Final frontier of trade policy?

President Trump has issued three Space Policy Directives thus far aimed at streamlining licensing for launch and re-entry, facilitating public dissemination of Defense Department data on space objects to help avoid collisions, and creating a focal point for the space industry within the Department of Commerce: the Space Policy Advancing Commercial Enterprise (SPACE) Administration. According to Commerce Secretary Wilbur Ross, the SPACE Administration will provide not just industry oversight, but offer “insights and foresight” to foster the expansion of a leading edge commercial space industry.

Meanwhile, the industry remains constrained by uncertainty around the laws and regulations that govern their activities both on terra firma and in space. Nation states control the airspace that extends vertically over their sovereign territory, but once you get into outer space, the laws and norms are murkier.

Government oversight:

A 1967 international treaty, known simply as the “Outer Space Treaty,” enumerates principles that apply to operations conducted by government agencies, but signatories also agree their governments are responsible to authorize and supervise national activities conducted in outer space by non-governmental entities.

Property rights and liability:

According to the Outer Space Treaty, nation states retain jurisdiction over their space objects and personnel in space, and shall be liable for damage caused by their space objects. But the treaty does not clearly cover private commercial property rights. With hundreds of thousands of trackable pieces of space debris already in orbit, the prospect of inadvertent damage to spacecraft and satellites is a mounting concern. But who’s responsible and how can you know the origin of most debris? What entity might be appropriate to settle disputes over orbital assignments? Once competition is sparked among companies in space mining, what set of national or international laws will apply to territorial claims staked and subsequent international sales among commercial parties of materials mined in space?

Trade in space-related technologies and services:

US law does clarify that the launch or re-entry of a space launch vehicle or payload is not deemed an export or an import (perhaps at least until we find aliens on other planets with whom to trade). However, all spacecraft and nearly all critical components of spacecraft, ground equipment, and related space technologies are classified as “defense articles” on the U.S. Munitions List. As such, they are restricted or prohibited under the International Traffic in Arms Regulations administered by the State Department from being traded or transferred to another country – or to a person from another country, even if that transaction takes place within the United States.

These restrictions also apply to the exchange of services such as engineering or consulting, including emails and conversations on related technical subjects. Some technologies have been moved a less restrictive Commercial Control List maintained by the Department of Commerce that applies to dual-use technologies, or those that have both military and commercial applications. Nonetheless, these regulatory frameworks for better or worse constrain the integration of a global space industry.

Sanctions:

US sanctions also figure into commercial space trade given Russia’s predominant role as a supplier of launch services and space technologies as well as involvement in the Russian space industry of individuals who are the subject of US sanctions.

Tariffs:

The WTO Information Technology Agreement (ITA) as expanded in 2015 will eliminate tariffs among the parties on many goods and technologies deployed in space activities. The savings should benefit commercial entities that are expanding production of the systems and equipment needed for extraterrestrial exploration and transportation, as well as the goods and services back here on Earth derived from the innovations in the space industry or the data retrieved from satellites.

Space commerce: Live long and prosper

Maybe one day we’ll be negotiating trade deals with other planets, but for now, we’re a long way off from having the framework we might need here on Earth if the space industry grows at the current pace.

Pioneering commercial uses of space can be a major growth driver for the US economy in addition to being critical to national security, offering important redundancies in capabilities, resiliency, and innovation. What we learn from outer space gives rise to new products and services on Earth. The allure of space as a business is attracting many more companies around the world as we quickly approach the frontier of international commercial disciplines. We’ll need to figure it all out if we want peaceful and sustainable commercial use of space. As Spock might say, may space commerce live long and prosper.