Washington: A maze of US regulations and export control laws stand between Australia and the multibillion-dollar AUKUS submarine agreement, prompting a key ally of the pact in Congress to propose a blanket exemption to accelerate delivery of the nuclear-powered fleet.

Democratic congressman Joe Courtney, who recently spearheaded a bipartisan defence of the Australia-UK-US pact amid jitters from some of his Washington colleagues, wants Australia to be given a waiver from strict US export controls that could otherwise derail the agreement.

Details of the AUKUS announcement regarding US submarines in Australia are expected to surface soon.

The International Traffic in Arms Regulations is one set of rules which could delay for years the transfer of crucial technologies at a time when Australia is racing to bolster its submarine capacity before the retirement of its Collins-class fleet.

Defence Minister Richard Marles has said the government will announce by March which type of submarine it will acquire, after receiving a recommendation from Jonathan Mead, the head of the Nuclear Powered Submarine Taskforce.

The announcement is expected to provide the first concrete insights into the cost, timing and procurement of the AUKUS deal. The modelling so far has suggested that if the submarines are produced in Australia, as the government has suggested, the earliest possible delivery date would be 2055.

While President Joe Biden supports AUKUS, he needs the backing of a divided Congress to make good on his promise to share American submarine secrets with Australia.

US congressman Joe Courtney (bottom right) is the co-chair of the Friends of Australia Caucus in Washington.

Courtney, who co-chairs the bipartisan “AUKUS caucus” and is regarded as one of Congress’ top navy experts, said a potential solution to the difficulties posed by US law would be to pass an exemption, with the support of the Pentagon, allowing Australia to bypass rules such as the International Traffic in Arms Regulations and related nuclear submarine laws, for the strict purpose of advancing AUKUS.

“Tip O’Neill [a former House Speaker] once famously said, ‘Keep it simple, stupid’, so I certainly subscribe to the principle of an exemption,” Courtney told The Sydney Morning Herald and The Age.

“The export controls that have built up over decades are going to require Congress to reform the system. The White House is fully aware of this and there’s a growing group of members of Congress that are becoming educated about this issue, but it’s harder than it sounds to fix. This is a threshold issue.”

Australian officials have for years been pushing their US counterparts to reform their treatment under arms regulations, and the issue was front and centre of the December Australian-US Ministerial consultations between Marles and US Secretary of Defence Lloyd Austin.

“There is, I think, a unanimity of purpose in wanting to create the kind of seamless environment … where information and technology can be shared much more freely between our two countries,” Marles told reporters in Washington last month. “Not for a moment do we underestimate the complexity of bringing that about within the American system.”

In response to questions from this masthead, a spokesman for the Australian Department of Defence said it was anticipating that export arrangements would need to change “to ensure technology and expertise could be transferred seamlessly and effectively among AUKUS partners, as well as their respective industrial bases, within a suitably designed protective framework”.

In Washington, others are also cognisant of the challenge. Among Republicans, AUKUS caucus co-chair Mike Gallagher, like Courtney, is committed to reforming the export control regime and has consistently talked up the importance of equipping Australia with attack boats to help counter China’s aggression and “protect our interests in the Indo-Pacific”.

He also acknowledged that AUKUS did not provide Australia with enough flexibility regarding the International Traffic in Arms Regulations and suggested a “carve-out” might be necessary to exempt the project.

Defence Minister Richard Marles with US Secretary of Defence Lloyd Austin in Washington.Credit:Department of Defence.

At a seminar last week, Democratic congressman Adam Smith, a ranking member of the House of Representatives armed services committee, also warned that while AUKUS was “a great idea, with a lot of promise” it “could also go bloop” unless some regulatory restrictions were eased.

And Mark Watson, the director of the Australian Strategic Policy Institute’s Washington office, suggested that “an AUKUS express lane is what we need” to avoid delaying or derailing the project due to the maze of red tape and complex US laws surrounding it.

But the regulatory hurdles are not the only difficulty the alliance faces.

One of the concessions Republican congressman Kevin McCarthy made this month to secure the speakership of the House of Representatives was a vote on a framework that caps discretionary spending at fiscal 2022 levels. Some fear that this could result in the US defence budget being cut in real terms, which Courtney warned “could have a very negative effect on AUKUS”.

Helping Australia acquire nuclear submarines will also test America’s submarine manufacturing industry, which has already been strained by the COVID pandemic.

While AUKUS has received bipartisan support since September 2021, a letter sent to Biden by Senator Jack Reed and then-senator James Inhofe, a Republican, in December raised concerns the US submarine base could be stretched to “breaking point”.

However, in a counter letter sent to Biden last week, Courtney, Gallagher and a group of other Republicans and Democrats defended AUKUS as “a multi-decade and multi-generational effort – one that is worth embarking on for the security of our nation and that of our allies in the Indo-Pacific”.

‘An AUKUS express lane is what we need’.

Last year, members of the group also brokered a bipartisan agreement to establish a training pipeline that will give at least two Australian submarine officers a year a chance to train with the US Navy.

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