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40 EXPANDING GLOBAL LAUNCH SERVICESAt the same time various domestic mergers andtake-overs in the U.S. launch industry have producedtwo powerful launch companies, Boeing and LockheedMartin, both successful aerospace conglomerates,engaged in other civilian and military space(manufacturing) activities as well. Already in 1996,President Clinton could confidently proclaim in hisNational Space Policy that the goal of the U.S. was“free and fair trade in commercial space launchservices”, in support of which the U.S. governmentwould“implement, at the expiration of current space launchagreements, a strategy for transitioning from negotiatedtrade in launch services towards a trade environmentcharacterized by the free and open interaction of marketeconomies.”9The prospects for the abolishment of the launchquota and other restrictive conditions by the year2000/2001, when the agreements expire, have dimmedconsiderably in the aftermath of the China affair. Therelations with China, having deteriorated as a result ofthese and other, more damaging nuclear espionagerelated conclusions of the above Cox Report, appear tobe less conducive to a (launch) trade liberalizationmove vis-a-vis that country; this will also affect thechances of the agreements with Russia and Ukrainebeing liberalized within the foreseeable future. Thisbrings us to another aspect of the agreementsconcerned, namely that of national security.As indicated above, national export controls arenot only used to restrict the sale or transfer of missileand launch technology but, these regulations generallyalso cover satellites and other so-called ‘dual-use’goods and technologies, i.e. roughly all high-tech goodsand technologies that can be used for both civilian andmilitary purposes.In the cold war era, CoCom was the multilateralarrangement through which the Western worldrestricted the export of dual-use items to the SovietUnion and other communist countries. After the demiseof CoCom, its successor, the Wassenaar Arrangementof 1997, of which Russia is one of the foundingmembers, has the same purpose (to prevent ‘sensitivetechnologies’ felling in the wrong hands) but differenttargets, namely terrorist-exporting/supporting and other‘rogue’ states or entities.National export control regulations generallyfollowed the above multilateral arrangements andincluded satellites in the national lists of controlleddual-use goods and technologies. Also the EuropeanUnion, in 1994, set up a Community regime for thecontrol of exports of dual-use goods, which includedcommunications satellites in the common list ofcontrolled goods.10In the U.S., commercial communications satelliteswere originally included in the Munitions List andtreated, for export purposes, as arms and thereforecontrolled by the State Department. In 1996, pressureon the part of the satellite manufacturers resulted in atransfer of this export licensing responsibility from theState Department to the Department of Commerce. Thisdid not dramatically change the scope of the controls,but rather the starting point and the focus: where StateDepartment controls have as their sole objective toserve U.S. national security and foreign policy interests,Commerce has a strong trade and commerce focus, andconsiders it its task, while applying export controls, to(also) take into account the concerns and wishes of theindustry.The bilateral launch trade agreements do notprejudice these controls on U.S. satellite exports. Thismeans that each U.S. satellite cleared for Chineselaunching under the provisions of the launch tradeagreement, still needs an export license before it can beshipped to China. The U.S. administrations of bothReagan, Bush and Clinton have routinely approvedsuch licenses, whether the controlling agency cameunder the State Department or Commerce: from 1989Commission’s competence to conclude such agreements.9 See National Space Policy, Fact sheet. The White House,National Space and Technology Council (Sep 19, 1996),Commercial space guidelines, para. 5.10 See Council Regulation (EC) No 3381/94 (Dec 19,1994) andCouncil Decision 94/942/CFSP (Dec 19, 1994), e.i.f. Jul 1,1995, OJ L367 of Dec 31, 1994, and amendments.
EXPANDING GLOBAL LAUNCH SERVICES 41to February 1998, a total of 13 case-by-case approvalsfor 20 satellite projects were granted.11The China affair has in the meantime resulted inlegislation, which w.e.f. March 1999, returned exportlicensing of commercial communications satellites tothe State Department. Where Congress found thatnational security had been compromised by at leastsome of the launches of U.S. satellites on Long Marchand, generally, felt that trade interests and traderelations had received too much benevolent attention atthe expense of national security, the respective Act,both in content and in spirit, clearly gives a higherpriority to the U.S. national security interests than totrade.This effectively removes China from the list ofreliable and predictable launch service providers forlaunches involving U.S. satellites, including non-U.S.satellites with State Department-controlled 'sensitivetechnology' components: the latter creates acomplication for satellite manufacturers from e.g.Europe and Japan which use such components. Thoughthese countries own export controls may in practiceallow the sale to, (and/or) the launch by China ofsatellites, U.S. controls on U.S.-manufactured satellitecomponents may form an impediment to the export ofthe respective satellites to China. Apart from thusaffecting the launch customers, this may create seriousbilateral trade conflicts between the U.S. and thecountries concerned.This primacy of national security also means thatthe question of the expiration or extension of therespective bilateral launch trade agreement has largelybecome moot, as the underlying export legislation andthe strict application thereof override the former’provisions. And, as suggested earlier, (the spirit of) thisCongressional legislation cannot but also affect the U.S.administration’s attitude towards Russia and the11 Each project may involve more than one satellite, and some ofthese satellites were bought by China and not launched for athird party, see China: possible missile technology transfersfrom U.S. satellite export policy - background and chronology,CRS Report for Congress, 98-485 F (Aug 13, 1998). Theseapprovals took the form of Presidential waivers of TiananmenrelatedCongressional bans on exports of, inter alia, satellites toChina.Ukraine, the other ‘controlled’ launch providers servingU.S. satellite exporters.This national security vs. trade interests dilemmais difficult to solve: both interests may be equallylegitimate and worthwhile serving. At the same time,the national security-inspired actions of one countrymay have a disproportionate effect on a major globalindustry and on the legitimate trade interests of othercountries. This creates responsibilities which go beyondnational borders. We will come back to that aspectlater.One other policy/practice, which could beconsidered an impediment to “free and fair trade incommercial space launch services” should be mentionedand briefly reviewed.Government procurement of launchservicesThe practice of governments to reserve the right toexclude their procurement of goods and services fromcompetitive international bidding is widely spread andgenerally accepted. The U.S., for example, has a socalled“Buy American Act” since 1933, which directsfederal agencies to procure articles, materials andsupplies from American sources. U.S. government airtravel, as a rule, takes place with U.S. licensed airlines.Many other countries have similar policies andpractices. In the field of launching, neither the Chinesenor the Russian authorities so far allowed theirgovernment satellites - whether civilian or military - tobe launched by foreign launch providers. TheConvention establishing the European Space Agency(ESA) of 1980 requires that the Agency, when definingits missions, shall take into account the launchersdeveloped within the framework of its programmes, orby a member state, or with a significant Agencycontribution, and“shall grant preference to their utilization forappropriate payloads if this does not present anunreasonable disadvantage compared with otherlaunchers or space transport means available at the
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SESSION FOURExpanding Global Remote
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SESSION SIXExpanding Global Navigat
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SESSION EIGHTMaintaining the Space
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220Session 3: Wednesday. 21 July. 1
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223Annex IITHIRD UNITED NATIONS CON
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