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The US has eased its export controls programme in order to allow improved technology sharing with the other members of the AUKUS security agreement, Australia and the UK.
According to a press release yesterday (15 August), the US State Department has informed Congress that it considers Australia and the UK to have suitably compatible export control regimes for the government to change its International Traffic in Arms Regulation (ITAR) rules to allow easier sharing of military technology with those countries.
This will mean that around 80% of trade in this technology will not require a licence, and comes following changes made by the UK and Australia to their export controls programmes in a bid to reassure the US that any technology it shares will not be shared further.
‘Revolutionise defence trade’
The State Department said:
"Today, the Department of State submitted to the Congress a determination that Australia and UK export control systems are comparable to those of the United States and have implemented a reciprocal export exemption for US entities.”
The changes, it added, would “maximise innovation and mutually strengthen our three defence industrial bases by facilitating billions of dollars in secure licence-free defence trade”.
Defence minister of Australia, Richard Marles, added:
“These critical reforms will revolutionise defence trade, innovation and co-operation, enabling collaboration at the speed and scale required to meet our challenging strategic circumstances.”
He added that it marked a “generational” change in the military trade between the three nations.
The Chartered Institute perspective
Hamish McKay, a trade and customs specialist at the Chartered Institute of Export & International Trade, said “this is a game changer from the military perspective” for trade between the three nations.
“UK and Australian companies working on joint projects with the US have had to jump through hoops to meet the ITAR requirements. Being able to move ITAR goods using exemptions will streamline the process and reduce supply chain time constraints accordingly.
“Any trade controls outside the scope of the ITAR and the UK Strategic Military Export Controls Lists will still be applicable. The UK has a really strong trading relationship with Australia and the US on military projects going back years.
“The US, meanwhile, has taken a global lead on export controls for a long time, and it is great to see that they are finally recognising that the UK and Australian export control regimes are just as stringent. This will cement the extraordinary trading relationship we have with the US for the future.”
Competitiveness
An anonymous UK official also told the FT that the reforms marked a major step in ensuring that “the UK, Australia and US [are as] competitive as they can [be] with China”.
A quicker approval process for exports falling under ‘Pillar 1’ of AUKUS, which covers nuclear-propulsion hardware, would help Australia to more quickly construct nuclear-powered submarines, the official added, while also helping to accelerate advances in other areas including military AI.
The UK would have been “happy with a shorter list of exemptions”, they added, and while “it doesn’t remove the bar” for approvals, it “lowers the bar significantly”.
Squire Patton Boggs’ Trade Practitioner blog noted yesterday that the US State Department published a new proposed rule on 29 July redefining ‘defence service’ under the ITAR regulations.
Those involved in the trade have been invited to submit comment to the department.