30 August 2001 The Honorable George W. Bush Dear Mr. President: This letter states the position of the Institute of Electrical and Electronics Engineers-United States of America (IEEE-USA) regarding the process of implementing the International Traffic in Arms Regulation (ITAR), as related to satellite communications and remote sensing exports. The IEEE-USA is concerned that ITAR, as currently implemented, is having a deleterious effect on the competitiveness of the American aerospace industry. The goal of ITAR is to prevent unfriendly nations from gaining access to the U.S. technology, systems and data vital to our security and other national interests. The legitimacy of such concerns is beyond question. Currently, the responsibility to implement ITAR has been given to the U.S. Department of State, and through them the Department of Defense. However, the Department of State is not adequately staffed with personnel knowledgeable in the state-of-the-art in pertinent areas. Today, implementation of ITAR is woefully time consuming, inefficient and places unnecessary restrictions on the flow of technology, systems and information in areas that are already well known to our international competitors. Consequently, the current implementation of ITAR prevents the U.S. industry from effectively competing in the global aerospace marketplace. Maintaining the status quo will further diminish our success in foreign markets, increase the competitiveness of foreign suppliers, and add to the US negative balance of trade. It may also lead to a loss of our leadership in this area, which is vital to our national security. Specifically, the U.S. aerospace industry is severely hampered by the tardy and inefficient implementation of ITAR, and is finding its foreign markets being eagerly subsumed by its competitors. The current ITAR implementation has un-leveled the playing field. In the last three years, in contracts for new communications satellites, the U.S. market share has dropped from approximately 70% to below 35%. This is in no small measure due to the manner in which ITAR is administered, and the resulting perceptions by contractors and operators of satellite-based communications systems. To maintain U.S. competency at high levels in areas of satellite technology and systems, U.S. industry must have adequate commercial market share. The delays and restrictions imposed by the current implementation of ITAR tend to diminish such market share. This competency is also crucial for our national security, and the absence of adequate market share may put it at risk. Foreign companies, even in "friendly" countries, do not share our security concerns, and they get an increased market share in no small measure because they do not face the same restrictions that our companies do. Thus, expediting action in these matters, as the U.S. Department of Commerce has done in the past, would not only help U.S. industry, but would also have a long-term positive, albeit indirect, effect on national security. It should be noted that issues raised in this letter relating to aerospace technology and systems apply equally to other research and technology areas, such as optics and photonics, etc. The implementation of ITAR by multiple departments often hampers U.S. commercial competitiveness in all these areas. The IEEE-USA, therefore, supports enactment of legislation that, while protecting sensitive matters relating to aerospace technology and systems, makes it easier and faster to obtain licenses to export technologies and systems not falling in this category. Further, in the interim, it supports changes in policies and regulations for implementing the current law, so as to mitigate, as much as possible, the disastrous effects noted above. IEEE-USA is an organizational unit of the Institute of Electrical and Electronics Engineers, Inc, created in 1973 to promote the careers and public policy interests of the more than 230,000 electrical, electronics, computer and software engineers who are U.S. members of the IEEE. If you have questions or need additional information, please contact me at (contact information edited for purposes of privacy). Sincerely, Ned R. Sauthoff, Ph.D. Copies to: The Honorable Donald L. Evans,
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