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With Congress now shut down for the November presidential
Cover Story - Presidential Election THE DEVIL IN THE DETAIL - II Defence trade treaty too elusive for overwhelmed Congress DEMOCRAT CAMPAIGN PHOTO Defence officials in the UK and Australia have reluctantly Key Points admitted that, overwhelmed by the rush to pass the • A 2007 initiative by President Bush to substantially free US$700 billion financial market ‘bail out’, Congress will up defence cooperation and arms transfer arrangements with not realistically get back to seriously considering a Defense Australia and the UK, has failed to win support from a Congress Trade Cooperation Treaty with each country until well since overwhelmed by the Global Financial Crisis (GFC). into the middle of 2009, if at all. Already frustrated by US Senators fearing a loss of control over sensitive arms • Bush Administration eagerness to push the US Senate transfer approvals, the atmosphere that will greet Treaty to ratify the Defense Trade Cooperation Treaty, has fuelled consideration in the 111th Congress – thanks to the global opposition from Senators claiming insufficient visibility was economic crisis – will be significantly different than the one being given to substantive regulatory amendments underpinning leading to its brokering at the close of 2007. the Treaty. • The US State Department has since issued a series of Trevor J Thomas/WASHINGTON ‘exclusions’ specifically limiting benefits for Australia under the W Treaty, which were not canvassed in the enabling documents ith Congress now shut down for the November presidential first signed by John Howard & President Bush. elections as global markets remain volatile despite unprec- edented government interventions, the very high prospects • Australian interests in signing up to new administrative for a major economic recession in the United States over 2009 can be requirements do not appear to have been adequately addressed expected to drive a resurgence of protectionist pressures, especially with via the Fact Sheet & National Interest Analysis accompanying the Treaty when it was first tabled in the Federal Parliament. the Democrat-controlled Congress. So no matter which flavour of politics is ultimately held by the new President, and irrespective of the hopeful aspirations of defence officials Minister, Tony Blair. Logically, the close timing and similarity of the ini- in London and Canberra, the prospects of US legislators rushing to tiative with two of the US’ closest allies, practically suggested the text of share their country’s deepest military secrets with other nations, even its the two treaties would be substantively the same. closest trusted allies, any time early in the new President’s term now ap- pears severely in doubt. LACK OF TRANSPARENCY IN TREATY MAKING: Independ- Following the 5 September 2007 signing – on the periphery of the ently, ADBR was able to obtain for early inspection the text of the APEC meetings in Sydney – by former Australian Prime Minister, John Treaty signed between the United States and the United Kingdom in Howard and US President, George W Bush, of a formal Treaty between September of 2007, given that the Australian Government elected to not the two Governments concerning ‘Defense Trade Cooperation’, Aus- release the United States/Australian text until December. As predicted, tralian Defence Business Review (ADBR) magazine reported (see Vol.26, both treaties followed a common line in seeking to overcome problems Nos.08/09, p35) the likely closeness of the prospective Australian agree- experienced in overcoming US International Traffic in Arms Regulations ment with one earlier (June) signed in Washington by then UK Prime (ITAR)-based export controls, themselves derived from the implement- 26 Australian Defence Business Review September-October 2008 Case Study: Defence Exports ing instructions of the Cold War-era US Arms Export Control Act. Statistics released by the US State Department indicated that liter- ally thousands of export licences and technical data agreements were EOS finds road to glory regularly approved for both allies, suggesting the ITARs were not actu- ally preventing US military technology from being passed to the UK and Australia. Instead, the effect of the regulations and their accompanying not always paved in gold bureaucracy and licence administration more often frustrated the process by slowing down technology transfers, whilst imposing added complex- A high profile ceremony in the relatively unknown ity to the lives of those seeking to provide better outcomes for national community of Richland Township near Johnstown warfighters in the course of improving interoperability between respec- (Pennsylvania) in August, and marking the award of a tive national forces. US$28.8m contract by the US Air Force & US Army to As it turned out, the treaties signed by Bush respectively with Blair Kongsberg Defence & Aerospace for deliveries of its and Howard turned out to be remarkably similar, both in terms of their ‘Protector’ crew remotely-operated weapon station, has good intentions – to ‘strengthen and deepen’ the defence relationship, capped off a ‘rocky road’ experience for one of Australia’s and ‘leverage the respective strengths’ of defence industries. However, most impressive high technology exporters. the real workings of the Treaty relied on effecting a series of accompany- worked to cause significant cost ing ‘Implementing Arrangements’ (then still to be drafted) and finalised Trevor J Thomas/JOHNSTOWN over-runs in establishing this busi- for mutual approval and subsequent consent by the Australian Parliament ness’. E and US Congress. In the latter, this involves the US Senate which, in re- ncouraged by the mantra of Supply arrangements for cent years, has shown considerable interest in not only preserving, but Defence industry policy and CROWS I systems – which have actually strengthening arms export controls. Austrade officials (including been in-service since early-2005 The relationship between the execution of US Foreign Policy and the successive ministers) to team with – saw ROI manufacturing gun sys- approval of arms transfers has a very long and controversial history, par- foreign companies to penetrate tem stabilized weapon mounts at ticularly during the Cold War era. It functions within a complex political global supply chains in the quest its Illinois facility, while EOS built trade-off between the need for legitimate governments to be provided to develop international export its electro-optic fire control & sen- with the means of stabilising volatile fledgling democracies, whilst at business, Canberra-based Electro sor components at its own factory the same time ensuring that transferred arms and military technologies Optic Systems (EOS) could not in Tucson (Arizona) – also set up do not end up in the wrong hands, and/or used for suppressing human have been blamed for thinking as the base for the provision of rights and enabling the committing of atrocities against national popula- it had struck gold in 2000 when ongoing depot support. The pair tions. – teamed with US-based Recon then went about progressively Optical Inc (ROI) – it was selected refining their patented ‘Raven’ LEGISLATORS RESIST BEING CUT OUT OF THE DEAL: to supply its targeting and fire R-400/CROWS I technologies, This is where the effect of the ITARs have traditionally come into play. control system into the ‘Raven’/ and subsequently found further By way of enforcing strict export licensing arrangements – said to be R-400 crew remotely-operated commercial success in late-2006 viewed on a case-by-case basis by State Department personnel trained weapon station (CROWS I) solu- with the Australian Defence Force, in the detection of fraudulent documents (and attempts to divert arms tion for the US Army. for systems destined for use in shipments for non-legitimate purposes) – senior elements within the On the back of the CROWS I Afghanistan. US Government, and particularly legislators, retain a strong belief that a order, EOS and ROI got in early on By the end of June 2008, modicum of justice can be achieved in a global trade that is not without the bow-wave of burgeoning inter- the Australian Army had 116 its moral critics. national demand for weapon sys- EOS-based SRWS systems in Hence, the need for proper oversight and transparency in the de- tems that eliminated the need for service on their project Land 116 tail and nature of proposed arms transfer deals – despite the angst of light gun operators to be exposed ‘Bushmaster’ infantry mobility ve- some arms recipients – which are regularly made available to the public to insurgent snipers, as tragically hicle fleet, while US Army orders through the US Defense Security Cooperation Agency (DSCA) notices, experienced in operational circum- pushed over 560 units (known prior to their cases being further developed for approval by Congress. stances in the Middle East. as the M101 CROWS), for use Having been interpreted in some quarters as ‘parting gifts’ by Presi- The benefit was short-lived, in Operation ‘Iraqi Freedom’. The dent Bush to close Prime Ministerial colleagues for their firm support however, as EOS latterly concedes first ‘Raven’ units were fielded in in the execution of US Foreign Policy in the Middle East, Bush is un- ‘continuously changing specifica- 2004 in Iraq, and employed by derstood to have been naturally eager to see the US Senate quickly ratify tions and the sporadic (stop-go) US Special Forces, military po- the two treaties, with administration officials citing ‘enhanced execution nature of early stabilised remote lice, infantry and transport units. of the war against terrorism’ as a prime reason they should be dealt with weapon system (SRWS) demand, CROWS I units currently equip the quickly. As the US Senate Foreign Relations Committee (SFRC) began its first hearing on the two treaties in May, it quickly became clear the Presi- dent’s expectations were running into trouble. The shared (hostile) reaction of the SFRC – particularly from Chair- man Senator Joe Biden (D-Delaware) and Senator Richard Lugar (R- Indiana) – appear to have taken the Acting Undersecretary of State for Arms Control & International