The U.S.-Australia Treaty on Defense Trade Cooperation
Released: 2007-12-12T00:00:00

U.S.-Australia Treaty on Defense Trade Cooperation

Former Prime Minister of Australia John Howard and President George W. Bush signed the U.S.-Australia Treaty on Defense Trade Cooperation in Sydney on September 5, 2007, immediately before the Asia-Pacific Economic Cooperation (APEC) summit. Proponents view the treaty as bringing what are already very close allies even closer together by facilitating defense trade between the two states and members of their respective defense industries. However, some are concerned that a treaty approach is not the best way to deal with perceived problems with arms and defense technology export controls.

The Treaty

The treaty would ease restrictions associated with the International Trade in Arms Regulations (ITAR) by creating a comprehensive framework within which most defense trade can be carried out without prior government approval. The trade must support combined U.S.-Australian counterterror operations, U.S.-Australia "research and development, production and support programs," and Australia and U.S. government-only end-uses in order to be eligible. Exports of defense articles outside the community consisting of the two governments and approved companies of the two nations would require U.S. and Australian government approval. Supporters state that the treaty will help the two nations strengthen interoperability between their military forces, help sustain them, and use defense industries in direct support of the armed forces.

Many of the details of how the treaty will operate have yet to be worked out. According to press releases, "under the implementing arrangements that are contemplated by the treaty, our industries will move from the licensing regime under the U.S. International Traffic in Arms Regulations, to the more streamlined procedures that will be set forth in these implementing arrangements."

The Australian Perspective

The treaty, which was negotiated under the former Liberal [right of center] Government that took office in 1996, would provide Australia with streamlined access to U.S. defense trade. This treaty would simplify U.S. export controls on defense articles to Australia that reportedly, along with U.S. defense industry, has been frustrated with existing restrictions. Australia and the U.S. reportedly approved 2,361 licenses and concluded 312 agreements in 2006. The treaty would also provide Australia with:

operational benefits from greater access to U.S. support; improvements to military capability development due to earlier access to U.S. data and technology; cost and time savings from significant reductions in the number of licenses required for export of defense equipment; and improved access for Australian companies involved in bidding on U.S. defense requirements, or in supporting U.S. equipment in the Australian Defence Force (ADF) inventory.

If passed, the treaty will likely require the enactment of enabling legislation in Australia and as a result will need the support of the newly elected government of Kevin Rudd to come into force. Key legislation that may require amendment are the Customs Act of 1901, Customs Regulations 1958, and Weapons of Mass Destruction(Prevention of Proliferation) Act of 1995. Rudd's Labor Party's sweeping victory in the November 24, 2007 election has given him a strong mandate.

The Labor Party has denied election year accusations in Australia that it would in some way downgrade the Australia-U.S. alliance and stated "Labor will enhance our strategic relationship and seek to make an already special friendship even stronger and more effective." The defense trade treaty is expected to be supported by the new Prime Minister due to the large bipartisan support for the Australia-New Zealand-United States (ANZUS) alliance in Australia. While Prime Minister Rudd views the United States and the ANZUS alliance as central to Australia's security he has indicated that Australia would begin a staged withdrawal of troops from Iraq. He has also stated that under his leadership Australia would consider increasing the number of troops stationed in Afghanistan.

Prime Minister Rudd has stressed that the history of the alliance is a bipartisan one that was instigated in World War II by President Roosevelt and Australian Labor Party Prime Minster John Curtin. He has also stated that "for Labor the U.S. alliance sits squarely in the centre of our strategic vision. Intelligence sharing, access to advanced technologies, systems and equipment, together with combined military exercises and training enhances Australia's national security." Rudd has been described as believing that a strong American presence in the region is crucial to regional stability and that U.S. strategic engagement in Asia is central to Australia's security.

The Strategic and Political Context and U.S. Interests

The treaty would further draw Australia into a very small circle of closely trusted allies that have stood with the United States not only in past conflicts but also in recent conflicts in Afghanistan and Iraq. It would do this at a time when the United States is increasingly unpopular in the world. In May 2007, Secretary of State Condoleezza Rice described the alliance as "... one that reflects the deep bond of enduring ideals and shared history, colonial origins, democratic development, and shared political and cultural values ... ours is an alliance that remains strong...." During his September 2007 visit to Australia, Pacific Commander Admiral Timothy Keating stated, "Every war we fought for the last century, the Australians have been with us, and we have been with them ... they are members of the coalition of the committed, not just the coalition of the willing."

The treaty could improve the image of the United States in Australia by demonstrating the benefits of the alliance. Australian attitudes towards the United States have changed significantly in recent years. Only 48% of Australians polled thought that the United States would be a "very close" economic partner of Australia in five to ten years as opposed to 53% that thought China would be. This is quite remarkable given that Australia is a longstanding treaty ally that has fought alongside the United States in most of America's wars and established a Free Trade Agreement (FTA) with the United States in 2005.

Several factors have contributed to the decline in U.S. popularity in Australia. These include Bush Administration policies; the view that the United States is a self proclaimed world watch dog; the war in Iraq; and U.S. foreign policies. Dissatisfaction with the bilateral FTA and with the United States' position on global warming also appear to be key factors. In a recent poll sixty seven percent of Australians polled had an "unfavorable" opinion of President Bush despite former Prime Minister John Howard's close relationship with the President. Some 48% of those polled in 2007 felt that it would be better for Australia's national interest to "act more independently of the U.S."

Despite these negative polling results, some 92% of Australians believe that the U.S. will be a very close or close security partner over the next decade and some 79% still believe that the U.S. alliance under ANZUS is "very important" (37%) or "fairly important" (42%) to Australia's security. It is striking that despite the decreasing popularity of U.S. foreign policy since 2001, some 74% of Australians polled still trust that the United States would come to Australia's assistance were it to be threatened by some other country. Thus, it appears that Australians draw a distinction between the current U.S. government and its policies and the long term value of the ANZUS alliance.

Issues for Congress

Some have expressed concern that the treaty as proposed with Australia could lead to reduced congressional oversight. Many of those concerned with the treaty are concerned not primarily because they believe Australia would transfer military technologies to unfriendly states or entities but out of concern that the treaty could undermine existing congressional oversight as defined in ITAR. The lack of supporting implementing arrangements to accompany the treaty document is also of concern to some. In September 2007, the Australian Embassy reportedly stated that details of the implementing agreements for the treaty would be worked out in the coming months. The arrangements will:

define precisely how the treaty will operate in both Australia and the United States, and how its obligations will be implemented to the mutual satisfaction of both countries. These arrangements include identifying the changes that might be needed to our legal and regulatory regimes, and putting these changes into effect.

Until such time as the implementing arrangements are made known it will be difficult to comprehend the full scope of the treaty. By using a treaty, which must be ratified by the Senate, to redefine defense trade cooperation with Australia, the Administration appears to some to be putting in place an arrangement that avoids the existing regulatory structure.

Proponents argue that the benefits of streamlining defense cooperation with this close ally far outweigh separation of powers concerns as well as the potential that Australia would be the source of technologies or weapons falling into unfriendly hands. The potential that third party transfers could result in the re-export of U.S. technology to potential enemies is reportedly addressed in the treaty by allowing the United States to vet such transfers. The treaty has been welcomed by representatives of the U.S. defense industry as most of Australia's key weapons systems are American-made by companies such as Boeing, Northrop, and Raytheon. Australia's defense budget has experienced a 47% real growth rate over the past 11 years. (See Table 1 with U.S. arms sales agreements and deliveries with Australia for further information.)