In the 1990s, two U.S.-based companies handed over secrets that could have helped the Chinese military space program. Their actions violated the International Traffic in Arms Regulations, or ITAR.

Congress acted, but not very well.

ITAR had been put in place to keep the private sector from compromising national security. But, rather than just let the guilty companies receive their prescribed punishments, Congress decided to layer on a bunch of new restrictions. They wound up regulating the export of virtually anything related to stuff that goes into space -- seemingly even if it could be bought at Radio Shack.

Domestic prohibitions typically help create foreign competitors. That was certainly the case here. A French-based firm, Thales Alenia Space, began actively marketing an "ITAR-free" satellite product. Predictably, U.S. market share in satellite sales collapsed. In 1999, American companies accounted for about 65 percent of that industry globally. In recent years, the U.S. share has sometimes dipped to less than half that.

The Aerospace Industries Association estimates that Congress's excessive export control restrictions cost American businesses about $20.8 billion in satellite manufacturing revenue -- the equivalent of almost 28,000 good-paying jobs a year.

Further, new regulations did not appreciably slow the proliferation of missile technology. In fact, a recent official U.S. government assessment concluded the changes had "no noticeable benefit to national security."

Last year, Congress smartened up and changed the law, modernizing the U.S. satellite export control regime.

Now, it is time for Congress to wake up and take a hard look at U.S. restrictions on the export of unmanned aerial vehicle technology -- commonly called UAVs, or drones.

Washington likes nothing better than to talk about drones. They even became the topic of a rare Senate filibuster. But as Washington drones on about who can shoot at whom, where, with what missile-armed drone, the reality is everybody is getting them. Today, UAVs are unquestionably the most dynamic component of the aerospace industry worldwide. The Teal Group, an aerospace consulting firm, recently estimated spending on UAVs will total $89 billion over the next 10 years.

More than 50 nations manufacture or employ drones, but the United States is the Walmart of UAVs. There are, however, lots of prohibitions on selling drones and drone-related equipment, software and technology. Some of the restrictions are to be compliant with the Missile Technology Control Regime (curbing the spread of unmanned delivery systems capable of carrying long-range nuclear weapons) and the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.

America, however, has additional ITAR restrictions. The White House also seems to have become shy about selling drones to allies. Last year, for example, the administration appeared ready to sell Italy $17 million worth of MQ-9 Reaper drones. The deal is still in limbo. Denying first-rate capabilities to first-rate allies makes them less capable and less interoperable with American forces.

Moreover, all this dithering will cost the U.S. market share. It will help create competitors that may be less picky about their customers.

It took Washington two decades to smarten up on satellite technology exports. Hopefully, Congress and the administration can wise up faster when it comes to UAVs.

The reality is drones are now ubiquitous -- not just for warfare but also for scientific research, disaster response, law enforcement and a range of economic activities. The U.S. needs laws and policies that respect and safeguard our freedoms and privacy as well as enhance our security, our knowledge of our environment and our economic opportunities.

Examiner Columnist James Jay Carafano is vice president for defense and foreign policy studies at the Heritage Foundation