Security Affairs, John Rood (along with the State Department) by surprise, as there was genuine belief the Com- mittee had been provided with all the necessary detail required to achieve ratification. Washington insiders have subsequently told ADBR that to be ‘sur- prised’ in a Congressional hearing – especially one of such significance and well telegraphed anticipation of a favourable outcome – is generally ADBR PHOTO reflective of poor (pre-hearing) staff work. Australian Defence Business Review September-October 2008 Australian Defence Business Review September-October 2008 27 27 Cover Story - Presidential Election To be fair, the State Department had submitted to the SFRC details and regulations being subject to advice and consent by the Senate was of the ‘Implementing Arrangements’ (as similarly circulated to Austral- resolved, “I can tell you as chairman of this committee that we are not ian stakeholders) associated with the two treaties, a move undertaken going to move.” in accordance with long-standing Committee requests as a condition of With SFRC Democrat and Republican leadership presenting such a hearing scheduling. clear and bipartisan front on the imperative for the State Department What was not submitted – and which the Department of State in- to come forth with the regulatory minutae underpinning the working dicated the Senate’s ratification would not be sought by the President of the Treaties to the Committee, Secretary of State Rice was formally – were the detailed changes to the ITAR regulations (and other re- informed in mid-September that administration officials had fatally mis- lated trade law) – that Senators maintained were ultimately required to be read the Senate’s feeling on concerns that both Treaty proposals risked sighted in order to achieve their confidence that the ratification of such conflicting with established US arms export laws, meaning they would Treaties would not undermine Congressional oversight of sensitive arms ultimately exceed the horizon of the 110th Congress. shipments. Sensing the pending catastrophe for Australia’s Treaty as media re- State Department officials went on to concede such regulatory ports filtered in from Washington, Defence Minister Fitzgibbon – dur- changes were massive, with detailed resolution taking many months to ing a 10-day US visit in July – ostensibly to ‘reaffirm the strength of draft and refine upon the receipt of legal advice, and hence, requiring Australia’s bilateral relationship with the US, and to advance Australia’s considerable administrative and staff effort in the run-up to Washington security, defence & foreign policy interests in the Asia-Pacific region’ closing down for the Presidential election. – made separate calls on the Chairman of the House Armed Services The State Department responded with a commitment to closely con- Committee, Congressmen Ike Skelton, and Senator Joe Lieberman (Air/ sult Congress in the ITAR re-drafting process, and critically, reaffirmed Land sub-committee Chairman), to raise accumulating problems with the there was absolutely no intention or suggestion of changes (despite Trade Cooperation Treaty’s ratification. Senator Lugar’s fears) to the Congressional notification and oversight processes for major arms sales to the UK, Australia, or any other nation. KNOCKING ON THE WRONG DOORS: Oddly, Minister Fitzgib- bon’s 17 July release justifying his 10-day sojourn (which took in Hawaii, BIDEN ON FREEWAY TO FAME: Still, Biden and Lugar were Texas, New York & Washington), did not indicate any effort had been ‘taken aback’ by a perception of arrogance in the Department of State’s made to schedule talks with SFRC Chairman, Senator Joe Biden, who by approach, pointing to fundamental flaws in thinking. The Senators a quirk of fate is now Vice Presidential running mate of Democrat US argued that if Congress did not like the administration’s regulations, it Presidential hopeful, Barack Obama. Hence, and in a different world could pass new legislation to change them. Alternatively, once having post-4 November, Biden’s enduring opposition to ‘the war on terrorism’ ratified a Treaty, the Senate is unable to make any further changes. Bi- being justified for proposals seeking to circumvent Congressional over- den responded that until the issue of the Implementing Arrangements sight on major defence & foreign policy issues is likely to find >>>32 EOS Annual Report – Ctd from page 27 Following media inquiries, EOS schedule, management, logistic in December 2007 confirmed that support, price, government M1114 up-armoured HMMWV which forecast a maximum 6,500 the CROWS II contract award was purpose license rights, past (Armoured Scouts/Military Po- weapons mount and targeting sys- currently the subject of ‘a strong performance, and small disad- lice), and M1116 up-armoured tems would be ordered over the protest’ by its US partner, Recon vantaged business being the HMMWV (US Air Force); the life of a new CROWS II contract. Optical Inc, with a determination sub-factors assessed.” M93A1P1 nuclear, biological, Drawn by the sheer volume of to be made by the US Govern- ROI/EOS and Kongsberg