States.''
In light of the challenges and implications of export control and
visa policies for carrying out fundamental research, the National
Academies report finds that:
``The best practices that underpin successful competition in
research and technology advancement [freedom of inquiry,
freedom to pursue knowledge at the scientist's own discretion,
freedom to collaborate without limitation, pluralistic and
meritocratic support of science, and freedom to publish] are
undermined by government regulation that restricts the flow of
information and people participating in fundamental research.''
These impediments can have negative effects on the competitiveness
of the U.S. scientific infrastructure within the global environment.
For instance, the report notes that:
``Breakthrough discoveries in science often come when
supporting advancements in related fields have occurred in
sufficient numbers or new types of instrumentation have become
available. If one researcher or laboratory `misses' a new
advance, it is likely that a competitive researcher elsewhere
will make the discovery soon thereafter.''
``. . . export controls and `deemed export' rules
make U.S. universities less able to attract the most capable
foreign researchers or to retain some of the most creative
faculty members. Important discoveries may be hindered, or may
simply occur elsewhere.''
``Licensing requirements inevitably lead to delays,
and they may deter or even eliminate the spontaneous
discoveries that arise from serendipitous interactions and
spur-of-the moment collaborations, most of which are impossible
under `deemed export' rules.''
``The best foreign universities now have the research
equipment and infrastructure to compete with the best U.S.
research universities for students and researchers. Where
limitations exist on foreigners studying or working in the U.S.
system, foreign universities are well positioned to extend
competing offers.''
Implications for America COMPETES Act
The issues noted above have implications for the Nation's
innovation and competitiveness and the types of actions directed in the
America COMPETES Act [P.L. 110-69], which has as its three primary
goals: 1) increasing research investment, 2) strengthening educational
opportunities in science, technology, engineering, and mathematics; and
3) developing an innovation infrastructure. The National Academies
report, Rising Above the Gathering Storm, which provided the basis for
the Act, recognized the impacts of export controls and recommended that
the current system of ``deemed exports'' be reformed:
``The new system should provide international students and
researchers engaged in fundamental research in the United
States with access to information and research equipment in
U.S. industrial, academic, and national laboratories comparable
with the access provided to U.S. citizens and permanent
residents in a similar status . . . In addition, the effect of
deemed export regulations on the education and fundamental
research work of international students and scholars should be
limited . . ..''
Using Lists to Control Exports
Using lists such as the Commerce Control List and the U.S.
Munitions Control List, according to the National Academies report, are
ineffective ways to control technology transfer because the
technologies and information on the lists are, in many cases, available
for sale on the open market from non-U.S. sources. The lists can also
have the effect of advancing indigenous science and technology
capabilities and competitiveness elsewhere. For example, the report
notes that foreign nations may use the lists to prioritize research and
development investments, because they anticipate that U.S. companies
and institutions may face challenges in exporting those controlled
technologies abroad. The case of U.S. commercial communications
satellite development exemplifies this point. As a result of ITAR
hurdles, Europe began to develop satellite components itself and to
produce satellites that do not use U.S.-developed technologies rather
than purchase the components, which are ITAR-controlled, from the U.S.
The lists also affect how U.S. researchers make decisions on the
type of research they pursue. The National Academies report notes that
``Some avoid research in areas that are affected by federal controls
out of an apprehension that significant work may not be published or
that students or researchers needed for first-rate laboratories will
not be available. Breakthroughs will thereby be thwarted.''
The recommendation from the National Academies is to: ``Apply
`sunset' requirements to all items on export control lists that are
controlled unilaterally by the U.S., and require findings to be made
every 12 months that removing controls on an item would present a
substantial risk to national security.''
Fundamental Research Exemptions
In 1985, President Reagan issued National Security Decision
Directive (NSDD) 189, which recognizes that ``our leadership position
in science and technology is an essential element in our economic and
physical security'' and ``The strength of American science requires a
research environment conducive to creativity, an environment in which
the free exchange of ideas is a vital component.'' To that end, NSDD
189 states:
``It is the policy of this Administration that, to the maximum
extent possible, the products of fundamental research remain
unrestricted. It is also the policy of this Administration
that, where the national security requires control, the
mechanism for control of information generated during
federally-funded fundamental research in science, technology
and engineering at colleges, universities and laboratories is
classification.''
During the late 1990s, however, the implementation of export
control policies tightened in response to findings about the
unintentional transfer of controlled defense technologies and
information to China, and those changes raised questions about the
fundamental research protections under NSDD 189.
In 2001, former National Security Advisor Condoleezza Rice
reaffirmed the Directive, and in 2002 the State Department modified the
ITAR as it applies to defense articles developed at U.S. universities
for use in fundamental research. Section 123.16(10) of the ITAR states
that:
``Port Directors of U.S. Customs and Border Protection shall
permit, without a license, the permanent export, and temporary
export and return to the United States, by accredited U.S.
institutions of higher learning of articles fabricated only for
fundamental research purposes.''
The exemption includes several conditions, including:
``The export is to an accredited institution of
higher learning, a governmental research center or an
established government funded private research center located
within countries of the North Atlantic Treaty Organization'' or
that have been designated as a non-NATO ally.
``All of the information about the article(s),
including its design, and all of the resulting information
obtained through fundamental research involving the article
will be published and shared broadly within the scientific
community, and is not restricted for proprietary reasons or
specific U.S. Government access and dissemination controls or
other restrictions accepted by the institutions or its
researchers on publication of scientific and technical
information resulting from the project or activity . . ..''
Despite the attempts to address the matter, the fundamental
research exclusion ``has not had the effect of precluding all such
restrictions'' according to the National Academies report. The Council
on Governmental Relations and the Association of American Universities
has conducted surveys of U.S. research universities to gauge the
problem of restrictive clauses on research. According to their report,
Restrictions on Research Awards: Troublesome Clauses 2007/2008, issued
in July 2008,
``. . . federal agencies are expanding the type of controls
they impose in award terms and conditions and are using more
sophisticated (and varying) technical language and approaches
for implementing restrictions that affect university research
projects. Particularly alarming is the spread of restrictive
award terms by federal agencies beyond contracts to federal
assistance mechanisms, such as grants.''
Universities maintain that the export control regulations are
confusing with respect to fundamental research, especially given that
research usually involves participation by non-U.S. persons in American
universities or abroad, and interactions with them may be considered
exports.
The National Academies committee ``recommends that the Fundamental
Research Exemption be maintained, adhered to, and properly implemented.
Universities and other research institutions have worked under this
regime successfully and have in place the necessary mechanisms to
comply with the exemption.''
ISSUES AND UNINTENDED CONSEQUENCES FOR U.S. GOVERNMENT CIVIL AND
COMMERCIAL SPACE ACTIVITIES
Commercial and civil space activities make significant
contributions to the economy and the Nation's science and technology
capabilities. In 2008, global sales for U.S. aerospace companies
totaled $204 billion of which $33 billion was for the U.S. sales of
space systems, according to the Aerospace Industries Association.
Universities, federal laboratories, research institutions, along with
private industry, conduct the Nation's space-based research activities.
These commercial and research activities help engage and train the next
generation of scientists and engineers and develop innovative
technologies that contribute to our economic competitiveness.
The aerospace industry, especially the satellite manufacturing
industry, has long maintained that export controls have led to
decreasing competitiveness and loss of market share in the global
market. In addition, space science researchers have identified
unintended consequences of the ITAR on fundamental space research.
Government officials have also questioned whether export controls are
affecting the health of the space and defense industry. Recent studies
have examined the impacts of export controls on these space sectors.
In 2007, the DOD completed a study, Defense Industrial Base
Assessment: U.S. Space Industry Final Report, which involved gathering
quantitative data on the U.S. space industrial base and reviewing
whether export controls were affecting the industry. The study involved
a survey of companies and business units that included prime
contractors that sell products to commercial and/or government
institutions (Tier 1), subcontractors that provide major components and
systems to prime contractors (Tier 2), and lower tier companies that
sell subassemblies, structures, materials and less complex components
as well as engineering and other services (Tier 3). The DOD Industrial
Base Assessment found that ITAR is having an impact on industry sales
and competitiveness; examples of these impacts are provided in the
sections below.
In 2008, the CSIS issued a Briefing of the Working Group on the
Health of the U.S. Space Industrial Base and the Impact of Export
Controls, which reviewed the results of the 2007 DOD Defense Industrial
Base Assessment, interviewed and collected data from across the
government, industry, and other experts, and examined the findings of
other reports on export controls. The findings of the CSIS study echo
many of the issues affecting the broader areas of science and
technology that were raised in the National Academies report. The CSIS
report concludes, for example, that:
U.S. policies are not controlling the rapid
proliferation of non-U.S. space capabilities and in some cases
the policies are encouraging them;
U.S. preeminence in space is being challenged;
Current export control policies are restricting U.S.
international space activities and partnerships; they have led
to separation between U.S. and emerging non-U.S. space actors;
Certain elements of export controls are in variance
with U.S. National Space Policy; and
U.S. market share in foreign space markets is
declining and it is harder for U.S. companies to compete in
non-U.S. markets, particularly for the lower tier companies.
The implications of these conclusions are described further in the
sections below.
The National Academies held a workshop on the implications of the
ITAR and space science. In 2008, the Academies released, Space Science
and the International Traffic in Arms Regulations: Summary of a
Workshop. The workshop summary pointed to the disconnect between the
ITAR regulations, the fundamental research exemption, and the way in
which space-based research is conducted. The ambiguities and
uncertainties in the interpretation of and application of the ITAR
requirements are leading academic institutions to be overly
conservative in their actions. This results in concerns over loss of
competitiveness in scientific research and education at U.S.
institutions of higher learning, according to the report.
Increasing Foreign Capability and Diminished U.S. Leadership in Space
The CSIS report found that ``United States preeminence in space in
under challenge in many areas.'' Export controls have not thwarted the
increasing capabilities of foreign space programs.
According to the CSIS report, Chinese and Indian
space programs have continued to make considerable progress
including the launching of indigenous high resolution imaging
satellites, lunar probes, and China's successful launch of a
human into outer space and the successful execution of its
first human space-walk activity.
The report also notes that the number of nations with
their own space-based positioning and navigation systems has
tripled since 1999; the number of countries possessing earth
observation and reconnaissance satellites has doubled since
1999; at least twelve nations are capable of launching their
own satellites; and 38 countries can control the operations of
their own communication satellites.
According to CSIS, the capabilities of non-U.S. space
countries participating in the commercial market has also
grown. Non-U.S. companies are now capable of producing
commercial communications satellites that are on par with those
of the U.S.
As noted in the CSIS report, ``Since 1998, European
and Asian manufacturers of satellites have gone from
delivering satellites that were smaller, had fewer
transponders, lesser payload power and shorter lives to
manufacturing satellites of equal weight, number of
transponders, payload power and lifespan.''
Europe has developed ITAR-free components and
systems.
According to a news item of the European Space
Agency, the European Commission, the European Space
Agency, and the European Defense Agency ``have agreed
to join forces in order to develop critical space
technologies in Europe. The aim is to ensure that
Europe can rely on a technical and industrial capacity
for accessing space, in particular in the area of the
manufacturing of satellites and launchers.''
Foreign innovation and human capital are important to
U.S. leadership in space but are increasingly harder to access.
The U.S. has benefited from foreign innovation and talent.
Foreign students obtain more than half of the Ph.D.s in
science, technology, and engineering and workers born outside
of the U.S. account for more than a quarter of the science and
technology workforce in the U.S., according to the CSIS report.
Export controls make it more difficult to take advantage of
this talent pool, as noted in the CSIS report.
Conflicts with Objectives of U.S. National Space Policy
In 1996, the Clinton Administration issued a National Space Policy
in which the policy's commercial space guidelines stated:
``The fundamental goal of U.S. commercial space policy is to
support and enhance U.S. economic competitiveness in space
activities while protecting U.S. national security and foreign
policy interests. Expanding U.S. commercial space activities
will generate economic benefits for the Nation and provide the
U.S. Government with an increasing range of space goods and
services.''
In 2006, the Bush Administration issued a U.S. National Space
Policy, which superseded the 1996 policy, and states that:
``The United States Government will pursue, as appropriate,
and consistent with U.S. national security interests,
international cooperation with foreign nations and/or consortia
on space activities that are of mutual benefit and that further
the peaceful exploration and use of space.''
The 2006 Policy also supports the use of effective export policies
and states that ``space-related exports that are currently available or
are planned to be available in the global marketplace shall be
considered favorably.''
The goals of the space policy include:
``Strengthen the Nation's space leadership and ensure
that space capabilities are available in time to further U.S.
national security, homeland security, and foreign policy
objectives;''
``Enable a dynamic, globally competitive domestic
commercial space sector in order to promote innovation,
strengthen U.S. leadership, and protect national, homeland, and
economic security;''
``Encourage international cooperation with foreign
nations and/or consortia on space activities that are of mutual
benefit and that further the peaceful exploration and use of
space, as well as to advance national security, homeland
security, and foreign policy objectives.''
The CSIS report found that aspects of current export control
policies and regulations are at variance with the national space
policy. For instance, the export control system does not enable
cooperation while also denying capabilities to adversaries. Placing
satellites on the USML has encouraged the development of non-U.S. space
capabilities, and ITAR regulations have had negative impacts for U.S.
industry. CSIS also notes that export controls have interfered with a
legacy of beneficial collaboration with foreigners and have made it
difficult for international partners to resolve anomalies in
collaborative space activities.
Issues for Fundamental Research Using Space-Based Hardware
In response to concerns about the transfer of export controlled
hardware and information to China during the 1990s, the Strom Thurmond
National Defense Authorization Act for Fiscal Year 1999 [P.L. 105-261]
transferred ``all satellites and related items that are on the Commerce
Control List of dual-use items . . . to the United States Munitions
List and controlled under section 38 of the Arms Export Control Act . .
..''
In 2002, the Department of State revised the ITAR language
concerning scientific satellites for fundamental research. ITAR
licenses are not required for scientific research satellites when
specific conditions are met. Space researchers, however, report
confusion about the application of that exemption to space research
projects.
The summary report of the National Academies workshop on space
science and ITAR noted that regulations are applied differently to
institutions involved in a single space project--national labs,
universities, industry, and government. In addition, researchers are
unclear about the type of information that can be placed in the public
domain, including in the classroom. Moreover, the fundamental research
exclusion in the ITAR applies only to ``accredited U.S. institutions of
higher learning.'' There is also a lack of clarity about involving
foreign students and researchers in space research projects that may
use ITAR-controlled technology. Researchers are also unclear about what
information regarding a satellite project they can share with non-U.S.
individuals or students in an academic environment.
In the absence of clarity, universities and researchers interpret
regulations conservatively and may add burdens that are not necessary
and lead to decisions that affect university engagement in space
research. For example, according to the National Academies' workshop
summary, universities and researchers may make decisions not to pursue
projects requiring ITAR licenses or to allow non-U.S. researchers and
students to participate in space research projects. In addition, the
report says that ``uncertainties are leading some professors to `dumb
down' course content rather than risk ITAR violations by discussing
their research in the classroom setting.''
The workshop summary on space science and ITAR also notes that
compliance ``creates a significant unfunded mandate for universities,
because they operate with capped overhead costs . . ..'' In addition,
universities bear the costs of educating faculty and contracting and
grants officers, maintaining documentation, handling negotiations with
the State Department, and ``the substantial costs of delays in securing
approvals for activities that fall under ITAR,'' according to the
report.
Reduced Competitiveness of Space Industry
Both the CSIS study and the Defense Industrial Base Assessment make
findings about the increasing challenges that U.S. space companies face
in being competitive in foreign markets. According to the results of
the DOD-initiated space industrial survey, ``Defense Industrial Base
Assessment: U.S. Space Industry Final Report,'' several companies
voluntarily commented that ITAR was an issue in being competitive in
foreign space markets. For example, the Assessment notes that:
``Over two-thirds of the survey respondents felt strongly
enough to add narrative comments with over a quarter of those
encountering difficulties in export markets. Some companies
have self-eliminated from foreign markets to focus on the
domestic only market.''
``There have been a number of firms in all tiers that have not
applied for export licenses (half of the companies surveyed)
due to real or perceived problems with navigating the licensing
process.''
One company commented that it chose to forgo space business because
that business has not been profitable and some foreign customers will
not procure items that require ITAR licenses.
Of the companies that participated in the survey for the DOD
Assessment, 58 percent listed export controls as the number one
barrier to entry when attempting to market products abroad.
According to the DOD Assessment, ``Companies reported $2.35B
of ITAR-related potential sales lost due to the licensing
process from 2003-2006, an average of $588M annually. This loss
represents about one percent of total U.S. space revenues.''
[Note that the $588M figure is a best estimate and does not
include opportunities that were not pursued or that were lost
due to ITAR. It may also involve some double-counting among
competitors.]
The cost of managing compliance with export controls is
another challenge. ``Space industry-wide compliance costs
averaged $49M per year in 2003-2006,'' according to the DOD
Assessment, and created a significant financial burden,
especially for smaller companies.
The CSIS recommendation is to ``Remove from the Munitions List
commercial communications satellite systems, dedicated subsystems, and
components specifically designed for commercial use; provide safeguards
by having Defense Department identify critical space components and
technologies that should always require licensing and referral. Have
the appropriate executive departments conduct a study to see if other
space technologies should be removed from the list.''
Pronounced Impacts on Competitiveness of Smaller and New Commercial
Space Companies
The Assessment and the CSIS report found, in particular, that the
burden of ITAR is ``more pronounced'' for smaller companies (the lower
tiers) in terms of compliance costs and exports to foreign systems for
example. It is the lower tier companies that are often the sources of
innovation. The CSIS study found that ``Export controls are adversely
affecting U.S. companies' ability to compete for foreign space
business, particularly the second and third tier. And it is the 2nd/3rd
tier of the industry that is the source of much innovation, and is
normally the most engaged in the global market place in the aerospace/
defense sector.'' In addition, the President and CEO of the General
Aviation Manufacturers Association (GAMA) stated at a March 2008 forum
on export controls that ``small companies where much of the innovation
takes place [are] leary of participating in a program that could put
them in a position of inadvertently violating export control rules.''
One space company that is aiming to sell access to a commercial
space habitat found that the modular inflatable technology that forms
the basis of its space habitat is export controlled. The company also
ran into ITAR problems with a basic technical stand. As the company
President, Robert Bigelow, reported in a February 2008 article in Space
News, ``A wonderful example of the irrationality of the current regime
is the 'technical stand' from our Genesis campaigns. This simple
aluminum stand is composed of a circular base with several legs
sticking out. If you were to turn the stand upside down it would
literally be indistinguishable from a common coffee table. However,
under the current export control regime, the stand was considered `ITAR
hardware' and we were required to have two security officers guarding
the stand on a 24/7 basis while at our launch base in Russia.''
Lost Revenue in Satellite Manufacturing Market
The CSIS report notes that ``Study after study shows the same
results, an erosion of U.S. share of the global commercial satellite
market since the late 1990s.''
In addition, the DOD Assessment, shows that, based on Satellite
Industry Association reports in 2004 and 2006,
``The U.S. share of global satellite manufacturing has
decreased since the ITAR changes were implemented in 1999.''
``U.S. market share dropped from 63 percent in 1996-1998 to
52 percent in 1999-2001 and 42 percent in 2002-2006.''
``Revenues dropped in real terms as well from an average of
$6.6B in the first period, to $5.5B in the transition period,
and $4.2B in the most recent period of the data.''
``U.S. share of GEO [geostationary] commercial
communications satellites manufactured has decreased 10 percent
since 1998.''
Challenges for Government-Sponsored International Space Activities
Much of the Nation's civil space activities are international given
the global nature of the marketplace, the benefits of commercial
strategic partnerships, and the legacy of cooperation in NASA's space-
based scientific research and human exploration mission programs.
Export controls hinder these activities and may introduce safety
concerns. The NASA director for export control noted at a March 2008
Aerospace States Association forum on Export Controls that:
``Unfortunately, certain provisos requiring separate and
specific government review and approval for any collaborative
anomaly resolution activity may impede the ability of NASA's
contractors to expeditiously take action to assure operations
safety and mission success, including during real-time
operations, where an anomaly could be encountered.'' He said
``Rendezvous and docking of the European Automated Transfer
Vehicle (ATV) and Japanese H-II Transfer Vehicle (HTV) with the
International Space Station are time-critical operations that
require timely exchange of information for effective
operations. In the event of an on-orbit problem, for the safety
of the Space Station and its crew, ATV and HTV engineers must
be able to quickly and easily share technical data--in real-
time--with U.S. engineers . . ..''
Along those same lines, a 2007 report of the International Space
Station Independent Safety Task Force (IISTF) explained that
``Currently the ITAR restrictions and the IP's objections to signing
technical assistance agreements are a threat to the safe and successful
integration and operations of the Station.'' The study recommended that
the State Department grant relief to NASA contractors working directly
with the International Space Station (ISS) international partners and
their contractors to enable engineering and safety reviews, program
management interactions, and to handle anomaly resolution among other
specific activities and that the ``Executive and Legislative Branches
of the government should conduct a comprehensive and thorough review of
government policies and procedures related to ITAR and related export
controls as soon as practical.''
The CSIS recommendation on anomaly resolution is that: ``The
Secretary of Defense and NASA Administrator, in addition to the
Secretary of State, should have the authority to grant real-time, case-
by-case, specific time period exemptions for anomaly resolutions deemed
to be in the national interest based on criteria from the National
Space Policy.''
The NASA export control director also commented that the State
Department has ``advised NASA to seek legislative authority as a
prerequisite to the Department's promulgation of an exemption to
facilitate the implementation of NASA's programs, including the U.S.
Space Exploration Policy.'' The Bush Administration did not send any
proposed legislation to Congress regarding this export control matter.
A significant portion of NASA's science missions involve
international cooperation in which export controls apply. At a hearing
of the House Committee on Science and Technology, Subcommittee on Space
and Aeronautics, held in March 2008 to examine NASA's science programs,
Dr. Jack Burns, a professor from the University of Colorado noted: ``.
. . we need to be looking at more international cooperation because
sharing the costs and the risks associated with these large projects in
astrophysics . . . The ITAR restrictions are making it more difficult
than they need to be.'' Another witness at the hearing, Dr. Steven
Squyres of Cornell University, the Principal Investigator for the Mars
Exploration Rovers (Spirit and Opportunity), testified that ``many
talented students come and want to work on the mission. These are
students and post-docs from Denmark and Canada, and we have had to turn
away people because of the restrictions on ITAR. And these are people
who can materially advance a U.S. space mission and make it a better
mission.''
In addition, the National Academies workshop summary on space
science and ITAR raised concern over the ability to continue
international collaborations, especially as projects become
increasingly more complicated. The workshop summary notes that:
``The costs and delays imposed by ITAR processing requirements
coupled with other nations' reluctance to be made subject to
restrictions derived from U.S. law and regulations, are making
the United States less and less desirable as a partner to its
foreign collaborations. The implications for continued
international collaboration are grave.'' The workshop summary
also said that ``International participants in the workshop
went so far as to speculate that without high-level U.S.
