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The US State Department ‘fully expects’ the new AUKUS trade waivers to be finalized in the next 120 days

By David Brunnström

WASHINGTON (Reuters) – The U.S. State Department said on Friday it fully expects to finalize new trade waivers for the AUKUS defense project with Australia and Britain in the next 120 days, signaling a further delay in the move, but it offers the prospect of a positive development. outcome of the project to counter China.

The National Defense Authorization Act of 2024 requires President Joe Biden to determine within 120 days of signing the law on Dec. 22 whether Australia and Britain have export control regimes “similar to the United States” and therefore qualify for the waivers. The 120 day mark will be reached on Saturday.

“Exemptions in our export control systems, within a framework of shared standards with Australia and Britain, are critical to harnessing and maximizing the innovative power inherent in our defense industrial bases,” the State Department said.

“We fully expect to finalize the new trade exemptions – based on stakeholder input – over the next 120 days,” the report said.

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The State Department statement indicated a delay in a positive decision from Biden, but the legislation requires him to revisit the issue in another 120 days.

Senior Republican lawmakers this week raised concerns about delays in AUKUS if Biden does not grant exemptions from strict export controls for defense items covered by the US International Trafficking in Arms Regulations (ITAR).

In comments shared with Reuters, Michael McCaul, the Republican chairman of the House Foreign Affairs Committee, said the waivers were needed to allow companies to quickly develop advanced capabilities without “burdensome bureaucracy and regulations.”

Jeff Bialos, a former senior Defense Department official and now a partner at the law firm Eversheds Sutherland, said the State Department has opposed blanket exemptions for Britain and Australia since they were first proposed by the Pentagon , almost 25 years ago, when he was in office.

He called the State Department’s statement “progressive” and said he now expects the three countries to submit draft waivers related to each other’s export control rules.

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“One of the criteria is that the other countries also have a system that exempts exports to the US. It is reciprocal,” he said.

On Thursday, the US Commerce Department said it is scaling back its export control requirements for Australia and Britain to promote cooperation under AUKUS, which was created in 2021 to address shared concerns about China’s growing power.

However, Commerce only regulates the licensing of certain defense-related items, and not the broader range of items covered by the ITAR regime, which is administered by the State Department’s Bureau of Political-Military Affairs.

The first pillar of AUKUS covers the supply of nuclear-powered submarines to Australia, while Pillar II calls for more immediate cooperation on high-tech defense items such as quantum computing, undersea capabilities, hypersonics, artificial intelligence and cyber technology.

Announcing the decision, the Department of Commerce said that both Australia and Britain “have robust export control systems in place and have taken additional steps in recent months to enhance technology protections.”

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It said the UK National Security Act 2023 provides for enhanced protection against the unauthorized disclosure of certain defence-related information.

It said Australian law provides for controls on the re-export of items originally exported from Australia, disclosure of controlled technology to certain foreign persons in Australia, and the provision of defense services.

(Reporting by David Brunnstrom; Editing by Chizu Nomiyama and Jonathan Oatis)

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