were chemical reconnaissance ve- weapons systems prospectively to ment Accounting Office (GAO) in both said by the GAO to have hicle, scout vehicle and some be ordered, new entrants came January 2008. based their proposals and bid of Textron’s M1117 Guardian quickly to the market, with EOS Outlining its observations on the samples on existing CROWS Armoured Security Vehicles butting up against Norwegian- solicitation process in its final re- systems that each firm had pro- (Military Police). based Kongsberg Defence & Aero- port, the GAO judged the CROWS vided under prior contracts, with A subsequent Netherlands R- space’s M151 ‘Protector’ system II award had been made “on a modifications or proposed modi- 400 remotely-operated weapon in an Australian competition to best value basis with (in descend- fications to meet the CROWS II system order in July 2007 for its equip RCWS to Australian Army ing order of importance) technical, RFP requirements. ROI, however, Thales Australia-supplied ‘Bush- ASLAVs heading for service in the master’ fleet was greeted by Middle East. EOS as being of “huge strategic EOS lost the Australian compe- importance”, and represent- tition to the M151, and it is now ing a breakthrough in terms of a matter of record (August 2007) accessing the European NATO that the ‘Protector’ system was market. This order was followed selected for the US Army follow- 30 May 2007 by the sale of on CROWS II solution. Leading ‘Raven’/CROWS systems to attributes for Kongsberg were that an unidentified Asian country, the M151 ‘Protector’ had been in valued at up to $50 million for full scale production since 2001, completion by 2010. with more than 1,500 systems In parallel with these devel- delivered to the US Army through opments, US forces in August the ‘Stryker’ M1126 Infantry Car- 2006 moved to define a fol- rier Vehicle program, with over low-on crew remotely-operated 1,000 units fielded in Iraq since CROWS ON ‘BUSHMASTER’ IMV - ADBR PHOTO weapons system solicitation, 2003. 28 Australian Defence Business Review September-October 2008 Cover Story - Presidential Election SENATOR JOE BIDEN - DEMOCRAT CAMPAIGN PHOTO had received either a ‘red’ or ing, because its bid sample did ness” rating because the source (R-400s were claimed to have ‘high risk’ rating under three not operate successfully at 20 selection authority had “doubt an operational readiness rate of of the most important factors volts direct current (VDC) during that ROI will be capable of provid- over 95% in Iraq & Afghanistan), (‘Technical’, ‘Schedule’ & ‘Man- testing, and a critical message ing a production system capable but not on units that were still in agement’), which then “raised instructing the user to shut down of operating reliably and safely the factory – with RFP language uncertainties regarding their abil- the system was displayed. down to -50 [degrees Fahrenheit], said to have made no such ity to meet schedule, resulting ROI was also said to have had prior to production delivery.” distinction. System level testing in delayed fielding of the Urgent Engineering Change Proposals Testing was said to have re- was also not planned to be com- Material Release item with an at- (ECP) required and pending, which vealed that ROI’s production pleted by ROI until three months tendant increase in expenditure in terms of tender evaluators, system did not meet rotation or after contract award, and soft- of [government] resources.” In raised concerns that the weight of elevation speeds at -50 degrees ware safety analysis would not contrast, Kongsberg was rated as external components (not includ- Fahrenheit as well as problems be conducted until government providing a technically superior ing the weapon & ammunition) with the display – the “monitor testing was complete. proposal at a lower price. above the roof may be over 400 was distorted and several verti- The evaluation agency also ROI relied for its submission pounds when fully included, and cal lines appeared on the screen expressed concern ROI’s pro- on the company’s fielding of over so might impact overall system … (and lasted for) approximately duction process was highly 250 systems in Iraq since first performance. three minutes” – and with “un- dependent on the success of its being awarded the initial devel- Again, under the ‘Stabilization’ commanded movement in the subcontractors (ie: EOS), be- opmental ‘Raven’ SRWS contract subfactor, the procurement agen- form of a continuous side to side cause the company “maintains in 2000. Since February 2007, cy gave ROI a “weakness” rating tremble of the mounted weapon.” minimal stock”, and had pro- however, the GAO observed no as it maintained it was unable The evaluation agency went vided only limited information on units were said to have been to “extrapolate the true weapon on to consider ROI had ‘an im- EOS, which would have respon- fielded, and the relevant pro- stabilization performance” of the mature system’ that did not have sibility for building approximately curement agency had moved to CROWS II response from the data any demonstrated or documented half the CROWS II systems. issue ROI with a ‘show cause’ and information that ROI provided. system reliability that provided According to authorities, “The letter and termination for default It was said ROI’s stabilization tests confidence a minimum and inher- information provided raised ad- cure notice due to performance did not account for weapon move- ent reliability of 1000 hours mean ditional concerns related to the problems. ment in the cradle, and its stabili- time between system aborts major subcontractor’s efforts to The GAO further noted that zation system did not account for [MTBSA] was achievable prior to outsource components and its under the ‘Vehicle Interfaces’ ‘linear disturbances.’ production delivery. ability to meet and maintain the sub-factor, ROI’s proposal was ROI’s ‘Temperature’ proposal ROI had relied on reliability data manufacturing schedule.” given a “major weakness” rat- was also given a “major weak- experienced with fielded units >>>31 Australian Defence Business Review September-October 2008 29 Case Study: Defence Exports - Ctd from p29 ROI contended that “as the from industry in the form of com- ties), compared to a net loss of emerge from 2009, and requir- incumbent contractor”, ROI was mercially available products. $20,734,269 for the year ended ing a diverse range of weapon the only offeror which has pro- Outsourcing arrangements already 31 December 2007. systems.” Outside of the US, duced stabilized CROWS units,” in place will allow EOS to produce As at 30 June 2008, the con- EOS is continuing to expand and therefore was more likely more SRWS in 2009 than in solidated entity – which operates sales to Asia (Asian custom- to meet the delivery schedule 2007, with less than 50% of the more broadly across Australia, ers have ordered dual weapon, than the other two tenderers staff employed in 2007.” the USA (as EOS Technologies) airburst and marine systems), (ROI’s system was assessed as Directors add the company’s and Germany (as EOS Optron- Europe (NATO) and the Middle third best overall). The evalua- investments in new technology ics GmbH) – in the development East, with up to 90% of military tion agency responded by citing and product evolution “have also manufacture and sale of tele- business now generated outside records showing ROI “had dif- been reduced to reflect a tighter scopes and dome enclosures, la- of the USA, and expected to be ficulty meeting schedule and focus on key customer objectives. ser satellite tracking systems and sustained in this fashion through performance requirements under In the absence of significant new the manufacture of electro-optic 2009. the incumbent contract.” contracts, EOS now has the ability fire control systems for defence, The half year report goes on Subsequent to the CROWS II to execute the closedown of the held cash totalling $22,522,095. to state the combined value of decision, and having built up a US military manufacturing facility The accounts note flexibility these programs – EOS serves as production base in the United by 30 November 2008, and Ger- with $5,616,713 is restricted, prime contractor in these mar- States to service the CROWS I man operations by 31 October as the cash pool secures bank kets – (and outside the US) ex- requirement, the loss of CROWS 2008.” guarantees relating to perform- ceeded A$43m, with firm funded II to Kongsberg has impacted The aftermath of the CROWS II ance on some extant contracts. orders exceeding $22m. Austral- adversely on EOS’ 2007 finan- experience has seen EOS bidding Directors went on to affirm, “the ia is also said to have emerged cial results, as well as its 2008 for new military contracts “the re- ability to continue as a going con- “as a major customer in the past outlook, with the event being sults of which are not yet known, cern remains dependent upon the two years, and in the half-year described as “placing large-scale but (we are) confident of winning company’s ability to achieve target to 30 June 2008 a total of 60 US production orders out of during the next 12 months.” Di- production levels for the military weapon systems were shipped reach for at least 24 months, rectors estimate the worldwide business in the second half of the for use by Australian forces.” slowing growth in revenue and RWS market will exceed 12,000 calendar year.” The company similarly main- potentially deferring the com- units (or $4 billion in contracts Successful re-positioning initia- tains it is supporting “over 600 by 2014), noting that in the past previously shipped weapon sys- pany’s transition to profitable tives were also said in the half- tems, with approximately 400 operations.” two years the number of SRWS year report to have re-based the fielded in current conflict areas.” In response, EOS directors producers has doubled to ten, company from being competitive EOS is also re-focusing its moved to substantially re-posi- including BAE Systems Bofors & profitable at annual revenues traditional telescope business tion the company in late-2007, (Lemur), FN-Herstal, Krauss-Maf- over $60m (achieved in 2006), through military optical gimbals advising that “production redun- fei Wegmann, Elbit Systems (OR- “to an entity with profitable op- to weapon system gimbals for dancies between plants in the CWS), Oto Melara, Rafael (RCWS erations at $40m per annum. conventional ballistic weapons, US and Australia – required only & ‘Samson’ families), Rheinmetall New military orders received in and a new market for directed for large-scale production to criti- and Thales (SWARM). 