Government relief on ITAR, the development of highly integrated
infrastructure programs, such as those envisioned for human
space exploration, will be impossible.''
ATTACHMENT A
National Academies, Beyond ``Fortress America'': National Security
Controls on Science and Technology in a Globalized World, 2009
Excerpt from the Executive Summary
``Recommendations
The committee structured its recommendations into three areas:
reforming the export control process, ensuring scientific and
technological competitiveness, and improving the non-immigrant visa
system that regulates the entry into the United States of foreign
science and engineering students, scholars, and professionals.
In the committee's view, it is important to act immediately, within
the boundaries of the President's authority to ameliorate the policy
logjam that is the unintended consequence of Congress's inaction over
dual-use export controls. The new President needs to make the changes
that will stem a serious decline affecting broad areas of the Nation's
security and economy.
Recommendation 1. The President should restructure the export control
process within the federal government so that the balancing of
interests can be achieved more efficiently and harm can be prevented to
the Nation's security and technology base; in addition to promoting
U.S. economic competitiveness.
Restructuring the export control process does not involve
abandoning all export controls. Rather, the committee recommends that
two policy changes and two structural changes be made to retain needed
export controls while shedding the largest obstacles to an efficient
system. With these changes implemented in an expedient manner, the
United States will stem the loss of technological and economic
competitiveness and begin to benefit from carefully targeted and
calibrated controls that reflect and meet current challenges that the
country faces in protecting both our national security and our economic
well-being.
Action Items
A. Recognize the interdependence of national security and economic
competitiveness factors in making export control decisions with respect
to individual requests for licenses through a principle-based system.
When the licensing agency applies principles to decisions about
export controls, the focus will stay on why items should or should not
continue to be controlled, rather than on adding to otherwise static
lists of controlled items. This kind of governance system can assess
each decision in terms of whether an item should be controlled against
the governing principles that have been established within the system.
Doing so can ensure that the remaining controlled items are relevant to
rapidly changing global conditions. It can also help ensure that
decisions are made in a timely manner. The following are the principles
that the committee recommends:
1. Maintain the value of protecting traditional U.S. national
security in export control policy.
2. Recognize that today this value must be balanced against
the equally important value of maintaining and enhancing the
scientific and technological competitiveness of the United
States.
3. Allow openness and engagement to prevail unless a
compelling case can be made for restrictions.
4. Articulate a rational basis for each restriction.
Restrictions on unclassified technology should be implemented
only when:
a. The U.S. alone, or the U.S. and cooperating allies,
possess technology that leads not only to identifiable
military advantage, but to an advantage that is likely
to persist for a significant period of time (i.e., the
time needed to field a system based on that
technology);
b. The U.S., or the U.S. acting together with allies,
control the technology such that they can prevent it
from moving into the hands of possible adversaries;
c. The restrictions do not impose costs and
inefficiencies that are disproportionate to the
restrictions' security benefits; and
d. Restrictions are re-examined and re-adjusted
periodically to ensure they remain appropriate.
5. Protect the capability to ``run faster.''
6. Treat weapons separately--but define them narrowly and
precisely.
7. Recognize the ``global public good'' nature of health-
related technologies.
B. Apply ``sunset'' requirements to all items on export control lists
that are controlled unilaterally by the U.S., and require findings to
be made every 12 months that removing controls on an item would present
a substantial risk to national security. No version of the current
control system should survive without an effective method for pruning
items from the control lists when they no longer serve a significant
definable national security interest.
C. Establish as a new administrative entity a coordinating center for
export controls, with responsibilities for coordinating all interfaces
with persons or entities seeking export licenses and expediting agency
processes with respect to the granting or denial of export licenses.
This small coordinating entity would be responsible for:
Receiving all applications for export licenses;
Determining whether the Department of Commerce or the
Department of State should handle the license application and
dispatch the application to the appropriate agency for a
decision;
Maintaining timetables for decision-making on license
applications so that applications do not languish;
Receiving decisions on applications from the
designated agencies and distributing these decisions to
applicants;
Receiving appeals of licensing decisions and
petitions for review of sunset decisions, and delivering these
to the appellate panel (see description below);
Maintaining timetables for decisions on appeal;
Receiving decisions on appeals and distributing these
decisions to applicants;
Providing administrative support to the appellate
panel (see description below); and
Monitoring and oversight of the sunset process.
D. Establish an independent export license appeals panel to hear and
decide disputes about whether export licenses are required, whether
particular decisions to grant or deny licenses were made properly, and
whether sunset requirements have been carried out properly. An
independent, neutral decision-making authority is required to break the
logjams in the system caused by philosophical differences and varying
interpretations of statutory, regulatory, and executive order language.
Two kinds of issues can be resolved quickly and effectively using an
appellate decision-making panel:
First, if the agency makes a decision (either
requiring or not requiring a license), and a party or a
government agency believes the matter was wrongly decided,
there is an avenue to resolve these differences.
Second, if the agency fails to remove an item or
category of items from the control list under the sunset
requirement, or does not act at all within the one-year time
period for review of each item on the list, an affected party
could appeal either to reverse the agency's determination, or
to require the agency to act in a timely way to make the
necessary determination.
The committee recommends that an independent export license appeals
panel be constituted, appointed by the President or the National
Security Advisor Panel members would serve a five-year term. [NB: It is
at times difficult to get presidential action on appointments in a
timely way, particularly at the beginning of an administration when
there are many competing concerns. For that reason, the President's
Executive Order would allow 90 days from the date of issuance of the
Order for the appointments to be made through the presidential
processes, and after that, the appointments would be made by the Chief
Judge of the Federal Court of Appeals for the District of Columbia
Circuit within 30 days. Replacement judges would be selected in the
same way. No Senate confirmation would be required because this is not
a ``court''; it is an administrative panel assembled by the President
to assist agencies in carrying out their responsibilities. This panel
makes decisions among competing interests of agencies the same way the
National Security Council's staff makes decisions about the competing
interests of the Departments of State and Defense.] The panel would be
co-located with the coordinating center and would be housed, for
administrative purposes, under the same organizational umbrella.
Appeals panels such as this one are not ``directed'' by an
administrative authority. This kind of panel acts independently and
neutrally to resolve disputes. It has no operational responsibility
other than to hear disputes and issue opinions.
The best organizational home for the proposed coordinating center
and the export license appeals panel would be within the National
Security Council structure, with the coordinating center's director
reporting directly to the National Security Adviser. This placement in
the White House structure will ensure the coordinating center's
independence and will establish its relationship to the President. The
coordinating center and the export license appeals panel would not
necessarily be co-located with the NSC. This would not be required for
an effective exercise of its powers under the Executive Order.
The committee weighed several options before making the
recommendation for a new coordinating center and an export license
appeals panel and locating them within the NSC. The option to create an
interagency group was rejected because experience supports the
conclusion that this would devolve into just another debating society
and would not constitute a practical means to improve the present
export control system. The option to use a group made up of private
sector members was rejected because that alternative would not be
acceptable to the government agencies involved. The option to place
this responsibility with the Department of Defense was rejected,
because the department, through its management of the Militarily
Critical Technologies List, is an important player in the export
control regime. Similarly, any placement within any other cabinet-level
department involved in licensing would also compromise the independence
of the proposed center. The option to place these administrative
functions in the Office of Management and Budget was also considered.
Although neither the National Security Council nor the Office of
Management and Budget is an operational agency, the committee thinks
that the NSC provides the better fit, because of its focus on national
security and economic policy. In addition, the chain of command would
have the coordinating center's director reporting directly to the
National Security Advisor. This would not only signify the importance
of these issues, in terms of both national security and economic
policy, it would also serves as a brake on the director in terms of
choosing his or her battles carefully.
Recommendation 2. The President should direct that executive
authorities under the Arms Export Control Act and the Export
Administration Act be administered to assure the scientific and
technological competitiveness of the United States, which is a
prerequisite for both national security and economic prosperity.
Action Items
A. Maintain the Fundamental Research Exemption that protects
unclassified research, as provided by National Security Decision
Directive 189, and ensure that it is properly implemented.
B. Create an economic competitiveness exemption that eliminates export
controls on dual-use technologies where they, or their functional
equivalents, are available without restriction in open markets outside
the United States.
Recommendation 3. The President should maintain and enhance access to
the reservoir of human talent from foreign sources to strengthen the
U.S. science and technology base. Traditionally, the United States had
to worry about science and technology flowing out of the country. In
today's conditions, the U.S. must make sure that advanced science and
technology will continue to flow into the country. For this reason, the
U.S. visa regulations as applied to credentialed foreign scientists
should ensure that the U.S. has access to the best talent. Science and
engineering degree holders who prefer, after graduation, to work in the
U.S. should have ready access to permission for long-term stays.
Granting this access for highly trained technical and scientific
personnel is an important way of augmenting a critical segment of the
workforce. The U.S. cannot protect U.S. jobs by denying entry to
foreign professionals; jobs will simply go abroad. It is important for
both the national security and economic prosperity to maintain the flow
of human talent into the United States.
Action Items
A. Streamline the visa process for credentialed short-term visitors in
science and technology fields.
The committee recommends the President's Executive Order require
that a non-immigrant visa applicant who is a graduate student,
researcher, or professional in any field of science or technology and
whose application is supported by a qualified university, scientific
body, or corporation should receive a determination on his or her visa
application within 30 days. This will allow access for credentialed
academic researchers to work with U.S.-based colleagues and in U.S.-
based programs, and will facilitate work done in U.S. science
laboratories.
B. Extend the duration of stay for science and engineering graduates
with advanced degrees.
The committee recommends the President's Executive Order provide a
one-year automatic visa extension to international students to remain
in the United States to seek employment or acceptance into further
advanced study on receipt of advanced degrees in science, technology,
engineering, mathematics, or other fields of national need at qualified
U.S. institutions. If these students are offered jobs by U.S.-based
employers and pass security screening measures, they should be provided
automatic work permits and expedited residence status. If students are
unable to obtain employment within one year, their visas would expire.
C. Include expert vouching by qualified U.S. scientists in the non-
immigrant visa process for well known scholars and researchers.
The committee recommends that the President's Executive Order allow
qualified U.S. scientists, as part of the visa application process, to
vouch for the technical credibility and legitimacy of visa applicants
who are in the same or in a similar field. A more interactive
application review procedure would permit those with expertise in
relevant scientific and technology fields (and personal knowledge of
the expertise of the individual whose application is being reviewed) to
aid consular officials in accurately and efficiently determining the
existence of a real security threat.
D. Institute skills-based preferential processing with respect to visa
applications.
The committee recommends that the President's Executive Order
institute a new skills-based, preferential processing with respect to
visa applications. The visa applications of scientists and engineers
should be given priority. Graduate-level education and science and
engineering skills should substantially raise an applicant's chances
and confer priority in obtaining residence permits and U.S.
citizenship.
In Conclusion
As a nation, we cannot, and should not abandon well-conceived
efforts to keep dangerous technology and scientific know-how out of the
hands of those who would use this knowledge to create weapons of mass
destruction and other, equally dangerous military systems. However,
these represent a very narrow and limited set of goods, technology, and
knowledge. Our former unilateral strategy of containment and isolation
of our adversaries is, under current conditions, a self-destructive
strategy for obsolescence and declining economic competitiveness. A
strategy of international engagement is a path to prosperity that can
be coupled with a smarter approach to security using an adaptive system
of government regulation and incentives. The committee recommends the
issuance of an Executive Order that implements the recommendations it
has outlined as one of the first orders of business in January 2009.''
ATTACHMENT B
Members of National Academies
Committee on Science, Security and Prosperity
John L. Hennessy (Co-Chair), President, Stanford University, Palo Alto,
CA
Brent Scowcroft (Co-Chair), President and founder, The Scowcroft Group,
Washington, DC
Ronald Atlas, Professor of Biology and Public Health, and Co-Director
of the Center for Health Hazards Preparedness, University of
Louisville, Louisville, KY
William F. Ballhaus, Jr., Retired, President and CEO, The Aerospace
Corporation, El Segundo, CA
Alfred R. Berkeley, III, Chairman, Pipeline Trading, New York, NY
Claude R. Canizares, Vice President for Research and Associate Provost,
Massachusetts Institute of Technology, Cambridge, MA
Gail H. Cassell, Vice President, Scientific Affairs and Distinguished
Lilly Research Scholar for Infectious Diseases, Eli Lilly and
Company, Indianapolis, IN
France A. Cordova, President, Purdue University, West Lafayette, IN
Ruth A. David, President and Chief Executive Officer, Analytic Services
Inc., Arlington, VA
Gerald L. Epstein, Senior Fellow for Science and Security, Homeland
Security Program, Center for Strategic and International
Studies, Washington, DC
John Gage, Partner, Kleiner, Perkins, Caufield & Byers, Menlo Park, CA
B.R. Inman, LBJ Centennial Chair in National Policy, University of
Texas, Austin, TX
Anita Jones, Lawrence R. Quarles Professor of Engineering and Applied
Science, School of Engineering and Applied Science, University
of Virginia, Charlottesville, VA
Judith A. Miller, Sr. Vice President & General Counsel, Bechtel Group,
Inc., San Francisco, CA
Norman P. Neureiter, Director, Center for Science, Technology and
Security Policy, American Association for the Advancement of
Science, Washington, DC
Elizabeth Rindskopf Parker, Dean, McGeorge School of Law, University of
the Pacific, Sacramento, CA
John S. Parker, Senior Vice President, Science Applications
International Corp., Alexandria, VA
Suzanne D. Patrick, Independent Consultant, Washington, DC
Deanne Siemer, Managing Director, Wilsie Co. LLC, Washington, DC
Mitchel B. Wallerstein, Dean, The Maxwell School, Syracuse University,
Syracuse, NY
Chair Gordon. This hearing will come to order, and good
morning. Welcome to today's hearing entitled the Impacts of
U.S. Export Control Policies on Science Technology Activity and
Competitiveness. I would like to begin by welcoming our panel
of distinguished witnesses and look forward to your testimony.
And let me just put everyone on notice that General Scowcroft,
who is an important part of this panel, is immortal and he got
stuck in the long lines. And we tried to in respect to those
folks who are here on time, get started on time, and as he
comes in, he will join us welcomely and discreetly. And so we
will just let everyone know that.
The Nation's export controls system and the related
International Traffic in Arms Regulations, also known as ITAR,
were put into place to help protect America's sensitive
technologies from falling into the hands of those who might do
harm to this nation.
In short, the export controls were supposed to strengthen
our national security.
However, in recent years there has been a growing chorus of
concern about some of the unintended consequences of the
current system of export controls for both the Nation's
competitiveness in the global economy and for the Nation's
science and technology enterprise.
Equally troubling, there are also increasing expressions of
concern from experts in the national security industry and
academic communities to the effect that the current system of
export controls is actually weakening our national security,
not strengthening it, while undermining the health of our
science and technology enterprise.
In that regard, let me quote from the recent National
Academies report authored by a distinguished panel under the
co-chairmanship of Gen. Scowcroft, one of witnesses at today's
hearing, and I quote: ``The national security controls that
regulate access to and export of science and technology are
broken. As currently structured, many of these controls
undermine our national and homeland security and stifle
American engagement in the global economy, and in science and
technology. Fixing these controls does not mean putting an end
to them, but implementing reforms based on the realities of the
risks and opportunities of today's threats to our nation.''
The panel then goes on to make an equally sobering
statement, and once again I quote: ``The export controls and
visa regulations that were crafted to meet conditions the
United States faced over five decades ago now quietly undermine
our national security and our national economic well-being.''
Those are very serious statements from a group of very
knowledgeable individuals, and I think that they warrant our
close consideration.
In addition, there have been a growing number of reports
that have focused on the impact of the current export controls
regime on America's civil and commercial space programs and
space research activities.
Those reports have also reached some of the same troubling
conclusions.
For example, the Center for Strategic and International
Studies Working Group on the Health of the U.S. Space
Industrial Base and the Impact of Export Controls, which was
co-chaired by another one of our witnesses today, Thomas Young,
quoted, and again I will quote: ``The current export control
policy is constricting U.S. engagement and partnerships with
the rest of the global space community, and is feeding a
growing separation between the U.S. space community and an
emerging non-U.S. space community.''
And they go further to say, ``Export controls are adversely
affecting U.S. companies' ability to compete for foreign space
business, particularly the second and third tier. And it is the
second and third tier of the industry that is the source of
much innovation, and is normally the most engaged in the global
market place in the aerospace/defense sector.''
Findings such as those led this committee last year to
include a provision in the House-passed NASA Authorization Act
of 2008 directing the Director of the Office of Science and
Technology Policy to carry out a comprehensive study of the
impact of current export control policies on our civil and
commercial aerospace enterprise.
While that provision did not make it into the final public
law, I am encouraged that President Obama called for a similar
review during his Presidential campaign, and I am optimistic
that such a study will be initiated and I will be in written
contact with the Administration making that request.
In closing, I think that it is time for Congress to take
another look at the Nation's export controls regime to ensure
that it is working effectively and without unintended adverse
impacts.
As part of that look, we want to understand any negative
effects that the current export controls regime may be having
on our efforts to stimulate the economy and promote long-term
growth through the investment of science and technology.
This committee is starting the process with today's
hearing, and I hope and anticipate that other committees will
be following up in the coming weeks and months with further
oversight of other aspects of the export controls issue.
With that, I again welcome our witnesses, and I will now
turn to my friend, Mr. Hall, for any opening remarks that he
cares to make.
[The prepared statement of Chair Gordon follows:]
Prepared Statement of Chair Bart Gordon
I would like to begin by welcoming our panel of witnesses to this
morning's hearing. We look forward to your testimony.
The Nation's export controls system and the related International
Traffic in Arms Regulations--also known as ITAR--were put into place to
help protect America's sensitive technologies from falling into the
hands of those who might do harm to this nation.
In short, export controls were supposed to help strengthen our
national security.
However, in recent years there has been a growing chorus of concern
about some of the unintended consequences of the current system of
export controls for both the Nation's competitiveness in the global
economy and for the Nation's science and technology enterprise.
Equally troubling, there are also increasing expressions of concern
from experts in the national security, industrial, and academic
communities to the effect that the current system of export controls is
actually weakening our national security--not strengthening it--while
undermining the health of our science and technology enterprise.
In that regard, let me quote from the recent National Academies
report authored by a distinguished panel under the co-chairmanship of
Gen. Scowcroft, one of witnesses at today's hearing:
``The national security controls that regulate access to and
export of science and technology are broken. As currently
structured, many of these controls undermine our national and
homeland security and stifle American engagement in the global
economy, and in science and technology.
Fixing these controls does not mean putting an end to them,
but implementing reforms based on the realities of the risks
and opportunities of today's threats to the Nation.''
The panel then goes on to make an equally sobering statement:
``The export controls and visa regulations that were crafted
to meet conditions the United States faced over five decades
ago now quietly undermine our national security and our
national economic well-being.''
Those are serious statements from a group of very knowledgeable
individuals, and I thus think that they warrant our close attention.
In addition, there have been a growing number of reports that have
focused on the impact of the current export controls regime on
America's civil and commercial space programs and space research
activities.
Those reports have also reached some troubling conclusions.
For example, the Center for Strategic and International Studies
Working Group on the Health of the U.S. Space Industrial Base and the
Impact of Export Controls, which was co-chaired by another of today's
witnesses, Thomas Young, found that:
``The current export control policy is constricting U.S.
engagement and partnership with the rest of the global space
community, and is feeding a growing separation between the U.S.
space community and an emerging non-U.S. space community.''
And
``Export controls are adversely affecting U.S. companies'
ability to compete for foreign space business, particularly the
second and third tier. And it is the second/third tier of the
industry that is the source of much innovation, and is normally
the most engaged in the global market place in the aerospace/
defense sector.''
Findings such as those led this committee last year to include a
provision in the House-passed NASA Authorization Act of 2008 directing
the Director of the Office of Science and Technology Policy to carry
out a comprehensive study of the impact of current export control
policies on our civil and commercial aerospace activities.
While that provision did not make it into the final public law, I
am encouraged that President Obama called for a similar review during
his Presidential campaign and I am thus optimistic that such a study
will be initiated.
In closing, I think that it is time for Congress to take another
look at the Nation's export controls regime to ensure that it is
working effectively and without unintended adverse impacts.
As part of that look, we want to understand any negative effects
that the current export controls regime may be having on our efforts to
stimulate the economy and promote long-term growth through investments
in science and technology.
This committee is starting the process with today's hearing on the
current export controls' impacts on science and technology, and I hope
and anticipate that other committees will be following up in the coming
weeks and months with further oversight of other aspects of the export
controls issue.
With that, I again want to welcome our witnesses, and I will now
turn to Mr. Hall for any opening remarks he would care to make.
Mr. Hall. Mr. Chair, thank you. I will skip over the
paragraph where I brag on you for a couple of three minutes,
and also I won't need to thank the distinguished panel. You
have done a good job of that, but I just want to say that
export controls are crucial and necessary to prevent the
proliferation of militarily-useful technologies from falling
into the wrong hands, and it is critically important that we
continue, to the best of our abilities, to deny the transfer of
these technologies to our adversaries.
In today's global marketplace, as our witnesses will soon
point out, it is equally important that export control
regulations recognize technologies that are no longer ours
alone to control, and to permit the rapid sharing of emerging
R&D technologies with our friends and allies. Based on a number
of scholarly studies, including the National Academies' Beyond
Fortress America report, it is clear to me that the current
export control regime fails I think to meet these standards.
Industry and academia endure enormous costs in an effort to
comply with ITAR. The price of direct compliance is fairly easy
to calculate, but the more difficult cost is the self-imposed
conservatism put into place by industry and academia because
they do not understand what is and what is not a violation of
clear and evolving standards. Technology is constantly shifting
the landscape. What is cutting edge today may be outmoded in
six months or a year from now. So too are the threats posed by
our adversaries, and for that matter, the adversaries
themselves.
As a consequence of these uncertainties and the lack of
transparency within the exporting licensing bureaus, industry
and academia are shying away from bringing products and ideas
into the international arena or collaborating with our friends
and allies. This result is less business and less engagement
with leading researchers the entire world over. It is, in
essence, a system that is designed to slowly erode our
technological superiority which we don't want.
The current system has no transparency, and as a result,
export licensing is bogging down the very same R&D enterprise
that made our economy the largest in the world.
And as I stated just a moment ago, we have to continue to
deny our adversaries access to emerging technologies, but I am
convinced the current export control regime is working against
our own national self-interest.
So I am anxious to hear from these gentlemen who put long
hours in taking their time to come before us. I yield back my
time. Yes, I am sorry, Mr. Chair. I yield to the gentleman from
California the remaining time I have which is three or four
minutes.
