Ban on satellite sales to China will hurt industry, aerospace officials say Flexibility asked on U.S. sanctions

August 28, 1993|By New York Times News Service

WASHINGTON -- Aerospace industry officials said yesterday that they would press the Clinton administration to soften the blow of trade sanctions announced Wednesday that bar the sale of U.S. satellites to China.

The officials argue that the satellite sanctions -- part of a broader ban on high-technology exports that the State Department ordered to penalize China for shipping missile parts to Pakistan -- unfairly punished the satellite industry and would stop it from selling goods to China that would not be used for military purposes.

One industry official said he hoped the Commerce Department would push the State Department to show some flexibility in banning satellite sales, adding that some Commerce officials told him in private that they were not enthusiastic about the decision to impose sanctions.

But department officials insisted yesterday that they were "fully supportive" of the decision to impose sanctions.

"The basic problem is once they determine that China sold parts of a missile, they have no choice but to impose sanctions," said Joel Johnson, vice president for international affairs for the Aerospace Industries Association. "The industry doesn't like unilateral actions and doesn't like sanctions that provide the executive branch with no flexibility."

Several industry officials said they would urge the State Department to find "some wiggle room" to ease the ban. But State Department officials insisted that the satellite ban was specifically required by an overlapping series of export laws.

These officials said satellites were included on the list of sensitive technologies because they contain some sophisticated components that could be used for military production.

David Shea, a spokesman for Hughes Aircraft Co. of Los Angeles, the world's largest producer of satellites, said his company feared China would start buying satellites from manufacturers in Britain and France unless those nations imposed similar sanctions.

Hughes was negotiating to sell two satellites to China, and China has expressed interest in buying 10 more Hughes satellites by the end of the decade.

Aerospace industry officials criticized the State Department for deciding to punish U.S. exports rather than imports from China. Chinese exports to the United States are not affected by the sanctions.

But State officials said the law under which sanctions were imposed does not allow for restricting imports from China when missile parts were found to be shipped in violation of the Missile ++ Technology Control Regime.

The law, however, allows for imports to be restricted if the government concludes that China shipped complete missiles to Pakistan.

Wednesday, the State Department announced that it would impose trade sanctions that would ban $400 million to $500 million in high-technology trade with China over each of the next two years.

State Department officials said exports of U.S. satellites would be hit hardest because most military-related exports to China were already restricted after the Tiananmen Square massacre in 1989.

As carrot to encourage China to abide by the missile control accord, Washington agreed to grant waivers to allow satellite exports.

In this way, satellites became the main category of sensitive exports still allowed to China. But now State Department officials said they would no longer grant such export waivers for satellites.

Staff members of the House Foreign Affairs Committee said they had asked the State Department for a briefing because they were unsure what high-technology equipment was covered by the sanctions.

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