The AUKUS agreement has never looked straight-forward, and who will rewrite the iTAR rules?
Now headed into its fourth year since its proposed founding, the AUKUS programme was created to be a strategic, long-term defence technology and industrial base effort between Australia, the United Kingdom (U.K.), and the United States (U.S.). Officially the three-nation partnership has as its goal “to bolster their allied deterrence and defence capabilities in the Indo-Pacific.”
Speaking at the Singapore Shangri-La Dialogue Asia-Pacific Security Forum at the end of May, Australia’s Deputy Prime Minister Richard Marles clarified that AUKUS is not a standard, conventional cooperative effort between the partner nations like the F-35 programme. “AUKUS is not an alliance,” he explained. “AUKUS is a technology-transferring arrangement between our three countries.” AUKUS is characterised by two ‘pillars’ that are to be implemented in roughly sequential order.
Pillar I is the more well-defined of the two. This calls for the acquisition and development of conventionally armed but nuclear-powered submarines for the Royal Australian Navy (RAN). The force currently operates diesel-electric submarines, but by replacing these with nuclear-powered boats its undersea capabilities will be significantly expanded.
Nuclear-powered subs, or SSNs, will extend the range of the RAN due to the enhanced endurance provided by the nuclear propulsion system. Nuclear-powered submarines are also quieter and therefore stealthier than the older-generation Collins-class diesel-electric models that are currently in RAN service.
This will make Australia the only country other than the U.K. with which the United States is sharing nuclear propulsion technology. But simply passing on that technology to Canberra is only the tip of a very large iceberg in terms of what it entails. What AUKUS amounts to is building a large resource-intensive defence industrial infrastructure in Australia, while at the same time creating a training regime and a cadre of both civilian specialists and ‘nuclear-navy military’ personnel.
The current plan is for this naval workforce and the accompanying defence industrial facilities to both be built up over the next seven years. The central goal of this activity will be to not just end up with a branch of the RAN that can operate and service these SSNs, but to be autonomous in this activity – no longer requiring an umbilical from its U.K. and U.S. partners.
The end game is for the RAN to be operating their own fleet of SSN-AUKUS subs, which will be a combination of a U.K. design and U.S. technology. These boats would enter service with the RAN by the late 2030s. Domestic production of the designs in shipyard facilities that the Australians will stand up in the meantime is scheduled to begin in the early 2040s. Five AUKUS-SSN boats are supposed to be built in Australia proper with a new boat to be launched every three years.
As a ‘bridge’ to this stage the U.S. is planning to sell as few as three or as many as five of the Block IV and above Virginia-class SSN-774s to the RAN. The baseline plan is for Australia to make the initial procurement of three of the Virginia-class models and to then exercise the option for two additional boats only if the programme falls behind schedule.
The first in-service U.S. Navy Block IV Virginia-class boat is planned for purchase by the RAN in 2032 and the second Block IV in 2035. The third boat would be sold to the RAN in 2038 and will be a next-iteration Block VII without the Virginia Payload Module (VPM). This module, which is included in the Block V and beyond Virginia SSNs, is added to the U.S. boats in order to give them a guided-missile capability when older-model USN SSGNs are retired from service. Thus it is not required for the RAN models.
These SSN-774s will be the most effective vehicle for training both the RAN crews and the shipyard personnel who have to support them in service as, according to official U.K. MoD statements, there is intended to “be a high degree of commonality” with the Virginia-class, including “sharing elements of the propulsion plant, combat system and weapons”.
Challenges, the Expanded Undersea Force and Beyond
This past April at the Navy League’s Sea-Air-Space exposition at Washington, DC’s National Harbour, the commander of the USN’s submarine force, Adm. Robert Goucher, was upbeat on the benefits of the partnership. The agreement between the three allies will create what he calls a “more subs forward” presence in the region.
The plan is for the three nations to create what is being called a “Submarine Rotational Force West” that can deter Beijing’s increasing territorial ambitions in the Indo-Pacific.
This trilateral undertaking builds on the decades of security cooperation between the three nations – which are all also part of the Five Eyes (FVEY) Anglosphere intelligence alliance. Sharing of some of these nations’ most closely-guarded classified data creates in theory a set of practices that would enable the equally-sensitive and strategically vital design technologies involved in nuclear-powered propulsion to be handed over to the Australians.
Those familiar with both the objectives of the AUKUS programme and the level of industrial engagement envisioned by the three partner nations are hopeful that the rather daunting challenges that lay ahead can be overcome. But willpower and dedication will not be enough, said one U.S. industry representative with long experience of working with Australia’s defence sector.
“The manner in which the U.S. directs and regulates defence exports – specifically the ITAR regime – create obstructions to many of the most critical phases of the AUKUS programme,” he said. “They will have to be addressed or the programme is over before it even begins.”
If those difficulties can be sorted, there will be even further complications when the programme moves into the Pillar II phase which calls for collaboration on advanced capabilities that will involve technology and information sharing.
At the same Shangri-La Dialogue forum, Marles pointed out that the lack of details about what Pillar II entails and the potential expansion of the effort to other allied partners beyond the original three AUKUS nations. Both of these issues will emerge eventually, but part of the difficulty in anticipating them is that Pillar I is not sufficiently advanced in its implementation to be looking that far into the future.
“Obviously Pillar I, which is Australia’s acquisition of the nuclear power company capabilities confined to ourselves, U.S. and the U.K.…Respectively, Pillar II is about the U.S., the U.K. and Australia working more creatively, working together on innovative military technology,” he stated.