[The prepared statement of Mr. Hall follows:]
Prepared Statement of Representative Ralph M. Hall
Thank you, Mr. Chairman, for calling today's hearing on the
implementation of the International Traffic in Arms Regulations (ITAR)
program, and the serious, unanticipated consequences it has imposed on
our industry, academia, national security, and technological readiness.
First I want to thank our distinguished panel of witnesses for
taking time out of their busy schedules to appear before the Committee.
I know you have put in long hours to prepare for your appearance this
morning, and we are grateful for the wisdom and insights you bring to
today's discussion.
Mr. Chairman, export controls are crucial and necessary to prevent
the proliferation of militarily-useful technologies from falling into
the wrong hands, and it's critically important that we continue, to the
best of our abilities, to deny the transfer of these technologies to
our adversaries.
In today's global marketplace, as our witnesses will soon point
out, it's equally important that export control regulations recognize
technologies that are no longer ours alone to control, and to permit
the rapid sharing of emerging R&D technologies with our friends and
allies. Based on a number of scholarly studies, including the National
Academies' Beyond Fortress America report, it is clear to me that the
current export control regime fails to meet these standards.
Industry and academia endure enormous costs in an effort to comply
with ITAR. The price of direct compliance is easy to calculate, but the
more difficult cost is the self-imposed conservatism put into place by
industry and academia, because they do not understand what is--and is
not--a violation of unclear and evolving standards. Technology is a
constantly shifting landscape; what is cutting-edge today may be
outmoded six months or a year from now. So too are the threats posed by
our adversaries, and for the matter, the adversaries themselves.
As a consequence of these uncertainties and the lack of
transparency within the export licensing bureaus, industry and academia
are shying away from bringing products and ideas into the international
arena--or collaborating with our friends and allies. The result is less
business and less engagement with leading researchers the world over.
It is, in essence, a system that is designed to slowly erode our
technological superiority.
The current system has no transparency, and as a result, export
licensing is bogging down the very same R&D enterprise that made our
economy the largest in the world.
As I stated a moment ago, we must continue to deny our adversaries
access to emerging technologies, but I am convinced the current export
control regime is working against our own national self-interest.
Thank you, Mr. Chairman.
Mr. Rohrabacher. Thank you very much, Mr. Chair, and
Ranking Member Hall. Clearly, America needs to nurture its
aerospace and--we are going to welcome General Scowcroft here.
America needs to nurture its aerospace and space technology-
related industries. This is vital to the security of our
country to have these industries on the cutting edge of
technology but also to be competitive with their competition
overseas. And everyone understands that there is a big problem
and has been a big problem for a long time with the ITAR
regulations. And everyone agrees that reform is needed. But we,
when discussing this issue, need to make sure that our high-
tech exports, again, number one, the regulations are not
strangling the industry but at the same time, these high-tech
exports are not going to potential enemies of the United
States, are not going to countries which proliferate weapons of
mass destruction in a way that would be detrimental to our
security and the security of other western democracies.
We know exactly who the nations are that are proliferators.
We also have a good understanding about which nations pose a
potential threat to the United States, who are our potential
enemies versus who are not our potential enemies. So whatever
changes that we enact into ITAR and other export regulations
should basically differentiate between the scofflaw and rogue
nations or potential enemies on one hand and those countries
that pose no threat to us and in fact, the largest numbers of
countries that are just wishing to be trading partners. But let
us note, there is a difference between the People's Republic of
China, which is the world's worst human rights abuser and also
a potential enemy of the United States, versus countries like
Brazil or Belgium or any number of other countries that we
could name. North Korea is not equivalent to The Netherlands.
Well, neither is the People's Republic of China equivalent to
India.
Ten years ago the Cox Report clearly demonstrated that U.S.
technology transfers to the People's Republic of China helped
improve and enhance the efficiency of China's arsenal of
missiles that are aimed at the United States. As a consequence,
we passed the Strom Thurmond Act which established requirements
that before any satellite technology could be exported to
China, the President of the United States had to first certify
to Congress that the tech transfer was not against our national
security interests or our domestic launch for satellite
industries. Since the Strom Thurmond Act became law 10 years
ago, not a single such certification by the President of the
United States has been made, and as a consequence, no western
satellite payloads have been flown in Chinese rockets. Let us
note that when we see the progress that is very clearly now
evident in the Chinese rockets and missiles, that could
probably be traced back to the transfer of technology from the
United States. Ironically, perhaps even worse, tragically, that
money that was taken from the American taxpayer's pocket for
research and missile technology has now ended up in the hands
of not only our competitors, but a potential enemy that aims
missiles at the United States of America.
So just as our Secretary of State Hillary Clinton was
visiting the People's Republic of China, let us note that
European satellite operator, Eutelsat, was cutting a deal with
Beijing to launch a satellite on a Long March rocket. Again, a
Long March rocket system that benefited greatly in its
development from the technology transfer from the United States
two decades ago.
Incidentally, the Eutel Satellite Corporation, these
satellites also make millions of dollars worth of profit from
selling satellite services to the United States Government
through defense contracts. These things are vitally important,
but Mr. Chair, as we discuss this issue, I hope that we keep in
mind the history of this issue as well as the potential
problems that lie ahead and not simply look about the aerospace
industry and technology today but where America will be in the
future. Thank you very much.
[The prepared statement of Mr. Rohrabacher follows:]
Prepared Statement of Representative Dana Rohrabacher
Mr. Chairman:
America needs a vibrant Aerospace and Space Technology industry.
Everyone agrees ITAR reform needs to happen. We need to make sure that
our high tech experts aren't strangled by regulations. On the other
hand, we need to remain vigilant that our advanced technology doesn't
end up in the hands of potential enemies or nations which proliferate
weapons of mass destruction. We know exactly which nations these are,
and we must make absolutely sure that whatever changes we enact to ITAR
and other export regulations, that these scofflaw and rogue nations are
barred from receiving our high tech systems. Chief among them is the
Peoples Republic of China.
Ten years ago, the Cox Report clearly demonstrated that U.S.
technology transfers to the Peoples Republic of China helped to improve
and enhance the efficiency of China's arsenal of missiles that were
aimed at us. As a consequence, we passed the Strom Thurmond Act, which
established the requirement that before any satellite technology could
be exported to China, the President of the United States had to first
certify to Congress that the tech transfer was not inimical to our
national security or our domestic launch or satellite industries. Since
the Strom Thurmond Act became law 10 years ago, not a single such
certification has been made by any Administration, and as a consequence
no Western satellite payload has flown on a Chinese rocket.
But the resolve of the Obama Administration is now being tested in
this area. Just as our Secretary of State, Hillary Clinton was visiting
the Peoples Republic of China, European satellite operator Eutelsat was
cutting a deal with Beijing for a launch on a Long March rocket.
Incidentally, Eutelsat sells tens of millions of dollars worth of
satellite services to the U.S. Government through DISA contracts.
Clearly, this is the beginning of a game of chicken between Eutelsat
and the Obama Administration. If the Obama Administration does nothing,
the message is clear: transferring technology to proliferators of
weapons of mass destruction like the Peoples Republic of China is a
perfectly acceptable business model. Surely we can make sensible
changes to ITAR and other export regulations, but we must not go so far
as to make them at the expense of our national security. Let us reward
our friends with openness in trade; and conversely let us be as single-
minded as possible in stopping items from the United States Munitions
List--like Eutelsat payloads--from falling into the hands of the
Peoples Republic of China and other proliferators.
Chair Gordon. Thank you. If there are Members who wish to
submit additional opening statements, including Mr.
Rohrabacher, your statements will be added to the record at
this point.
[The prepared statement of Mr. Costello follows:]
Prepared Statement of Representative Jerry F. Costello
Thank you, Chairman Gordon, for convening this hearing on U.S.
export control policies and continuing to keep this committee's focus
on our nation's technological competitiveness in a global market.
This committee has held numerous hearings on global competitiveness
in the science and technology fields and recently spent a great deal of
effort on the COMPETES Act, which commits a renewed investment into our
children's education in math and science. During the last session of
Congress, this committee heard from Bill Gates, Chairman of the
Microsoft Corporation, on the many obstacles that face a hi-tech giant
due to this country's falling position in the global competitive
market.
Despite the work of this committee to pass the COMPETES Act and
other federal investments in research and development initiatives, our
national security controls on science and technology remain so
antiquated that they severely restrict commercial and academic
innovation in these fields. If our scientists cannot share information,
cannot receive licenses, cannot expand their field of research because
of government restrictions in the name of national security, no amount
of investment dollars will allow this country to regain its competitive
edge in the global marketplace.
I look forward to a constructive dialogue on this issue and the
recently released report, Beyond ``Fortress America'': National
Security Controls on Science and Technology in a Globalized World.
Thank you, Mr. Chairman for your leadership of this committee and for
my time, I yield back.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Representative Eddie Bernice Johnson
Good morning, Mr. Chairman and Ranking Member.
Today's hearing on exports controls has significant impacts on the
space and defense industries.
As you know, the space and aeronautics industry is an important
economic driver in Texas.
Johnson Space Center and NASA contractors provide jobs and
facilitate innovation in our state and around the Nation.
Investments in human space exploration and development have been
responsible for valuable new technologies, and at the center of many of
these innovations is the Johnson Space Center.
Johnson Space Center's combined workforce in the Bay Area of
Houston alone accounts for more than 16,000 jobs.
When the economic multiplier effect of these jobs is considered,
the total impact from the space center and Texas exceeds more than
26,000 employees with personal incomes of more than $2.5 billion; and
total spending exceeds $3.5 billion.
Truly, the space and aeronautics industries have dynamic and broad
based impacts on the economic, educational and quality of life on the
entire State of Texas.
NASA provides $72 million for grants and contracts to Texas
universities and colleges as well as $44 million to Texas non-profit
organizations.
NASA is so important for our nation and the State of Texas.
Since the Cold War, investments in NASA and other agencies have
created a robust science and engineering workforce, driven innovation,
fueled economic growth, and established the United States' preeminence
in science and technology.
Mr. Chairman, I will be interested to know whether America's
friends and allies perceive a climate of export controls that is
conducive for long-term international collaborations to expand human
and robotic presence in the solar system.
I would like to welcome all of today's witnesses.
It is my hope that they can help the Committee assess the
implications and unintended consequences of current export control
policies for the conduct of United States Government science and
technology activities.
Thank you, Mr. Chairman. I yield back the balance of my time.
[The prepared statement of Ms. Giffords follows:]
Prepared Statement of Representative Gabrielle Giffords
I want to thank our distinguished witnesses for appearing here
today to share their insights on a very important topic--the impacts of
our export control system on U.S. science and technology activities and
competitiveness. Export control is not a subject that Americans discuss
at the dinner table, but it is something that affects every American,
because the intent of the policies is to help protect the Nation from
harm.
Today, our witnesses will shed light on the importance of science
and technology to our economic and national security and on the need to
ensure that the Nation's export control policies and procedures do not
inadvertently undermine that security as well as weaken our
competitiveness in science and technology in a very challenging global
economy. In that regard, I am especially interested our witnesses'
perspectives on the implications of current U.S. export control
policies for our nation's civil and commercial space activities,
because many of the technologies and information involved in space
activities are regulated by export control policies.
Space is increasingly a global undertaking, with new space-faring
nations emerging that will provide both competition and opportunities
for cooperation in the coming years. As a study of the Center for
Strategic and International Studies noted, ``Other space-faring nations
continue to make strides whether they have access to U.S. technology or
not'' and ``United States preeminence in space is under challenge in
many areas.'' We need to make sure that our export control policies are
structured to enable us to meet that challenge while still protecting
our legitimate security needs.
I am particularly concerned about the challenges that current
export control policies present to the effective conduct of fundamental
space research. According to a National Academies workshop summary on
space science and the International Traffic in Arms Regulations (ITAR),
some researchers report that ITAR makes it difficult to develop space
research projects, which are typically conducted in partnership with
industry, government labs, and international institutions. Some
researchers are also uncertain about whether they can discuss their
research in a university classroom that includes non-U.S. students. Our
universities are a significant source of innovation for our science and
technology enterprise, for our space program, and for our economic
strength. I think it is important that we look carefully at the impacts
of current U.S. export controls policies on our universities and take
whatever steps are appropriate to mitigate the unintended consequences.
In closing, I am pleased that the Science and Technology Committee
is taking the lead in addressing these important issues. I hope that
this hearing will be the first step in a thorough review of our current
export control system by Congress, including the House Armed Services
and House Foreign Affairs Committees on which I also serve and which
have important oversight and legislative roles to play with regard to
these issues.
[The prepared statement of Mr. Mitchell follows:]
Prepared Statement of Representative Harry E. Mitchell
Thank you, Mr. Chairman.
Today we will review the impacts of current export control policies
on U.S. science and technology activities and competitiveness.
As we addressed last year with the America COMPETES Act, it is
critical to ensure that our nation is prepared to lead in science and
technology in an increasingly globalized economy.
However, export control policies, which were established decades
ago, fail to consider the present-day realities of a global economy.
As the National Academies report, Beyond ``Fortress America'':
National Security Controls on Science and Technology in a Globalized
World states, ``the export control system enforced in the U.S. today
has failed to evolve with changing global conditions and now produces
significant harm to U.S. military capability, to homeland security, and
to the Nation's economic competitiveness.''
While we work to establish export control policies that reflect
present day realities, we must also be careful to ensure that these
policies continue to protect U.S. national security.
I look forward to hearing more from our witnesses on the commercial
and national security concerns related current export control policies.
Chair Gordon. At this time, I would like to introduce our
witnesses. First up we have Lieutenant General Brent Scowcroft
who is the Co-Chair of the National Academies Committee on
Science Security and Prosperity and former National Security
Advisor for Presidents Gerald Ford and George H. W. Bush. And
General Scowcroft, I had a sick daughter and got caught in
traffic this morning, so I was late for my first meeting. They
couldn't start without me, but we could start without you. And
so we didn't think you would mind. Mr. Thomas Young is the Co-
Chair of the Center for Strategic and International Studies
Working Group on the health of the U.S. Space Industrial Base
and the Impact of Export Controls. Dr. Claude Canizares is the
Vice President for Research and Associate Provost and the Bruno
Rossi Professor of Physics at the Massachusetts Institute of
Technology, MIT. And finally, we have Major General Robert
Dickman who is the Executive Director for the American
Institute of Aeronautics and Astronautics.
As our witnesses should know, you each have five minutes
for your spoken testimony. Your written testimony will be
included in the record for the hearing, and when you have
completed your spoken testimony, we will begin our questions.
Each Member then will have five minutes for their questions. As
the former Chair Sherry Boehlert used to frequently say,
although we have five minutes, this is a very important issue
and we do not want you to feel that you have to cut off mid-
sentence. So we do want to hear from you.
So we will start with Lieutenant General Scowcroft.
STATEMENT OF LIEUTENANT GENERAL BRENT SCOWCROFT (USAF, RET.),
PRESIDENT AND FOUNDER, THE SCOWCROFT GROUP
Lieutenant General Scowcroft. Thank you very much, Mr.
Chair, Mr. Hall, Members of the Committee. I appreciate the
opportunity to appear before you as a Co-Chair of the National
Research Council's Committee on Science, Security and
Prosperity.
The study we have done on export controls and technology in
a globalized world concludes that the national security
controls on science and technology are broken. They harm our
national security and reduce our economic competitiveness.
These controls which were established during the Cold War work
well as long as three conditions prevail. The U.S. science and
technology establishment has only one significant competitor,
the Soviet Union, and that was a weak competitor. Two, military
research and development production took place separately from
the commercial sector and generally led it by a great degree.
And third, a common sense of purpose existed among the United
States and its allies regarding the nature of the threat.
These three conditions no longer obtain. First, the United
States has competition in most areas of advanced research and
development, including military-related science and technology.
The number of access points to advanced science and technology
has grown considerably and perhaps more to the point, outside
the control of the United States.
Second, most military production in the United States is
now commercially based, thus blurring the distinction between
commercial grade and weapons grade for thousands of so-called
dual-use goods and technologies. And third, the alliance has
lost its Cold War consensus. As a result, we are not hurting
ourselves both in terms of science and technology and economic
competitiveness.
The Fortress America approach of current controls cuts us
off from information and technologies that we need for our
national security.
There is clearly a better way to manage the application of
American science and technology abroad that protects our
national security and our competitiveness. We need to change
the mindset, and we need an agile system of security controls
that can adapt quickly to the changing political and
technological landscapes. Our mindset is now negative. Don't
let anything out which might be of use abroad or don't let any
H-1 visa applicants in who might be a problem. We need to turn
to an open mindset. Export unless there is a reason not to. Let
H-1 visa applicants in unless there is a reason not to. And to
improve our ability, the committee recommends the establishment
of two administrative entities, perhaps within the National
Security Council. The first would be a coordinating center for
export controls that would be a one-stop shop for people
seeking export licenses. This would determine whether the
Commerce Department or the State Department should handle the
application. Now, the applicant has to decide, and if he
guesses wrong, there is months of delay in determining it. The
second entity is an appeals panel that would hear and decide
disputes about whether export licenses are required and whether
particular decisions to grant or deny those licenses were
properly made and also hear appeals on sunset requirements and
how they are being carried out. Our committee proposes that
sunset requirements be applied to all items on the export
control list and reviewed annually.
Another recommendation dealing with the mindset proposes
the administration of existing export control statutes should
assure the science and technological competitiveness of the
United States as a prerequisite to both national security and
economic prosperity. To assure the conditions for scientific
and technological competitiveness, the committee has
recommended that the fundamental research exemption, also known
as NSDD-189 should be maintained and properly implemented.
The committee also proposes the establishment of an
economic competitiveness exemption that eliminates export
controls on dual-use technologies where they or their
functional equivalent are available without restriction in open
markets outside the United States.
The final recommendation addresses the need to maintain and
enhance access to the reservoir of human talent from foreign
sources through H-1 visas to strengthen the U.S. science and
technology base. The committee recommends that the President
issue an executive order to put these provisions into effect.
This order would not and cannot contravene current law, rather
it would govern the exercise of Presidential authorities
established under existing law. The executive order would not
affect anything that is protected by the national security
classification system, nor would it address export controls
that the State Department imposes strictly on foreign policy
grounds. As a first step in overhauling the overall system of
controls, putting these provisions into effect would create a
record and experience base that the Congress can evaluate and
modify as it sees fit at such time as new export control
legislation can be successfully addressed.
Perhaps the most significant challenge to implementing
these recommendations is to help the relevant agencies
understand that these reforms will not micro-manage their own
licensing procedures or challenge agency expertise.
In closing, I am grateful for the interest that the
Committee on Science and Technology has taken in this report
and hope that your Members will continue to be involved in this
issue. Thank you, Mr. Chair.
[The prepared statement of Lieutenant General Scowcroft
follows:]
Prepared Statement of Lieutenant General Brent Scowcroft
Chairman Gordon, Ranking Member Hall, and other Members of the
Committee on Science and Technology, thank you for this opportunity to
appear before you this morning to discuss the effects of U.S. export
control policies on science and technology activities and
competitiveness.
I am President of the Scowcroft Group, an international business
advisory firm. I speak before you today as Co-Chair of the National
Research Council's Committee on Science, Security and Prosperity. I am
here to discuss the findings and recommendations of this committee's
report, Beyond ``Fortress America'': National Security Controls on
Science and Technology in a Globalized World.
The national security controls on science and technology are
broken. They were established during the Cold War to help maintain the
United States' superiority in military-related science and technology.
These controls worked fairly well as long as the following three
conditions held:
(1) The U.S. S&T establishment had only one significant competitor--and
we knew that they had a weak R&D base. This meant that we did not have
to look much beyond ourselves to find the most advanced S&T. (2)
Military research, development and production took place separately
from the commercial sector. Thus denying the transfer of military goods
did not affect the commercial economy. (3) A common sense of purpose
existed among the United States and its allies regarding the nature of
the threat and the means to manage it; thus the West was largely
unified about denying weapons-grade materials and technologies to its
adversaries.
These three conditions no longer obtain. First, today the United
States has competition in most areas of advanced research and
development, including military-related S&T. Advances in science and
technology now occur throughout Europe, in Russia and Japan, and also
in the developing economies of China, India and Brazil. Thus the number
of access points to advanced science and technology have grown
considerably and perhaps more to the point, outside the control of the
United States. Second, most military production in the U.S. is now
commercially based, thus blurring the distinction between commercial
grade and weapons grade for thousands of so called ``dual-use'' goods
and technologies. And third, the Western alliance has lost its Cold War
consensus; NATO member countries and Japan no longer agree on what
countries need to be controlled, what items should be controlled, and
what kinds of controls are needed. Together, these changes make it much
more difficult for the United States to successfully control the
transfer of goods and technologies that have both commercial and
military applications. As a result, many national security controls on
science and technology no longer work in the ways they were intended.
We endanger our own national security in thinking that unilaterally
controlling dual-use items here prevents others from obtaining them
elsewhere.
Because science and technology research, development and production
have become a global enterprise, the ``Fortress America'' approach of
current controls cuts us off from information and technologies that we
need for our national security. If we sustain these export control and
visa barriers, we will increasingly lose touch with the cutting edge of
science and technology, and we risk missing emerging national security
threats.
Following are just a few of the unintended consequences that the
inappropriate application of export controls have on our national
security and our economic competitiveness:
At a time when battlefield inter-operability is
increasingly the norm, the licensing process can prevent repair
at facilities closest to the theater of operation.
Export controls constrain both U.S. commercial and
military capabilities from expanding into new fields and from
applying new scientific developments.
The government's rules are accelerating the
development of technologies in capable research centers outside
the United States.
As foreign companies and governments fill these
competitive gaps, valuable technical developments occur outside
the U.S. to which the U.S. military and intelligence agencies
then have no access.
U.S. scientists are hobbled by rules that prevent
them from working with world-class foreign scientists and
laboratories located overseas, making it less likely that
valuable discoveries and inventions will occur in the U.S.
The government's rules are driving jobs abroad-
knowledge-intensive jobs that are critical to the U.S. economy.
There is clearly a better way to manage the application of American
science and technology abroad that protects our national security and
our competitiveness. This report articulates the need for the U.S. S&T
sector to ``run faster'' by anticipating and capitalizing on research
breakthroughs more quickly than those who would use these advances to
harm us or compete against us economically, and by developing
qualitatively better products and services with the best talent
available. In policy terms, running faster means having an agile system
of national security controls that can adapt quickly to the changing
geopolitical and technological landscapes.
The first recommendation proposes the establishment of two
administrative entities, possibly within the National Security Council.
The first is a coordinating center for export controls that will
constitute a ``one-stop-shop'' for all export-license applications. The
chief role of this small coordinating center is to determine whether
the Department of Commerce or the Department of State should handle the
license application and then dispatch the application to the
appropriate place for decision.
