US aerospace companies are likely to receive more freedom to operate on the export market under sweeping reforms detailed today by the Obama Administration. Perhaps thousands of products facing a lengthy and sometimes ambiguous review process could be downgraded or removed altogether from export control lists.
The lists themselves are being subdivided into three categories, creating different standards for approval in each tier. Meanwhile, "subjective" criteria for granting licenses will be replaced by objective parameters, such as horsepower or microns.
The Administration released a fact sheet preview of remarks scheduled for tomorrow by President Obama.
Such changes could make US companies more competitive on the global arms market. For nearly two decades, industry officials eying sales opportunities abroad have complained that national export control policies have hindered sales or partnering on foreign programmes, particularly in the space industry.
Most complaints have focused on what the Administration acknowledges as a review process now defined by "jurisdictional disputes and ambiguities", with three primary licensing agencies using different and sometimes conflicting policies. The system also rigidly applies the same review process to all weapons, whether the product is an end-item fighter jet or a component such as a brake pad.
"You don't need to control this kind of junk," says export control reform advocate Joel Johnson, the executive director-international of the Teal Group consultancy.
But the Obama Administration also faces political opposition on reform from Republicans and even some Democrats concerned about lowering barriers to sensitive technologies to potential adversaries or violators of human rights.
As the former deputy assistant secretary at the State Department's Bureau of Political-Military Affairs, Greg Suchan managed the licensing process during the George W. Bush Administration for items on the US Munitions List. He calls the new reforms "ambitious", and predicts opposition from Congress.
"One could imagine that the loyal opposition will ask what's going to happen after the items are decontrolled," says Greg Suchan, a former deputy assistant secretary who is now senior associate at the Commonwealth Consulting. "Does this mean you don't care if Chinese, Iranians and human rights violators get all this stuff without asking, 'Mother, may I'?"
The administration fact sheet states that sanctions directed at specific countries, including Cuba and Iran, will remain in place.
Both existing lists of items controlled by the US government - the Munitions List and the Commerce Control List - will also remain, but be split into three tiers.
In the lowest tier will be items that provide a significant advantage to the military or intelligence community, but are broadly available on the open market. The highest tier is reserved for weapons of mass destruction or items that provide a "critical" advantage and are exclusively available in the US.
In the middle tier are items with a "substantial" advantage but are only available from the US, allies or multilateral partners.
The Obama Administration has already run a "beta" test of the new system on Category VII of the Munitions List, which applies to tanks and military vehicles. The test shows that 74% of 12,000 items licensed last year would be removed from the Munitions List. In the roughly one-fourth of the items that remain, none of the 12,000 licenses would qualify for the highest tier and 18% would be placed in the middle tier.
Suchan, however, suspects that Category VII was selected because tanks and vehicles represent one of the lowest areas of concern in the export control community. More sensitive are categories for controlling space vehicles, aircraft and night vision, he says.
"I give them high marks for thinking big," Suchan says. "That said, most of these things are there for a reason. How they end up carrying this out is going to be a challenge."
The Aerospace Industries Association (AIA) praised the reform initiatives as helpful especially to small businesses.
"These companies rarely have the resources to ensure compliance with the current export control regime. Simplifying the system offers them the opportunity to be more competitive in the international marketplace," AIA president and chief executive officer Marion Blakey says in a statement.
Source: Flight International