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Highlights from the April 17 U.S. Committee on Foreign Affairs Roundtable "Executing AUKUS Pillar II: ITAR Exemptions for the UK and Australia"

Updated: May 1

On the 17th of April the United States Committee on Foreign Affairs convened a full committee for a roundtable to discuss AUKUS Pillar II and the ITAR exemptions for Australia and the United Kingdom. The roundtable focused on obtaining key industry insights about the need for and the content of the exemptions as well as ancillary defence trade recommendations to support the intent of AUKUS.

The roundtable convened key witnesses from prominent aerospace and defense companies, including representatives from Aerospace Industries Association, Anduril, Lockheed Martin, and General Atomics. Each industry representative had the opportunity to present to the Committee how they view the progress and opportunities to come under AUKUS.

Congresswoman Young Kim's opening remarks addressed the sluggish progress of the AUKUS partnership, attributing the delays to bureaucratic hurdles and regulatory complexities. She underscored the necessity of streamlining export control regulations, asserting that excessive red tape "is the death of innovation". Kim emphasised the urgency of granting the AUKUS ITAR exemption for Australia and the UK, expressing disappointment at potential delays, which she deemed "shameful".

Industry representatives were then given the opportunity to provide opening remarks. Each industry representatives emphasised the importance of AUKUS Pillar II in integrating the industrial bases of the US, UK, and Australia, highlighting the potential for regulatory relief to enhance defence capabilities and innovation. Key points included:

Aerospace Industries Association (AIA) noted the failure of the Defense Trade Cooperation Treaties, which the U.S. Senate ratified in 2010. AIA emphasised the importance of industry co-design, visibility and feedback on the content and language of the imminent AUKUS ITAR exemptions, pointing out that the failure of the Treaties was largely due to the lack of industry involvement in their design.

Anduril Global Defense emphasised that AUKUS Pillar II's ambitious goals, facilitated by ITAR reform through the AUKUS ITAR exemptions for Australia and the United Kingdom, will serve as a vital deterrent to adversaries. The representative highlighted the necessity of the AUKUS ITAR exemption for fostering industry collaboration and stressed the importance of adhering to core technology development principles such as open architecture, software-first design, modern manufacturing practices, and scalable supply chains to ensure interoperability in technology development approaches under AUKUS Pillar II.

General Atomics underscored the necessity of modernising both current export control mechanisms and the AUKUS ITAR exemptions to achieve the full objectives of AUKUS. The representative addressed the outdated regulations of the Missile Technology Cooperation (MTCR) and its negative impact on investment, collaboration, technology development, and the sale of U.S. Unmanned Aerial Systems (UAS). They highlighted the disparity, noting that China, not bound by the MCTR, faces no such hindrances.

The representative from Lockheed Martin argued that the United States greatest strength is staying ahead of the technology advancement of adversaries by "working with our friends". The representative stated the new exemption should "not be more complex than getting a license", and that it should be seen as the "start to the process, not the end and that [it] should be updated as time goes by to ensure it remains responsive to modern business practice".

The industry representatives also provided examples of the challenges posed by current ITAR regulations. Mark Webber, Vice President, International Trade and Supply Chain, Lockheed Martin, provided the example of the sale of the Virginia-class to Australia, discussing the sale of the Virginia Class and related technologies to Australia, saying it was:

     “actually never intended to be sold to anyone other than the U.S. navy [as it] contains the most guarded technology for the U.S. warfighter … Almost every system and technology on the Virginia Class will need an export licence under the current ITAR regime… without an export exemption the Virginia Class sale to Australia will have the potential to generate not hundreds but thousands of licenses for manufacturers which then have to be adjudicated by licensing officials from the U.S. Department of State…”

In conclusion, the roundtable discussion illuminated the critical need for streamlined export control regulations to maximise the potential of the AUKUS partnership. Industry representatives emphasised the importance of the AUKUS ITAR exemptions for Australia and the UK in fostering collaboration and innovation while highlighting the challenges posed by the current United States regulations. Moving forward, swift action and ongoing dialogue between government and industry will be essential to overcome bureaucratic hurdles and fully realise the strategic objectives of AUKUS.

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