The second entity is an appeals panel, possibly composed of retired
federal judges, that will hear and decide disputes about whether export
licenses are required, and whether particular decisions to grant or
deny licenses were made properly. This panel will also hear appeals on
whether ``sunset'' requirements have been carried out properly. The
committee proposes that ``sunset'' requirements be applied to all items
on U.S. export control lists, and it would require findings to be made
every 12 months that removing controls on an item would present a
substantial risk to national security.
The second recommendation proposes that the administration of
existing export control statutes--the Arms Export Control Act and the
Export Administration Act--should assure the scientific and
technological competitiveness of the United States as a prerequisite
for both national security and economic prosperity. To assure the
conditions for scientific and technological competitiveness, the
committee has recommended that the Fundamental Research Exemption (also
known as National Security Decision Directive 189), which has been in
effect since 1985 and reaffirmed by then National Security Advisor,
Condoleezza Rice in November 2001, be maintained and properly
implemented.
In addition, the committee proposes the establishment of an
economic competitiveness exemption that eliminates export controls on
dual-use technologies where they, or their functional equivalents, are
available without restriction in open markets outside the United
States. Just as NSDD-189 precludes the conduct and reporting of
unclassified information from being restricted, the economic
competitiveness exemption would preclude the export of so called
``dual-use'' items that are, or soon will be, legally available in open
markets overseas, from being restricted.
The third recommendation addresses the need to maintain and enhance
access to the reservoir of human talent from foreign sources to
strengthen the U.S. science and technology base. Put simply, this will
help ensure that the United States remains the destination of choice
for the world's ``best and brightest.''
These innovations can help to bring transparency, efficiency and
consistency to a system that is now lacking all three of these
qualities. They will help to protect what needs to be protected without
harming the economy or our scientific leadership. The committee
recommends that the President sign an Executive Order in early 2009
that will put these provisions into effect ninety days hence.
This Executive Order will be fully consistent with existing
legislation. It would not and cannot contravene current law, but rather
would govern the exercise of Presidential authorities established under
existing law. The Executive Order would not affect anything that is
protected by national security classification, which is addressed by a
separate Executive Order, nor would it address export controls that the
State Department imposes strictly on foreign policy grounds. The
Executive Order signifies that the President will bring discipline into
a process over which he already has primary authority. As a first step
in overhauling the national security controls over science and
technology, putting these provisions into effect will create a record
and experience base that Congress can evaluate--and modify as it sees
fit--at such time as export control legislation can be successfully
addressed.
Perhaps the most significant challenge to implementing these
recommendations is to help the relevant agencies understand that these
reforms will not micro-manage their own licensing procedures or
challenge agency expertise. They will, however, bring consistency and
efficiency to the application process, and transparency to the
agencies' decisions.
If these reforms are not implemented, the system will continue to
bog down, with multiplying negative effects to our national security
and competitiveness. There will be nothing to prevent the continued
erosion of our defense industrial base; the loss of market-share
globally in advanced technologies; the off-shoring of knowledge
intensive jobs; the bureaucratic wrangling among the agencies to name a
few.
In closing, I am grateful for the interest that the Committee on
Science and Technology has taken in this report and hope that your
Members will remain involved in these efforts, particularly in helping
to assure the scientific and technological competitiveness of the
United States.
Biography for Brent Scowcroft
As President and founder of The Scowcroft Group and one of the
country's leading experts on international policy, Brent Scowcroft
provides Group clients with unparalleled strategic advice and
assistance in dealing in the international arena.
Brent Scowcroft has served as the National Security Advisor to both
Presidents Gerald Ford and George H.W. Bush. From 1982 to 1989, he was
Vice Chairman of Kissinger Associates, Inc., an international
consulting firm. In this capacity, he advised and assisted a wide range
of U.S. and foreign corporate leaders on global joint venture
opportunities, strategic planning, and risk assessment.
His prior extraordinary twenty-nine-year military career began with
graduation from West Point and concluded at the rank of Lieutenant
General following service as the Deputy National Security Advisor. His
Air Force service included Professor of Russian History at West Point;
Assistant Air Attache in Belgrade, Yugoslavia; Head of the Political
Science Department at the Air Force Academy; Air Force Long Range
Plans; Office of the Secretary of Defense International Security
Assistance; Special Assistant to the Director of the Joint Chiefs of
Staff; and Military Assistant to President Nixon.
Out of uniform, he continued in a public policy capacity by serving
on the President's Advisory Committee on Arms Control, the Commission
on Strategic Forces, and the President's Special Review Board, also
known as the Tower Commission.
He currently serves on numerous corporate and nonprofit boards. He
earned his Master's and doctorate in international relations from
Columbia University.
Chair Gordon. Mr. Young, you are recognized for five
minutes.
STATEMENT OF MR. A. THOMAS YOUNG, LOCKHEED MARTIN CORPORATION
(RET.); CO-CHAIR, CENTER FOR STRATEGIC AND INTERNATIONAL
STUDIES (CSIS), WORKING GROUP ON THE HEALTH OF THE U.S. SPACE
INDUSTRIAL BASE AND THE IMPACT OF EXPORT CONTROLS
Mr. Young. Thank you, Mr. Chair, Mr. Hall, Committee
Members, I greatly appreciate the opportunity to provide the
views of the committee I co-chair on the impact of export
controls on our space endeavors.
One of the things we highlighted is that we strongly
support the United States' need for export controls that really
do two things, one, protect technologies that are critical to
our national security and two, maximize the opportunity to
maintain our leadership in critical areas. It is our
overarching view that our current export controls have an
adverse impact on our national security, a negative impact on
our industrial base, particularly at the second and third tier
of the base and they complicate the relationships necessary to
mutually-beneficial, international cooperative endeavors.
These deficiencies are both serious and correctable. We
found that we are controlling technologies that are not
critical to our national security and are readily available in
the global marketplace. The most obvious are commercial
communications satellite systems which are a globally available
commodity today. The result of this over-control is that our
space industry loses international sales, second and third
level suppliers which depend upon the international market have
questionable viability, other countries have determined that it
is in their best interest to develop indigenous capabilities
rather than be dependent upon the United States as a supplier.
For cooperative endeavors, the United States ceases to be the
partner of choice. Our access to international innovation is
greatly diminished. This is extraordinarily important because
the United States has always been a technology vacuum cleaner.
We are incredibly good at taking technology no matter where it
comes from and turning it to our military and our economic
benefit. And we are cutting ourselves off from having access to
some of the world's best human capital.
In summary, this over control by our current export control
policies and procedures have accelerated the development of an
international space community resulting in the United States'
preeminence being challenged in many areas. It has resulted in
us becoming somewhat insular which always results in a
technological decline. Our national security and our space
community have been adversely impacted. Without change, our
export control policies and regulations for space will continue
to erode as both a national security and an economic advantage.
The recommendations in the report that General Scowcroft
talked about, Fortress America, are consistent with the
recommendations in our report and they would help to mitigate
the adverse impact of export controls on the space sector.
Our current export controls need major correction by both
the Administration and the Congress to reconcile the strategic
intent. Items that are globally available such as commercial
communication satellite systems should be removed from the
controls. The process of implementation of the controls should
be user-friendly for both the public and the private sectors.
The process and procedures must be structured in a manner that
allows access to international technology and human capital
with minimum restrictions. We must change the policies and
procedures that affect the way we treat our partners in
international cooperative programs. Such programs allow us to
be a full participant in the international space community
resulting in knowing what is going on, having access to
technology, and builds relationships with some of the world's
best minds.
Thank you.
[The prepared statement of Mr. Young follows:]
Prepared Statement of A. Thomas Young
Chairman Gordon and Mr. Hall,
It is a privilege to appear before this distinguished committee to
present the findings and recommendations of an independent Working
Group from the Center on Strategic and International Studies (CSIS) on
the Health of the U.S. Space Industrial Base and the Impact of Export
Controls.
It was my honor to co-chair this expert study group with Dr.
William Ballhaus, The Aerospace Corporation, and Mr. Pierre Chao,
Senior Associate, CSIS. The other distinguished members of our Working
Group were:
Richard Albrecht, Moog
Jeffrey Bialos, Johns Hopkins
Lincoln Bloomfield Jr., Palmer Coates
David Danzillio, Emcore Photovoltaics
John Douglas, Aerospace Industries Association
Paul Kaminski, Technovation
John Klineberg, Consultant
Lon Levin, SkySeven Ventures
Tom Marsh, Lockheed Martin, retired
Tom Moorman, Booz, Allen Hamilton
J.R. Thompson, Orbital Sciences
John Tilelli, Cypress International
Robert Walker, Wexler & Walker Public Policy Associates
Our task was as follows:
1) Review previous and ongoing studies on export-
controls and the U.S. space-industrial base and 2) assess the
health of the U.S. space-industrial base and determine if there
is any adverse impact from export controls, particularly on the
lower-tier contractors.
Review the results of the economic survey of the U.S.
space industrial base conducted by the Department of Commerce
and analyzed by the Air Force Research Laboratory (AFRL).
Integrate the findings of the study group with the
result of the AFRL/Department of Commerce survey to determine
overall conclusions and recommendations regarding the impact of
export controls on the U.S. space-industrial base.
The methodology we used to meet this task was:
Leverage a broad set of interviews and data from:
the U.S. Government
Department of State, Department of
Defense (OSD/Policy, OSD/AT&L, DTSA, STRATCOM,
General Council(??)), NRO, Department of
Commerce, NASA, FAA, and GAO
the U.S. Congress
Foreign Governments and agencies (Asia and Europe)
U.S. industry
Boeing, Lockheed Martin, Northrop
Grumman, ATK, Moog, Swales, GeoEye and SES
Americom
Other experts
IDA, Aerospace Corporation, Booz
Allen Hamilton, Satellite Industry Association,
Space Foundation, U.S. Chamber of Commerce,
CSIS, and Aviation Week
Leverage the comprehensive survey of space-industrial
base undertaken by AFRL/Department of Commerce
In doing this study, we were guided by the following set of
principles:
Space is critically important to U.S. national
security
Global leadership in space is a national imperative
Similarly, sustaining technological superiority in
space is a U.S. national interest
Given the interdependence between the defense,
intelligence, civil and commercial sectors of space, U.S.
leadership in all four is important
A strong space-industrial base is important
A prudent export control policy is necessary to
control sensitive technologies, and
The U.S. must have unimpeded access to the
technologies (global and domestic) needed for national space
systems
Mr. Chairman and distinguished Members of the Committee, the
Working Group recognizes that the United States must have export
controls that protect technologies critical to our national security
and maximize the opportunity to maintain our leadership in critical
areas. However, it was the overarching conclusion of our study that our
current export controls have had an adverse impact on our national
security, a negative impact on our industrial base, most particularly
at the second and third tiers of the industry, and has complicated the
relationships necessary for mutually-beneficial, international
cooperative endeavors.
It is our view though that all of the deficiencies in our export
control processes can be corrected without an adverse impact on our
national security. It is also our view that correcting these
deficiencies will have a positive impact on our national security.
We found not only that the intent of current export controls was
not being realized, but it was also having an adverse impact on the
health of the space-industrial base. Specifically, we are controlling
technologies that are not critical to our national security and are
readily available in the global marketplace. Most obvious are
commercial communications satellite systems that are a widely available
commodity today. There are clearly others, such as some aspects of
weather satellites. The result of this over-control is that our space
industry loses international sales; other countries conclude it is more
advantageous to develop indigenous capabilities rather than be subject
to our export control requirements; and countries that throughout the
space age have been our partners in space exploration no longer
consider the U.S. the partner of choice.
Instead of maintaining our leadership, this over-control has been a
catalyst for other nations to develop their own capabilities. An
example is India. Clearly, U.S. export controls have been a motivation
for their current most impressive development of a comprehensive
national space program. In the last decade, the space community has
grown from a very exclusive Club X into a very broad array of countries
with substantial space capabilities. As an example, a dozen nations are
able to launch their own satellites, and 38 countries have operational
control over their own communications satellites. Although this
expansion of space capabilities would have eventually occurred, U.S.
export controls have caused it to accelerate to the degree that today,
the U.S. does not control its proliferation, and U.S. preeminence in
space is under challenge in many areas. Other unintended consequences
of our over-control are that we have become insular, meaning we are not
a full player in international space, and consequently we have somewhat
diminished our access to foreign innovation and human capital.
Our report presents 13 findings and nine recommendations, which are
summarized below.
Finding 1: Overall financial health of the top-tier manufacturers in
the space industrial base is ``good,'' but there are areas of concern
within the broader health of the industry.
Finding 2: As earlier studies have documented, the ability of the
government and industry to meet program-execution commitments remains
inadequate.
Finding 3: The U.S. space-industrial base is largely dependent on the
U.S. defense/national security budget.
Finding 4: There are rapidly emerging foreign space capabilities, and
the U.S. does not control their proliferation.
Finding 5: U.S. preeminence in space is under challenge in many areas.
Finding 6: The current export-control policy has not prevented the rise
of foreign space capabilities and in some cases has encouraged it
(International Traffic in Arms Regulations (ITAR)-free space products).
Finding 7: U.S. leadership in space benefits significantly from access
to foreign innovation and human capital. That access is becoming
increasingly difficult.
Finding 8: The current export control policy is constricting U.S.
engagement and partnership with the rest of the global space community
and is feeding a growing separation between the U.S. space community
and an emerging, non-U.S. space community.
Finding 9: Some elements of the export-control laws are in conflict
with the U.S. National Space Policy, which has as one of its goals to
``encourage international cooperation with foreign nations on space
activities that are of mutual benefit'' and states that ``space-related
exports that are currently available or are planned to be available in
the global marketplace shall be considered favorably.''
Finding 10: The U.S. share of the global space markets is steadily
declining, and U.S. companies are finding it increasingly difficult to
participate in foreign space markets.
Finding 11: Export controls are adversely affecting U.S. companies'
ability to compete for foreign space business, particularly the second
and third tiers. And it is the second and third tiers of industry that
is the source of much innovation, and is normally the most engaged in
the global marketplace in the aerospace/defense sector.
Finding 12: A U.S. export-control policy that protects sensitive
security space capabilities is important.
Finding 13: There is unanimous agreement that the export-control
process can be improved without adversely affecting national security.
Working Group Recommendations
1. The Administration and Congress should review and reconcile
the strategic intent of space export controls.
2. Critical space technologies should be identified and should
remain on the Munitions List and under the State Department
ITAR process.
3. Remove from the Munitions List commercial communications
satellite systems, dedicated subsystems, and components
specifically designed for commercial use; provide safeguards by
having the Department of Defense identify critical space
components and technologies that should always require
licensing and referral. Have the appropriate Executive branch
departments conduct a study to see if other space technologies
should be removed from the Munitions List (e.g., weather
satellites).
4. Annually review the appropriateness of designating specific
satellite and other space systems, components, and capabilities
as Munitions List items based on criticality of items and on
their availability outside the U.S.
5. Additionally, Congress could amend the legislation related
to satellite export licensing and adopt some of the best
practices being used in other processes--set timelines,
technology thresholds, de minimus rules, and special licensing
vehicles.
6. The Secretary of Defense and NASA Administrator, in
addition to the Secretary of State, should have the authority
to grant real-time, case-by-case, specific time period
exemptions for anomaly resolutions deemed to be in the national
interest based on criteria from the National Space Policy.
7. Create a special program authority to permit timely
engagement of U.S. participants in multinational space
projects.
8. Increase the dollar threshold for satellite exports,
increase Congressional notification and establish a mechanism
to enable the threshold to adjust with inflation.
9. Relevant space-related government agencies should
collaboratively undertake an annual assessment of their
industrial base.
Mr. Chairman, I have attached a copy of the Working Group's full
report [see Appendix 2: Additional Material for the Record] and I look
forward to your questions.
Biography for A. Thomas Young
Mr. Young retired from Lockheed Martin Corp. in 1995 after having
served as an executive vice president from March 1995 to July 1995.
Prior to its merger with Lockheed Corporation, Young served as the
President and Chief Operating Officer of Martin Marietta Corp. from
1990 to 1995.
Mr. Young is on the Board of Directors of the Goodrich Corporation
and Science Applications International Corporation.
Chair Gordon. Thank you. Professor Canizares.
STATEMENT OF DR. CLAUDE R. CANIZARES, VICE PRESIDENT FOR
RESEARCH AND ASSOCIATE PROVOST, BRUNO ROSSI PROFESSOR OF
PHYSICS, MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Dr. Canizares. Thank you, Mr. Chair, Mr. Hall, and
distinguished Members. I greatly appreciate the opportunity to
appear before you today.
Allow me to begin by quoting one sentence: ``The strength
of American science requires a research environment conducive
to creativity, an environment in which the free exchange of
ideas is a vital component.''
This sentence comes from President Ronald Reagan's National
Security Decision Directive NSDD-189 which establishes as
national policy, and I quote, ``that, to the maximum extent
possible, the products of fundamental research remain
unrestricted.'' Promulgated in 1985 and still in force today,
the directive provides the basis for the so-called Fundamental
Research Exclusion that is embodied in current export control
regulations.
Our report described by General Scowcroft, Beyond Fortress
America, finds that freedom of scientific inquiry and the free
exchange of technical information are even much more important
now than they were in 1985. He alluded to this, and I will cite
four reasons.
First, whatever dominance we might have enjoyed in our
scientific leadership in 1985, we are now clearly one among
many international players in nearly every technical field.
Second, even within our borders, a significant fraction of
our scientific and engineering workforce is international. By
the year 2000, nearly a quarter of the science and engineering
workers in the U.S. were foreign nationals. I imagine it was
considerably higher today. Two-thirds of the post-doctoral
researchers in the United States are international.
Third, thanks to the Internet, both the pace of scientific
communications is now instantaneous and geography is global.
The Internet does not have national boundaries.
And fourth, in the present national security and economic
climate, a vigorous and innovative research community is more
much important than ever. Universities are the prime performers
of basic research in the U.S., and they are also the source of
our future scientific and technical workforce, both of which
are essential for both national security and for economic
prosperity of our country.
As one measure of economic impact from my own institution,
MIT, a Kauffman Foundation report released just last week
estimates that approximately 26,000 currently active companies
were founded by MIT alumni employing over three million workers
with annual world revenues over $2 trillion.
For universities, the primary area of concern regarding
export controls involves restrictions on the sharing of
technical information about controlled items with non-U.S.
persons within the United States often referred to as deemed
exports. The scope of regulated technologies is broad and
includes many that are available outside the U.S. as my
colleagues have already mentioned.
Despite a Presidential directive protecting fundamental
research, export controls continue to inhibit, retard or
eliminate university research projects, and there are hundreds
of stories of sand in the gears because of export controls.
While several positive actions have been taken in recent
years by the Department of Commerce and the Department of
Defense, our report suggests that a more systematic and
fundamental change is required, to move from a philosophy of
containment and retrenchment to one of prudent engagement.
Specifically, the report recommends as General Scowcroft has
mentioned, this Fundamental Research Exemption be maintained
but also that it be properly implemented which has not always
been the case.
We also recommend an Economic Competitiveness Exemption and
the adjustment of visa policies to access the reservoir of
human talent in science and technology.
Because you asked, Mr. Chair, for specific recommendation
for this committee, allow me personally to respectfully suggest
that this committee, through its oversight of key science
agencies, could play a very important role by endorsing the
change in philosophy that was recommended in our report as well
as the detailed recommendations and by maintaining that each
federal agency under your oversight must implement a plan and
periodically report how it is addressing these issues.
Thank you for your attention.
[The prepared statement of Dr. Canizares follows:]
Prepared Statement of Claude R. Canizares
Mr. Chairman and distinguished Members, thank you for taking up
this very important topic and for your invitation. I am honored to be
sitting with two very distinguished co-panelists, Gen. Scowcroft and
Mr. Young.
I am Vice President for Research at MIT and a space scientist. For
over 35 years I have designed, built and used space instrumentation for
scientific research. Although I represent the university community on
this panel, I also have experience with matters of national security. I
have served on the Scientific Advisory Board of the U.S. Air Force, and
I currently oversee MIT's Lincoln Laboratory, a facility that does
classified national security research. I am also a Director of L-3
Communications, a Fortune 200 corporation. And I was privileged to
contribute to the recently released National Academies' report ``Beyond
Fortress America,'' summarized by Gen. Scowcroft. My testimony is based
in part on that report.
Allow me to begin by quoting one sentence: ``The strength of
American science requires a research environment conducive to
creativity, an environment in which the free exchange of ideas is a
vital component.'' [National Security Decision Directive 189, 1985]
This sentence comes from President Ronald Reagan's National
Security Decision Directive 189. NSDD 189 establishes as national
policy ``that, to the maximum extent possible, the products of
fundamental research remain unrestricted.''
Reagan's NSDD 189 was promulgated in 1985, reaffirmed in 2001, and
is still in force today. It provides the basis for the so-called
Fundamental Research Exclusion embodied in current export control
regulations in order to protect the enormous benefits derived from the
``free exchange of ideas.''
Our report finds that freedom of scientific inquiry and the free
exchange of technical information are even much more important now than
they were over 20 years ago when President Reagan signed his directive.
Let me cite four points:
First, whatever dominance we might have enjoyed in our scientific
leadership in 1985, we are now one among many international players in
nearly every technical field. In my own discipline of physics, both the
world's biggest fusion energy facility, ITER, and the most powerful
particle accelerator, the Large Hadron Collider, are located abroad. In
our own, U.S. Physics journals in 2006, 70 percent of the publications
now come from international authors--ten years ago it was 50 percent.
In 2006 international inventors accounted for one half of the patents
filed with the U.S. Patent Office [Beyond Fortress America, p. 30]. No
doubt both figures are higher now.
Second, even within our borders, a significant fraction of our
scientific and engineering workforce comes from overseas. ``The
percentage of science and engineering workers in the U.S. who are
foreign nationals increased from 14 percent to 22 percent from 1990-
2000. In 2006 more than half the doctorate-level graduating engineers
in the United States were foreign-born, as were 45 percent of the Ph.D.
recipients in the physical sciences, computer sciences, and life
sciences'' [Beyond Fortress America, p. 34].
Universities, like MIT, are international melting pots. Roughly
one-third of MIT's current faculty were born outside the U.S. Forty
percent of MIT's 6,000 graduate students are international, and each
year approximately 1,600 international scholars bring their skills to
MIT.
Third, thanks to the Internet, both the pace and geography of
scientific communications have exploded since 1985--the pace is now
instantaneous and the geography is global. This rapid and pervasive
interchange of ideas and innovation fuels remarkable advances. For
example, the information technology revolution of the 1990's was a
significant factor in fueling a remarkable three percent annual growth
in U.S. productivity.
My fourth point is to suggest that, in the present national
security and economic climate, a vigorous and innovative research
community is more important than ever.
Universities are the primary performers of basic research in the
U.S., and they are also the source of our future scientific and
technical workforce. This human and intellectual capital is essential
contributors to the national security and economic prosperity of the
United States.
