Bastian Giegerich
Draft – not for citation
alternative is not fully operational, GPS enjoys a monopoly. Occasionally, US officials
have made the case that Galileo would threaten the GPS business model by setting up
an alternative (see: Swider 2003). This argument has some economic merits if one
considers technological implications and associated trade in good and services.
Nonetheless, it is hardly convincing for anybody outside the US government.
In fact, the logic is similar to when Europeans again started talking about
building rockets to launch satellites in the 1970s. Previous European attempts had failed
and the US was dominating the launch market. US officials tried to discourage their
European counterparts from renewing their efforts, arguing that it was an essentially un-
economic business. The US even offered to launch European satellites essentially for
free. The Europeans declined with the French government being the driving force and
eventually founded ESA and Arianespace, the commercial space launch company.
Arianespace went on to take a significant chunk of the market and, in some ways more
important, set-up independent European capacity and a technological base rivalling the
US. The parallels to Galileo seem to be obvious.
However, there was a variety of clearly expressed national security concerns on
the American side with regards to Galileo. First, given the time-honoured and well-
founded American complaint about low European defense spending and resulting lack
of military capabilities, Galileo was an irritating spending priority. Not only did the EU
members set out to duplicate an existing American system but they furthermore did
invest this money despite clearly defined and pressing military shortcomings (see: Hasik
and Rip 2003). Related to this is the fact that GPS’s de facto monopoly does not only
have economic implications but security implications as well – the US government
effectively controls global positioning and navigation via satellite. “The Galileo
challenge raises the question as to whether the US will continue to enjoy its current
dominance…That is why the Pentagon is so nervous” (Braunschvig et al. 2003).
Galileo also raises the issue of third party access to technology and sophisticated
positioning and navigation services. Especially the fact that China decided to invest in
Galileo has been irritating to the US. The European Commission signed an agreement
with China in September 2003 which secures a 200 million Euro Chinese stake in the
project and cooperation on various aspects (see: European Commission 2003:
IP/03/1266). Another agreement has been negotiated with Israel in 2004 and a wide
range of other third countries has expressed interest into Galileo, among them India,
Ukraine and Russia (see: European Commission 2004: IP/04/360). Neither China nor
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Convention