PDF of Event Summary Here

AUKUS, Pillar 2 Roundtable: Challenges and Opportunities for Implementation

On May 9, 2024, the Potomac Institute's Global Competition Project and 401 Tech Bridge hosted a roundtable focused on the challenges and opportunities associated with the implementation of AUKUS, Pillar 2. The Australia – United Kingdom – United States (AUKUS) security partnership, announced on September 15, 2021, was a watershed moment for competition with China in the Indo-Pacific region. Pillar 1 of the agreement, which hinges on the US and UK sharing nuclear propulsion technology and the delivery of nuclear-powered submarines to Australia, has received the lion’s share of attention. However, Pillar 2 arguably has far greater potential for economic and security impact and cooperation among the AUKUS partners given its focus on the joint development of advanced technological capabilities. Progress has been modest, but momentum is gaining, and fruitful implementation of Pillar 2 will depend on robust engagement across the policy, industry, and academic communities. The intent of the GCP session was to lay a foundation for action on science and technology, research and development, and policy related to the goals of Pillar 2.   

Here are some of the main takeaways from that discussion: 

Defining Success 

The panel identified three aspects of success for Pillar 2:  

getting capabilities into warfighter hands;  
creating an environment that enables the delivery of those capabilities; and  
de facto, organic capability development and cooperation across all three defense industrial bases.  
The group recognized that defining success is not enough, it needs to be measured to hold ourselves accountable.   

Challenge #1: Culture 

Current business norms—via defense security cooperation and foreign military sales, for example—are too cumbersome to meet the threat and do not match the spirit nor the intent of AUKUS. The buying, selling, and co-development of capabilities at all stages between AUKUS partner nations should move toward treatment as one seamless domestic marketplace. Governmental policies and business practices should be adopted to incentivize such a shift. Overall success will require continuously engaged leadership and focus at the highest levels of government and industry.  

Challenge #2: Information Sharing  

Self-imposed barriers and other information classifications are stifling the goals of AUKUS cooperation. Particularly, in the US, Controlled Unclassified Information (CUI) and "NOFORN" designations are uniquely troublesome to sharing information between the US and UK or AUS, while the UK and AUS have more streamlined information sharing practices. A deliberate reexamination of what information must truly be withheld and shared between partners is necessary. Boundaries must be lifted for industry and government to have meaningful and timely conversations at the unclassified level or with greater ease at classified levels.  

Challenge #3: Financial Incentives  

Financial disincentives hinder motives for cooperation across the industrial bases of the AUKUS partner nations. Businesses remain conservative due to the increased costs associated with cross-border business opportunities. Room must be made for smaller contractors to compete and contribute, as well as for intellectual property to be shared equitably to garner innovative solutions all can benefit from. Antiquated government policies and practices need updating to counter financial disincentives and reduce logistical and time hurdles for commercial contracting.