BGA’s Australia team, led by Managing Director Fergus Hanson, wrote an update to clients on the newly announced enhanced trilateral security partnership between Australia, the United Kingdom and the United States called “AUKUS.” The update spotlighted the background to the announcement, why it matters as well as how it could affect Australia and wider regional dynamics in the coming months, with implications for businesses and other stakeholders.

Context

Australia has joined an enhanced trilateral security partnership with the United States and United Kingdom called “AUKUS.” AUKUS will include support of Australia’s acquisition of nuclear-powered submarines.

The announcement was made by Morrison (in Canberra), U.K. Prime Minister Boris Johnson (in London) and U.S. President Joe Biden (in Washington). It comes during the 70th anniversary of ANZUS and on the same day Australian and U.S. foreign and defense ministers met in Washington for the annual AUSMIN 2+2.

Significance

While not stated publicly by officials, the consensus is that AUKUS is directed at countering China, Australia’s largest trading partner. Australia’s relations with China have deteriorated sharply in recent years and Canberra has become increasingly concerned about China’s military buildup and its readiness to use coercive measures against its neighbors.

This new strategic announcement will enhance joint capabilities and interoperability despite the immediate fallout with France. AUKUS could see advances in the security domain, especially the case in the areas of cyber, artificial intelligence, quantum technologies and additional undersea capacity. The submarines decision resulted in Australia axing its partnership with France, and though the project had been plagued by cost blowouts and delays, French officials have reacted strongly.

It could also have spillover effects into other allied mechanisms. AUKUS may influence dynamics within the Quadrilateral Defense Coordinating Group, “the other Quad,” which includes the United States, Australia, New Zealand and France and conducts regular defense exercises in the region. AUKUS also creates an unofficial first tier within the “Five Eyes” intelligence-sharing arrangement between Australia, New Zealand, Canada, the United States and United Kingdom.

 Implications

Australian, U.K. and U.S. defense companies are expected to benefit from the AUKUS. Added collaboration could also benefit other sectors including in emerging and critical technologies.

Australian Prime Minister Scott Morrison believes AUKUS will enhance Australia’s contribution to its network of partnerships in the Indo-Pacific, but not all Australians agree.  Morrison sees AUKUS as being part of a series of networks including those related to the Association of Southeast Asian Nations (ASEAN), the Quadrilateral Security Dialogue (“Quad”) and the “Five Eyes” intelligence-sharing arrangement. Quad Leaders are expected to convene at the White House on September 24 for the inaugural in-person meeting.

Not all Australians agree that moves such as AUKUS are in the national interest, and the development is already playing into Australia’s wider debate about its strategic positioning in the Indo-Pacific amid intensifying U.S.-China competition. Former Prime Minister Paul Keating said the submarine arrangement “would witness a further dramatic loss of Australian sovereignty, as materiel dependency on the U.S. would rob Australia of any freedom or choice in any engagement it may deem appropriate.”

BGA will continue to keep you updated on developments in Australia as they occur. If you have any comments or questions, please contact BGA Australia Managing Director Fergus Hanson at fhanson@bowergroupasia.com.

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