US 'Has to' Reform ITAR, Former DOD Official Says

“If AUKUS fails, there is a good chance that the United States can no longer defend the liberal international order,” Stacie Pettyjohn, a defense posture expert with the Center for a New American Security, said during an event last week hosted by the Carnegie Endowment for International Peace. “We have to find ways to combine in a meaningful way our capabilities with our allies and partners.”

ITAR was designed to restrict exports of technologies the U.S. created in the mid- to late 20th century, a time when America had no technological “peer,” said William Greenwalt, a defense export control expert with the American Enterprise Institute. But the regime is now outdated, he said, partly because it has lengthy processing times for license applications and places onerous restrictions on sharing items with even close American allies.

“ITAR does not work well with either our allies or the commercial marketplace,” said Greenwalt, a former Defense Department official and senior staff member for the Senate Armed Services Committee. “It creates tremendous incentive for our partners, and particularly the commercial marketplace, to never deal with the Department of Defense and the U.S. government.”

Greenwalt said the ITAR needs to be “discriminatory” and apply less strict export rules for close allies while keeping stronger restrictions on countries of concern. “It has to be modified,” he said. “It is essentially applied equally across the world.”

Although Congress “historically” has been “split” on revising the ITAR and has usually deferred to the State Department, which oversees the regulations, Greenwalt said that mindset appears to be changing. After the U.S. earlier this month announced a timeline for delivering nuclear-powered submarines to Australia through AUKUS, several lawmakers said they would support legislation to reform U.S. export controls to allow more efficient technology sharing within the group (see 2303140018).

“I think there are those in Congress who have been pushing” for ITAR reform, Greenwalt said. But he also said he is skeptical any changes are imminent, partly because the Armed Services Committee, which he said is one of the committees that most wants to address the ITAR, doesn’t have jurisdiction over export control issues.

Pettyjohn said other committees want to tackle export controls, but “they don't have as deep of an understanding of the national security issues.” It’s “not just Foreign Affairs and Armed Services,” she said. “There are other committees that have interest.”

Greenwalt suggested he is less hopeful the State Department will initiate comprehensive ITAR reform. Federal agencies “haven't quite come to terms with the changing technological dynamics that are taking place” and are comfortable continuing the ITAR status quo, he said. “Therefore, they're continuously controlling what they know and not making changes,” Greenwalt said, “because they fear for the national security implications of that.”

ITAR controls have been especially “cumbersome” for Australia, which faces “very long” timelines when it wants to buy controlled U.S. technology or is participating in the U.S. Foreign Military Sales program, said Ashley Townshend, an Australian expert on Indo-Pacific security at Carnegie. That process involves many U.S. federal agencies discussing “whether or not there are any concerns about the release of this technology” to Australia, even though “the answer is nearly always yes.”

The lengthy processing times make “a lot of sense 99% of the time for most countries,” Townshend said. “But when it comes to Australia and Britain, or to the U.S.’s closest allies,” that “mindset just doesn't make sense.”

Under the ITAR, Australia must submit “retransfer or reexport authority requests” to the State Department “prior even to undertaking a military exercise with the United States, to say nothing of operations or exercises with other parties,” Townshend said. “The paperwork is endless. The time it takes is extremely cumbersome.”

The State Department recently proposed an expansion to the ITAR’s definition of activities that don’t require export licenses, including when a foreign government’s armed forces or U.N. personnel takes a defense article out of a previously approved country (see 2212150028 and 2302270026). The agency also recently announced an open general license pilot program designed to more efficiently authorize certain reexports and retransfers of certain defense items and services to Australia, Canada and the U.K. (see 2207190008), and said it may consider expanding the program to exports (see 2301240029).

But without broad ITAR reform, Greenwalt and Townshend said, AUKUS will fail and U.S. defense trade with allies will continue to be crippled. “It's all bound up by red tape,” Townshend said. “If we don't get this right, we won’t get the capability in a time frame of relevance, we won't be empowered and we’ll be a less valuable U.S. alliance partner.”