‘Historic breakthrough’: US ditches defense trade restrictions with top allies to counter China

The U.S. and its top allies have taken a significant step in removing defense trade restrictions to ensure that technology and equipment can be shared at rapid speed as the AUKUS partnership looks to counter growing Chinese threats in the Indo Pacific.

The “historic breakthrough” means the U.K. and Australia will no longer be subject to strict export license controls under the U.S.’s International Trafficking in Arms Regulations (ITAR) for the “majority” of Washington’s defense technology.

“We want the U.K. to be the U.S.’s number-one ally, and Australia’s desire is to be the U.S.’s number-one ally in the Pacific,” a U.K. official familiar with the agreement told Fox News Digital. “AUKUS is about us recognizing the threat that China poses and the need for us, as America’s allies, to do everything we can to be part of competing with China in that space.”

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A limited number of sensitive items will remain under tight U.S. control, and the U.K. official said this is another area in which the alliance can look to deepen its trust and partnership in the face of growing adversarial aggression. 

“We’re looking for deep collaboration with the U.S. over the coming period,” the official said.  “Some of the restrictions that remain on the excluded lists will be in those very advanced technologies where the U.S. is still rightly cautious about controlling access to them and really safeguarding the technology. 

“What we want to do with this new status quo is use it to show that our industry is equally competent of controlling those secrets, equally competent of safeguarding the technology, so we can build even more trust with the U.S., so we can expand this sharing of technology even further,” the U.K. official added.  

The official could not pinpoint the percentage of U.S. defense weapons and technology that will remain exempt from the latest trade-sharing deal but noted that those exemptions remain only in the “far reaches of technology” on systems involving artificial intelligence, autonomous weaponry and hypersonic weaponry. 

Australian Prime Minister Anthony Albanese (L), U.S. President Joe Biden (C) and British Prime Minister Rishi Sunak (R) hold a press conference after a trilateral meeting during the AUKUS summit on March 13, 2023, in San Diego, California. President Biden hosts British Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese in San Diego for an AUKUS meeting to discuss the procurement of nuclear-powered submarines under a pact between the three nations. (Leon Neal/Getty Images)

The reform is estimated to cover up to £500 million in U.K. defense exports annually along with billions of dollars of trade across all three nations, which will in turn “boost our shared economic growth,” Fox News Digital was told.

The AUKUS deal comes as the U.S. and the U.K. look to help Australia acquire nuclear-powered submarines as the alliance looks to bolster its defense posture to counter Chinese aggression in the region and beyond. 

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“I think it’s very difficult to overstate how important the submarines are, in terms of the Indo-Pacific and containing China,” the official told Fox News Digital. “Just because they look quite old school, they are still very, very critical to that theater.”

The alliance, which was formed in 2021 specifically to counter Beijing, was received with some frustration and concern among European allies who feared that the U.S. and the U.K. were distancing themselves from Europe at a time when security threats on the continent had reached a level not seen since World War II. 

But Washington and London have pushed back on these arguments, and in speaking with Fox News Digital, the British official highlighted that increasing ties with the U.S. can only help deepen security in theatres across the globe. 

U.S. President Joe Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak deliver remarks on the Australia – United Kingdom – U.S. (AUKUS) partnership, after a trilateral meeting, at Naval Base Point Loma in San Diego, California on March 13, 2023.  (Reuters/Leah Millis)

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“The U.K. being a very close ally of the U.S. helps lock the U.K. and the U.S. together in NATO,” the official argued. “I don’t think this does anything to distance us from that. 

“If anything, it gives us both even better capability and even better interoperability to work together in the Euro-Atlantic area if we needed to do that militarily,” the official added.