Washington, D.C. – U.S. Rep. Howard L. Berman, the Ranking Democrat on the House Foreign Affairs Committee, delivered the below remarks as prepared for delivery at today’s committee hearing entitle, “Export Controls, Arms Sales, and Reform: Balancing U.S. Interests, Part II.”

During the hearing, witness Marion G. Blakely, President and Chief Executive Officer of the Aerospace Industries Association of Amer ica (AIA) commended Ranking Member Berman for his efforts to modernize the export control system.

“A perfect example of that bipartisanship is H.R. 3288, a bill signed by members such as Ranking Member Berman, Congressman Ruppersberger, Congressman Manzullo, and Congressman Connolly. H.R. 3288 aims to initiate practical, common sense legislative reforms to address the issues outlined in AIA’s new report: Competing for Space: Satellite Export Policy and U.S. National Security,” said Blakely in her prepared testimony.

The report reads, “Members of Congress including long-time champion of export control modernization Rep. Howard Berman (D-Calif.), have become more and more interested in trying to find a new approach that balances technology protection while also allowing U.S. firms to compete abroad. Congress has begun to recognize the necessity of legislative action. In 2010, Rep. Howard Berman (D-Calif.) introduced H.R. 2410 with the goal of providing flexibility to commercial satellites and related components under the USML. In 2011, Rep. Berman also introduced H.R. 3288, Safeguarding United States Satellite Leadership and Security Act of 2011, to continue efforts to strengthen and modernize satellite export controls.”

Patricia A. Cooper, President of the Satellite Industry Association (SIA), added in her testimony, as prepared for delivery, that “SIA applauds Ranking Member Berman’s introduction last year of H.R. 3288, the “Safeguarding United States Satellite Leadership and Security Act of 2011,” legislation which would correct the historical over-regulation of satellite exports while retaining protections on critical technologies. SIA supports this Bill and we note with appreciation that twelve additional Members, both Republicans and Democrats, have co-sponsored H. R. 3288, including several Members of this Committee, Representatives Manzullo, Connolly, and Keating.”

Below are Ranking Member Berman’s comments, as prepared for delivery:

The reform of U.S. export controls on defense and defense-related items is long overdue. Our current system of export controls was born amid the tensions of the Cold War, when the United States was the dominant provider of defense-related technology.

The Cold War is now a subject for the history books, yet the U.S. maintains the same fundamental export control system, one that inefficiently responds – if it responds at all – to changes in the international environment and the breakneck pace of technological innovation and diversification.

Our out-of-date export controls are more unilateral -- and therefore less effective – than they were in the past and are fast becoming a burden on our defense industrial base, our scientific leadership, and our national security.

Three years ago, the National Research Council published a report which concluded that America’s national security is highly dependent on maintaining our scientific and technological leadership. In stark terms, this report stated “the current system of export controls now harms our national and homeland security, as well as our ability to compete economically…the United States now runs the risk of becoming less competitive and less prosperous; we run the risk of actually weakening our national security.”

The Obama Administration’s Export Control Reform Initiative has taken on the herculean – some would say “Sisyphean” - task of beginning the reform of the U.S. export control system. After three years of work, the Administration is now beginning to publish the draft changes it seeks to make in the U.S. Munitions List. These changes, once enacted, would mean that literally tens, if not hundreds, of thousands of defense items that the Administration deems to be less militarily-sensitive would be moved to a new sub-list of the Department of Commerce’s Commerce Control List.

There is much that Congress can do to help this effort. The first would be to pass a new Export Administration Act, to replace the lapsed EAA of 1979. Because Congress has failed over the course of two decades to enact a new statute, the EAA exists only as a result of the President’s invocation of the International Emergency Economic Powers Act. It is a Cold War relic, and on potentially shaky legal grounds for enforcement since it doesn’t really exist.

Last May, I introduced H.R. 2004, the “Technology Security and Antiboycott Act”, to succeed the EAA. In contrast to the old EAA’s focus on economic warfare against long-gone adversaries, my bill focuses on the current threats to U.S. security. It provides the President with the authority to regulate the transfer from the U.S. of goods, services, software and technological information that could pose a threat to U.S. national security if obtained by hostile governments, terrorist groups or threatening persons.

Unlike the old EAA, my bill defines U.S. national security to include strengthening scientific and technological leadership, high-technology manufacturing and the U.S. defense industrial base. In today’s world, sustaining our cutting-edge universities, research establishments, high-tech companies and skilled workforce is as essential to our security as is military superiority

Export controls must be calibrated to serve academic and technological excellence and support U.S. high-tech jobs.

The second thing the Congress can do is to restore the President’s authority to move less-sensitive satellites, related components and technology from the U.S. Munitions List.

In 1998, in response to unlicensed technical assistance to China’s space launch program by two U.S. companies, Congress mandated that all U.S. satellites and components were to be moved from the Commerce Control List and become subject to licensing as weapons under the State Department’s United States Munitions List, regardless of whether the proposed export was to China or a NATO ally.

This well-intended restriction is now causing unintended consequences. European satellite manufacturers believe that U.S. Munitions List restrictions are too onerous to include U.S. components; consequently, U.S. manufacturers are currently in danger of having their products “designed-out” of foreign satellite systems. That has serious implications for the health of our space and defense industrial base. If smaller satellite component manufacturers lose market share, and perhaps go out of business, then the Department of Defense will not be able to buy their products to meet our national security needs.

Along with my colleagues Don Manzullo and Gerry Connolly, I introduced H.R. 3288, the “Safeguarding United States Satellite Leadership and Security Act” last November. This bipartisan legislation would help restore America’s global competitiveness in high-tech satellite technology and protect vital U.S. national security interests. It would also prohibit outright any such exports to China – the original concern that caused Congress to legislatively transfer all satellites to the Munitions List – and to Iran, North Korea, Syria, Sudan, or Cuba, the countries that pose the biggest risks to our national security.

The bill would also prohibit any foreign satellite with a U.S. component from being launched on a Chinese rocket. This latter provision is actually tougher than current law, including the Tiananmen Square sanctions, which allows such exports.

In closing, let me say that I think the Administration’s Export Control Reform efforts are moving in the right direction. My only concern is that there may not be enough time to complete the review of all 21 categories on the USML, publish the draft changes for comment, receive and reflect upon those comments, publish final changes, AND insure that our Committee and the Senate Foreign Relations Committee – the committees of jurisdiction – are able to conduct the necessary oversight of these changes.

My preference would be for the Administration to set priorities, to make sure that two of the most important categories - aerospace and space systems, which now comprise Categories 8 and 15 of the USML – could be completed in this Congress. I would like the witnesses’ thoughts on this point.

Thank you, Madam Chairman, for holding this hearing.


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