While much of the world continues to watch U.S. negotiations with Ukraine and Russia, recent events near Australia underscore the pressing dangers of the current moment. As is increasingly the case, the source of these challenges is China. Whether it was a China naval task force circumnavigating Australia, China’s unprofessional and unsafe live-fire exercises, the Chinese ambassador’s warning in Canberra to Australia to get used to such activities, or Beijing’s new deal with the Cook Islands, the past several week’s events have generated an enormous amount of uncertainty, anxiety, fear, and anger.
What these unsettling events should do is underscore the urgency with which Australia and the United States need to accelerate the acquisition of key defense capabilities. The best bet for doing so, at the necessary scale and speed for meaningful deterrence, is to realize the ambitions of U.S.-Australian defense industrial integration.
Leadership of every political stripe in both Australia and the United States has recognized the need for an enhanced defense partnership to ensure deterrence and security in the Indo-Pacific. This determination has manifested itself in unprecedented, once-in-a-generation security arrangements such as AUKUS, a security partnership between Australia, the United Kingdom, and the United States. And yet this extraordinary level of defense cooperation depends on a level of defense industrial integration that remains elusive even for the closest of allies.
Recent strategic documents in both countries—the National Defense Industrial Strategy in the United States and the Defence Industry Development Strategy in Australia—emphasize cooperation to bolster defense capabilities, build more resilient supply chains, and strengthen deterrence.
But this is easier said than done. A new CSIS report which the Australia Chair published this week, Enhancing Defense Industrial Cooperation Between Australia and the United States, highlights areas of progress, examines persistent barriers to cooperation, and makes recommendations to overcome them.
To begin, there has been steady work by Washington and Canberra to facilitate more defense cooperation and overcome existing barriers. Reforms to the International Trafficking in Arms Regulations (ITAR) by the United States, and the allowance of exemptions for AUKUS partners, has enabled an expedited licensing process for companies exporting defense articles between countries. This is a promising and important step.
However, this is just one obstacle that has been removed; many more remain. These barriers add up to an ecosystem where cooperation is prized but remains difficult to achieve in practice. Through extensive interviews with private industry executives and conferences in Washington and Canberra bringing together industry and government representatives, our study found that barriers exist at nearly every level, ranging from budgetary to bureaucratic, to cultural, political, strategic, and technical.
Several practical steps can be taken to overcome these challenges. Setting broad standards between the AUKUS partners is a strong first step in overcoming regulatory and bureaucratic barriers, with positive spillover effects on bilateral U.S.-Australian cooperation. These standards can include defense articles, accreditation, and security clearances that equally apply to each country. This allows for less bureaucratic confusion and a more seamless defense ecosystem.
More collaboration between government agencies is also needed to close the gap on cultural, political, and strategic barriers. Each country’s defense departments could audit the implementation and outcomes of industrial cooperation efforts, publish progress reports, and work to conduct outreach campaigns to Australian and U.S. companies about new ITAR rules and boundaries. This would allow for clearer goals and would help demystify the ITAR process for companies.
To overcome economic barriers, the AUKUS partners should create an AUKUS Consortium to facilitate economic ties between businesses. This consortium would be an entry point for vendors and could ease the discovery process for government customers, making the acquisition process more digestible for small- and medium-sized firms.
Some of these steps are underway while others are being considered. But real and sustained change can only start once policymakers embrace a mindset that believes time is of the essence and that approaches the challenges of national and allied preparedness with a sense of urgency.
Such an endeavor is not simply an attempt to bolster alliance cooperation, play off of shared history, or harness the personal chemistry between leaders. Rather, it is in the hardheaded interests of both nations.
For Australia, the ambitions are clear—access to greater technology, more lethal firepower, and the growth of its own sovereign capabilities. This is no less true for the United States, which would see the alleviation of its overextended defense industry, production, positioning, and access to munitions in the most strategically significant region globally, and the enabling one of its most trusted allies to become more capable.
Revamping the U.S.-Australia alliance to ensure that it can align national strategic visions and also produce the vital defense equipment needed is the necessary step for doing so.
Cynthia Cook is director of the Defense-Industrial Initiatives Group and senior fellow with the Defense and Security Department at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Charles Edel is a senior adviser and the inaugural Australia Chair at CSIS. He previously served on the U.S. secretary of state’s Policy Planning Staff.
If you are interested in learning more about this topic, explore CSIS’s Executive Education course Mapping the U.S. DOD Acquisition Ecosystem.
