[Congressional Record Volume 141, Number 197 (Tuesday, December 12, 1995)]
[House]
[Pages H14258-H14260]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   UKRAINIAN COMMERCIAL LAUNCH POLICY

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Florida [Mr. Weldon] is recognized during 
morning business for 5 minutes.
  Mr. WELDON of Florida. Mr. Speaker, tomorrow the Clinton 
administration will give away another U.S. industry: the United States 
domestic commercial space launch industry.
  A decade ago, the United States held nearly 100 percent share of 
commercial space launches. Today the United States holds 30 percent of 
the market. This loss of market share is largely due to the fact that 
our competitors receive heavy subsidies from their governments.
  Between 1996 and 2001, it is estimated that there will be 350 
commercial satellite launches--120 of these will be geostationary 
launches. These are the high Earth-orbit, expensive launches that the 
United States dominated until recent years.

[[Page H14259]]

  For each of these launches that goes overseas the United States loses 
$50 million--if we lose all 120, that's about $6 billion that will go 
overseas.
  I'm all for the free-market. But I will aggressively oppose any plan 
that gives the advantage of foreign competitors that receive heavy 
subsidies from their governments. Mr. Clinton's plan does jut this, and 
that's why I'm an aggressive opponent of his plan.
  This chart shows what may happen to our commercial launch industry.
  There will be 120 geostationary launches between 1996 and 2002.
  It is a given Arainespace--Europe's subsidized space launch 
industry--will receive 72. That's 60 percent of these launches. Their 
subsidies allow them to undercut the United States unsubsidized prices.
  Under an existing agreement with the Chinese, the United States will 
allow 20 satellites to be launched on Chinese-Government subsidized 
launch vehicles.
  Under another existing agreement with the Russians, the United States 
will allow eight satellites to be launched in Russian-Government 
subsidized launch vehicles.
  This only leaves 20 launches for U.S. companies. Well, that is until 
tomorrow.
  Under the new agreement that the Clinton administration will sign 
with the Ukrainian Government tomorrow, the Ukranian-Government 
subsidized space launch company will get the other 20 launches.
  This leaves U.S. companies with a grand total of zero.
  Yes, it's true that U.S. companies can compete for the launch of 
these vehicles, but with the billions in subsidies from their 
governments, our foreign competitors will easily to able to undercut 
U.S. companies.
  It is very possible that of the 120 geostationary launches over the 
next 6 years, none of them will be launched from U.S. soil.
  This is a tragedy for U.S. leadership in space. For the American 
workers who have dedicated their lives to making these launch vehicles. 
And, for the dedicated and highly skilled workers at our Nation's space 
launch facilities.
  I, along with others, in a bipartisan effort urged the Clinton 
administration to renegotiate some of the earlier agreements to ensure 
that the Ukrainian launches were not in addition to those already 
allotted to our competitors. This suggestion was soundly ignored by the 
Clinton administration.
  I'm pleased that many of my colleagues have also expressed their 
concerns about this agreement.
  The Florida delegation sent a strong bipartisan letter expressing 
grave concern over the Clinton-Ukraine Agreement which I would like to 
submit for the Record. The distinguished minority leader, Mr. Gephardt 
of Missouri, let the administration know of his concerns in a letter 
which I would also like to submit for the Record.
  The Governor of Florida, Lawton Chiles, has expressed his opposition 
to this agreement. The Colorado congressional delegation also raised 
objections to the plan.
  Mr. Chairman, this Ukrainian agreement is bad for this nation. And, I 
am disappointed that the Clinton administration appears to have given 
no consideration to our concerns. In fact, I'm still waiting for a 
response to my letter of 3 weeks ago.
  America is the loser in this deal.
  As vice-chairman of the Space Subcommittee, I have called for a 
Congressional hearing on this issue. I will continue my aggressive 
opposition this agreement. I urge my colleagues to take a closer look 
at this and other international agreements that the Clinton 
administration is negotiating.

