United States – On Tuesday, the US State Department and Australia’s Department of Defense announced their strategy to simplify the process of passing military equipment and technology in the AUKUS deal, which encompasses the Americas, Australia, and the United Kingdom.
Removing Regulatory Barriers
Australia, the UK, and the United States, which signed off on the AUKUS treaty in 2021 with a common goal of balancing the increasing Chinese power, agreed to transfer the nuclear-propelled attack submarines and other advanced weaponry such as hypersonic missiles from the USA, as reported by Reuters.
Nevertheless, the US controls the transfer of technological knowledge, which is stipulated in the International Trafficking in Arms Regulations (ITAR). It is, therefore, a barrier to cooperation.
Proposed Rule Changes
With the proposed rule change from the US State Department under consideration on Tuesday, the DDTC, an agency under the State Department, will no longer have to license or approve defense articles. This measure will help remove some of the administrative burdens for companies that want to make defense products in Australia or the UK.
Game-Changing Exemptions
“This exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies,” the State Department said in its posting in the Federal Register.
“These exemptions will be a game changer for AUKUS countries and revolutionize how the United States, the United Kingdom, and Australia cooperate on defense trade,” Kevin Rudd, Australian ambassador to the United States, said in a written statement.
Impact on Defense Export Permits
“For the first time, AUKUS defense industries will be able to work in a seamless, license-free environment, making it easier for us all to develop the scientific, technological, and industrial capabilities we need for our security and to promote global stability,” Rudd said.
Australia’s Department of Defence said in a statement that the proposed alterations from the AUKUS agreements would do away with the necessity of 900 permit requests valued at A$5 billion a year from Australia to the United States and 200 permits of defense exports from the United Kindom to Australia.
License-free trade would be allowed for over 70% of defense exports out of the US to Australia and for 80% of trade terms concerning exports of defense controlled by EAR.
The US is planning similar, concurrent rule changes, and a State Department official has confirmed this to the press, noting that the move “exempts the vast majority of currently licensed defense trade” among the three nations.
According to the State Department, an items list for “excluded” articles will still be generated, and films and materials with national significance would require approval. So, along with other State Department officials, we will look at items that the Missile Technology Control Regime (MTCR), an international arms control agreement, regulates and inputs for nuclear devices and some landmines.
A user list will be generated for their authentication and to ensure the rightful use of these technologies.
Greenwalt, a former senior Department of Defense (Pentagon) official charged with industrial policy and a senior fellow at the American Enterprise Institute, asserts that the policy’s open-ended list of excluded companies renders it almost meaningless.
“The message in that list is that we really don’t trust our closest allies to do much with us or are confident in their ability to positively contribute to those areas,” he said.
Continued Oversight and Public Feedback
Jeff Bialos, a former senior military official now a law partner at Eversheds Sutherland, is now an opponent who said during his military time that the State Department had fought against the exemption for Britain and Australia proposed by the Pentagon nearly 25 years ago. On Thursday, the US Commerce Department revealed plans to phase down export control conditions for Australia and Britain. The Commerce Department issued only some of these defense-related licenses, not those for the full range of items characterized under the ITAR system, which the Bureau of Policy and Military Affairs within the State Department manages, as reported by Reuters.
On May 1, Australia and the United States will begin a public comment period on the new rules, which is set to close on May 31.