AUKUS Pillar II and the Space Race: A New Frontier for Australia
US officials have set the stage for the AUKUS Pillar II License while Canberra is aggressively chasing the future with an agreement to launch of US space vehicles from Australian soil.
I'm back in Sydney after from a trip home to NZ and I’d like to draw peoples attention once more to the under the AUKUS Pillar II arrangement. Recent discussions in Sydney with senior officials from Australia, the UK, and the US have set the stage for a groundbreaking shift in defense technology trade. The focus of these discussions has been the introduction of the AUKUS Pillar II License, which is drafted to become part of the upcoming National Defence Authorisation Act. This development signals a major policy shift, aiming to create a more liberalized environment for the trade of arms, dual-use technology, and information exchanges among the AUKUS nations.
Canberra is aggressively chasing the future with the recent signing of the Technology Safeguards Agreement (TSA) between Australia and the United States marking a pivotal development. This agreement facilitates the launch of US space vehicles from Australian soil, significantly boosting Australia's capability in space technology and launch services. With this TSA, Australia not only deepens its ties with the US in space technology but also creates an environment that attracts more investment and innovation in its space sector.
In contrast, New Zealand's space industry, while having its own TSA with the United States, could face stiff competition from Australia, especially if New Zealand does not engage in similar or parallel initiatives like AUKUS Pillar II. Without active participation in such agreements, New Zealand risks lagging in technological advancements and strategic partnerships, potentially losing its edge to Australia's burgeoning space sector. As Australia advances with the support of AUKUS-related initiatives, New Zealand's space industry must navigate these changing dynamics carefully to maintain its competitiveness and attractiveness for future space ventures and investments.
AUKUS Pillar II License: Liberal Trade of Defense Technology
In a recent forum in Sydney, with senior officials from Australia, the UK, and US, discussions centered around easing restrictions on arms, dual-use technology, and information exchanges. The concept they proposed was to facilitate a near license-free trade environment and to simplify ITAR provisions amongst the AUKUS nations. The three countries are changing policy in unison. The first steps toward this end are being taken with the US preparing to introduce an AUKUS Pillar II License in the National Defence Authorisation Act which is due late 2023/early 2024.
Implementing AUKUS Pillar II
The specific areas of advanced capabilities included within AUKUS Pillar II are cyber, artificial intelligence, quantum technologies, undersea capabilities, hypersonics, counter-hypersonics, electronic warfare, innovation, and information sharing. The roadmap for AUKUS Pillar II involves several critical steps:
Establishing Working Groups: Seventeen trilateral working groups focusing on specific areas of advanced capabilities will drive the initiative forward, emphasizing collaborative project development and implementation.
Sharing Technology and Expertise: The mutual exchange of military technology and expertise is expected to hasten the advancement of these capabilities, creating opportunities for joint ventures and cross-national collaborations.
Enhancing Interoperability: Efforts to ensure seamless operational compatibility among the AUKUS forces will require alignment in training, communication systems, and procedures.
Boosting Research and Development: Increased investments in R&D are anticipated, possibly involving joint research institutions and collaborative programs to foster technological breakthroughs.
Creating a Trilateral Innovation Ecosystem: The initiative aims to cultivate an environment that encourages interaction between government, industry, and academia, potentially leading to groundbreaking innovations and synergies.
The implementation of AUKUS Pillar II marks a pivotal moment in defense collaboration and technology advancement. As these initiatives unfold, they will likely catalyze significant policy and investment shifts, not only within the participating countries but also globally. AUKUS will set the stage for a new era in defense capabilities.
AUKUS Pillar II License
Officials in Sydney recently discussed that the US is preparing to introduce an AUKUS Pillar II License. Based on the broader objectives of the AUKUS agreement and the typical characteristics of defense-related licenses, we can infer some potential features of the AUKUS Pillar II License:
Scope of Technology: The license would likely cover a wide range of defense and dual-use technologies, including those related to undersea capabilities, quantum technologies, artificial intelligence, cyber defense, hypersonic technologies, and electronic warfare.
