What obstacles to cooperation in AUKUS Pillar II remain and what might be done to remove them?
The Big Ask | No. 36.2025
From 9th to 12th September, the Defence and Security Equipment International 2025 (DSEI 2025) exhibition will be held in London. The world’s largest exhibition for showcasing military technology equipment, DSEI provides a forum for governments, armed forces, industry professionals and thought leaders to discuss the future of defence innovation and forge strong working partnerships.
The Council on Geostrategy is proud to lead six discussions as part of DSEI 2025. A key theme in these is the future of the AUKUS trilateral partnership between the United Kingdom (UK), United States (US) and Australia. In this week’s special edition of the Big Ask, we asked the three experts participating in the Trade Association Fireside Chat: What obstacles to cooperation in AUKUS Pillar II remain and what might be done to remove them?
Defence Director, ADS Group
AUKUS is a multi-generational security pact, and, understandably, barriers still remain to effective cooperation under AUKUS Pillar II. First, uncertain demand signals from governments limit industry’s ability to invest with confidence in skills, infrastructure and research. Without clear timelines and capability roadmaps, companies face risk in mobilising resources.
Second, regulatory and legal misalignments – particularly around export controls, contracting terms and intellectual property – still slow collaboration. Even with progress on International Traffic in Arms Regulations (ITAR) reform, differing national procurement systems create friction.
Third, skills shortages and mobility barriers threaten delivery. While each nation is building its defence workforce, there is not yet an AUKUS-wide approach to training, mobility and security clearances.
To remove these barriers, governments should issue a coordinated AUKUS Pillar II roadmap, signalling priority capabilities, funding streams and timelines. Establishing an AUKUS Skills Passport and trilateral mobility agreements would unlock labour capacity. Harmonising cybersecurity, contracting frameworks and Intellectual Property (IP) policies would enable trusted cross-border collaboration.
Finally, creating joint industry-government working groups to map infrastructure, supply chain resilience and acquisition models would shift cooperation from concept to execution. Clear political direction and trilateral alignment are essential to turn ambition into tangible delivery.
Vice President, International Affairs, Aerospace Industries Association
There has been tremendous progress made on streamlining technology sharing between the AUKUS partners. Changes to ITAR and Export Administration Regulations (EAR) signaled a sea change for cooperation and strong commitment by the US to AUKUS.
Several opportunities for improvement remain. First, more companies should become involved in the ‘Authorised User Community’ (AUC). The AUC can take advantage of the new regulatory mechanism for licence-free trade. Since the US State Department has established that the British and Australian export control systems are comparable to the US, the more companies in the AUC, the more licence-free trade can occur.
Second, the need for changes to ‘third-party transfer’ rules should be addressed to take full advantage of the licence-free exemption.
Third, there should be a change in how technologies controlled by the AUKUS nations, but in a deployed, warfighting environment, are thought about. This is called ‘extraterritoriality’ and, under current regulations, even if a technology was transferred licence-free, it needs a licence if it leaves the physical territory of the AUKUS nations.
There are challenges ahead for AUKUS partners, but also great opportunities as export control reforms continue to be implemented.
Director, Emerging Industries and Innovation, Australian Industry Group
Four years after AUKUS was announced, the Australian defence industry recognises the enormous potential of Pillar II, but needs clearer guidance on how to contribute. Like assembling a complex capability without the instruction manual, stakeholders see different pieces – research projects, procurement programmes and policy frameworks – without understanding how they fit together.
The opportunity? Defence can transform AUKUS Pillar II from policy framework into capability delivery by providing the missing elements: dedicated funding streams, clear capability requirements and streamlined acquisition pathways that industry can navigate confidently.
Australian industry has proven its capability – delivering AU$5 billion (£2.42 billion)-worth of F-35 Lightning II Joint Combat Aircraft contracts demonstrates what is possible with a clear programme structure. The Joint Strike Fighter (JSF) model shows how defence can create successful trilateral partnerships through defined workshare arrangements and transparent engagement processes.
Defence can lead the solution to AUKUS obstacles by releasing a comprehensive public strategy explaining specific capability targets, establishing identifiable funding lines within the Defence Integrated Investment Programme and creating structured trilateral industry engagement mechanisms. This would enable Australian companies to compete effectively with international counterparts while supporting national strategic objectives.
The foundation exists. Defence now has the opportunity to build the framework into a fully operational capability development programme that delivers advanced technologies for Australian security.
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