Continuing he explained: “we are open to the idea of that work being expanded to other countries. And we talked about that happening in Japan. Really the precondition to that, is that it’s not so much about the other countries, it’s actually about us getting runs on the board ourselves, ensuring, if you like, the work that we’re doing between the three countries, is that there is something very significant to share.
“And its early days, if we’re being honest about how the work we’re doing in relation to the two. But we are really confident now about how that is going, and we see that development happening pretty quickly. And in time we do see the opportunity of getting that work.”
Unanswered questions
But what looms ahead for AUKUS are some difficult and yet unanswered questions. As a commentary published by the Washington-based Center for Strategic and International Studies (CSIS) just after the March 2023 announcement by President Joe Biden and Prime Ministers Anthony Albanese and Rishi Sunak in San Diego, point out that AUKUS is not just about the submarines themselves. There are a host of associated requirements that will have to be addressed in parallel.
In no particular order, aspects of the programme and its impact in other areas that have to be resolved are:
- Estimates for the cost of AUKUS from now until 2055 run at about $240 billion (AUD 368 billion). This makes it a project that dwarfs any other in Australia’s history and that aggregate sum amounts to over 700 percent of Australia’s FY 2022–23 defence budget. Even once the subs are built and are in service there will be in subsequent decades significantly greater costs for new basing facilities, defence procurement, personnel, etc. that will required sustained commitments.
- What capabilities will Australia have to forgo in order to fund this massive effort. All this time the People’s Liberation Army (PLA) is not standing still. The force continues to expand, to add new weapons and technologies, to build more ships. The new submarines will be an asset that adds enormous capabilities to the Australian Defence Forces (ADF), but it is likely that all the branches of the service will have to be revamped. This in order to both respond to the increasing military prowess of Beijing and to be capable of managing the kind of power projection that the AUKUS boats will be bringing to the table.
- Given the enormous impact that uncrewed systems, cyber capabilities, electronic warfare (EW), satellite, ISR platforms and other technologies are having on the Ukraine war and becoming essential to any military in a modern conflict, it seems likely that Australia will need to stand up and maintain similar capacities within the ADF. Maximising the potential that the AUKUS subs bring to the defence of Australia will also require the creation of these overlapping and technology-intensive networks, which is another parallel – but necessary – universe to that of traditional conventional military power.
- It will also be close to a decade before the RAN are actually operating any nuclear-powered submarines. This presents two realities that will need to be factored into any future ADF planning. One is that the dynamics of warfare evolve rapidly in the present day. There is every chance that the threats posed to Australia today will be non-existent in ten years’ time. The second is that in the meantime there is still a growing need to develop other expensive, longer-reaching defensive systems – like extended-range ASMs and air defence systems.
A New Arms Export Regime?
One potentially positive development is that in response to the many regulatory obstructions that can potentially stymie the AUKUS programme, the U.S. State Department has published proposed changes that would facilitate secure license-free defence trade between the U.S., the U.K. and Australia.
The State Department announcement reads that “proposed changes to the International Traffic in Arms Regulations – or ITAR – would create a licence exemption supporting billions of dollars in license-free defence trade between Australia, the United Kingdom, and the United States and allow for deeper security cooperation and innovation among AUKUS partners. All three nations are committed to working with our private sectors and our research communities – those who will use these exemptions – to ensure the exemptions, taken together, support the goals of the AUKUS enhanced security partnership.”
Public servants are loathe to present even the slightest sign that they lack any knowledge or experience necessary to render a proper and ingenious decision – hence a normal tendency to behave as though they have nothing to learn from those outside of government circles. However, in an unusual step, the State Department announcement reads that it was being put forth in order to solicit “public and industry input.”
The final paragraph of the announcement reads: “the U.S. Department of State is soliciting public feedback and comment by May 31, 2024. The proposed ITAR change, and details on submitting public comments, can be found on FederalRegister.gov.” A distinct departure from normal behaviour for the US diplomatic corps.
U.S. industry representatives who spoke to AMR stated that the ITAR regulations are not just one of the major intersection points for all of the interested parties in the AUKUS programme, but ITAR is the supreme bureaucratic sword that State wields in the interagency and multi-layered process that is the arms export mechanism of the U.S. Government.
“The power of DDTC [Directorate of Defense Trade Controls] is the big chip in the game that State has and one of the areas where their authority trumps everyone else’s,” one company executive said. “State may be soliciting opinions and putting this out there now while AUKUS is still in its infancy in order to get out in front of everyone else and to not be outmanoeuvred. The number and the sweeping nature of the changes to the [export] system that AUKUS dictates could give another agency an opening to steal some or all of this authority away from them.”
That is not just paranoia at work. A report last week is that the Defense MoU Attachés Group (DMAG), supported by the U.S. Chamber of Commerce and the Aerospace Industries Association (AIA), have collectively proposed creation of a new position in the Pentagon – an Under Secretary of Defense for International Cooperation. This position, the DMAG have put forth as their rationale, would “enhance the harmonisation and efficiency of international armaments cooperation” and “provide interoperable and interchangeable capabilities to our warfighters at this critical time and into the future.” In other words, creating a parallel universe to DDTC and trying to displace it.
It is a very clear attempt by the Defense Department to gain control over some or all of State’s authority in the weapons sales regime – one of the byproducts of the AUKUS programme not usually mentioned. These and other acts of internecine warfare by different U.S. Government entities wanting to have a bigger vote in the export process (and using AUKUS as the vehicle to do so) are probably only just beginning.
by Reuben F. Johnson
