AUKUS-ITAR Reform May Be Losing Momentum, UK Parliament Hears
Although Australia, the U.K. and the U.S. have taken steps to ease defense trade restrictions, companies are still being cautious because progress around AUKUS appears to have stalled, researchers and U.K. lawmakers said this week. They also said it’s still too early for the three nations to invite other countries to join, adding that they need to first prove that the concept works among themselves.
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Ian Roome, a member of the U.K. Parliament’s Defense Committee, said British lawmakers have heard that the AUKUS effort is “rapidly losing a bit of credibility due to a lack of tangible progress.”
Fred Thomas, another member of the committee, reported that British Ministry of Defense officials have said they're “very proud of the work they have done on [International Traffic in Arms Regulations] reforms,” but industry is less optimistic.
U.K. government officials “want to talk you through it, show you the list and say how good it is,” Thomas said during a committee hearing this week. “But we talk to industry every day, and … they would say, ‘There may be an approved list, but we still cannot really do anything.’”
The U.S. last year revised both the ITAR and Export Administration Regulations to reduce certain license requirements for trade within AUKUS, including by creating a list of preapproved authorized users for a new AUKUS ITAR exemption (see 2412040044 and 2406100023). Since then, researchers and industry officials have called on the three countries to make more items eligible for the defense trade exemption and expressed skepticism about whether the Trump administration will prioritize the effort (see 2507250013).
Sophia Gaston, a senior research fellow for the Centre for Statecraft and National Security at King's College London, said during the hearing that the “ITAR reforms are really significant.” But she also said they have been “profoundly inhibited by the absence of the fundamental building blocks of cooperation, particularly security clearances and mutual recognition of classifications” between the three countries. “Those are the sorts of things that industry will reel off as the everyday barriers to their working, even internally between their own business operations in the trilateral market.”
“Until we solve those problems,” she added, “it is going to be very difficult to reap the rewards of the reforms that have been achieved.”
In addition, Gaston said it remains unclear whether AUKUS is better off under President Donald Trump than under former President Joe Biden. “The question is whether we are in a better position to have movement on that with the Trump administration in power than we were previously,” she said. “There was certainly no race to the finish on that under the Biden administration.”
Sidharth Kaushal, a senior research fellow at the Royal United Services Institute think tank, also said there’s a “risk that Pillar 2 loses momentum,” referring to the portion of AUKUS focused on increasing defense technology cooperation. He said there’s a “degree of political uncertainty regarding certain policies within the U.S.,” which is driving non-U.S. companies to be even more cautious about making sure their products don’t touch any portion of the ITAR to help them avoid being caught in cumbersome U.S. export licensing rules.
“ITAR-free has increasingly become something of a selling point, particularly in Europe,” Kaushal said.
A State Department spokesperson didn't respond to a request for comment.
U.S. lawmakers recently have proposed legislation that aims to continue removing obstacles to defense trade within AUKUS (see 2508220049), and a State Department nominee earlier this year said he has a “clear mandate” to continue working on ITAR reforms (see 2505150053).
Kaushal and Gaston also said the U.K. shouldn’t yet advocate for other countries joining AUKUS, such as Japan and South Korea (see 2409170030).
“If we cannot get this to work and produce outcomes between the three most compatible, integrated and in-sync countries with the deepest homogeneity in terms of intelligence sharing, I just do not think it is viable as a proof of concept,” Gaston said. “We need to prove ourselves as a trilateral enterprise.”
Kaushal made similar points, adding that there are still “significant, outstanding issues regarding the compatibility of specific mechanisms for governance and the control of information across certain prospective partner states and AUKUS members.” He specifically pointed to Japan, “which still does not run a system of clearances that is strictly compatible with those of Five Eyes states.”
Adding Japan could “occur in the medium to long term in a way that makes accession possible, but right now, I see that as relatively distant,” Kaushal said. “Growing the partnership risks diluting it.”