                                Congress of the United States,

                                Washington, DC, November 15, 1995.
     Ambassador Mickey Kantor,
     U.S. Trade Representative,
     Washington, DC.
       Dear Ambassador Kantor: We are very concerned about the 
     direction the Administration is taking regarding United 
     States launch policy. Last year, the Administration issued 
     it's National Space Transportation Policy. This policy 
     contained a commitment to negotiate and to enforce 
     international commercial space launch services agreements 
     with relevant non-market economies (NME's). It also contained 
     a commitment to launch U.S. government payloads on U.S. 
     launch vehicles.
       Your office is currently in the process of negotiating an 
     agreement with the government of Ukraine. It is deeply 
     troubling that the Administration is considering giving up 
     even more of our domestic launch industry to competitors who 
     are overly reliant on subsidies by their own governments, 
     which distort the competitive market place. Any U.S.-Ukraine 
     agreement must reflect the realities of the commercial 
     market. U.S. commercial launch providers have relied upon the 
     1994 National Space Transportation policy and have invested 
     hundreds of millions of dollars to build launch vehicles 
     which are built with virtually 100 percent American 
     components, technology, and labor. It is imperative that the 
     following be observed and acknowledged:
       Higly subsidized competitors place U.S. launch providers at 
     an unnecessary and unfair disadvantage.
       Both the Ukraine and Russia benefit from any Ukraine launch 
     agreement since much of the content of the Ukraine vehicle is 
     of Russian origin.
       The purchase or the launch of any NME-built vehicle by a 
     U.S. entity should be counted against any quantity limitation 
     in the relevant trade agreement.
       The basic terms of the current US-China and the US-Russia 
     Space Launch Services Agreements should not be modified 
     before they are due to expire.
       Additionally, we understand that the Department of Defense 
     (DoD) may be changing it's current policy which prohibits 
     national security payloads from being launched on non-U.S. 
     launch vehicles. We have serious objections to allowing DoD 
     to use non-U.S. launch vehicles for military payloads. This 
     would seriously erode our nation's ability to launch military 
     space assets during times of crisis and severely jeopardize 
     our nation's domestic commercial launch vehicle business by 
     undermining the U.S. launch industrial base.
       These policies have the potential to undermine the U.S. 
     national interest of maintaining our domestic launch 
     capabilities and infrastructure. Florida's long, proud 
     history in the U.S. space launch industry may be seriously 
     jeopardized. For our government to give away this heritage 
     and these high-tech, high-wage jobs is unacceptable to 
     American taxpayers and the Florida Congressional delegation.
       The U.S. space launch industry is ready to work hard and 
     fight competitively for their market share. But we shouldn't 
     ask them to do so when its own government changes the rules 
     in the market place. We understand that if the proposed plan 
     goes forward, 70 to 90 percent of the commercial, and 
     potentially national security, launches will occur outside 
     the United States. This would be, in our view, very 
     detrimental both to our national security and to our own 
     prospects for future investments by our own launch industry 
     in this country's space infrastructure.
       We request that you brief our delegation on your intentions 
     prior to your upcoming meeting with the Ukraine. We look 
     forward to hearing from you very soon.
         Dave Weldon;
         Mark Foley;
         Dan Miller;
         Carrie Meek;
         Bill McCollum;
         Peter Deutch;
         Bud Cramer;
         Tillie Fowler;
         Bill Young;
         Porter Goss;
         Clay Shaw;
         Alcee Hastings;
         Lincoln Diaz-Balart;
         Charles Canady;
         Cliff Stearns;
         John Mica;
         Jim Trafficant.
                                                                    ____



                                                  U.S. Senate,

                                Washington, DC, November 28, 1995.
     President William J. Clinton,
     The White House,
     Washington, DC.
       Dear Mr. President: We are writing to you regarding a 
     matter that has already received much attention by our 
     colleagues in Congress as well as many in the U.S. space 
     industry.
       It is our understanding that the Administration is in the 
     process of negotiating a bilateral agreement with Ukraine 
     which could allow their nation to launch up to 22 U.S. 
     commercial satellites. It is also our understanding that 
     these discussions have prompted Russia to propose reopening 
     its current agreement with the U.S. in hopes of raising their 
     quota to 20 launches.
       Without a doubt, such agreements will have a major impact 
     on the U.S. space launch industry and our nation's trade 
     balance. However, it is not clear to us exactly what the 
     effects would be and what other options could, and perhaps 
     should, be pursued by our government as we explore ways to 
     assist these nations to strengthen their economies without 
     hindering U.S. efforts in this area.
       We have not passed judgment on this matter since we have 
     not been briefed by the Administration, nor are we aware of 
     any formal briefings being held for Congress, regarding this 
     issue. It seems reasonable that before an agreement is 
     negotiated that the Administration inform Congress of what is 
     being contemplated for agreement as well as its ramification 
     on the U.S. economy and space industry. Therefore, we ask 
     that finalization of any agreement with Ukraine be delayed 
     until either Congress has been briefed or has had an 
     opportunity to hold hearings in this matter. Consistent with 
     this, we ask that 

