By Adam Leslie*
The AUKUS defence partnership of Australia, the UK and US has made remarkable progress since its establishment in September 2021, though it also faces emerging challenges. After decades of frustrated attempts at reform of US defence-technology export regulations, the past three years have demonstrated what bipartisan congressional courage and masterful diplomacy can achieve when aligned with strategic necessity. (The Australian Strategic Policy Institute. The Strategist.)
In an era where metrics often oversimplify complex realities, Courtney’s reframing of the US shipbuilding debate deserves particular attention. While critics focus on vessel count, Courtney presents a more nuanced picture: US shipyards are already operating near peak Cold War production levels when measured by tonnage. More significantly, AUKUS will drive production over the next decade to exceed even World War II levels, though in fewer but substantially larger and more sophisticated vessels. This shift in measuring capability rather than quantity reflects the evolution of naval warfare and industrial capacity, and underscores the advantage of Australia building an additional allied shipyard.
However, this industrial renaissance faces immediate challenges. The most pressing concern lies within the Defense Department, where mid-level officials are wrestling with decisions about adding certain submarine technologies—particularly in propulsion and acoustics—to the exclusion list of the US export rules, called the International Traffic in Arms Regulations (ITAR). These seemingly technical decisions could have outsized implications for AUKUS’s first pillar. While McCaul reports reassurances from Deputy Secretary of State Kurt Campbell that these exclusions will ultimately align with AUKUS requirements, the situation highlights the complex interplay between bureaucratic processes and strategic objectives.
The congressional AUKUS Caucus of supporters are confident that the partnership’s durability extends beyond current administration priorities. McCaul’s confidence in AUKUS’s Trump-proofing stems from the former president’s role in its genesis, suggesting a rare point of bipartisan consensus in US foreign policy. Donald Trump’s candidate for secretary of state, Marco Rubio, on 15 January predicted strong support for AUKUS in the incoming administration.
Yet the alliance’s true resilience may lie in what Rudd astutely identified in its second pillar: the de facto creation of an AUKUS free trade agreement.
This emerging defence technology marketplace represents perhaps the most revolutionary aspect of the partnership. The deterrent effect of a unified, innovative defence industrial base across three continents could prove as strategically significant as the submarine program itself. However, realising this potential requires more ambitious steps toward market integration.
The current framework establishes key technological verticals but leaves crucial questions about the stages of innovation and company growth unanswered. A more comprehensive approach would better define the span from basic research to mature companies, which could lead to the creation of a genuine AUKUS innovation ecosystem. This could include shared acceleration programs, coordinated investment strategies, and unified contracting vehicles—all while drawing upon each nation’s unique investment and industrial strengths.
Such integration would require modest personnel commitments, targeted investment to back agreed winners and unprecedented transparency about capability gaps across the three nations. Yet these challenges pale in comparison with the strategic advantages of a truly integrated defence industrial base. This would not only accelerate innovation but also create redundancy and resilience in critical supply chains, a lesson brought into sharp relief by recent global disruptions.
The AUKUS partnership represents more than a submarine deal or even a defence agreement; it is a blueprint for deep industrial integration among democratic allies. As geopolitical competition intensifies, particularly in the Indo-Pacific, this model of alliance-building through industrial policy could prove as significant as traditional security arrangements.
Success will require sustained attention to seemingly mundane details: export control reforms, procurement harmonisation and investment coordination. These unglamourous tasks might not capture headlines like submarine announcements, but they will determine whether AUKUS fulfills its transformative potential.
Moving forward, policymakers should focus on three priorities. First is resolving the ITAR exclusion list challenges in a way that enables rather than constrains technology sharing. Second, there needs to be a comprehensive framework for market integration across all stages of technological development. Finally, we must establish the institutional mechanisms needed to coordinate investment and procurement across three different national systems.
The progress achieved in just three years suggests these challenges are surmountable. More importantly, it demonstrates that democratic nations can move with relative speed and unity when faced with clear strategic imperatives. As AUKUS evolves from concept to reality, maintaining this sense of urgency while attending to crucial technical details will be essential.
The ultimate measure of AUKUS’s success will not be in submarine counts or even tonnage produced but in whether it creates a new model for alliance-building through industrial integration. Early indicators suggest it is well on its way to doing exactly that.
