[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

                              ----------                              


                      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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