Simplified Export Controls: One of the main goals of the AUKUS Pillar II initiative is to facilitate easier transfer of technology between the United States, the United Kingdom, and Australia. Therefore, the license might offer a streamlined process for exporting these technologies, reducing bureaucratic hurdles.
Enhanced Information Sharing: The license might include provisions for increased sharing of sensitive information and technology among the AUKUS nations, particularly in areas underpinning advanced military capabilities.
Compliance with International Regulations: Despite the simplification of trade procedures, the license would still need to comply with international arms control agreements and non-proliferation treaties.
Cybersecurity and Data Protection Measures: Given the sensitivity of the technologies involved, the license would likely incorporate strict cybersecurity and data protection guidelines to safeguard against espionage and unauthorized access.
End-Use Monitoring and Restrictions: There would likely be strict controls on the end-use of the technologies and equipment transferred under this license, to ensure they are used only for intended purposes and do not fall into unauthorized hands.
Collaboration in Research and Development: The license might include provisions for joint R&D efforts, sharing of testing facilities, and collaborative innovation projects.
Legal and Regulatory Frameworks: The license would need to be embedded within the legal and regulatory frameworks of each country, respecting their sovereign laws while facilitating cooperation.
The AUKUS Pillar II License represents a step in defense collaboration, aiming to enhance the collective technological capabilities of the participating nations while maintaining a balance with global security concerns and international law.
There’s a New Launch Pad Down Under
With the upcoming AUKUS Pillar II License facilitating restricted arms trade and technology exchange among the AUKUS partners, Australia is positioning itself at the forefront of a range of technologies. Additionally, Australia recently signed its own TSA with the US which will open space launch programs down under.
Australia's Aggressive Moves In Space
Australia has capitalized on the opportunities presented to it by AUKUS, and recently signed a Technology Safeguards Agreement (TSA) on the 25th of October with the United States. This agreement, symbolizing deepening ties between the two countries, enables the launch of US space vehicles from Australian soil and fosters technology sharing. Equatorial Launch Australia (ELA) has been a notable beneficiary, and is preparing to finalize contracts with US rocket manufacturers for launches from the Arnhem Space Centre in the Northern Territory.
The precise demand for Australian launch sites from American launch companies remains unclear. The ELA statement included an illustration of four small launch vehicles from ABL Space Systems, Astra, Phantom Space and Vaya Space, as well as Rocket Lab’s Neutron medium-lift rocket.
Of those companies, the only one that ELA had previously identified as a prospective customer is Phantom Space. In April, the two companies said they were expanding a previously undisclosed memorandum of understanding with plans for a “multi-launch contract” for Phantom’s Daytona rocket. That rocket has yet to make its first flight although Phantom’s website states it is “booking launches for 2023.” Spacenews
Australia's strategic advancements in the space sector, particularly through the AUKUS Pillar II License and the Technology Safeguards Agreement (TSA) with the United States, signify a monumental leap in its defense and aerospace capabilities.
The recent developments, align with the Australian Government's ambitious goal to triple the size of its space sector from an estimated AUD$4 billion in 2016 to AUD$12 billion by 2030. This expansion is supported by over AUD$2 billion in civil space sector investments since 2018, and an additional AUD$17 billion allocated for developing defense space capabilities as part of the 2020 Force Structure Plan. The TSA paves the way for U.S. commercial space launch vehicles to operate from Australian soil. This agreement not only enhances Australia's capacity in earth observation, space tracking, and satellite operations but also solidifies its role in global partnerships like the Five Eyes intelligence alliance. By fostering these international collaborations and heavily investing in its space sector, Australia is poised to become a pivotal player in the global space industry, bolstering its technological, economic, and strategic standing on the world stage.