As a measure of economic impact, MIT research results in roughly
125 licenses for new technology and spawns 20-25 new start-up companies
each year. A great many more companies, nearly 1,000, are founded each
year by MIT alumni. A Kauffman Foundation report on MIT
Entrepreneurship released last week gives a conservative estimate that
if a nation were formed from the active companies founded by MIT
alumni, it would have the 17th largest economy in the world. The real
number is plausibly higher: 26,000 MIT alumni-founded companies
employing over three million workers with annual world revenues over $2
trillion, comparable to the 11th largest Nation's economy.
Interestingly, half the companies formed by our non-U.S.-citizen alumni
are located in the U.S., employing over 100,000 people [Roberts &
Eesley, Entrepreneurial Impact: The Role of MIT, Kauffman Foundation,
2009]. Nationwide, roughly two-thirds of internationals receiving
Ph.D.s in the U.S. stay in our country [Nature Vol. 457, p. 522, 2009].
For universities, the primary area of concern regarding export
controls involves restrictions on the sharing of technical data and
information about controlled items with non-U.S. persons within the
U.S. or abroad. These are often referred to as ``deemed exports.''
There has always been considerable ambiguity around how or when NSDD
189's protection of fundamental research applies and whether--despite
clear language to that effect in NSDD 189--it covers the conduct as
well as the products of research. Moreover, because the exclusion
applies to universities, it does not facilitate interactions between
universities and industry or national laboratories.
So, despite a Presidential directive protecting fundamental
research, export controls continue to inhibit, retard or eliminate
research projects that do not involve militarily relevant technology.
Just last year one MIT research group abandoned a fruitful
international space astronomy mission because of export-control
impediments. The foreign partners are proceeding with out us, thereby
leaving us out of the advances in science and technology they will be
making on their own. Many more projects have been delayed by many
months as control issues are sorted out. One colleague, leader of a
major NASA mission, had to wait 18 months for a Technical Assistance
Agreement so her French graduate student could access Mars data from a
NASA computer system. There are hundreds of such stories of ``sand in
the gears'' from export controls [e.g., see Space Science and the
International Traffic in Arms Regulations: A Workshop, National
Academies Press, 2008; The Deemed Export Rule in the Era of
Globalization, Department of Commerce, 2007; Science and Security in a
Post 9/11 World, National Academies Press 2007].
A major difficulty is the broad scope of the export control
regulations. For example, the State Department controls virtually all
spacecraft systems, associated equipment and data, regardless of their
actual military utility. And both State and Commerce often control
technologies that are widely available outside the U.S. For many
categories of the Commerce Control List, one-third to one-half of the
items are controlled only by the U.S. [Beyond Fortress America, p. 34,
p. 86]. And most importantly, none of the other countries has a
provision comparable to our deemed export regulation [The Deemed Export
Rule in the Era of Globalization, Department of Commerce, 2007, p. 6].
Several positive actions have been taken in recent years. The
Department of Commerce formed the Deemed Export Advisory Committee
(DEAC) and the Emerging Technology and Research Advisory Committee
(ETRAC), on which I serve. And last June, Undersecretary of Defense
John Young reaffirmed the fundamental research exclusion in DOD
sponsored activities. But when I recently asked a senior Pentagon
official if the John Young letter was having an effect, he replied that
it was ``too soon to tell.''
Our report suggests that a more systematic and fundamental change
is required, to move from a philosophy of containment and retrenchment
to one of prudent engagement.
As Gen. Scowcroft describes, Beyond Fortress America recommends
maintenance and proper implementation of the Fundamental Research
Exemption. Proper implementation is critical, as numerous forces
continue to eviscerate the spirit and letter of Reagan's NSDD 189. We
also recommend the creation of an Economic Competitiveness Exemption to
eliminate controls on dual-use technologies that are readily available
outside the U.S. And we recommend steps for adjusting visa policies
that will enhance our access to the reservoir of human talent in
science and technology from foreign sources.
Your invitation, Mr. Chairman, asked me what your committee might
do to address the negative effects of export controls. Allow me to
respectfully suggest that this committee, through its oversight of key
science agencies, could play a very important role by endorsing the
change in philosophy as well as the detailed recommendations in our
report, and by mandating that each federal agency under your oversight
must formulate, implement a plan to carry them out and report to you on
its progress.
Thank you for your attention.
Biography for Claude R. Canizares
Professor Canizares is the Vice President for Research and
Associate Provost and the Bruno Rossi Professor of Physics at MIT. He
has overall responsibility for research activity and policy at the
Institute. He oversees more than a dozen interdisciplinary research
laboratories and centers, including the MIT Lincoln Laboratory, the
Broad Institute, the Plasma Science and Fusion Center, the Research
Laboratory of Electronics, the Institute for Soldier Nanotechnology,
the Singapore-MIT Alliance for Research & Technology, the Francis
Bitter Magnet Laboratory,the Haystack Observatory and the Division of
Health Sciences and Technology. The Technology Licensing Office, the
International Scholars Office and the Division of Comparative Medicine,
among others, report to Professor Canizares. He also has policy
oversight for the Office of Sponsored Programs. In addition, Professor
Canizares is a member of several MIT committees: Academic Council and
the Academic Appointments committee, the Committee for Renovation and
Space Planning, the Conflict of Interest Management Group, and the
Research Policy Committee.
Professor Canizares earned his BA, MA and Ph.D. in physics from
Harvard University. He came to MIT as a postdoctoral fellow in the
Physics Department in 1971 and joined the faculty as an Assistant
Professor of Physics in 1974. He progressed to an Associate Professor
of Physics in 1978, to a Professor of Physics in 1984, and to his
current position as the Bruno Rossi Professor of Experimental Physics
in 1997. From 1988 to 1992 he was the Head of the Astrophysics Division
in the Physics Department; from 1990 to 2002 he was the Director of the
Center for Space Research (since named the Kavli Institute for
Astrophysics and Space Research); and from 2001 to 2006 he was
Associate Provost. Professor Canizares is currently the Associate
Director of the Chandra X-ray Observatory Center and a principal
investigator on NASA's Chandra X-ray Observatory, having led the
development of the Chandra High Resolution Transmission Grating
Spectrometer. He has also worked on several other space astronomy
missions, including as Co-investigator on the Einstein Observatory
(HEAO-2). Professor Canizares' main research interests are high
resolution x-ray spectroscopy and plasma diagnostics of supernova
remnants and clusters of galaxies, X-ray studies of dark matter, X-ray
properties of quasars and active galactic nuclei, and observational
cosmology. He is author or co-author of more than 218 scientific
papers.
His service outside MIT includes the Department of Commerce's
Emerging Technology and Research Advisory Committee and the National
Research Council (NRC) committees on Science Engineering and Public
Policy and on Science Communication and National Security. His past
service includes the National Academy of Sciences Governing Council,
the Air Force Scientific Advisory Board, the NASA Advisory Council,
chair of the Space Studies Board of the NRC and of NASA's Space Science
Advisory Committee. He is a member of the of L-3 Communications, Inc.,
Board of Directors and he served on the Board of Trustees of the
Associated Universities Inc. Professor Canizares is a member of the
National Academy of Sciences and the International Academy of
Astronautics and is a fellow of the American Academy of Arts &
Sciences, the American Physical Society, and the American Association
for the Advancement of Science. Professor Canizares has also received
several awards including decoration for Meritorious Civilian Service to
the United States Air Force, a NASA Public Service Medal for his
service to the NASA Advisory Council, a NASA Public Service Medal for
his contributions to the Chandra X-ray Observatory, and the Goddard
Medal of the American Astronautical Society.
Chair Gordon. Thank you, sir. General Dickman.
STATEMENT OF MAJOR GENERAL ROBERT S. DICKMAN, EXECUTIVE
DIRECTOR, AMERICAN INSTITUTE OF AERONAUTICS AND ASTRONAUTICS
Major General Dickman. Mr. Chair, Mr. Hall, Members of the
Committee, I thank you for the opportunity to be with you today
to represent our members as we address this extremely important
issue.
Each year many of AIAA's 30,000 professional and 6,000
student members visit the Congress to express our views on
issues important to the aerospace profession. Last year for the
first time the subject of export controls had become such an
important concern to our individual members that it was on our
key issue list, along with such topics as the overall level of
R&D funding and creating an integrated aerospace workforce
development strategy. It is again on the list that we will
address when we are back for our 2009 visit three weeks from
today.
My words about whom I represent are carefully chosen.
General Scowcroft, Mr. Young, and Dr. Canizares have drawn an
enormous amount of information from government, industry and
academic sources. There is little I can add to what they say,
but what I do have to add reflects the views expressed by
aerospace professionals. AIAA is the largest technical society
in the world serving the global aerospace workforce. The vast
majority of our members are scientists and engineers who are
involved day to day in designing, developing, and building the
miraculous systems that fly in air and space, serving
commercial travelers, scientific research and national
security. Export controls are a major concern to this
workforce.
Almost continually since the dawn of man's space flight and
certainly shortly after the beginning of the space age, the
United States has enjoyed global technological leadership in
air and space systems. Even today in many areas of space
capabilities, our competencies are unmatched. However, as you
have heard, that leadership is being challenged in many areas
and has been lost in some. There isn't a single class of space
systems, launch vehicles, imaging and signals intelligence
collection, position navigation and timing, mobile and fixed
communications, environmental sensing, tactical warning, and
even space tourism where there isn't a qualified foreign
competitor. All of these systems have national security
implications, and all are available for purchase on the global
market.
Not only are there competitors, one of the attributes often
touted by foreign suppliers is that they have no U.S.
components. They don't phrase it quite that way, though. What
they say is they are ITAR free. Our arms control regulations as
applied to space systems not only have failed to meet the goals
of slowing proliferation of technologies with national security
application, they fostered the international development of
comparable technologies and severely impacted the ability of
U.S. firms to sell commercial products on the world market.
Each year AIAA administers about 25 technical conferences
across the whole spectrum of aerospace. In 2008 over 5,300
technical papers were published in our conference proceedings.
Every one of these conferences has a requirement, that all
papers comply with ITAR. How much collaboration, how much
information wasn't exchanged because of that limitation? On the
one hand you could say that the authors were appropriately
protecting information important to our national security, and
in many cases, I am sure that was correct. On the other hand,
we also weren't getting insight into what is being done
overseas. When our companies can't sell to overseas
manufacturers, we will lose understanding of what else is in
those foreign systems. When a company or individual is
reluctant to even discuss the design of a simple commercial
component in a spacecraft and enter into technical dialogue
with an international colleague because of the very real
criminal penalties associated with ITAR, we lose a source of
information that simply isn't available any other way.
As you have heard, our export policies also ripple directly
into the workforce, into our ability to hire foreign nationals
to work on U.S. space systems. Let there be no doubt that these
individuals are still receiving the best aerospace education in
the world at universities around the United States, including
that of my distinguished colleague. However, unlike several
decades ago when many of the best and brightest stayed in the
United States because the work was more interesting and
compensation was better, now most have no choice but to return
home. We will train them, but we can't put them to work on our
most challenging problems, not while they are graduate students
and not while they can enter the workforce later, either. In a
very real sense, we the American taxpayer, are subsidizing the
development of a technical workforce that is building the
systems that are taking business away from U.S. companies and
threatening our security.
I am not an advocate for protectionist policies. However,
we obviously should restrict access to technologies, software
and hardware, that are critical to national security. On the
other hand, I think we are doing far more harm than good with a
blanket approach to export control to space systems that is in
place today.
We at AIAA know this is a busy time for the Congress, and
we appreciate you holding this hearing. We look forward to your
questions and offer our help in any way we can serve.
[The prepared statement of Major General Dickman follows:]
Prepared Statement of Major General Robert S. Dickman
Chairman Gordon, Representative Hall, Members of the Committee, I
want to thank you for this opportunity to address this extremely
important issue today. This is a timely and necessary discussion, and I
applaud your willingness to address the topic.
U.S. trade and visa policies put in place to provide additional
layers of national security are having severe and long-term effects on
advanced systems technology sectors and the professional workforce that
serve them. As a result industries are faltering, innovation is
stifled, competencies are withering, and the technology workforce is
becoming less competitive in the global marketplace.
As Executive Director of the American Institute of Aeronautics and
Astronautics, I represent a constituency of nearly 30,000 aerospace
professionals, located in all fifty states and in 80 countries
internationally. These are the men and women who are ``in the
trenches'' and see first hand everyday the effects of export controls
policies and International Trafficking in Arms Restrictions (ITAR).
This is an area of great concern for our members.
I also sit before you as a retired military officer with 37 years
of service to our nation and am deeply committed to its security. I
have seen the effects that these policies have had from the
acquisitions side as well. I understand the need to protect our current
advantages in capabilities.
We all understand the reasons why our export control policies were
put in place. We have enjoyed technical superiority from decades of
investment in education and RDT&E, and from producing and attracting
generations of the best intellectual talent pool the world has ever
seen. To maintain that superiority, these policies were established to
insulate our advantages from the rest of the world, and specifically
from regimes that maintain a different and adversarial world view from
our own.
However, we need to make a realistic evaluation of how these
policies are being implemented, and what effects they are having. We
need to be willing to act if these policies are falling short, if these
policies have become detrimental to our goals. Today, the reality is
that these policies are counterproductive to their stated objectives.
We need to begin corrective steps so that we do not continue to
exacerbate the crisis the current policies have created that are
actually harming our national security as key vendors in our technology
sectors go out of business due to lack of export opportunities thus
denying us the very technology we are trying to protect. We need to
make certain that we develop and implement integrated policies and
holistic strategies that enable us to remain technologically superior
to threats against our national security, embrace participation in the
international science community, and regain competitiveness in the
global marketplace.
There are things we can begin to do in the current regimen that
will reestablish some faith in the system and that will enable us to
adapt rather than start from scratch with an entirely new set of
policies. At the very least this will enable us to correct some of the
more detrimental aspects of the current policy while developing the
next generation of export policies.
As a point of departure, we need to reevaluate the technologies and
their components listed that we believe provide us with a distinct
advantage in the national security arena. This needs to be done on a
regular basis so that the list can keep up with changes and advances in
technologies and capabilities. One problem with the current lists is
that they have not been examined comprehensively since their inception.
What we now have are broad lists of components with little rationale
for why many of these items were originally restricted and whether that
rationale is still correct. There is also a lack of explanation for how
a component is evaluated for export release and how decisions are made
in the certification process. It is frustrating to both venders and
purchasers to have so many unknowns up-front in the process.
Recommendation 1 in the National Academies' ``Fortress America''
report focuses on balancing interests and objectives. Several of the
action items included in the recommendation revolve around this idea of
evaluating the components on the lists, individually justifying
inclusion both on a basis of what makes the item unique in capability
and in what way its export would present a substantial national
security risk. In other words, technologies and components would be
restricted from export on a ``by exemption'' basis, rather than the
current approval for export on an individual basis. This recommendation
also stresses the need to regularly examine these lists, and goes so
far as to recommend ``sunsetting'' the list and starting over as often
as every 12 months.
At AIAA, we are performing an independent evaluation of satellite
components similar to the suggestions in the ``Fortress America''
report. We have drawn on subject matter experts for this evaluation,
and have created a process to analyze components based on several
criteria. Our objective is to produce a survey, and a well-developed
process that will be helpful in developing a regular evaluation of
listed components.
The first step is to re-evaluate whether these components are truly
commercial use, dual use, or exclusively military use. This will mean
developing a definition of what each of these categories involves, and
then providing a compelling national interest for listing components
within these categories. I think we would all agree that those
components that fall into that last category should remain restricted,
and a number of the components that fall into that second category
should also remain restricted. A major part of the problem today is
that many dual-use items with little or no unique military value are
controlled. However, because the state-of-the-art changes, and the
evolution of the commercial marketplace, we must continually re-
evaluate whether each component remains correctly categorized. This is
really a process that should take place within the national security
community as an honest discussion, not a protectionist blanket.
Second, we need to examine whether the manufacturing capacity,
either domestic or foreign, offers some strategic advantage. By this I
mean we should examine whether the ability to produce a component or
system provides some military advantage, and then determine which other
nations have that capability. This is to provide a criterion for
determining whether the ability to produce a particular component
merits greater security restrictions than would just the capabilities
of that component.
These first two steps should help us to narrow the list of
components that are subject to the third step, which is to evaluate the
performance of those components on this shortened list, and compare
them to the capabilities of foreign manufacturers. In some of the
recent reports and studies on this issue some examples have been
provided of foreign technology far out-pacing its U.S. counterpart and
have revealed the absurdity of applying ITAR restrictions unilaterally
on all satellite components. These include instances where the
performance of multiple foreign designed and manufactured components'
performance exceed the capabilities of the U.S. equivalent, and are
readily available in the global marketplace. However, while the U.S.
product may enjoy some economically competitive advantages such as
costs associated with the manufacturing process, the U.S. product is
put at a disadvantage in this marketplace because it remains subject to
ITAR and the export control licensing process. The ``Fortress America''
report well describes this in the following terms: ``(t)he artificial
limitations on trade imposed by lists of controlled technologies have
had predictable results with respect to the U.S. position in global
markets. With U.S. companies prevented by export controls from
competing in certain markets, foreign competitors . . . spring to fill
these competitive gaps. As these competitors have proliferated, U.S.
companies have suffered challenges in the marketplace that would not
have been present but for export controls.''
Fourth, we need to evaluate the trends in capabilities of foreign
components. While we may still maintain the state-of-the-art
capabilities, we need to examine how far equivalent components'
capabilities have come and project when we may expect those
capabilities to surpass our own.
I understand that there are practical constraints that limit this
process. I know that the licensing office within the Department of
State has been streamlined, and that they have become much more
efficient in processing licensing applications. However, they are still
limited in the human capital available to perform these evaluations,
and I understand it would be placing an unrealistic burden upon that
staff to complete periodic comprehensive evaluations of the components
that they may not possess the expertise to perform, and while still
maintaining their workload. To make the problem manageable, the list
must be shortened carefully but quickly. I also believe that the
Directorate of Defense Trade Controls can be instrumental in working
with policy-makers to develop a defined standard that is used in the
evaluation of applications, and I do think that it would be very
helpful for both the venders and the purchasers to understand the
standard when assessing the utility of moving forward with a licensing
application.
CONCLUSION
There are some encouraging signs. Just five years ago nobody was
having this conversation in the public forum even though the problem
clearly existed. Our policy-makers did not seem ready to accept the
realities of the effects of current export control policies, and they
certainly did not want to open up the possibility of loosening
restrictions on sensitive technologies during these uncertain and
unsettling times. Industry leaders were concerned with drawing further
scrutiny on their applications, were reluctant to be seen as badgering
their largest customer, the U.S. Government, and were frankly timid on
this issue because they did not want to be accused of putting their
bottom line before national security. Now, however, there is widespread
agreement that the time has come to fully address these issues, and I
believe this is in large part attributable to these studies that have
been mentioned, as well as other reports that have also discussed the
direct decline in national security caused by these and other
restrictive national policies on export of technologies.
The effects we are seeing are troubling. It is a multi-faceted
issue, and the current state in each of these areas is alarming. Early
on, we noticed the economic impacts of ITAR and export controls. The
belief at the time was that we should endure the economic costs to
preserve national security. Nobody can fault the philosophy of putting
national security before economics. However, this is clearly a
situation where it was not an either/or dynamic. The policies that we
have put in place are having severe impacts on both.
In recent years, this committee has focused on America's ability to
compete as the world continues its transformation into the information
age. How we approach educating and developing our workforce is just as
important as the approach we take to global trade. We need to increase
and improve our investments into RDT&E to ensure that these programs
continue to attract the best minds, capture the imagination and
creativity of the next generation, and provide the technological return
on investment that we are enjoying by the foresight put in our
investments in these areas 20 to 30 years ago and longer.
While these are not irreversible trends, further inaction will put
us dangerously close to the point were it may well be. Our course
moving forward must be proactive. We must change the process and the
philosophy that we used in restricting technology sales. We should look
beyond technology restrictions, and improve the intellectual discourse
in R&D in our universities, our industry programs, and our federal
research facilities. We should focus on preparing the next generation
workforce to compete in advanced technology industry. This includes
loosening visa constraints, and encouraging the worlds' brightest minds
to come to the U.S. We must also be willing to make long-term
investments in R&D and the infrastructure that supports it.
QUESTIONS POSED BY THE HOUSE COMMITTEE ON SCIENCE AND TECHNOLOGY
1. What are the implications and unintended consequences of current
export control policies and regulations on U.S. science and technology
competitiveness, including its space research activities?
I believe some of the more obvious include the reverse ``brain
drain,'' the loss of institutional knowledge, the stifling of
industrial advantages and entrepreneurial success, and the
strengthening of foreign industrial competitors with the direct
reduction in our own industrial capacity. For example, I think you are
also seeing U.S. industrial space research become even more risk averse
because of the reduction of profit margins for
U.S. technologies caused by the increased competition and reduction
of foreign markets for U.S. products.
In 2008, the Center for Strategic and International Studies
released Health of the U.S. Space Industrial Base and the Impact of
Export Controls, which reported the findings of a study specifically
focused on this topic. I know Tom Young co-chaired this study. That
working group did an outstanding job of examining the many implications
that export controls have had on the space industry. The conclusions of
this study were startling. The study also identified seven principles,
or truths about the role of space science and technology, and the
national space industrial base as they apply to our national security.
This committee, the Congress and the Administration must consider
what is happening to the U.S. industrial base and look at it from more
than the economic perspective, which in itself have been detrimental.
It really needs to be viewed from a more inclusive holistic view of our
national security perspective. Do our export control policies help or
hinder our ability to design and build the capabilities that we would
need to defend ourselves, no matter the adversary?
I think it is important that our national security goals should
also ensure a robust and sustainable aerospace sciences, technology,
and industrial base. When you examine those principles defined in the
CSIS study, you cannot help but to realize how imperative this point
is. We must stop looking at these issues from a standpoint of what it
will cost, or what we will lose control of. Instead, it must become a
matter of what it will cost to not to take bold action, and what will
we have left to maintain.
Whether we are talking about creating this change of course in
months, or over the next several years, the one thing that is clear is
that it serves us no good to do this piecemeal. There has to be some
real strategy with a defined intended outcome.
2. The National Academies recently issued a report, Beyond ``Fortress
America'': National Security Controls on Science and Technology in a
Globalized World. To what extent would action on the report's
recommendations help mitigate the unintended consequences of export
controls on trade, and research and education, including space
research?
I don't want to go into a long discussion about visa policy since
that is not the focus of this hearing. However, that is a conversation
this committee needs to continue having. I bring it up because of the
influence of these federal policies on foreign technology professionals
and the adverse effects these policies have had on our science and
engineering research base. I sincerely believe that for changes to
either technology or the human capital associated with technology to be
successful, you must also make modifications to the both. The 2007
National Academies report, Rising Above the Gathering Storm, that study
group made several recommendations to improve national visa policy that
would increase the flow of intellectual talent coming to and remaining
in the U.S. to train, work, and teach. If we are going to regain our
role as the recognized leader in research and development then we must
reverse the barriers to foreign technology professionals thriving in
the U.S. to create the advantage of the international ``brain drain''
from overseas that we enjoyed from the 1940s through the 1970s.
