NCPA - National Center for Policy Analysis

Export License Bottleneck Costs Sales

March 20, 2000

Concerned about improper sharing of U.S. satellite technology with China, Congress last year shifted responsibility for review of U.S. export licenses for satellites and related items to the State Department from the Commerce Department. Since then, the length of time needed to complete such reviews has risen 30 percent.

The upshot is that some of our best trading partners are taking their business elsewhere -- resulting in some U.S. companies experiencing billions of dollars in lost sales.

Satellites are not all that is at stake. U.S. companies have been hampered in competing for foreign buyers of a wide range of products -- including airplane landing and navigation gear, communication radios and binoculars.

  • The aerospace industry provides the U.S. with its biggest trade surplus -- $37 billion last year -- and is one of the few bright spots in an otherwise dismal trade picture.
  • Experts say that last year's $1 billion in lost U.S. satellite sales could soon pale beside lost business of other aerospace parts and defense-related segments.
  • Last December, ambassadors of 17 nations that buy U.S. products sent Secretary of State Madeleine Albright a letter requesting her "personal attention" to the matter because the processing time for approving export licenses "has lengthened alarmingly."
  • DASA -- the aerospace subsidiary of Germany's DaimlerChrysler AG -- last fall ordered company engineers to start looking for alternative suppliers for items held up in the export-licensing process.

Even the Canadian government has begun complaining and seeking alternate suppliers for some U.S. products.

In 1999, the State Department had just 45 employees processing 45,000 applications with an estimated value of $20 billion. A typical application consists of a 3-foot pile of paper that often must be copied in-house and moved between offices by grocery cart.

Source: Anne Marie Squeo, "Regulations Stifle U.S. Aerospace Sales," Wall Street Journal, March 16, 2000.


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