ITAR Should End for Australia

The National Security Strategy (NSS), released by the White House on October 12, states that the United States and its allies face a global strategic competition with China—its first major opponent since World War Two, which has “both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to advance that objective.” Despite recognizing the necessity of working as closely as possible with key allies, there remain significant regulatory and bureaucratic barriers from earlier times. These should be reformed, otherwise the United States’ chances of winning this strategic competition are at serious risk. The International Trade and Arms Regulations (ITAR) system is the most significant obstacle to win this strategic competition.

U.S. national interests include having the most advanced technology and most capable close allies. The country’s national security is now undermined by outdated ITAR laws that are unintentionally handing a technological and military advantage to adversaries. AUKUS—the defense-technology sharing agreement signed last year by the United States, Australia, and the United Kingdom—cannot achieve its ambitious goals of sharing and codeveloping critical and emerging technologies, from nuclear submarines to hypersonic missiles and autonomous systems, without revising ITAR, at least for Australia as the United States has previously done for Canada under the National Technology and Industrial Base (NTIB). U.S. law and bureaucracy creates months of delays to service U.S.-made helicopters, prevent the repair of U.S. naval fighter aircraft, and even transfer bolts for U.S.-made aircraft flown by the Australian military. The United States needs to be thinking and acting now with the sense of urgency demanded by the rapidly deteriorating and extremely difficult threat environment.

Australia has been the target of Chinese efforts over the past several years to weaken Australia's alliance with the United States by exploiting its position as Australia’s leading trade partner and meddling in the Australian political system through its foreign interference campaign. When Australia stood up for itself against China—banning Chinese equipment from Australian 5G telecom equipment, passing legislation to counter foreign interference attempts, and requiring the registration of all who lobby on behalf of foreign governments, including national security as a criterion in its foreign investment reviews, and calling for an independent investigation of the origin and causes of the Covid-19 pandemic—China reacted with a series of restrictions on Australian exports to China, a refusal to meet (or even talk to) any Australian government officials, and threatened for more retaliatory actions. Indeed, the Chinese embassy in Canberra gave the media a list of 14 issues that Australia was required to unilaterally remedy to reverse these ”punishments.” If implemented, these demands directly undermine such basic Australian principles as freedom of the press, restrict parliamentary debate, and threaten academic freedom.

Rather than give an inch to this attempt of coercion, Australia has instead decided to shore up its economic resilience and reaffirm its sovereignty. This includes diversifying its trade partners to reduce its dependence on China's market, investing in new military capabilities, and—perhaps most significantly—signing on to AUKUS so that all its defense capabilities can be brought to bear notwithstanding the required huge increase in Australian defense spending as a result of AUKUS.

As the NSS states, the United States “[places] a premium on growing the connective tissue—on technology, trade and security—between our democratic allies and partners in the Indo-Pacific and Europe because we recognize that they are mutually reinforcing and the fates of the two regions are intertwined.”

China continues the most rapid naval buildup in history. It is seeking new civilian-military ports and other facilities to Australia’s north and northwest that could be used to effectively blockade Australia. And China continues to invest heavily in emerging and critical technologies such as quantum communications and computing, hypersonics, artificial intelligence (AI), and machine learning, which will be the new high ground of any future conflict.

Australia pays to acquire U.S. technology and matériel to credibly deter Chinese military ambitions. This technology-sharing effort with Australia will not only help the United States strengthen the capabilities of this long-standing and highly capable democratic ally but also enable the United States to benefit from Australia’s home-grown technology. But the United States cannot fully compete in this time-sensitive contest if it continues to apply outdated rules on technology sharing and weapons sales to Australia. ITAR practices often cause long delays in selling U.S. military goods to Australia. Other restrictions impede the mutually beneficial exchange of technologies and the U.S. purchase of Australian-developed systems.

To win this competition with China, the NSS notes “our alliances and partnerships around the world are our most important strategic asset and an indispensable element contributing to international peace and stability.”

The United States and Australia share intelligence under the Five Eyes partnership. Their soldiers have fought alongside each other in every major conflict since 1918, and an Australian is deputy commander of the U.S. Army Pacific. The idea that they can share so much but they need to go through protracted bureaucratic analysis to sell Australia the matériel it needs to defend itself and help U.S. forces in this time of heightened tension and competition is not only absurd on its face—more concerning, it gives China more time to make more relative gains.

ITAR and associated regulations date from the Cold War period. National Security Advisor Jake Sullivan has made clear that the world is now in the post-Cold War period, and the United States should immediately update its rules for working with their closest allies so that they are all as well-prepared as possible to win this intensifying strategic competition. There is no more time to waste.

James Carouso is a senior adviser and chairman of the Advisory Council to the Australia Chair at the Center for Strategic and International Studies in Washington, D.C., and was chargé d’affaires to Australia from 2016–2019. Thomas Schieffer was the U.S. ambassador to Australia from 2001–2005. Jeffrey Bleich was the U.S. ambassador to Australia from 2009–2013. John Berry was the U.S. ambassador to Australia from 2013–2016. Arthur Culvahouse was the U.S. ambassador to Australia from 2019–2021.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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James Carouso
Senior Adviser and Chairman of the Advisory Council to the Australia Chair, Australia Chair

Thomas Schieffer

Former U.S. ambassador to Australia

Jeffrey Bleich

Former U.S. ambassador to Australia

John Berry

Former U.S. ambassador to Australia

Arthur Culvahouse

Former U.S. ambassador to Australia