TRADE IN A GALAXY FAR, FAR AWAY
Historic launches . . . and customs paperwork
On July 16, 1969, the Apollo 11 astronauts rocketed from Pad 39-A toward a rendezvous with history. Within hours, their massive Saturn V rocket — which churned out as much energy as 85 Hoover Dams — catapulted the astronauts out of Earth’s orbit and on a trajectory to the Moon. But, although Apollo 11 eventually slipped from the grasp of Earth’s gravity, the crew couldn’t avoid the reach of U.S. Customs. Upon their return to Earth, astronauts Neil Armstrong, Buzz Aldrin, and Michael Collins filed one of history’s most unusual trade documents — a customs declaration listing their point of departure as the “Moon” and their cargo as “Moon rocks and Moon dust samples.”
Later this month, Pad 39-A should again witness history when a Falcon 9 rocket boosts astronauts Bob Behnken and Doug Hurley to the International Space Station (ISS) aboard a SpaceX Dragon spacecraft. This milestone launch will be the first time in the annals of spaceflight that a privately owned and launched spacecraft has carried humans into orbit. The Dragon launch—together with rapidly advancing plans to harness the resources on the Moon and asteroids—heralds a new era in which the trade and commercial implications of space are far more complex than the quirky experience of Apollo 11.
Facilitating space exploration
As a general matter, items launched into space are considered to be in international commerce. U.S. Customs, for example, deems the launch of an article into space as an “export” under its regulations.
Over the years, the United States and other spacefaring nations have taken steps to prevent trade rules from complicating space operations. Under a 1984 law, for instance, the United States doesn’t consider articles launched from and returned to U.S. customs territory aboard an American spacecraft to be an “importation” requiring customs entry. Similarly, under the agreement governing the International Space Station, the United States and its international partners have agreed to the duty-free import and export of articles required for the ISS. Like vacationing Earthlings, astronauts do, however, have to clear customs when they travel internationally for spaceflights, although officials hold their passports while they’re in space.
International treaties also establish critical norms for the conduct of nations and their nationals in space. The 1967 Outer Space Treaty forms the basis of international space law. Among other things, that treaty: (i) limits the use of the Moon and other celestial bodies to peaceful purposes, (ii) provides that space is free for exploration and use by all nations, and (iii) prohibits nations from claiming sovereignty over space or celestial bodies. Other treaties govern the rescue and return of astronauts, liability for damage caused by space objects, and the registration of objects launched into space.
The era of space commerce and resources
While this legal framework has generally functioned well during the age of government-dominated space exploration, the rapidly emerging era of space expansion and commerce — in which governments and private firms increasingly harness physical space resources — requires new rules.
Under Project Artemis, NASA, together with private sector and foreign partners, has ambitious plans to return humans to the Moon and establish sustainable, long-term operations there. This will require finding, extracting and using the Moon’s water and mineral resources. In the coming decades, countries and companies will target asteroid resources, extracting water to generate fuel for spacecraft, mining metals like iron and nickel to build equipment in space, and eventually returning rare elements like platinum to Earth. Astrophysicist Neil deGrasse Tyson predicts that asteroid mining could ultimately generate trillions in economic value.
Who owns the Moon?
These efforts will face enormous technical hurdles, and a big legal one: the ongoing inability of the global community to agree on who can extract, use, and own space resources. This conflict dates back to the negotiation of the Outer Space Treaty itself, when the United States rejected the Soviet Union’s position that space should be a commons, where ownership was not possible.
One group of countries and legal experts continues to espouse a global commons approach to space resources, as outlined in the 1979 Moon Agreement. That treaty, which also covers other celestial bodies, provides that the exploration and use of the Moon “shall be carried out for the benefit and in the interests of all countries,” and that the Moon’s natural resources are “the common heritage of mankind” and cannot become the property of any government, organization or person. The Agreement also calls for the eventual establishment of an international regime to govern the exploitation of the Moon’s resources. There are currently 18 parties to the Moon Agreement, most of which are not spacefaring countries.
Other countries, including the United States and Luxembourg, take a contrary view. Under a 2015 law, the United States declared that U.S. citizens engaged in commercial recovery of space resources were entitled to own, use and sell those resources under applicable law. A recent U.S. Executive Order doubles down on this position, reaffirming the right of private parties to exploit space resources, rejecting the Moon Agreement and the global commons, and instructing U.S. officials to seek agreements with like-minded countries on the private exploitation of space resources. The Trump Administration is planning to negotiate “Artemis Accords” with partner countries that would provide for “safety zones” around future Moon bases and rules for private Moon mining.
Proponents claim that these actions don’t constitute a prohibited claim of national sovereignty in violation of the Outer Space Treaty, while others believe that such steps can only be authorized by further international agreement. Russia has denounced recent U.S. actions as an impediment to international cooperation.
Failure to resolve this disagreement could eventually result in growing international and trade conflicts — both on Earth and in space. Nations that maintain that space resources are a global commons might, for example, impose trade or other sanctions on countries or companies that unilaterally mine space resources, or they could ban trade in those resources or their products. Without agreed rules on space mining operations, disputes among space prospectors competing for celestial stakes could, in turn, generate significant terrestrial conflicts.
Even if countries eventually resolve disagreements over rights to space resources, other issues of space trade and commerce will continue to emerge. If a government extensively subsidizes space mining operations by its national companies, for example, will there be a need for global anti-subsidy disciplines like those currently applied to state subsidies for steel production?
Peace in space
At a time of simmering trade wars, pandemic-related trade barriers, and calls to abolish the World Trade Organization, crafting clear international accords for space resources and commerce might appear to be a low-priority concern. But this effort is vital, given rapid advances in technology, the potentially vast value of space resources, and fundamental differences among nations about who can own and exploit them.
Even science fiction calls for action on this issue. After all, as Star Wars fans may remember, a conflict over galactic trade is what kicks off Episode 1 – and the entirety of the Star Wars saga.
Also on TradeVistas: The Global Space Economy is Taking Off Like a Rocket
Ed Gerwin is a lawyer, trade consultant, and President of Trade Guru LLC.
Need a Logistics Provider?
Compare over 100 Instantly
TRADE IN A GALAXY FAR, FAR AWAY