In Recommendation 3 of the ``Fortress America'' report, the authors
specified action items that mirror those earlier recommendations from
the Gathering Storm report. We need to provide the opportunities for
foreign talent to come and stay in the U.S. as part of our R&D
strategy, and we must ensure that there is a pathway for them to enter
and remain to take advantage of these opportunities.
I believe the recommendations in this report to be sound, and a
good foundation for the fundamental changes that we must adopt if the
U.S. is to remain competitive. As I mentioned earlier, I believe that
the correct approach will consist of adopting changes in several areas
of federal policy including trade, RDT&E investment, and visa policies.
That approach must be integrated, and we must be willing to make long-
term investments of time and funding to ensure that these policies
bring about those intended objectives for national security and
economic stability. I think we have a lot of supporting documentation,
and the real task before us is incorporating many of these
recommendations into a cohesive comprehensive strategy.
3. In your view, what are the most critical issues regarding the
export control system that the Committee on Science and Technology
should consider as part of its oversight responsibilities for the
Nation's civil and commercial space programs? What actions, if any,
would you expect the Committee to take?
I realize there are limitations due to oversight jurisdictions
placed on this committee and by jurisdiction given to other
congressional committees, and that not all of the changes that are
needed can originate here. But given the role that this committee fills
and comparing that especially to ``Fortress America,'' but also with
the Rising Above the Gathering Storm report, I would recommend starting
in four areas. These are not in order of importance, but more in order
with what is practical and can be implemented more rapidly.
First, we need to make certain that we are committed to the ideals
of initiatives such as the America COMPETES Act, and really invest in
our education system and workforce. We need to create and support
programs and facilities that captivate our students at a young age with
hands-on instruction and training, so that we are developing a home-
grown workforce that is enthusiastic and capable in science,
technology, engineering, and mathematics. They will be the foundation
for our nation's ability to compete and excel in an evermore-
competitive global marketplace. We must ensure that future generations
of the U.S. technology workforce are able to sustain and build upon the
advances that our nation has achieved.
Next, I believe this committee can encourage global engagement in
science and technology. We need to once again invest in our research &
test facilities to make them attractive to international collaborators
and researchers. We need to develop policies that allow and encourage
U.S. researchers to talk and share ideas, findings, and recommendations
without a fear of violating U.S. trade policy. We need to make certain
that the U.S. is once again considered a valued and necessary research
partner in international collaborations.
Third, I believe that the Committee can support appropriate changes
to current visa policies to promote access and inclusion of
international students and researchers into U.S. colleges and
universities, industry research programs, and federal research programs
and facilities. This will help us to insure that the talent pool
participating in U.S. research continues to be drawn from among the
brightest in the world, so as to reduce the capable talent available to
foreign competitors, and challenge the perspectives and paradigms of
American-produced scientists and engineers, improving the overall
quality of their research.
Finally, and most directly related to the export control system, I
think the Committee can be instrumental in prescribing a process by
which the Administration can review and update technology and their
components lists on a regular basis, streamline the several lists for
some uniformity, and standardize licensing considerations and
requirements. I agree with the report's recommendation that this needs
to be done with a focus on understanding why items should or should not
continue to be controlled, rather than on adding components to an
increasingly restrictive and misunderstood list.
4. In the absence of any changes to export control policies and
regulations, what is the outlook for the competitiveness of our space
industry, our ability to execute U.S. Government-funded space programs,
and our overall leadership in space over the next five years?
Without a change of course, we will certainly witness dramatic
changes in our competitiveness and level of superiority. We are really
talking about generational effects, well beyond five years.
When the European Union brokered an agreement on aerospace R&D,
European Vision 2020 was designed with the goal of developing an
aerospace sector that would be unrivaled even by the U.S. Their
partnerships and collaborative agreements have allowed Europeans access
to state-of-the-art facilities where world-class research is being
conducted. When this was first brokered, American aerospace executives
believed their hold on aerospace markets to be too great to be
concerned by the Europeans' aspirations. It took a decade from their
original declaration for Airbus to surpass Boeing in annual global
sales.
``ITAR-free'' marketing is designed specifically to compete with
U.S. systems and components with contracts that have much less
regulation, and can be completed in a much shorter timeline. These are
policies developed specifically to make the European manufacturers a
more attractive alternative to U.S. industry and the marketing has been
very successful, even for almost purely commercial products. The effect
has been a dwindling U.S. industrial base largely dependent on
government contracts to keep production lines open.
The policies we have implemented that have sent us on this path
were not established for a five-year course. As we have ceded
superiority in space technologies, we have seen growth of competencies
around the world increase significantly. While it has taken some of
these federal policies 20 and in some cases 40 years to take their real
toll, now that we are at this point, we are now seeing rapid technology
gains around the world and more rapid deterioration within our own
industrial base. Nations and companies no longer need to come to the
U.S. for our knowledge, facilities, or technology because our
restrictions and their own advancing technology. As they continue to
institutionalize their education, research, and manufacturing capacity,
they will gain a greater edge. To be direct, we will be noticeably less
competitive in five years without a change in course and far more so in
ten, 15, 20 years and beyond. The issue is whether the U.S. is willing
to invest in regaining that superiority or whether we will continue to
shield our eyes from this glaring problem, and see our capacity and
capabilities continue to whither.
Biography for Robert S. Dickman
Bob Dickman is the Executive Director of the American Institute of
Aeronautics and Astronautics, a professional membership technical
society with more than 36,000 members in 80 countries.
Mr. Dickman was born in Brooklyn, N.Y., grew up in New Jersey and
entered the Air Force in 1966 as a distinguished graduate of the ROTC
program at Union College, Schenectady, N.Y. His military career spans
the space business from basic research in particle physics to command
of the 45th Space Wing and Director of the Eastern Range at Cape
Canaveral, FL. He served as the Air Force's Director of Space Programs,
the Department of Defense Space Architect and the senior military
officer at the National Reconnaissance Office. He retired from active
duty in 2000 as a major general. From 2002 to 2005, he was the Under
Secretary of the Air Force's Deputy for Military Space.
Mr. Dickman has graduate degrees in Space Physics and Management
and is a distinguished graduate of the Air Command and Staff College
and the Naval War College.
He is a member of the Air Force Scientific Advisory Board and the
DOT Commercial Space Transportation Advisory Committee. He has been
recognized by Union College with its Nott Medal, was the National Space
Club's Astronautics Engineer of the Year, was selected as one of Space
News ``100 Who Made a Difference'' and is a Fellow of the American
Institute of Aeronautics and Astronautics.
Bob, his wife Barbara and their son, Tad, live in Springfield,
Virginia.
Discussion
Chair Gordon. Thank you, General Dickman. Unfortunately, we
are going to be having a series of votes coming up soon, and
this is a very, very important hearing. But I am going to try
to expedite things for everybody's convenience. So I had my
say, although I have some questions, but I am going to skip
myself now and move to Ms. Giffords and recognize her for first
questions.
Executive Order Relating to Relief for Universities
Ms. Giffords. Thank you, Mr. Chair. I appreciate your
bringing such a distinguished panel of speakers today on this
incredibly important topic. I know that export controls is not
the subject that most Americans are having around their dining
room table every night. However, they probably should be
because as the testimony from the gentlemen today really
indicated, this is an incredibly important aspect of our
economy, our national security, and the way we became as
prosperous as a nation because of its focus on space and
exploration and certainly science and technology.
My first question is for Dr. Canizares. In terms of the
National Academy report that identified several challenges that
export controls present for universities in carrying out the
fundamental research and education for the next generation, if
President Obama implements the recommendations of the National
Academy's report, can you talk about how much relief will
actually be provided to the universities?
Dr. Canizares. Thank you for the question. I think that the
recommendations in the report would be a very important step.
However, the real issue with the implementation of the
fundamental research exclusion is how it gets implemented over
and over and over again in numerous contracts, awards,
technical interchanges. And one of the difficulties has been
that with the philosophy, as General Scowcroft indicated, of
primarily sort of trying to contain everything, we have managed
to do what was described in the report that Norm Augustine put
out recently from the Department of Commerce who quoted George
Bundy saying if you protect your diamonds and your toothbrushes
with equal zeal, you will lose fewer toothbrushes but more
diamonds. And I think in that sense, unfortunately, that is
largely what has happened. And so in the case of ITAR, we have
many space projects where technical information simply on, you
know, where to put the screw holes to attach your scientific
instruments to a satellite is ITAR-controlled and not available
to a graduate student who would be normally be drilling the
holes.
And therefore, I think the real key will be to have a
change in mindset that encourages all the contracting officers,
all the agencies, to really implement with proper attention the
intent of keeping as much open as can be kept open. That will
be a difficult, long process, but with the attention of this
committee and we hope of many others in the government, it is
achievable but it will take some time.
International Dual-use Technology Balance
Ms. Giffords. Following that for members of the panel, I
know that we will not be able to take a go-it-alone approach
when it comes to space initiatives that we plan to pursue,
including the human exploration of the moon, beyond obviously
the Mars sample return, global climate change. I am curious
about the balance of our desire to cooperate with emerging
space-faring nations like China and perhaps India on specific
projects against concerns about that dual-use nature of some of
those nations' activities. And certainly we have seen other
countries, specifically Iran for example, launch a satellite,
and we know that the quest of those who control the skies
control the battlefields. If members of the panel could talk
about that balance?
Mr. Young. I will try and then others may want to comment.
I think in my opening remarks, there are things that need to be
controlled, and so I don't want to leave the impression that,
you know, we are advocating abolishing controls. But the
advantages of international cooperation are enormous, not only
technologically but above and beyond as a policy, part of our
foreign policy. I think if we go back and take a look at even
at the height of the Cold War, as General Scowcroft was talking
about, our cooperative arrangements with the Soviet Union on
things like Apollo-Soyuz and other programs were
extraordinarily mutually beneficial. And I think that, you
know, we gave us a stronger appreciation of some of the things
that were going on with their programs and vice versa without
compromising our national security. So I think relative to
adversaries, I personally am an advocate that we cooperate
there but we do it in a very thoughtful manner which is what
you are suggesting.
But equally important is--our current controls have really
an adverse impact on cooperating with our friends, and I will
give you, you know, a few examples. One is that if we sat down
today and developed a relationship with the most friendly of
countries for a space program and after we had reached all the
conclusions, then we give this country a raft of documents, I
guess technical assistant agreements. And if you scan through
them, you know, they sure don't communicate that this partner
is a true partner. And they sign away an awful lot. You know,
partners say why in the world after I have reached all these
agreements, you know, do I need to go through that aspect of
it?
Let me give you one more example. Today on the Atlas 5, we
use a Russian engine called the RD-180. The people who were
doing that program selected it because they concluded it was
one of the world's best engines. You might say it fit my
earlier comment of being a technology vacuum cleaner in that
regard. But if we have a launch problem, we cannot sit down--
this is a Russian-developed, Russian-produced engine, we cannot
sit down with them and have a discussion as to what the problem
is without having a new license to establish it. It goes even
further if I may just add one other. Tommy Holloway who many of
you know who managed both the shuttle program and the
International Space Station program, chaired a study recently
and said that this inability to do problem resolution in a
real-time fashion added enormously to the risk associated with
flying on the International Space Station. I could go on and
on.
Chair Gordon. Yes, well, thank you, Mr. Young. We were
going to try to beat the bells. Mr. Hall, you are recognized
for five minutes.
Differentiating Military Weapons and Dual-use Technology
Mr. Hall. Thank you, Mr. Chair. I want to ask some of you
about the military components. The Fortress America report
recommends that export controls, ``treat weapons separately but
define them narrowly and precisely.'' I guess my question is
how does this process distinguish between a weapons system and
a component that might be integral to the system? I remember
somehow about the CAT scan and when it came aboard. Medical
production and medical people and maybe some folks that think
different to others of us that don't recognize barters. They
want to share breakthroughs like that with the nations of the
world because it is medical and it helps everybody in the
world. But I believe I remember and either you generals might
remember or you other men, when the CAT scan came on, we didn't
share that with anyone because about 15 percent of the
technology there was involved in the M-1 bomb or the M-2 bomb
or whatever it was that was powerful at that time. It is shared
with the world now, but that is just the kind of thing I am
asking about, how this might distinguish between a weapons
system and any components that might be integral to the system
like that part of the CAT scan was. General, do you want to
give that----
Lieutenant General Scowcroft. Well, Mr. Hall, let me take a
crack at it.
Mr. Hall. I remember it, and I remember Phil Barnaro, too--
--
Lieutenant General Scowcroft. What our study is dealing
with is not items that are under the military classification
system, a weapons system or essential component parts, if it is
a screw that holds things together. That is something else, but
only those dual-use items where they have a commercial use and
they have a valid military use. And our tendency now is not to
let anything out.
Mr. Hall. That describes the CAT scan.
Lieutenant General Scowcroft. Well, it does describe the
CAT scan.
Mr. Hall. But we found a way, or someone found a way to
share that with the world, and I don't object to that because I
think the secrecy of the type bomb mechanism is outside our
borders, too.
Lieutenant General Scowcroft. Look, we are not going to
solve all of these problems, and there are problems to
distinguish. What we are saying is let us try to make those
distinctions clear and more apparent and not simply say we put
the blanket over everything and we don't let everything go
unless you can demonstrate----
Mr. Hall. General, thank you. Thank you, sir.
Lieutenant General Scowcroft.--where it should go.
Mr. Hall. I have used three minutes. Could I yield my two
minutes to Mr. Rohrabacher? He is hurting.
Chair Gordon. Sure.
Mr. Rohrabacher. Thank you very much, and thank you both,
the Chair and the Ranking Member, for this very important
hearing and the courtesy they have displayed to me to let me
have a chance to ask a couple questions and to give an opening
statement.
Dual-track Export Control Systems
First and foremost, let me just note I represent a district
that is very rich in aerospace technology, and I take the
employment of my constituents very seriously. And I realize the
issues that you brought up today are risking--we are putting at
risk our aerospace industry and the jobs of all of my people by
having an irrational ITAR regulation system. We understand
that. What direction are we going to go, how do we get out of
it is a whole other issue and quite frankly, I believe that we
have had these restrictions because there was a transfer of
technology 20 years ago during the 1990's to a potential enemy
of the United States, China. And all of your suggestions about
how we need to work with the people overseas is absolutely
correct for the health of our industry. But I take it that none
of you believe that the United States should be working and
having this possibility of transferring technology in order to
get a contract or to build your industries at the expense of
building up the capabilities of Iran or North Korea or some
enemy like that which is clearly an enemy of the United States.
But with China, no one wants to face that. Let me just ask down
the line, would you be willing to try, in order to open up
trade, high-tech industries and the type of business that we
need to do to keep our aerospace industry and other high-tech
industries competitive. Would you be willing to have a dual-
track system which places heavier restrictions on trade with
non-democratic countries like China, and including China,
versus having just the idea that we have to open up and loosen
up the controls for everybody?
Chair Gordon. Mr. Hall's time is up, so if you would, I
think that deserves an answer but if you could move forward
maybe with an answer.
Mr. Rohrabacher. Could I just have a yes or no from the
panel? Would you be willing to have tougher controls on China
and other potential enemies versus ITAR that would have to be
opened, just overall change?
Lieutenant General Scowcroft. I don't want to answer yes or
no because I think it is a more complicated question.
Mr. Rohrabacher. Okay. I don't think it is, General. I am
sorry. What would be your answer? This is not a complicated
issue. Why don't we have tighter controls on an issue that
poses a potential danger to our country than we do with
democratic countries?
Dr. Canizares. Yes, I believe we should, and certainly all
the export regulations have that, and in fact the
recommendations of our report also allow for it.
Mr. Rohrabacher. So we should still have controls----
Dr. Canizares. I will not decide which countries--it is not
at all appropriate for me to decide which countries should be
on the list. However----
Mr. Rohrabacher. All right. So the answer is yes, we should
have a dual system.
Dr. Canizares. Yes.
Mr. Rohrabacher. Mr. Young.
Mr. Young. Yes, I think we should have a dual system, but
like General Scowcroft, it is more involved in the answer----
Export Control Dangers With the Chinese
Mr. Rohrabacher. Nobody wants to say China. The bottom line
is our major industries are making billions of dollars off of
trade with China that could potentially cause damage to our
national security. When our businessmen acknowledge that, we
are going to have some progress on this. Until then, we are
going to have controls because the American people can't count
on our big businessmen to watch out for the security interests
of our country over temporary and short-term profit.
Mr. Hall. I yield back my time.
Mr. Rohrabacher. That is what this is all about.
Lieutenant General Scowcroft. Mr. Rohrabacher, if the
Chinese can get the same product from the British or the French
that they could get from us, then we don't solve your problem
but we injure the American economic competitiveness. That is
why it is a complicated answer.
Mr. Rohrabacher. I will tell you----
Chair Gordon. Mr. Rohrabacher, if you would yield, it is
really a----
Mr. Rohrabacher.--in aiding Adolf Hitler because the French
have been aiding Adolf Hitler----
Chair Gordon. Thank you, Mr. Rohrabacher. There are a lot
of nuances to this, and it is unfortunate that we are under
this gun because this does need to be discussed more. But we
are going to try to keep some regular order.
Ms. Dahlkemper, did you have a question that you wanted
to--okay. Mr. Smith, did you have a--well, Mr. Rohrabacher,
would you like to rant just a little bit longer?
Mr. Rohrabacher. Listen, again, my people are aerospace
employees, and I am very concerned about the issues they
brought up.
Chair Gordon. Why don't you--okay. Why don't we--Mr. Young?
Mr. Young. Yeah, I would like to respond because I think
the comments are quite good. I really want to highlight the
fact that the reason, the primary reason in my view for making
the changes we are talking about, is not American industry, it
is national security. And our concern, when we really got into
this, and it is no matter what country we are dealing with, the
way we are currently implementing our export controls is having
a detrimental effect on our national security. In other words,
I think if we make a mistake, I would be in favor of making a
mistake on the conservative side relative to not harming
national security. But what alarmed us, when we really got into
this, is that the way we are currently going about it,
including even with adversaries, is we are doing it in a manner
that has a negative impact on our national security. If I could
just add one item, not an adversary, but we had various foreign
governments come in and talk to us. Indian government came in
and talked to us. They said the best thing that ever happened
to them was ITAR, that it accelerated their program beyond what
would have ever been possible if it had not been for U.S.
export controls. The reason I point that out is that that
really is a broad way that it is being implemented.
Chair Gordon. Thank you, Mr. Young.
Mr. Rohrabacher. But don't you think----
Chair Gordon. Mr. Rohrabacher, if I could just----
Mr. Rohrabacher. I thought I was going to rant some more.
Conclusion of Hearing
Chair Gordon. Well, you had your opportunity. We only have
four minutes and 45 seconds to go. As I said earlier, this
really is just not fair. I mean, this is such an important
question. There are lots of nuances. As we stated earlier,
though, this is sort of the opening, and I am glad that
hopefully we can, this committee hearing, has put it on the
table. There needs to be other hearings. This needs to be
something that is talked about. I am going to contact the
President and ask him to--once again, as we sit in this, in our
earlier to our authorization last year is that they need to
take a quick look at this, or not a quick look, I mean they
need to quickly start to take a serious look at this. But as
today, I am afraid that we are going to have to come to
conclusion. The record will remain open for two weeks for
additional statements for Members and for answers to any of the
follow-up questions the Committee might ask. And Mr.
Rohrabacher, the witnesses would welcome you to go down and
have a conversation as we continue with going to vote.
Mr. Rohrabacher. All right.
Chair Gordon. And again, I thank all of you. The witnesses
are excused.
[Whereupon, at 11:05 a.m., the Committee was adjourned.]
Appendix 1:
----------
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Lieutenant General Brent Scowcroft (USAF, Ret.), President
and Founder, The Scowcroft Group
Questions submitted by Chair Bart Gordon
Q1. In discussing the Presidential Executive Order recommended by your
committee, the report states: ``Not only will these reforms support
economic vitality and promote national security, but they will create a
track record and experience base that Congress can evaluate--and modify
as it sees fit.'' What should Congress look for in evaluating the
effectiveness of changes to the export control system directed in such
an Executive Order, should the President decide to issue one?
a. At what point after the proposed Order is put into effect
should Congress expect to see improvements?
A1. The changes that the report proposes are intended to make the
export licensing system easier to navigate because the ``one-stop-
shop'' coordinating center will reduce the bureaucratic ambiguity that
both industry and the agencies currently experience. Over time, these
should lead to such quantifiable improvements as shorter license-
processing times, increased defense industry cooperation among allies,
and up-to-date controls lists (both the CCL and the USML). The report
does not specify when improvements should become evident; however, in
my view, nine-months from the time that the system is fully operational
should be sufficient to begin to see positive changes.
Q2. Your prepared statement notes that ``the most significant
challenge to implementing these [National Academies] recommendations is
to help the relevant agencies understand that these reforms will not
micro-manage their own licensing procedures or challenge agency
expertise.'' Do you have any specific suggestions on how to address
this challenge?
A2. Although the report does not address this issue, members of the
committee are conducting briefings throughout the relevant agencies to
explain that the new processes do not change how each agency conducts
its own licensing reviews. This explanation should be included in any
materials that accompany the launch of the coordinating center and
licensing appeals panel.
Q3. Dr. Canizares' testimony suggests that some of the actions our
committee could take to address the impacts of export controls include
1) endorsing the recommendations in the National Academies report and
2) requiring that each agency under our jurisdiction develop and
implement a plan to execute the recommendations and report to Congress
on their progress. Do you agree with Dr. Canizares' suggestions? Are
there other actions this committee could take, within its jurisdiction,
to address the impacts of export controls on science and technology
competitiveness and to ensure America's leadership in space?
A3. It would certainly be beneficial for this committee to endorse
these recommendations.
Dr. Canizares has explained what he meant by the part of his
testimony that would require ``each agency under our jurisdiction [to]
develop and implement a plan to execute the recommendations and report
to Congress on their progress.'' He was not referring to agencies that
administer and enforce export controls, but rather to those that
conduct and support research (at universities and industry). He gave as
an example, the 2008 John Young Memo that reaffirmed ``free scientific
exchanges and dissemination of research results to the maximum extent
possible.'' He would like to see agencies being asked to explicitly
meet our recommendation for reaffirming the Fundamental Research
Exemption (NSDD 189). I think this is a very good idea.
Q4. Your committee's report recommends that sunset requirements be
applied to all items on export control lists that are controlled
unilaterally by the U.S. Who did the committee think should review the
lists to be in compliance with the report's recommendation for
sunsetting?
a. Does this recommendation for sunsetting apply only to the
Commerce Control List or does it also apply to the ITAR?
b. Would satellites be covered under the sunset requirements?
