In Kiruna, Sweden, sits the world's northernmost spaceport and a major outpost of Europe's scientific community. Kiruna is also an excellent site for space tourism: after a stay at the ICEHOTEL, tourists could, if timed right, fly straight through one of the most spectacular sights in the natural world, aurora borealis.

Virgin Galactic, likely to be the first company to begin commercial suborbital flights when it begins operation in 2013, recognised the potential of Spaceport Sweden early on. In 2007, the company signed an agreement with the spaceport to build a base of operations and conduct flights, making Kiruna its secondary launch site.

At an October conference in Las Cruces, New Mexico, not far from Virgin Galactic's primary launch site in Upton - Spaceport Sweden's chief executive Karin Nilsdotter set out the challenges of running the spaceport. Sweden would gladly welcome more space business. "However," says Nilsdotter "we have one major, big challenge in doing so. And it spells..." On the projection screen, a slide came up displaying the word ITAR, drawing laughs. "It's also a limiting factor for the US," she continued. "You are limiting [your own] market. There's a hungry world out there, guys." The crowd applauded.

Ice Hotel Sweden

 © Leif Milling/AnnaSofia Maag

ICEHOTEL is a partner in the Spaceport Sweden project

ITAR stands for International Traffic in Arms Regulations, and nominally refers to provisions in the Arms Export Control Act of 1976 (AECA), which imposed restrictions on certain weapons. AECA authorises the administration to enforce two lists: first, the commerce controlled list (CCL), which denotes that a product is commercially sensitive; second, the United States Munitions List (USML), which regulates items that could be used as weapons. USML is the most restrictive list, requiring strict licenses not just to sell a controlled item, but to even talk about it. Even relatively simple clearances can take months to wind their way through the US Departments of State, Commerce and Defense.

It is understandable that a launch vehicle, which is essentially a ballistic missile, would be restricted. But the restriction goes for components and parts as well, meaning that anything, down to the level of nuts and bolts, are subject to ITAR restrictions. In the highly competitive manufacturing and launch markets, ITAR compliance adds additional cost that US companies cannot necessarily afford. Most large- and medium-size space companies have several full-time ITAR lawyers; smaller ones contract out.

Until the late 1970s, the USA held 100% of the global launch market for commercial satellites. As the satellite market grew and competition - notably the European Ariane and Russian Soyuz and Proton rockets - became feasible, the US market declined precipitously. Today, the US share is down by around 16% of the market. The decline may be in no small part due to ITAR. International manufacturers have long successfully marketed a wide range of launch vehicles, satellites and components as "ITAR-free".

"ITAR affects everything," one US spacecraft manufacturing executive told Flight International. "It's affecting our conversation right now."

Satellites and components are another issue altogether. The 1990s saw two Chinese rockets fail while carrying US commercial satellites. In conjunction with growing fears of Chinese espionage and political influence, Congress acted. One result was the Cox Committee report, a catalogue of Chinese espionage cases. The other was a rider to the 1999 defence authorisation bill, requiring that "all satellites and related items" stay on the USML instead of the CCL.

"The initial concern that caused this legislation back in 1999 was country specific and activity specific," said Patricia Cooper, president of Satellite Industry Association. "But the 1999 NDAA legislation regulated every type of satellite transaction, and it affected trade with every country. That has had a wide-sweeping effect on the nation's space industrial base, our competitiveness in satellite technology and our investment and innovation."

Few in defence circles would consider Sweden either hostile or particularly threatening, and US defence contractors do, in fact, supply weapons systems to the Swedish military. That an US company cannot sell a product with little defence value in a decidedly neutral country may seem overly restrictive, given that the same product is available to anyone from anywhere if the buyer is willing to fly from New Mexico.

Vybild Spaceport

 © Spaceport Sweden

Kiruna is a far northern outpost of Europe's scientific community

The same issues affect XCOR Aerospace, another suborbital tourism company, which has plans to launch from Curacao and South Korea. Curacao is a Caribbean island nation and South Korea is one of America's closest allies.

Businesses involved in space-related industries routinely decry ITAR restrictions. The focus on commercial spaceflight has led to a growing awareness that tight export restrictions are legacies of a world where the USA had little competition, and where modern rocketry was a strategic secret. As China has demonstrated by routinely launching rockets and, most recently, docking two human-capable spacecraft together in orbit, that world no longer exists. Even Iran and North Korea have space programmes.

In that context, government officials are cautiously toying with the idea of rolling some restrictions back. Tucked into section 1248 of the 2010 defence authorisation bill was text compelling the administration of US president Barack Obama to write a report on the consequences of removing satellites from USML. The Obama administration instead took it a step further, initiating a broad review of export controls.

"While the report was in clearance, a number of things happened - the National Space Policy, the National Space Strategy and, most significantly, progress on the Administration's broad export control reform efforts," says Cooper. "The executive branch started a deep scrub of 19 or so categories of technology to evaluate what is genuinely sensitive, what's not, what should be on the munitions list, and what shouldn't."

A final report is expected before the end of 2011. On 1 November, a bill was introduced in the US House of Representatives to allow the administration to move satellites from the USML back to the CCL, if it desired, with the explicit caveat that policy towards China will not be affected.

The effect of easing ITAR restrictions is unpredictable. It seems quite likely that the USA will never regain much market share - Russia and Europe have affordable, flight-proven launch vehicles, and the Chinese space industry becomes more capable by the day.

Source: Flight International