The AUKUS trilateral partnership presents Australia with an unprecedented opportunity to achieve national-security goals that have eluded it for decades. It could offer access to cutting-edge technologies. It can further integrate Australian, US and UK military forces, allowing more unified action to maintain deterrence against national and transnational actors who threaten the global rules-based order. Perhaps most importantly, AUKUS—in particular its Pillar.2 objectives—is an opportunity for Australia to pursue the long-sought industrial capacity necessary to defend its borders and its interests across a range of probable conflict scenarios.

AUKUS partner nations implement operational and regulatory frameworks to co-produce, co-field and continuously enhance world-leading national defence capabilities in critical technology areas. Governments will provide leadership and resources to drive effective multinational collaboration among government, industry and academic contributors, leveraging competitive advantages from across the alliance to deliver collective capability.

Past debate has contributed valuable insight into problems that can threaten the full realisation of the AUKUS arrangement including for example, problems like outdated and dysfunctional export-control regulations, struggles with integrating complicated classified information systems and differing regulations and frameworks among the AUKUS partners. Yet, when it comes to fixing those problems, regulators and industry participants often talk past one another. Governments claim that mechanisms are in place to facilitate cooperation. Businesses counter that waiting six months or more for necessary approvals is an unreasonable impediment to innovation. Both sides have a point. So far, reform efforts have been unable to break the logjam.

In this study, rather than wade once more into the morass of trade regulations to identify obstacles and recommend fixes, the authors interviewed the regulators and businesses that implement and operate under those regulations. The data collection involved engaging more than 170 organisations, as well as key individuals. The authors' intent here is to provide an operational perspective on practical barriers to cooperation as envisaged under AUKUS, particularly under Pillar 2, and offer the Australian government detailed and actionable recommendations that they believe would help AUKUS Pillar 2 succeed.

Key recommendations:

• Empower and resource Defence Export Controls (DEC), the Defence Industry Security Program (DISP) and similar organisations as critical agents of Australian competitive advantage.
• Consider both public- and private-sector organizational incentives.
• Establish expert-led governing bodies for AUKUS to manage ambiguity and surprise.
• Support industry as it builds skill sets that are currently lacking in the Australian economy.
• Understand and account for the changing costs and benefits associated with industry supply-chain strategies.
• Align Australian industrial security standards and data-sharing protocols better with the US system.