UK Prime Minister Rishi Sunak visited Washington for talks with US President Joe Biden, focusing on shared economic and security challenges, including energy security, climate concerns, and the situation in Ukraine. While Ukraine remains a significant topic from a national security perspective, an often-overlooked issue of export controls reform has emerged as a key point of discussion.
Export controls have traditionally been associated with preventing the transfer of arms and sensitive technologies to potential threats and as a tool to support economic sanctions against illegal activities, as demonstrated at the recent G7 Summit in Japan concerning Russia and China. However, it’s essential to recognize another dimension of this matter. The United States’ closest allies have long been frustrated by the extensive and extraterritorial application of export controls, specifically the International Traffic in Arms Regulations (ITAR). This approach has hindered their efforts to collaborate on technology sharing and capability development projects due to the associated costs and time-consuming processes. This issue has broader implications for national security, as William Greenwalt, a nonresident senior fellow at the American Enterprise Institute, has noted.
ITAR was introduced during the Cold War when the United States had significant technological and industrial advantages over potential adversaries. At that time, the US could afford to work independently, overlooking allied contributions to military capability development. However, this scenario no longer holds true, as the Department of Defense now acknowledges the importance of allies and partners in national security strategies. Nonetheless, ITAR restricts the United States from accessing cutting-edge allied technology and indirectly diminishes the military capabilities of its allies. For instance, the UK government estimated that compliance with ITAR costs UK companies nearly half a billion dollars annually, effectively a 0.7 percent tax on the national defense budget of a close ally.
Moreover, the “ITAR taint,” or the risk that any technical cooperation with US entities may lead to the loss of control over their technology, deters non-US companies from engaging. Small and medium-sized enterprises, crucial in fields like quantum computing and materials science, appear to be disproportionately affected.
The issue is not straightforward to resolve, as the Department of Defense does not govern ITAR policy or implementation—the State Department does. Unfortunately, the State Department does not feel the impact of delayed programs and reduced technological advantage. The organizational incentives within the State Department are not aligned with the pace and flexibility required by modern technology and current geopolitical situations, leading to self-imposed limitations that ultimately affect the warfighter.
Fortunately, members of the legislative and executive branches of the US government are starting to recognize this problem, particularly in the context of the AUKUS deal involving Australia, the United Kingdom, and the United States. There is growing interest in Congress to address this issue through the Truncating Onerous Regulations for Partners and Enhancing Deterrence Operations (TORPEDO) Act.
To address this challenge effectively, UK Prime Minister Rishi Sunak and US President Joe Biden should focus their discussions on finding a balanced and enforceable solution to the export controls issue, particularly as it pertains to the AUKUS nations. Collaborating with allies and partners is crucial for the United States to counter the dynamic threats posed by adversaries, and it is essential not to let an outdated and inappropriately enforced export control system hinder this cooperation.
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