[[Page H14260]]
     current agreements not be opened for renegotiation until such meetings 
     are held.
       Your consideration and cooperation in this matter is much 
     appreciated.
           Sincerely,
     Bob Graham,
       U.S. Senator.
     Connie Mack,
       U.S. Senator.
                                                                    ____

                                      Spaceport Florida Authority,


                                              Cocoa Beach, FL,

                                                 November 9, 1995.
     Ambassador Mickael Kantor,
     U.S. Trade Representative,
     Washington, DC.
       Dear Ambassador Kantor: I am profoundly concerned that 
     consideration is being given to authorizing the use of excess 
     Ukrainian ballistic missiles for sale to commercial United 
     States payloads. As you know, the American launch industry is 
     attempting to establish a strong commercial launch sector. 
     This is especially critical to the economy of Florida in 
     light of continuing reductions in civil and military launch 
     missions.
       It is in America's vital national security and economic 
     interests that a healthy commercial launch industry be 
     developed. Recognizing this, the Department of Defense, NASA, 
     the State of Florida and several other state governments have 
     undertaken an ambitious and expensive program of 
     infrastructure modernization. The major aerospace companies 
     no longer develop launch vehicles in response to federal 
     contracts. A fleet of new vehicles is being developed at 
     great expense to meet the requirements of commercial payload 
     customers over the next twenty years. We believe that in the 
     future, space transportation can be as economically 
     significant as aviation.
       Unfortunately, this climate of investment would be 
     seriously disrupted if the assumptions of the market and 
     projected demand are rendered useless by allowing the dumping 
     into the market place artificially priced, non-market, 
     heavily subsidized launch assets. U.S. policy wisely 
     prohibits its surplus military launch vehicles to compete for 
     commercial payloads, in order to prevent just such 
     disruptions and distortions to the market.
       The mastery of emerging transportation technology has been 
     the root of national prominence and security throughout 
     history. Surely you will agree that the United States should 
     not cut the development of its commercial launch industry off 
     at the knees in order to accomplish foreign aid objectives 
     through alternative means. The price is simply too high.
           Sincerely,
     Edward A. O'Connor, Jr.,
       Executive Director.
                                                                    ____



                                     House of Representatives,

                                 Washington, DC, November 8, 1995.
     Ambassador Mickey Kantor,
     U.S. Trade Representative,
     Washington, DC.
       Dear Mr. Ambassador: Last year, the Administration issued 
     its National Space Transportation Policy. In the policy, a 
     commitment was made to negotiate and to enforce international 
     commercial space launch services agreements with relevant 
     non-market economy countries (NMEs). Your office is currently 
     negotiating such an agreement with the Government of Ukraine.
       In making a recent key business decision, my constituent 
     McDonnell Douglas, relied on the Administration's commitment 
     to negotiate agreements that prevent the disruption of the 
     market and avoid seriously jeopardizing a key part of our 
     space infrastructure. In the spring, McDonnell Douglas 
     announced the planned investment of hundreds of millions of 
     dollars in the development of the Delta III launch vehicle. 
     We believe that this private sector investment in upgrading 
     the nation's launch capability is wholly consistent with, and 
     supportive of, the Administration's goals.
       Any change in the Administration's policy, or any weakening 
     of the existing space launch services agreements before their 
     expiration dates, would impede McDonnell Douglas' ability to 
     meet required launch rates and put the Delta III program at 
     risk. These capricious changes in policy also serve to 
     discourage private investment in our launch infrastructure.
       Offering the Ukraine 22 potential launches of satellites 
     and reopening the Russian trade agreement to raise their 
     limit to 20 satellite launches, would more than double the 
     limit currently agreed to for the NMEs. This is unfair to our 
     domestic industry and the thousand of high tech jobs at risk.
       I urge you to postpone the negotiations with the Ukraine 
     until a more thorough assessment of the impact to our 
     domestic industry can be made and to not reopen the Russian 
     agreement signed only a year ago.
           Sincerely,
                                                    Scott McInnis,
     Member of Congress.
                                                                    ____

