Thursday, September 18, 2008

US-Australia treaty 'deferred'

Defense News in Washington has just broken the story that the US-Australia Defence Trade Cooperation Treaty won't be ratified until some time in 2009 - possibly as much as two years after it was first signed in Sydney by President George W Bush and Prime Minister John W Howard.

If I understand the cause of the delay correctly, the US Senate Foreign relations Committee is worried that the treaty (and a similar one signed between the US and the UK) is in breach of the US State Department's International Trade in Arms Regulations (ITAR). The only way the treaty can be signed is if the ITARs are amended to accommodate it, and the State Department has been dragging the chain - as it seems always to do on this issue. 

The ITARs inhibit and constrain collaboration and cooperation between the US and its allies. They are actually rather insulting; while they are designed to protect US know-how the way they are applied seems calculated sometimes to create a commercial advantage for US companies. 

A case in point: recently an Australian company teamed with a US partner to bid for a VERY big US defence contract. The partners decided to offer a variant of a successful Australian product; they also decided to develop an enhanced variant of it. Because the prototype of this enhanced variant - designed, incidentally, by Australians in Australia - was built in the US, the IP in that prototype is now covered by ITAR. The Australian company can't sell a product it designed itself, can't even manufacture it in Australia, without getting ITAR clearance. The partners' joint bid failed to win the contract, but the prototype of the enhanced product is still covered by the ITARs.  Ridiculous!

Even US firms operating in Australia have problems. Under certain circumstances if an Australian engineer sends some information to his US parent company, the parent company cannot send it back to him without requesting an export licence to do so under the ITAR regime. 

The US government owes it to its allies, and especially those who've gone out on a political limb over issues like Iraq, to sort this mess out. The US-Australia Defence Trade Cooperation Treaty won't fix all of the problems but it will put the bilateral relationship on a more mature footing. I just hope whoever's in the White House next year will get a grip on this issue and do something about it.

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