If not, did the Committee consider what actions are necessary
to assess the effectiveness of export controls for satellites
and satellite components?
A4. The report proposes that the coordinating committee should have
oversight of the ``sunset'' process but does not get more specific than
that regarding who ought to participate in the process. In my view, the
technical expertise of those who are directly involved in research
(from university, national and commercial laboratories) is an essential
component of this process. While the report is not specific as to who
should participate, it discusses an approach that includes several of
the principles listed in Recommendation #1 and the proposed Economic
Competitiveness Exemption.
The sunset process is intended to be applied to both the Commerce
Control List and the International Traffic in Arms Regulations. The
report does not discuss satellites per se because they are covered by
statute, but in my own view, yes, they should be included under sunset
requirements.
Q5. The National Academies report recommends the creation of a
Coordinating Center for Export Controls to receive applications,
determine agency jurisdiction, maintain timetables on license
application processing, and managing the appeals process, for example.
How big of an operation would this be? What is required for the Center
to be successful?
a. If both the federal agencies that administer export control
regulations and the export control license applicants can
appeal decisions on licenses and on whether sunset requirements
have been properly implemented, what measures are in place to
ensure that the appeals process recommended in the report does
not become overly burdened and time-consuming?
A5. Although it is not discussed in the report, the committee
recommends that the coordinating center should be a small
administrative office. In order for the coordinating center to be
successful, the report specifies that the coordinating center's
director should have binding authority (1) to determine which agency--
Commerce or State--will review a particular application, and (2) to
establish default-to-decision orders with respect to licensing decision
timetables and sunsetting timetables.
The report does not discuss in detail how to prevent the appeals
process from becoming over-burdened. However, the committee believes
that the establishment of an appeals process that does not reside in
Commerce, State or Defense and does reside in the National Security
Council will dampen the tendency to abuse the appeals process.
Q6. During the hearing, Congressman Rohrabacher stated that ``the
American people can't count on our big businessmen to watch out for the
security interests of our country over temporary and short-term
profit.'' How, if at all, would implementation of the recommendations
in your report address this concern?
A6. The report does not recommend an end to export controls, but to
implement ``reforms based on the realities of the risks and
opportunities of today's threats to the Nation.'' Nor does the report
recommend putting industrial stakeholders in charge of any aspect of
the export control process. Indeed, the recommendations proposed in the
report would not make it any easier for American businessmen to ignore
or undermine export control policy. In fact, the system would very
likely close some loopholes that currently exist because of the multi-
agency application process. Also, many businesses would no longer be
compelled to build research laboratories outside the United States in
order to get around export controls.
Q7. To what extent do current American export controls prevent China
from gaining access to advanced technologies?
a. How would the approach recommended in Beyond ``Fortress
America'' protect U.S. technologies from being exploited by
China?
A7. The United States and its allies do not see eye-to-eye on selling
advanced ``dual-use'' goods and technologies to China. For example, as
stated in the report: ``despite U.S. protests on the transfer of dual-
use technology, the European Union signed an agreement with China in
2003 that allowed China to invest 230 million Euros in the European
Union's satellite navigation system.'' Furthermore, China is able to
buy U.S. products from third country manufacturers who are the original
legal buyers; there are no international legal restraints to prevent
this. Thus it is a mistake to think that withholding U.S. products from
the Chinese actually prevents them from getting the same advanced
``dual-use'' goods elsewhere.
The report does not deal specifically with China's efforts to gain
access to American advanced technologies that could have a military
purpose. However, it articulates the need to redesign the multi-lateral
regimes, such as the Wassenaar Arrangement, in ways that will better
respond to today's globalized and threat-diffuse world.
Questions submitted by Representative Gabrielle Giffords
Q1. Your testimony states that ``If we sustain these export control
and visa barriers, we will increasingly lose touch with the cutting
edge of science and technology, and we risk missing emerging national
security threats.'' Could you elaborate on this point, especially with
respect to emerging national security threats?
A1. The emerging threats in my statement refer to technological
advances taking place elsewhere that could weaken America's position in
the battlefield, and to technologies that could have catastrophic
consequences if unleashed on the American population. As the report
states, ``[w]hile the United States remains a world leader in advanced
science and technology, it no longer dominates; it is now among the
leaders. We are increasingly interdependent with the rest of the
world.'' Therefore advanced science and technology will develop in the
United States, but also, for example, in China, Germany, India, and
Russia. If export controls prevent foreign scientists from coming here
to study, or from collaborating with American scientists, the United
States will lose vital information about what is going on elsewhere.
Q2. The State Department maintains a Technology Alert List (TAL) which
establishes a list of major fields of technology transfer concern. That
list expanded greatly after 9/11, and some have argued that it is too
exhaustive. As a result, consular officers with little or no scientific
training of their own will request an additional review, called a Visa
Mantis review, for the overwhelming majority of visa applicants with
advanced science and engineering degrees. However, what is being
recommended in the National Academies report seems to be the opposite
approach: preferential treatment for those with advanced STEM degrees,
with no discussion at all of security concerns or of how to achieve
improvements within the current system. Can you elaborate on how you
approached your recommendations with respect to visas?
A2. With all due respect, the question is a mischaracterization of the
committee's recommendations with regard to visas. The report does not
seek in any way to end the screening process, but to make it more
rational, so that ``legitimate and qualified students and researchers''
(emphasis added) can attend school, attend conferences, and ultimately
seek employment. For example, see Recommendation 4 which states that
``The committee recommends the President's Executive Order require that
a non-immigrant visa applicant who is a graduate student, researcher,
or professional in any field of science or technology, and whose
application is supported by a qualified university, scientific body, or
corporation receive a determination on the visa application within 30
days'' (emphasis added). The recommendation also affirms that graduates
should be eligible for employment only after the ``pass security
screening measures.'' The vouching process that is recommended is not
meant to replace screening measures, but to augment them.
As has been the case throughout its history, ``It is important to
both the national security and to our country's economic prosperity to
maintain the flow of human talent into the United States.''
Q3. One of the visa recommendations in the National Academies report
calls for an executive order requiring determination on visa
applications for scientists and engineers within 30 days provided the
application is supported by a U.S. university, scientific body, or
corporation. In the report, it is noted that this is already common
practice and few reviews slip beyond 30 days. If that is the case, are
there more specific recommendations to the relevant agencies to
mitigate those few delays that do still occur?
A3. The current system works for 95 percent of visa applications;
however, the difficult five percent is precisely the population with
which the report is concerned--scientific students, researchers and
professionals. The report does not specify actions that the relevant
agencies need to take.
Questions submitted by Representative Ralph M. Hall
Q1. You state that the export control system is ``broken,'' that it is
slowly wiping away any technological advantages we may have once had,
and is crippling our ability to maintain superiority. The Fortress
America report proposes changes that could be implemented using
existing Executive authorities to improve the export license process.
If the Administration were to embrace the report's recommendations,
from the applicants' perspective, what improvements would likely
result?
A1. The changes recommended in the report will bring about greater
transparency, openness, consistency and agility, all of which are
lacking in the current system. The ``one-stop-shop'' will reduce
licensing timetables and therefore promote consistency and agility. The
appeals process, which recommends publication of decisions, will
promote transparency and openness. A process that applies principled
and consistent sunset requirements will be able to bring about
consistency and rationality. The Economic Competitiveness Exemption
will make the system more realistic because it takes into account the
fact that the U.S. gains no significant protection by prohibiting
legitimate U.S. companies from exporting dual-use items that are, or
soon will be, legally available in open markets overseas.
Q2. What would be the best approach to conduct the first round of
`sunset' reviews for items currently on export control lists?
Presumably, it would be a massive undertaking. Who should populate such
a review committee?
A2. The report does not address the specifics for how to manage the
first round of ``sunset'' reviews, although the committee members agree
that the initial pruning of the list will be ``arduous.''
Technical experts currently working in their fields (see the answer
to Chairman Gordon's fourth question) will be essential. Per my
colleague, Claude Canizares' answer to Ranking Member Hall's first
question, ``the Emerging Technology and Research Advisory Committee
(ETRAC) recently established by the Department of Commerce's is
currently working to define a methodology that may well be relevant to
reviewing the Commerce Control List and possibly also sections of the
Munitions Control List.'' I would propose consideration of their
recommendation as it becomes available.
Q3. Foreign satellite builders have been openly marketing satellites
as being ``ITAR-free.'' What has been the record of their marketing
efforts? Is there any evidence that they are taking away sales from
U.S. builders? Technologically, how do their satellites compare to
ours?
A3. I would like to refer you to the 2008 CSIS report, ``Health of the
U.S. Space Industrial Base and the Impact of Export Controls.''
Q4. Since imposition of export controls decades ago, is there a public
record of opinions on licenses that would give industry and academia
roadmaps about what is acceptable, and what isn't. How transparent and
consistent is the licensing process? To what degree can applicants cite
previous license approvals to gain quick consideration of similar,
pending applications?
A4. It is unlikely that such a record exists. The current system is
anything but transparent. Because technologies are in a constant state
of change, precedents are not necessarily a useful guide.
Questions submitted by Representative Pete Olson
Q1. What are examples of capabilities in satellite and launch systems
where the U.S. excels and should hold tight to the underlying
technologies?
A1. This issue is not dealt with directly in the report, nor are
satellites my area of expertise. This is a question that is best put to
space scientists.
Q2. In statements presented during the hearing, several witnesses
cited difficulties engaging in collaborative space research missions,
given that all U.S. satellites are controlled by the State Department's
munitions list. Yet the State Department claims they have streamlined
the licensing process. From your vantage point, has the Department made
real improvements, or is the system still weighed down with too many
uncertainties, making future science collaborations a difficult
proposition?
A2. The State Department has made some changes in response to President
Bush's January 2008 Presidential Directives designed to streamline and
improve export control policies and procedures. These include moving to
an online application system and correcting the severe backlog of
applications from 2006-7. However, their efforts have not addressed
either the lack of transparency or ``commodity jurisdiction'' issues--
issues that are dealt with in the committee's recommendations. Thus
while the improvements are real and necessary, they are not sufficient.
Answers to Post-Hearing Questions
Responses by A. Thomas Young, Lockheed Martin Corporation (Ret.); Co-
Chair, Center for Strategic and International Studies (CSIS),
Working Group on the Health of the U.S. Space Industrial Base
and the Impact of Export Controls
Questions submitted by Chair Bart Gordon
Q1. Dr. Canizares' testimony suggests that some of the actions our
committee could take to address the impacts of export controls include
1) endorsing the recommendations in the National Academies report and
2) requiring that each agency under our jurisdiction develop and
implement a plan to execute the recommendations and report to Congress
on their progress. Do you agree with Dr. Canizares' suggestions? Are
there other actions this committee could take, within its jurisdiction,
to address the impacts of export controls on science and technology
competitiveness and to ensure America's leadership in space?
A1. I agree with Dr. Canizares' recommendations.
Q2. The first recommendation of the CSIS working group is: ``The
Administration and Congress should review and reconcile the strategic
intent of space export controls.'' What specifically do you think needs
to occur in such a.strategic review and what entity should lead that
effort? Does the strategic intent of space export controls need to be
resolved before any structural changes to the export control system are
put into place, such as those recommended by the National Academies?
A2. Our view is that the strategic intent of space export controls
should be uniquely to protect the national security of the U.S. Current
controls are so broad and unfocused that the net result is an erosion
of our national security. The administration and Congress should
together make the changes to space export controls to assure the
objective stated above is accomplished.
While it would be useful, this issue does not have to be resolved
before other important structural changes are implemented.
Q3. What specifically does the CSIS recommend to address concerns
about the impact of export controls on the commercial sale and use of
satellites for research purposes?
A3. Specifically, the law that makes satellites controlled items should
be repealed and only those elements of satellites that are critical to
our national security should be controlled.
Q4. The CSIS study, as noted in your testimony, refers to the negative
impact of export controls on the second and third tiers of the
aerospace industry, which is where much of the innovation and global
engagement in the industry occurs. How serious are the impacts to
innovation at this level of industry? What does CSIS recommend to
mitigate these impacts?
a. Do you have a perspective on whether any weaknesses in our
supplier base are causing U.S. companies to increase
dependencies on non-U.S. suppliers?
A4. The impact on second and third tier companies is severe. These
companies require both domestic and international sales to be viable
and to be able to invest in innovation. Today, we are becoming
dependent on, non-U.S. suppliers in areas such as traveling wave tubes
and batteries.
Q5. One of the recommendations of the CSIS study is for relevant
space-related government agencies to collaborate on conducting an
assessment of the space industrial base on an annual basis. Could you
elaborate on why an annual assessment is needed? How would this
information be used in informing export control regulations? How
feasible would it be to carry out such assessments every year?
A5. The CSIS study had a dual objective to assess the health of the
space industrial base and the impact of export controls. A conclusion
of the study is that government funding directly defines the health of
the base. Periodic assessments are necessary to assure the base
continues to be healthy at the prime contractor level and that
appropriate corrective action is being effective at the second and
third times.
Q6. The CSIS working group recommended that ``a special program
authority to permit timely engagement of U.S. participants in
multinational space projects'' be created. Could you please elaborate
on the nature of such a program authority and how, in practice, it
would work? How broad or narrow should the special program authority
be?
A6. When the U.S. participates in a multinational space project export
controls have a chilling effect on the partnership. International
partners are required to approve onerous documents above and beyond the
international agreements that define the project. Anomaly resolution
cannot take place without further approvals. Meetings and meeting
attendees are affected. These are some examples of the adverse impact
of space export controls that cause potential international partners to
no longer consider the U.S. as the partner of choice.
A solution would be to include export controls that are critical to
the U.S. national security, as well as those of our partners, in the
project defining documents with implementing responsibility assigned to
the U.S. organization lead for the project.
Questions submitted by Representative Gabrielle Giffords
Q1. The CSIS study on export controls that you co-chaired noted
concerns regarding the negative impact of export controls on selected
areas of the space supplier base such as solar cell and solar cell
substrate technologies. These would appear to be space technologies
that could have applications for the development of advanced renewable
energy technologies for civil applications. Can you elaborate on the
basis of those concerns?
a. Are you aware of any broader implications of export
controls for achieving the Nation's objectives to invest in
``green technologies'' and renewable energies?
A1. We did not examine the impact of space export controls on ``green
technologies'' and renewable energies; thus, I cannot elaborate on
these concerns.
Questions submitted by Representative Ralph M. Hall
Q1. What would be the best approach to conduct the first round of
`sunset' reviews for items currently on export control lists?
Presumably, it would be a massive undertaking. Who should populate such
a review committee?
A1. The conduct of the first round of ``sunset'' reviews would be a
massive undertaking but critical to our national security. It should
include those organizations responsible for implementing space export
controls, such as the Department of State, and those organizations with
the capability of assessing technologies critical to our national
security, such as DOD and the NRO.
Q2. Foreign satellite builders have been openly marketing
satellites,as being ``ITAR-free.'' What has been the record of their
marketing efforts? Is there any evidence that they are taking away
sales from U.S. builders? Technologically, how do their satellites
compare to ours?
A2. Foreign commercial communication satellites today have comparable
capability to U.S. satellites. Foreign sales have grown at the expense
of U.S. builders.
Q3. Since imposition of export controls decades ago, is there a public
record of opinions on licenses that would give industry and academia
roadmaps about what is acceptable, and what isn't: How transparent and
consistent is the licensing process? To what degree can applicants cite
previous license approval to gain quick consideration of similar,
pending applications?
A3. The licensing process is not very transparent, is very time
consuming, and while the reported approval rate is very high most
approvals come with required change. Large companies have learned to
deal with these difficulties and consider the associated impacts as a
``cost of doing business.'' Again, the critical impact is to second and
third tier companies.
Questions submitted by Representative Pete Olson
Q1. What are examples of capabilities in satellite and launch systems
where the U.S. excels and should hold tight to the underlying
technologies?
A1. Capabilities that are critical to our national security should be
determined by our defense and intelligence organizations.
Q2. In statements presented during the hearing, several witnesses
cited difficulties engaging in collaborative space research missions,
given that all U.S. satellites are controlled by the State Department's
munitions list. Yet the State Department claims they have streamlined
the licensing process. From your vantage point, has the Department made
real improvements, or is the system still weighed down with too many
uncertainties, making future science collaborations a difficult
proposition?
A2. The State Department has made progress; however, when we conducted
our review the process continued to be very onerous.
Answers to Post-Hearing Questions
Responses by Claude R. Canizares, Vice President for Research and
Associate Provost, Bruno Rossi Professor of Physics,
Massachusetts Institute of Technology
Questions submitted by Chair Bart Gordon
Q1. Your testimony identifies ``deemed exports'' as particularly
problematic for the academic environment. What types of impacts have
``deemed exports'' had in the university environment?
a. Does National Academies study recommend any actions to
mitigate these effects? If so, please discuss them.
Q2. Your testimony notes that ``Despite a Presidential directive
protecting fundamental research, export controls continue to inhibit,
retard or eliminate university research projects.'' Can you provide
examples of the negative impacts to clarify the extent of the problem?
a. The National Academies report recommends that the
Fundamental Research Exemption be maintained and implemented
properly. Your testimony refers to the need for a ``change in
mindset that encourages all the contracting officers, all the
agencies, to really implement with proper attention the intent
of keeping as much open as can be kept open.'' What are your
thoughts on any specific actions that could be taken to help
change the mindset?
A1, 2. Because of the similarity of Questions 1 and 2, I believe it
would be appropriate to provide a single answer that attempts to
address all the issues raised in both questions.
First, allow me to note that I use the term ``deemed export'' in
its generic sense to encompass both the Department of Commerce Export
Administration Regulations (EAR) and the Department of State
International Traffic in Arms Regulations (ITAR). In ITAR, transfer of
technical information to a non-U.S. person within or outside the U.S.
is referred to as a ``defense service.''
While there has never been a systematic study of the impacts of
deemed exports on universities, university researchers have reported
serious negative impacts in numerous workshops and other informal
venues. For example, see ``Space Science and the International Traffic
in Arms Regulations'' [National Academies Press, 2008]. That workshop
report lists, for example, the following categories of impact in the
space science arena alone (pp. 16ff): (i) Controls at odds with
international character of science; (ii) Diminishing U.S. access to
foreign expertise; (iii) Handicaps on effective space-mission designs;
(iv) compromising the quality of student experience; (v) effects of
regulatory uncertainties on faculty and staff; (vi) costs and
administrative burden; In fact, many of these same factors also apply
to other areas of deemed export controls (such as the control of ``use
technology'' by the EAR). Item (v) above deserves special mention: The
``chilly climate'' engendered by deemed export controls dissuades
researchers and students from undertaking forefront research projects
that might otherwise yield important results for the Nation. I gave one
such example in my testimony, involving a putative space mission to
detect extra-solar planets that was not conducted because of ITAR's
perceived impediments. In that sense, a significant part of the impact
resembles Sherlock Holmes' ``dog not barking in the night.'' It is true
that these impacts are not easily quantifiable, but all of us in the
research university community who deal with this issue are convinced
that the aggregate impacts are substantial.
The potential impact of a stricter application of deemed export
regulations by the Department of Commerce is even more problematic, as
it could cover hundreds to thousands of pieces of equipment on
university campuses and require thousands of licenses. This impact was
chronicled in hundreds of comments received by DOC in response to a
Notice of Public Rule Making several years ago. This response led DOC
to form the Deemed Export Advisory Committee, and more recently the
Emerging Technology and Research Advisory Committee. As a member of
ETRAC, I am hopeful that some of the potentially very negative effects
that had been foreseen might be mitigated by actions that DOC can
undertake to simplify and limit the application of deemed export rules.
Our report, ``Beyond Fortress America,'' recommends maintaining the
``Fundamental Research Exemption (FRE)'' which has permitted
universities to operate with relative freedom, and ``ensur[ing] that it
is properly implemented.'' As I noted in my testimony, that last phrase
is essential. There is a natural tendency for individual contracting
officers to always take the most conservative interpretation of any
situation and to find reasons why the FRE should NOT apply, rather than
the other way around. An example is the continual struggle that all
universities have had with funding agencies, particularly those in the
Department of Defense and NASA, to apply ``inappropriate contract
clauses'' to research activities that do not contain any classified
components. This practice has been described in several reports of the
American Association of Universities and the Council on Government
Relations. In my personal opinion proper implementation of the FRE will
require each cognizant agency to issue appropriate direction to all
contracting officers, and establish a process of review and, if
necessary, appeal of their actions. In this regard, the letter issued
last June by the Undersecretary of Defense (AT&L), Mr. John Young,
appears to be a positive step.
Q3. Satellites are directed by law to be regulated as exports under
the ITAR. What particular challenges does this designation of
satellites as defense articles have for conducting fundamental space
research? What would you recommend be done to mitigate those
challenges?
A3. Our report did not focus on this issue, although it certainly
constitutes one of the significant areas of concern for research
universities. Some of the points in the previous answer also apply
here, so I will not repeat them (see the referenced National Academies
workshop report). A major concern for universities has been ITAR's
overly broad categorization of virtually all spacecraft systems,
associated equipment and data as subject to control, regardless of
their actual military utility or their widespread availability outside
the U.S. This is particularly problematic when, as is usually the case,
universities must work together with industry in order to accommodate a
space science instrument on a research satellite. Even the dimension of
the screws used to attach a piece of hardware will generally be marked
``ITAR Controlled.'' Fundamental science data is also affected, as I
noted in the example in my testimony of the 18 months it took a French
graduate student to gain access to data about Mars.
Our report's recommendation regarding the Fundamental Research
Exclusion, if properly implemented, could mitigate some of the negative
effects of ITAR on space research. In the future, a more systematic
approach to addressing this matter could be undertaken by Congress and
the Department of State.
One personal suggestion would be for the Department of State to
provide a ``carve-out'' for scientific instruments developed in an open
university setting, and which extends to the necessary interface
information required to accommodate such scientific instruments on a
spacecraft. I understand that the Department's Directorate of Defense
Trade Controls is indeed considering new definitions that might
accomplish such a carve-out. DTC's Defense Trade Advisory Committee has
been tasked to undertake a review of ITAR definitions.
Questions submitted by Representative Gabrielle Giffords
Q1. Your prepared statement as well as various reports and materials
note that export controls may be hurting or preventing the U.S. from
participating in international collaborations on space research and
encouraging other nations to seek partnerships that do not include the
U.S. Could you give us some examples of how export controls have
affected existing or potential space research collaborations?
a. If universities, companies or other institutions lose
opportunities for international space activities, are not
invited to participate, or opt out of collaborative projects,
what are the broad consequences?
b. Are there any national security impacts?
