'Fresh Look' Needed to Continue ITAR Reform, Panelists Say
The U.S. should take more steps to slash export barriers hindering defense trade with close allies, especially Australia, industry officials and a researcher said last week.
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The State Department last year issued an exemption for certain defense trade among the U.S., Australia and the U.K. under the International Traffic in Arms Regulations (see 2412040044 and 2408160019), which was welcomed by many defense companies. But some have urged the three AUKUS countries to expand the exemption and continue eliminating ITAR barriers, including by removing items from the new Excluded Technologies List, which are technologies that still require a license despite the exemption (see 2410010030).
Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, noted that the U.S. “made tremendous progress over the last 18 months” on loosening ITAR regulations. But he also said “we think we need a fresh look at that,” because “there's more to be done.”
“Whether it's on the Excluded Technologies List, whether it's on the regulations related to the Missile Technology Control Regime, anything related to the export control barriers that we still see,” Hardwick said during an event last week hosted by the Center for Strategic and International Studies. “We think that there's an opportunity there.”
AIA has previously asked the State Department’s Directorate of Defense Trade Controls to make sure the agency's controls align with other member nations of the multilateral Missile Technology Control Regime, including by removing restrictions on items that aren’t also controlled by other MTCR countries (see 2412300013). Other researchers have asked DDTC to adopt a policy of “strong presumption of sharing,” as opposed to more restrictive policies, for license reviews of certain AUKUS-related technology categories covered by the MTCR (see 2408220017).
Hardwick said the U.S. needs to be “looking at the MTCR-related regulations and how we read the MTCR versus how other countries read the MTCR.” He specifically said AIA wants to make sure the U.S. is “not self-limiting ourselves in our reading of the MTCR that precludes cooperation with partners in allies.”
Cynthia Cook, a senior fellow in the CSIS Defense and Security Department, noted that the ITAR is a “cultural issue” as well as a regulatory one. “It quiets conversations,” she said. “It makes people more cautious about sharing things.”
Cook added that one company told her it was concerned about “talking to foreign nationals for things that appeared on their website” because of fear of the ITAR. “It limits the interactions that would underpin stronger defense industrial cooperation.”
Hardwick agreed, saying some ITAR restrictions “tend to slow down the cooperation,” which could hurt defense-related collaboration between the U.S. and Australia. He said the U.S. headquarters of some defense firms, like Boeing or Northrop Grumman, have trouble working with subsidiaries in Australia because of the ITAR. “Sometimes those two organizations can't talk to each other because of the export control restrictions,” he said. “And we have endeavored to try and break those barriers down as much as possible.”
Hardwick added: “The purpose of the U.S.-Australia relationship is to not slow down. It's to speed up.”
Lee Goddard, CEO of the Australian Missile Corporation, made similar points, saying it’s the “responsibility of leadership now to look down and say, ‘Where are the barriers?’ and remove them.” If there is demand for more defense trade, he said, “get cracking and move as fast as you can.”
Hardwick said there is demand. He said he has recently been approached by many small and medium-sized companies asking about the Australian market. “There's no other country in the world they come to me and ask me about. Right now, it's ‘tell me about Australia,’” he said. “They're coming to me asking for those contacts because they recognize the opportunity, both from a resiliency perspective, but also an opportunity for them to grow their business.”
The Trump administration has shown early signs of wanting to build on defense trade reforms with countries like Australia, Hardwick added. He noted that Defense Secretary Pete Hegseth's first meeting with a foreign counterpart was with Australian Defense Minister Richard Marles in February, where the two discussed AUKUS and other issues (see 2502100012).
“That is a tremendous signal to be sent, not only here in the United States, but also to Australia,” Hardwick said. “That is a huge demand signal that was sent to U.S. industry that the commitment is still there in Australia.”