This document discusses priorities for UK space exports and trade negotiations following Brexit. It notes that the UK space industry generates over £5 billion in exports annually, with top markets in Europe, North America, Asia Pacific, and the Middle East. Key barriers include restricted government procurement, commercial restrictions, weak IP enforcement, and regulatory barriers. The document identifies priority countries for new trade agreements, including the US, India, China, Japan, and countries in the Gulf. It outlines opportunities and barriers in these markets, and provides examples of provisions in existing EU trade deals to boost space sector access. Officials seek industry feedback on identified priorities and barriers.

1. gov.uk/ukspaceagency
Trade Negotiations Priorities
SGP Export Forum
16 November 2017

2. What will we cover?
1. UK Space Exports – value and region
2. Key features of FTAs
3. Trade policy priorities
4. Priority non-EU markets and barriers
5. Example provisions in current FTAs
6. Questions

3. 1. UK Space Exports: value and region
£5bn revenue through exports in 2014/15
UKSA/DIT export survey top markets
Location Income (£m) Percentage of income (%)
Rest of Europe 2,452 49
North America 957 19
Asia Pacific 793 16
Africa and Middle East 398 8
South America 369 8
Undefined 34 0
TOTAL 5,008
Top 10 Non-EU Export Markets Top 10 Import Markets
1. USA 6. India 1. USA 6. South Korea
2. Japan = 7. GCC 2. Russia N/A
3. China = 7. South Africa 3. Israel N/A
= 4. South Korea = 7. Israel 4. Japan N/A
= 4. Russia 10. Brazil 5. China N/A

4. 2. Key features of FTAs
FTAs are bilateral or regional trade agreements
covering ‘substantially all trade’
In theory, pretty much every aspect of trade is on the
table, including: tariffs, services (including
establishment), procurement, product standards, IP,
regulatory barriers.
In reality, certain areas, including defence
procurement aren’t.
Typically take years to negotiate.
But, FTA negotiations create wider dynamics on
economic cooperation. Also UK will seek to pursue
commercial interests in advance of finalising FTAs.

5. 3. Trade Policy Priorities
For manufacturers, the key barriers are:
Restricted government procurement (effectively closed to foreign firms in most major space
nations)
Commercial presence restrictions – e.g. equity ownership
Weak intellectual property enforcement
UK export controls
For operators, the key barriers are:
Regulatory/security requirements - countries often require operators to build gateway
infrastructure to land signals which is costly, restricting or preventing market access
Licensing and testing requirements on satellite equipment
Spectrum allocation
Restrictions on selling direct to customer, requirement to use national incumbants
Local establishment restrictions
For applications, the key barriers are:
 Commercial presence restrictions
 Restrictions on services, including cross-border trade in services including digital/data
 Regulatory barriers affecting DTH, including domestic firms buying from foreign operators

6. What does the export survey tell us?
Market Access Barrier % Respondents
UK export controls 55.56%
Preference to domestic suppliers 50.00%
Regulatory barriers 41.67%
Restricted government procurement 41.67%
Requirement to use national incumbents as intermediaries 36.11%
Customs procedures 33.33%
Security concerns 33.33%
Weak intellectual property protection 30.56%
Licensing requirements 19.44%
High tariffs 16.67%
Export survey supports this assessment and has informed it. All but UK export
controls can be tackled through trade negotiations.

7. 4. Priority non-EU markets and barriers
Focused on markets without EU FTAs already in place…
Tier 1 countries (large developed space nations)
USA
India
China
Tier 2 countries (mixture developed and developing space
nations)
Japan
GCC
Brazil
Indonesia
Others (developing space nations and LICs)

8. FTA Priorities: USA
Opportunity
The US is the largest producer and consumer of space-based products and services.
US government procurement (through DoD and NASA) accounts for around 13% of
global space revenue. US commercial space sector of similar size.
The North American market (USA & Canada combined) accounts for 19% of total UK
export revenues (c. £1bn p/a).
Barriers
No tariffs. Open commercial market, but extremely competitive
Highly restrictive procurement – ‘Buy American’ – but reasons for optimism: Buy
American waivers, special status as part of US National Technology and Industrial
Base (implications?)
Procurement is key:
Achieving access for UK companies through an FTA is likely to require concerted
bilateral diplomacy as part of trade and defence cooperation, along with R&D
collaborations. Time for a campaign?
Defensive interests:
US highly competitive and subsidised by huge institutional procurement, effective
cross-subsidisation. Any further UK opening must be contingent on the US opening
its procurement to UK suppliers.
We need Technology Safeguard Agreement (TSA) for launch programmes –
opportunities/risks?

9. FTA Priorities: India
Opportunity
6th largest space market (institutional). Largely self-sufficient, but does buy technologies
and tier 1 and 2 products. Nascent commercial sector and significant potential for
downstream applications – e.g. climate, agriculture, education, health.
No accurate export data, but identified as priority country by industry through the Space
Growth Partnership (SGP) and 6th largest export market in space survey.
Barriers
10% tariffs.
Restricted procurement– role of Indian Space Research Organisation (ISRO) and its
commercial arm Antrix.
Very high regulatory barriers affecting operators – ISRO again … incl. preference Indian
satellites, need to provide capacity through ISRO (middle-man), licenses (media), import
licenses for handsets, gateway infrastructure, in-flight connectivity
But some positive signs, recently permitted 100% FDI in space sector, ISRO committed to
increase commercial procurement, ‘downstream’ opportunities

10. FTA Priorities: China
Opportunity
China is the 3rd largest market (institutional). Increasingly sophisticated and self-sufficient,
but keen to buy technology. Dominated by government.
No accurate import/export data. From export survey, 3rd most important non-EU export
market and 5th most important source of imports.
Barriers
Tariffs low (0% parts, 2-2.5% satellites). Weak IP protection and technology transfer
requirements.
Export controls are the major barrier for manufacturers
Restrictive FDI rules: foreign equity restrictions, for telecoms need JV with State owned
enterprise and high capital requirement (c.US150m)
Restrictive type approval of terminals.
Regulatory restrictions on operators – e.g. lease through ‘qualified domestic entity’, but
some pragmatism.

11. Other markets
Japan: 4th largest institutional market. Export survey:
2nd non-EU export market. Regulatory barriers and
preference for domestic suppliers. Value of UK-Japan
Satellite Procurement Agreement (like US one).
GCC: 5% tariff on parts. Export controls. Security
requirements.
Brazil: opaque and burdensome regulations. Satcom
operators face triple-tax (to domestic customer, to 2nd
domestic customer, to consumer)
Indonesia: opaque and unclear regulations. Security
requirements (for govt. censorship) favours domestic
suppliers. Possible equity restrictions …

12. 5. Example provisions in current FTAs
Specific space-sector provisions in EU FTAs include:
EU-South Korea FTA allows EU satellite
broadcasters to operate directly cross-border into
South Korea, thus avoiding the obligation to liaise
with a Korean operator.
EU-Canada CETA proffers access to procurement
by the Canadian Space Agency, covering goods
and services limited to those related to satellite
communications, earth observation and global
navigation satellite systems.

13. 6. Questions…
Have we identified the right countries – e.g.
focusing on new FTA countries, not lower tier
markets etc?
Have we identified the right barriers, what’s
missing, what relative importance?
What is the best way of engaging space industry
on specific barriers as negotiations progress?
Contact:
philip.brown@ukspaceagency.bis.gsi.gov.uk