                                         House of Representatives,


                                  Office of Democratic Leader,

                                 Washington, DC, November 1, 1995.
     Hon. Mickey Kantor,
     U.S. Trade Representative,
     Washington, DC.
       Dear Mickey: I understand that serious consideration is 
     being given to revising this country's space launch services 
     trade agreement program in a manner that will severely 
     jeopardize McDonnell Douglas' ability to continue in the 
     commercial launch vehicle business. The change may be 
     recommended in relation to the U.S.-Ukraine Space Launch 
     Services Agreement which your office is currently 
     negotiating.
       Specifically, an Interagency Working Group is expected to 
     recommend to you and the White House a substantial change in 
     policy regarding such trade agreements. My constituent, 
     McDonnell Douglas, relied upon the 1994 National Space 
     Transportation Policy when it announced in May, 1995, its 
     decision to invest hundreds of millions of dollars to build a 
     new vehicle--the Delta III. Its existing Delta II vehicle 
     currently has the best reliability record in the increasingly 
     competitive international market. The Delta III will be 
     virtually 100% American in terms of components, technology, 
     and labor. This is significant at a time when other U.S. 
     manufacturers of these strategic assets are purchasing 
     foreign components or buying foreign vehicles off the shelf 
     in lieu of domestic production.
       For instance, the Boeing ``Sea Launch'' proposal would 
     utilize Ukrainian-built vehicles at ``dumped'' prices. They 
     would be launched from a platform in the Pacific Ocean--not 
     from the States of Florida and California. Similarly, the 
     Lockheed Martin Corporation has joined forces with a Russian 
     entity to offer below market pricing for flights on the 
     Russian Proton vehicle. On the other hand, the McDonnell 
     Douglas commercial space operations are located primarily in 
     California, Colorado, and Florida. They employ approximately 
     6,000 people in high-technology jobs in those states. We 
     cannot afford to export these jobs which are so important to 
     our national security infrastructure.
       If the recommendations are accepted and implemented, 70-90% 
     of commercial launches will occur outside the United States, 
     using foreign assets. This policy shift will significantly 
     affect the viability of McDonnell Douglas' investment to 
     develop the Delta III and any future investments.
       I thank you for your thoughtful consideration in this very 
     important matter.
           Yours very truly,
     Richard A. Gephardt.
                                                                    ____

                                               The Governor of the


                                             State of Florida,

                                                    July 12, 1995.
     Hon. Bill Clinton,
     President of the United States,
      Washington, DC.
       Dear Mr. President: I appreciate the ongoing efforts of 
     your administration to develop a National Space Policy that 
     recognizes the concerns of Florida and other states that are 
     investing in commercial space launch capabilities. At the 
     invitation of the Office of Science and Technology Policy 
     (OSTP), representatives from Florida, California, Alaska, New 
     Mexico, and Virginia gathered in Washington recently to 
     discuss launch policy issues common to our states. We 
     presented a broad range of issues which are critical to the 
     development of state-sponsored spaceports.
       Of particular concern to Florida is the challenge to United 
     States competitiveness for commercial satellite launches. 
     This challenge is due in part to existing bilateral 
     agreements between the U.S. and countries with non-market 
     economies, such as China and Russia, which permit those 
     countries to launch significant numbers of U.S. satellites. 
     We certainly recognize the importance of these agreements and 
     the strategic alliances they represent. In looking at the 
     establishment of new bilateral agreements, such as the one we 
     believe is proposed between the U.S. and the Ukraine, we wish 
     to encourage that careful consideration be given to domestic 
     economic needs; effective enforcement of agreed upon launch 
     quotas and a monitoring program to assure that Florida and 
     other states are able to complete equally with foreign 
     countries.
       The State of Florida is committed to building our space 
     industry's competitiveness and we believe strongly that the 
     commercial launch marketplace offers an exciting transition 
     for companies who are experiencing diminishing defense 
     contracts.
       Your leadership role on this vital issue will assist the 
     U.S. commercial launch industry in receiving the domestic 
     policy support that is required to increase our international 
     competitiveness. I appreciate your continued attention to 
     space industry issues and look forward to the release of the 
     National Space Policy.
       With kind regards, I am
           Sincerely,
     Lawton Chiles.

                          ____________________