The US State Department announced on Friday (April 19) that it is expected to finalize the trade exemption for the AUKUS defense project involving the United States, the United Kingdom, and Australia within the next 120 days.
This indicates that the Biden administration will miss the deadline set by the US Congress. However, this development could still bring positive prospects for the AUKUS plan.
AUKUS was established in 2021 to address common concerns of the US, UK, and Australia regarding China. In addition to other defense cooperation projects, Australia is set to purchase nuclear-powered attack submarines. However, the sharing of submarine technology is subjected to strict control under the United States International Traffic in Arms Regulations (ITAR).
The 2024 National Defense Authorization Act (NDAA) requires President Biden to determine within 120 days of its effective signing on December 22 whether Australia and the UK have “substantially equivalent” export control systems to the US to obtain an ITAR exemption. The 120-day deadline is set to expire this Saturday.
On Friday, the US State Department issued a statement indicating that the AUKUS partners are making significant progress towards creating an innovative ecosystem to support their common interests and deepen defense and security cooperation.
The statement mentioned that the US Department of Commerce’s Bureau of Industry and Security (BIS) had issued a “temporary final rule” on Thursday, significantly relaxing licensing requirements for Australia and the UK to facilitate defense trade and technological innovation.
“We can fully expect to finalize the new trade exemption in the next 120 days based on stakeholders’ feedback,” the State Department stated.
The UK’s Ministry of Defense, in a statement, expressed a “warm welcome” to the “significant progress” made in advancing AUKUS.
“Both the UK and Australia are meeting NDAA requirements in a step-by-step manner and benefiting from the exemption,” the UK said. “We believe that in the next 120 days, we will fulfill all the requirements for the comprehensive implementation of the ITAR exemption.”
Australia’s Ministry of Defense also welcomed the “concrete steps” taken by the US to simplify the export control licensing requirements for AUKUS in a statement.
Australia stated, “The US Department of Commerce’s decision to establish a license-free environment for dual-use military-civilian products between AUKUS partners is another major step towards creating a seamless environment for innovation, cooperation, and collaboration.”
However, Chairman of the House Foreign Affairs Committee Michael McCaul expressed dissatisfaction in a statement regarding the State Department missing the deadline set by Congress, calling it “very unfortunate.”
“While I am pleased to see the Department of Commerce promptly issuing a temporary rule to ease export controls, the State Department continues to delay and make the necessary decisions to counter the threats posed by China in the Indo-Pacific region and elsewhere,” he said in a statement.
On Thursday, the US Department of Commerce announced the reduction of export control requirements for Australia and the UK to promote cooperation within the AUKUS framework.
However, the Department of Commerce is only responsible for issuing licenses for certain defense-related items and not all items covered by the ITAR regime, which is managed by the State Department’s Bureau of Political-Military Affairs.
Former senior Pentagon official Jeff Bialos told Reuters that the State Department has been resisting the comprehensive exemption for the UK and Australia since the Pentagon first proposed it nearly 25 years ago.
However, he noted that the State Department’s statement is “forward-looking” and expressed anticipation for the US, UK, and Australia to propose reciprocal export control exemptions covering each other.
The first pillar of AUKUS involves supplying nuclear-powered submarines to Australia, while the second pillar calls for more direct cooperation in high-tech defense projects such as quantum computing, underwater capabilities, hypersonic technology, artificial intelligence, and network technology.