A1. Please see answer #1 to the questions posed by Chairman Gordon,
which I believe addresses the first part of this question. As to the
consequences, the most extreme result is the exclusion of U.S.
researchers from forefront research areas that are instead advanced by
other, international partners. The U.S. has long attempted to retain a
position of significant leadership across the spectrum of the sciences
and engineering. As a result of globalization, as our report states, we
may no longer be the sole leader in some fields, but our economic,
social and political strength requires us to at least maintain our
position at the forefront along with a small number of other advanced
nations. Keeping that place is by no means easy nor is it assured. To
voluntarily cede that place in return for no apparent gain, as we are
doing by overly strict application of export controls, is unwise and
counterproductive. Because the technical information involved does not
deal explicitly with national security information, I believe that our
security will actually be improved by following the recommendations of
our report.
Q2. How might qualified U.S. scientists go about vouching for the
credentials of foreign scientists seeking visas, as recommended in the
National Academies report? Is it sufficient for any U.S. university
professor to send a letter to the appropriate consulate on behalf of an
applicant?
a. Does it make sense to set up a more formal process through
a single credible institution such as the National Academies or
some other entity? Was the panel able to explore possible
mechanisms for implementing this recommendation?
A2. Our panel chose not make a more detailed recommendation about about
how best to implement the proposed vouching for foreign scientists. We
believe that the implementation details should be defined jointly by
the appropriate government agencies working together with scientific
representatives. Those representatives could well be organized through
the National Academies, as you suggest, as well as several other
national professional scientific associations and societies.
Questions submitted by Representative Ralph M. Hall
Q1. What would be the best approach to conduct the first round of
`sunset' reviews for items currently on export control lists?
Presumably, it would be a massive undertaking. Who should populate such
a review committee?
A1. Our panel did not attempt to specify a mechanism for carrying out
such a review, but I note that the Emerging Technology and Research
Advisory Committee (ETRAC) recently established by the Department of
Commerce is currently working to define a methodology that may well be
relevant to reviewing the Commerce Control List and possibly also
sections of the Munitions Control List. It is important that any review
committee include appropriate technical expertise and representatives
from several stakeholders, including universities. It would also be
important that the charge to such a committee reflect the concept of a
``culture of openness and engagement,'' as articulated in our report,
rather than the ``culture of containment'' represented by our current
export control regime.
Q2. Since imposition of export controls decades ago, is there a public
record of opinions on licenses that would give industry and academia
roadmaps about what is acceptable, and what isn't? How transparent and
consistent is the licensing process? To what degree can applicants cite
previous license approvals to gain quick consideration of similar,
pending applications?
A2. With all respect, I believe that these questions should really be
answered by the appropriate offices in the Departments of Commerce and
State. Both agencies have indeed made attempts to reach out to their
constituencies in order to facilitate the licensing process. And both
have attempted to shorten the time for review and approval of licenses.
However, the primary problem for universities is Deemed Export. If
licenses were routinely required even for so-called ``use technology,''
thousands of licenses would be needed to accommodate the large number
of international students and the thousands of pieces of equipment on
the campuses of our research universities. The administrative burden on
both the universities and the federal agencies would be substantial,
with little or no gain in national security.
Questions submitted by Representative Pete Olson
Q1. What are examples of capabilities in satellite and launch systems
where the U.S. excels and should hold tight to the underlying
technologies?
A1. I do not feel qualified to identify specific capabilities, but feel
confident that an appropriately composed panel of industry, academic
and government experts would be able to do so.
Q2. In statements presented during the hearing, several witnesses
cited difficulties engaging in collaborative space research missions,
given that all U.S. satellites are controlled by the State Department's
munitions list. Yet the State Department claims they have streamlined
the licensing process. From your vantage point, has the Department made
real improvements, or is the system still weighed down with too many
uncertainties, making future science collaborations a difficult
proposition?
A2. I do believe that the State Department, like the Commerce
Department, has made good faith efforts to streamline the licensing
process. However, there are still many stories of excessive delays
(such as the one I mentioned in my testimony, in which it took 18
months for a graduate student to get permission to download Mars data).
Furthermore, while expedited licensing might make sense for the
physical export of a piece of hardware, it is generally not practical
for the implied ``deemed export'' or ``defense service'' associated
with the transfer of technical information. The major difficulty is
that scientific research is normally conducted in an open environment
with a diverse population of students, visiting scientists, and often
with international collaborators. It is simply impractical to obtain
large numbers of licenses nor is it even known which license might be
needed at which time. Finally, one might ask why we should go through
such a licensing process in the first place if the technology in
question is, in fact, of no national security importance or widely
available outside the U.S.
Answers to Post-Hearing Questions
Responses by Major General Robert S. Dickman, Executive Director,
American Institute of Aeronautics and Astronautics
Questions submitted by Chair Bart Gordon
Q1. Dr. Canizares' testimony suggests that some of the actions our
committee could take to address the impacts of export controls include
1) endorsing the recommendations in the National Academies report and
2) requiring that each agency under our jurisdiction develop and
implement a plan to execute the recommendations and report to Congress
on their progress. Do you agree with Dr. Canizares' suggestions? Are
there other actions this committee could take, within its jurisdiction,
to address the impacts of export controls on science and technology
competitiveness and to ensure America's leadership in space?
A1. I believe Dr. Canizares is correct to endorse the recommendations
of the ``Fortress America'' report. These recommendations are designed
to provide more consistency to the regimen, account for changes in the
marketplace, encourage ingenuity, and ensure strategic competitiveness.
I also agree that Congress should place accountability on federal
agencies that impact, and that are impacted by export control policies.
This is necessary to gauge the effectiveness of any changes in policy
and evaluate whether agencies are implementing the kinds of changes
Congress may call for. It may also help to indicate when and where
future changes are needed.
There are other areas within the jurisdiction of the House Science
Committee where actions can be taken to address the impacts of export
controls. With its oversight responsibilities over federal scientific
research, development, and demonstration, there are opportunities to
examine, adjust and affect policies that restrict collaborative
research and access to research. As I mentioned in my testimony before
the Committee, I believe the House Science Committee possesses the
jurisdiction to encourage global engagement in science and technology.
We need to invest in our research & test facilities to ensure that we
maintain the state-of-the-art in capabilities in those areas. If visa
policies are indeed changed to provide more access for foreign
scientist and students, we must make certain that we have the
infrastructure and programs in place that capture their passions and
imaginations once they are here so as to increase our available talent
pool at the expense of the talent pool foreign competitors have to draw
from.
I certainly would not want to see the Committee limited to these
suggestions. I believe that as new policies are put in place, more
obvious opportunities will also present themselves for the Committee to
examine and enact. The first step is taking the first step, and I
believe that the Committee has already committed to that through its
efforts to examine where improvements can be made in the current export
control regimens.
Q2. Your testimony states that ``We need to make certain that we
develop and implement integrated policies and holistic strategies that
enable us to remain technologically superior to threats against our
national security, embrace participation in the international science
community, and regain competitiveness in the global marketplace.'' That
sounds like a pretty challenging task. How in practical terms should we
go about doing that? What entity should be involved in leading the
development and implementation of an integrated policy and strategy?
A2. While the challenge is not insignificant, it simply proposes is
that we regain a position we held for many decades--that we do the
things that got us there in the first place. The process should begin
with defining core principles that serve as a foundation for policies
and programs that are developed. Whether in government, academia, or
industry, it is a common business practice to define a core mission and
goals and then develop a strategic plan around those defining
principles. Over the course of time, it is necessary to step back and
evaluate what you are doing strategically, moving towards evolving
opportunities, and retiring outdated pursuits. The key is having that
core mission and associated values to act as an axis for the strategic
plan and its subsequent evolutions to revolve around.
I believe that this needs to take place at a sufficiently high
level so as to have the authority to provide coordination and cohesion
among the many departments, agencies and offices involved. The National
Security Council (NSC) comes to mind because of the level of the office
and its ability to coordinate policies and initiatives through the
Office of Science and Technology Policy, the Office of the United
States Trade Representative, and the President's Intelligence Advisory
Board and Intelligence Oversight Board.
Of course, policies have little practical effect without the
support of implementing authorization and appropriation.
Q3. What specifically does the AIAA recommend for addressing concerns
about the impact of export controls on the commercial sale and use of
satellites for research purposes?
A3. As I elaborated upon in my testimony before the Committee, I
believe we need to take on the task of evaluating why we are protecting
capabilities, and then examine those capabilities that are currently
restricted to ensure that we are not building the fence higher than is
necessary to protect national security at the expense of the innovation
and industrial base we are depending on to provide those national
security capabilities. I think it is important that our national
security goals should also ensure a robust and sustainable aerospace
sciences, technology and industrial base.
Once that bar has been set, the same constraints should apply to
specific components of research satellites as are applicable to
commercial service satellites (e.g., communications satellites). Once
the components are in foreign hands, there is really no further control
regarding their application.
Q4. You testified that the AIAA is undertaking an independent effort
to create a process for evaluating the list of controlled satellite
components on a regular basis. Could you please elaborate on the
process you envision creating? What is the timetable for AIAA to
complete its work? Who should conduct those regular evaluations?
A4. AIAA has a cataloguing effort underway that is analyzing components
of the communications satellite. What we are currently examining is
just a start of what is necessary, and it will have its limitations. To
begin with, we understand that Congress will need to provide authority
to someone within the executive branch to make determinations on how to
use the findings of an examination such as what belongs on which list,
and to what degree a component should be subjected to restrictions. We
also are working with unclassified data. Certainly there are going to
be directorates and offices within our national security agencies that
have control of data that is not and should not be publicly available.
That can include anything from alloy characteristics and structural
traits to capabilities and manufacturing technologies that would give a
domestic component a national security-designated advantage.
For our purposes, we started with just the satellite bus, and broke
it down by component. We then worked throughout our membership to
identify appropriate subject matter experts (SMEs) who could examine
those components in a comparison with commercially available foreign
designed and manufactured components. We use a series of criteria that
include metric for performance, analyze the range of U.S. suppliers,
compare against the best non-U.S. component, and make a determination
of whether or not a competitive advantage exist for the U.S. component.
Finally, we analyze whether there is a discriminating value between
military and non-military applications. Once an SME has completed,
documented and submitted a survey, it is then subjected to a peer
review process that evaluates both the conclusion of the survey, and
the process and support provided by the SME in making these
determinations.
Our timeline for this process is to complete this initial
examination and have a compilation of surveys completed by early
summer. This will not be a formal report, and is only intended to
provide supporting data for a much larger process.
I would suggest that the cataloguing process and the determinations
on which control list components should be placed should reside
somewhere within the national security community where there is access
to current classified data on components, capabilities and uses, both
domestic and foreign. That office must consist of a highly-technical,
highly-competent workforce, and the staff should be rotated regularly
to maintain an appropriate mix of individuals from government, industry
and academia who have a strong familiarity with current research,
technology and capabilities in this area. The review committee should
include relevant discipline experts from a number of different
organizational entities to provide a balanced perspective and should
include at least the Department of Defense, NASA, the National Security
Agency, the Department of Commerce, the National Security Space Office
(NSSO), National Reconnaissance Office (NRO), the Office of the
Director of National Intelligence (ODNI), and some recognized non-
governmental organizations with resident experts on applicable
technologies.
Q5. In your prepared statement, you recommend that ``we need to
evaluate the trends in capabilities of foreign components . . . examine
how far equivalent components' capabilities have come and project when
we may expect those capabilities to surpass U.S. components to inform
periodic reevaluation of technologies.'' Could you please discuss this
evaluation process? Is the data on foreign component capabilities
available to allow an evaluation of foreign capabilities? Who should
have responsibility for regular evaluations of foreign capabilities?
A5. Once a systematic evaluation survey process is established with
qualified and confirmed data and SMEs capable of executing those
evaluations with sufficient peer review, the goal of this
recommendation becomes institutionalized. As part of that survey, we
should be evaluating the progression in foreign capabilities perhaps
building a timeline that shows that progression that corresponds with
the surveys. A ratio between the metric that measures the capability
with correlating timeline that competitors have achieved progressing
levels of capability would illustrate those trends. That is much easier
said than done, but it is not so difficult that we cannot complete this
initial step in a reasonable timeframe.
After that point, it is a matter of continuing to invest resources
and maintaining oversight so that this survey office does not develop a
culture similar to other parts of the export control sector where
decisions can be arbitrary and become unnecessarily conservative in
their approach to moving technologies and services off the most rigid
control lists, or, conversely, overly aggressive in removing sensitive
technologies off those same lists. It really becomes a balancing act at
that level, and the key will be sufficient oversight from Congress and
upper levels within the Administration.
I would refer to my response for Question 4 on much of this. I
believe that the U.S. national security community has and does collect
much of this data, however, I am not able to venture a guess on whether
a centralized clearinghouse for this type of highly sensitive
classified information exists, or whether it would involve several
individual collections of data housed among several agencies and
offices. For the sake of consistency in the process, the same
individuals charged with examining the U.S. capabilities should
probably examine those foreign capabilities and progression trends.
Questions submitted by Representative Gabrielle Giffords
Q1. The CSIS study on export controls noted concerns regarding the
negative impact of export controls on selected areas of the space
supplier base such as solar cell and solar cell substrate technologies.
These would appear to be space technologies for civil applications.
From your AIAA perspective, are you aware of any implications of export
controls on our ability to achieve the Nation's objectives to invest in
``green technologies'' and renewable energy capabilities?
A1. Excluding nuclear power sources and perhaps state-of-the-art high
efficiency, space-qualified solar cells, I know of no reason why
satellite power system technologies should be sufficiently sensitive
from a national security perspective to be on the ITAR list. To the
extent that these technologies can contribute to cost-effective means
for supplying renewable energy, it is in the national interest to
assure they get maximum use. Achieving the maximum potential to reduce
greenhouse gas emissions globally using space-derived renewable energy
technologies can only be realized with minimum restriction on their
export. Applying the ITAR regimen to these technologies will inhibit
realization of that objective.
An example of the effects of export controls have had in limiting
the ability of technology, though not a green technology, would be
Magnetic Resonance Imaging (MRI) medical equipment. While this
technology has shown great benefit to the medical community, it was
slow to gain exclusion from export controls because of its advanced
technology systems that were subject to those controls. It is a medical
technology that has improved the human condition worldwide. However, it
has only become widely available after an exclusion was included in
Category 3 of the Commercial Control list.
As has long been the case with aerospace and aerospace systems
technologies, we are bound to discover civil and commercial ``green
technology'' uses well beyond the original design intent through
technology transfers as we look to reduce our consumption of carbon-
based fuels. In that process, it should be expected that there will be
export control obstacles. The hope is that as innovation progresses, we
will be able to overcome many of those hurdles and bring those
technologies to bear in our efforts to reduce our carbon footprint.
Q2. Stories have appeared in the foreign press regarding the possible
repatriation of foreign-born scientist and engineers being lured by the
promise of expanding space programs in their native countries. From
your position in AIAA, what does this mean for the workforce of
agencies such as NASA and for the U.S. aerospace industry? What types
of incentives do foreign scientists and engineers educated or working
in the U.S. have for staying in the U.S. as opposed to taking their
talent and experience overseas?
A2. The U.S. remains the leader in many science, technology and
engineering research disciplines. In many instances, there remains
considerable esteem for being a part of U.S. research and development,
in U.S. innovation. About 15 percent of the membership of AIAA is made
up of foreign aerospace professionals. There are measurable benefits
that they receive for that membership, but first and foremost they come
to us for the esteem of being a part of the American Institute of
Aeronautics and Astronautics.
For all the faults that `experts' find in U.S. science and
technology policy and programs, we are a stable base for innovation and
research. Many foreign scientist and students continue to come to the
U.S. to be apart of that. What often gets lost in the budget
discussions is that, while the percentages of our federal budget
designated for research and development has waned, we are still
investing more in this area than any other single country in the world.
That investment goes a long way in influencing foreign scientist and
students to be apart of the U.S. system.
Questions submitted by Representative Ralph M. Hall
Q1. What would be the best approach to conduct the first round of
`sunset' reviews for items currently on export control lists?
Presumably, it would be a massive undertaking. Who should populate such
a review committee?
A1. We must first examine the principles for why we restrict
technologies and build a sound strategy for examining and listing the
technologies based on those principles. As I've previously mentioned,
once a systematic evaluation survey process is established with
qualified and confirmed data and SMEs capable of executing those
evaluations with sufficient peer review, the goal of this
recommendation becomes institutionalized. As part of that survey, we
should be evaluating the progression in foreign capabilities, building
a timeline that shows the progression that corresponds with the
surveys.
I don't believe that we should have the same people who evaluate
the applications also performing this technical analysis of the
capabilities of technologies and services. I would suggest that the
cataloguing process and the determinations on which control list
components should be place should reside somewhere within the national
security community where there is access to current highly classified
data on components, capabilities and uses, both domestic and foreign.
That office must consist of a highly-technical, highly-competent
workforce, and the staff should be rotated regularly to maintain an
appropriate mix of individuals from government. industry and academia
who have strong familiarity with current research, technology and
capabilities in this area. The review committee should include relevant
discipline experts from a number of different organizational entities
to provide a balanced perspective and should include at least the
Department of Defense, NASA, the National Security Agency, the
Department of Commerce, the National Security Space Office (NSSO),
National Reconnaissance Office (NRO), the Office of the Director of
National Intelligence (ODNI), and some recognized non-governmental
organizations with resident experts on applicable technologies.
Q2. Foreign satellite builders have been openly marketing satellites
as being ``ITAR-free.'' What has been the record of their marketing
efforts? Is there any evidence that they are taking away sales from
U.S. builders? Technologically, how do their satellites compare to
ours?
A2. I believe there are six specific cases where the stated determining
factor in the decision to use a foreign manufactured satellite was
``ITAR-free'' marketing. However, the real impact is being felt
downstream in the second and third tier companies who design,
manufacture and sell satellite and launch components and services. This
is where satellite manufacturers have become very vocal about their
intent to seek ``ITAR-free'' components, and this is where the U.S. is
beginning to see a real consolidation and reduction in the industrial
base. Our primes are still delivering enough hardware to the U.S.
Government, that they have been able to sustain market share losses in
other markets due to ITAR and other export control regulations up to
this point.
Unfortunately, much of the innovation that drives this sector of
the economy comes from these second and third tier companies. As these
areas fade away, so does the culture that is willing to take on risk in
their research, design, & development, and that is able to adapt to
changes and challenges in the marketplace at the fastest pace.
I believe that in most instances, U.S. satellites still lead the
world in design and capability. However, where we are losing footing is
in the components that make up those satellites. As this happens, it is
only a matter of time before we begin to see the playing field in the
satellites begin to level.
Q3. Since imposition of export controls decades ago, is there a public
record of opinions on licenses that would give industry and academia
roadmaps about what is acceptable, and what isn't? How transparent and
consistent is the licensing process? To what degree can applicants cite
previous license approvals to gain quick consideration of similar,
pending applications?
A3. The roadmap question is an interesting one. In the National
Academies report, Recommendation 1.a states, ``(The President should)
Recognize the interdependence of national security and economic
competitiveness factors in making export control decisions with respect
to individual requests for licenses through a principle-based system.''
Recommendation 1.c continues, ``(The President should) Establish as a
new administrative entity, a coordinating center for export controls,
with responsibilities for coordinating all interfaces with persons or
entities seeking export licenses and expediting agency processes with
respect to the granting or denial of export licenses.'' Recommendation
1.d concludes, `` (The President should) Establish an independent
export license appeals panel to hear and decide disputes about whether
export licenses are required, whether particular decisions to grant or
deny licenses were made properly, and whether sunset requirements have
been carried out properly.
From the book United States Export Controls, Fifth Edition, which
appears in Appendix F of the ``Fortress America'' report, Table 1-1
lists the U.S. Government entities with statutory authority to control
exports. This table lists 16 departments and agencies, under 35
different regulations, many with similar areas of controlling
authority. Further, Table 1-3 shows the decision tree for determining
agency jurisdiction. This table shows 17 steps, many with several
substeps to use in determining whether an export is subject to a
control regimen, and, if so, where. Much of the delay in the
application process is a matter of figuring out under just exactly
which jurisdiction a particular product or service falls. These two
tables well illustrate the lack of transparency and clarity in the
current process. If Recommendation 1.c is enacted establishing a
central clearinghouse, much of this confusion in the front end of the
process would be removed, and businesses could have a single source to
seek information on what controlling authority exists for a given
product or service, and to which their application is filed.
Recommendations 1.a and 1.d both address the question about the
citation of previous applications in the consideration of similar
pending applications. Currently, no standards or precedence exist that
are used in processing applications. Each new application is viewed in
a vacuum that creates much of the uncertainty of the process. By
creating a principled-based system that uses standards and precedence
in the certification process, we can remove much of the current
ambiguity in the process, and reduce the time spent in the evaluation
of the applications. It further streamlines the process for appeals
with a governing entity to hear those appeals using guiding principles
to do so.
Questions submitted by Representative Pete Olson
Q1. What are examples of capabilities in satellite and launch systems
where the U.S. excels and should hold tight to the underlying
technologies?
A1. The list of what falls in this category is getting shorter all the
time as other nations independently make advances to achieve the same
technical prowess we have been trying to protect. While probably not
limited to these, the following are some specific areas where we still
selectively excel and may therefore want to restrict export for
national security reasons:
Some very specific features of engines and fuel
containment systems for the following:
1. LH2-based propulsion
2. Hypergolic propulsion
3. Solid propellant propulsion
4. Advanced electric and magnetohydrodynamic
propulsion
Precision inertial navigation systems
Re-entry guidance and control algorithms
Communication encryption systems
Advanced data processing, reduction, and compression
algorithms
Advanced observation devices
Optical wave-front control technologies
High slew-rate momentum transfer devices
Q2. In statements presented during the hearing, several witnesses
cited difficulties engaging in collaborative space research missions,
given that all U.S. satellites are controlled by the State Department's
munitions list. Yet the State Department claims they have streamlined
the licensing process. From your vantage point, has the Department made
real improvements, or is the system still weighed down with too many
uncertainties, making future sciences collaborations a difficult
proposition?
A2. The fact is that the Department of State has been able to reduce
processing times and reduce the pending caseload for certification
licenses. However, I don't believe that they have improved the lot of
the applicants. The approval rate for applications has historically
been relatively high assuming the correct application was completed and
filed to the correct oversight agency. However, under the previous
system, applications could sit for months before any review took place.
Once the appropriate jurisdiction had been established, it could take
several more weeks or possibly months before an evaluation of the
application was completed and a determination made.
Under the new system, the application processing times have been
greatly reduced, and most reviews are completed in weeks or just a few
months. Now, however, companies are reporting that most applications
return with qualifying language that place more uncertainty than was
experienced under the previous system. So while the State Department
has streamlined its processes, these caveats often place reporting and
verification obligations on the companies that they have no ability to
satisfy, and the certification is for naught, leaving the companies in
no better position than they were under the longer waiting periods.
Appendix 2:
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Additional Material for the Record
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