Despite
being announced over five years and a few defence and prime ministers ago, the
Defence trade treaty between the US and Australia is still under consideration
in Australia.
Way back on September 5, 2007, Prime Minister
John Howard and US President George W. Bush announced to a treaty allowing Australia
better access to US defence technology equipment. At a joint press conference
in Sydney during the APEC meeting, the two leaders said this would remove the
layers of bureaucracy involved in any acquisition of American defence
technology.
Plenty of people were delighted but five years on we’re still
waiting.
The latest holdup occurred at the end of August when the
government announced there would be a further period of consultation on the
proposed treaty enabling legislation, the Defence Trade Controls Bill 2011. That
will be conducted by a pair of well-credentialed defence figures, businessman Ken
Peacock and chief defence scientist Dr Alex Zelinsky. There’s no timetable for this
fresh round of talk but unspoken is the desire to get it done ASAP. That
message comes loud and clear from the speed with which the government got this
process under way.
On August 15, the Senate Foreign Affairs, Defence and Trade
Legislation Committee tabled a scathing report in the Senate. On August 17, the
government announced the Peacock and Zelinsky review - blinding speed for the
launch of a process of this nature and indicative that the government well
realised that despite an awful lot of work, there was still work to be done and
there could be no corner cutting.
The problems fall into two areas. One is that the US is conducting its own
reforms of the International Traffic in Arms Regulations (ITARs), likely to
have a very direct bearing on the operation of Australia’s legislation. That’s
expected by the end of 2012 and it would appear good sense to wait to see where
the US goes.
More fundamental for the Australian legislation were concerns
raised by the university and research sector that proposed regulation of
transfer of intangibles could capture much unexceptional research plus the
interaction between researchers.
First some background for those not wholly across what remains
an exceedingly complex area. Despite a perception that the US will joyfully
sell any of its weaponry to anyone with cash, the US has always imposed tight
controls, even in dealing with close allies, as Australia knows only too well.
Fundamentally that’s to preserve US military superiority, especially in areas where
it holds significant technological advantage. Think low observables, software
and there’s plenty more.
China’s diverse espionage effort in the US shows this technology
is highly desired, so why shouldn’t the US take all reasonable steps to protect
intellectual property gained at vast cost and effort.
Some equipment, such as the F-22 Raptor can’t be sold to anyone.
Other equipment can be sold but the US won’t release key information such as
some computer source code. That seems to be less of a problem these days with
purchasing nations generally stipulating full release of all pertinent IP.
Export involves a complex licensing process. This isn’t just
occasional bureaucracy, with each individual trade transfer requiring a
licence. The fact sheet issued by defence at the time of the Howard-Bush agreement
cites 2,361 licenses and 312 agreements approved by the US for Australia in
2006 alone.
For the rest of the world, the US typically issues more than
100,000 export licences a year, requiring a vast, cumbersome and costly
bureaucracy which still isn’t specially effective at keeping stuff out of the
wrong hands. On the Australian side, Defence and local firms had no choice but to
grit their teeth and factor this time and expense into all their dealings in
the US.
So, the treaty looked a very good arrangement and the government
pointed to reduced time and cost and enhanced business opportunities for
Australian firms in the US. Central to the way this treaty would work is the
“approved community” of the Australian and US governments and companies,
accredited as able to meet the required standards. Alas it was never going to
be simple.
In November last year, the Senate Scrutiny of Bills Committee
raised various issues including a concern that some provisions reversed the
onus of proof with the person accused of a breach having to prove he didn’t do
it, rather than the other way round.
Concerns raised in the most recent report are more complex and
relate to elements of the legislation dealing with Defence Strategic Goods List
(DSGL), an extensive compilation of weaponry, munitions, materials, chemicals,
organisms and specifically military and also dual use technology. The
legislation creates offences for transfer of DSGL technology by tangible (hard
copy or computer drive) or intangible (e-mail, fax or internet) means.
It’s this extension of the legislation to take in intangibles
that has concerned the university and research sector which points to normal
communications between researchers and all the normal processes of
collaborative research as now potentially regulated.
The universities and the research sector, backed by the federal
Department of Industry, Innovation, Science, Research and Tertiary Education,
complained that as drafted the legislation would simply not deliver on its
stated intention of only regulating some high end specialised research. Neither
had they been adequately consulted on the implications of all this, they said.
Even defence companies had some lingering concerns such as that the processes
to join the approved community would be onerous in terms of time required and
cost.
The Senate Foreign Affairs, Defence and Trade Legislation
Committee agreed. “Unless defence can provide assurances to the contrary, the
committee believes it would be folly to proceed with the bill at this time while
the resolution of important matters remain outstanding,” it said in its report.
So the government and
defence had little choice but to conduct further consultations. The US has held
up its end of the deal with the US Senate agreeing to ratify in late 2010.
Admittedly, this hadn’t been a speedy process with the Treaty stalled there since
December 2007. Now it’s down to Australia to sort out the remaining issues. There
could be another year in it