Our focus on innovation also extends to space, where we look forward to tomorrow's signing of a space Technology Safeguards Agreement that creates the potential for new space-related commercial opportunities while providing the legal and technical framework to protect sensitive US space launch technology and data in Australia consistent with our shared non-proliferation goals. We also welcome progress in negotiations of a bilateral space framework agreement, and encourage further joint commercial investment across all sectors, including space situational awareness and commercial space stations. Joint statement from Prime Minister Albanese and President Biden
Regulatory Challenges in NZ Space
New Zealand, while deliberating its role in the AUKUS alliance, observes neighboring Australia making significant strides in defense and space capabilities. In New Zealand's space technology industry, the intersection of defense technology and commercial ventures presents unique challenges and opportunities. While New Zealand has a Technology Safeguards Agreement (TSA) with the United States for space launch vehicles, companies like Rocket Lab face stringent restrictions on conducting R&D activities locally. This limitation hampers technological progress and workforce development within New Zealand's space sector. The Australian space industry on the other hand will have much more open access to US technology. As a publicly traded entity, Rocket Lab's primary obligation is to its shareholders, driving it to operate in environments that offer the most favorable conditions for growth and innovation.
The TSA inhibits local development
A crucial aspect of New Zealand's TSA with the United States includes a commitment that New Zealand will not develop or acquire missile technology control regime category I rocket systems without prior consultation with the US government. This clause significantly curtails New Zealand’s ability to independently develop certain technologies, aligning its space sector closely with US interests and regulations. The TSA's constraints pose a strategic challenge for New Zealand’s space tech industry, particularly for companies aiming to innovate and expand in the field of rocket systems. This limitation not only affects the scope of research and development activities but also impacts New Zealand’s stance in the global space technology arena.
Balancing International Commitments and Local Innovation
New Zealand's commitment to the TSA necessitates a delicate balance between adhering to international agreements and fostering local innovation within the allowed parameters. Companies like Rocket Lab, operating under the umbrella of these restrictions, must navigate a complex landscape where their growth strategies are intertwined with regulatory compliance and international diplomacy.
Operational Strategies within TSA Boundaries To work within these constraints, New Zealand’s space tech sector needs to:
Focus on Non-Restricted Areas: Prioritize development in areas not restricted by the TSA, leveraging New Zealand’s unique strengths in the space sector. Encourage innovative approaches within the regulatory framework in areas like satellite technology, Earth observation, and space tracking.
Outsource Restricted Development: The US office for Rocket Lab conducts the development for the restricted technologies such as engines. Operations in Australia will have more R&D flexibility going forward too.
Strategic Collaboration: Engage in strategic partnerships that align with the TSA’s stipulations, ensuring compliance while seeking growth opportunities.
The Technology Safeguards Agreement with the United States presents both challenges and opportunities for New Zealand’s space technology sector. Companies like Rocket Lab, while operating within these limitations, have the potential to explore and expand in complementary areas of space technology, however they will be required to expand development operations outside of New Zealand to keep innovating in core rocket systems.
Companies Will Offshore Without Some Form of AUKUS Tech Sharing in NZ
Rocket Lab, a global leader in launch services, has been quick to adapt to the changing regulatory dynamics. The company, which has roots in New Zealand, announced the establishment of a wholly-owned subsidiary in Australia, Rocket Lab Australia in February 2023, to support the expansion of Australia’s national space capabilities. This move is a strategic response to the Australian government's commitment to tripling the size of its space sector by 2030, backed by substantial investments.
New Zealand's hesitation in deepening its ties with AUKUS and its space and defense initiatives poses a significant risk, particularly to its space industry. Without active participation in agreements similar to the AUKUS Pillar II or tangential initiatives, New Zealand risks losing out on technological advancements and strategic partnerships. Companies like Rocket Lab, with a strong presence in New Zealand, may increasingly shift their focus towards more supportive and integrated markets like Australia and the US. This could relegate New Zealand's role in such companies to lesser value-added functions like manufacturing, maintenance, and localized launches.
Should this trend continue, New Zealand’s space sector could face a reduction in innovation and technology transfer, impacting its global competitiveness and attractiveness for future investments. The country will also miss out on being part of cutting-edge developments in areas like quantum technologies, AI, and advanced cyber capabilities, which are at the forefront of the AUKUS Pillar II initiatives.
New Zealand stands at a crossroads
To maintain and grow its space sector, it must consider more proactive engagement in global defense and space alliances. This might involve seeking partnerships or agreements that parallel the AUKUS framework, fostering an environment conducive to technological innovation and investment. As Australia shows, such involvement can catalyze significant growth and positioning in the rapidly evolving global space industry. For New Zealand, the time to act and carve its path in this dynamic landscape is now.