2007 totalled $46m, with a total energy weapons, which are cal schedules – were eliminated. Summing up the current out- backlog at 31 December of $56m both areas of new capability The company’s staff numbers look, EOS Holdings’ half-year – representing 18 months of development for the Australian world-wide were reduced from financial report (six months production capacity from diverse Defence Force expected to be 235 to 134, by 30 June.” ended 30 June 2008) released customers not identical to CROWS included in the new Defence Outsourcing of production is 27 August, indicated the firm business. White Paper. further said by EOS management had now substantively recovered Directors indicated the com- to have “continued to achieve its position from the CROWS II pany was now “actively preparing a reduced level of production loss, achieving a net profit of for the next wave of US remote complexity … over 50% of SRWS $2,400,974 (generated prin- weapon system requirements … technology can be purchased cipally from defence activi- with opportunities expected to ADBR TAKING CARE OF BUSINESS USA-STYLE: US Army Humvees (far L) fitted with the ROI/EOS ‘Raven’ R-400 crew remotely-operated weapons system (CROWS I); US Congressman John P Murtha (L), as Chairman of the House Appropriations Defense Subcommittee, says he’s seen every kind of new military capability acquisition pitch that’s ever been proposed, and is always happy to welcome new defence-industry investment into his own 12th Congressional district; Kongsberg Defence & Aerospace M151 ‘Protector’ CROWS II SRWS and controller (R); Kongsberg opened its 138,000sqft ‘Protector’ manufacturing facility in Richland Township, Pennsylvania on 14 August. US ARMY & ADBR PHOTOS Australian Defence Business Review September-October 2008 31 Cover Story - Presidential Election very little tolerance, thus ensuring treaties of the nature proposed for As noted above, ‘List C’ operates to exclude from the Treaty manu- the UK and Australia will continue to butt up against opposition if pro- facturing technology for a large range of platforms and systems of key gressed in the same manner as advanced by the Bush administration. relevance to the ADF, which Wylie concludes will “significantly reduce Further revelations as to the diminution of the benefits of the Aus- the utility of the Treaty in terms of facilitating Australian industry in- tralia-United States Defense Trade Cooperation Treaty first signed off by volvement in the supply of platforms and systems.” John Howard and George Bush emerged recently in an article by Robert In short, this pours salt into a long-festering sore in Australia’s se- Wylie, published in the Kokoda Foundation’s ‘Security Challenges’ journal curity relationship with the US, given Wylie’s observation “the denial (Vol.4, No.3). The article provides a useful expose of the scope and in- of access to the source code required to configure US-origin platforms tent of the proposed Treaty, along with observations regarding develop- and systems for operation by the ADF in Australia’s region of primary ment of the accompanying ‘Implementing Arrangements’ and the utility strategic concern has long vexed defence business relations between the of the overall arrangements for Australian-based defence companies. US and Australia at both government-to-government and commercial levels. ” PROTECTIONISM SETS IN ON FREE TRADE: The article notes that since the Treaty was first signed – and perhaps reflective of ANAO ON THE MONEY, AGAIN: To illustrate his point, Wylie concerns expressed by Congress to retain firm control over major arms cites problems identified by the Australian National Audit Office export deals – the US State Department has promulgated a tripartite (A, (ANAO) in 2004 (Report #32), where it was said a lack of US Gov- B and C) list of Treaty exclusions, which critically, might reasonably have ernment export licenses for some of project Air 5077’s (‘Wedgetail’ been relied upon by the Australian government in populating future mili- AEW&C) advanced technology, worked to preclude local industry from tary capability acquisitions arising out of the new Defence White Paper. involvement in some $44 million worth of contracts in such areas as sys- In brief, the exclusions lists now proposed to be applicable to the tem design and development, system integration, software and systems Australia-US Defense Cooperation Treaty covers stealth and counter- engineering. stealth technology, satellite technologies and a While the Australian Parliament’s Joint Stand- range of enabling (including manufacturing) ing Committee on Treaties has yet to report on the technologies related to precision guided muni- merits of ratifying the Defense Trade Cooperation tions, electronic warfare tools and systems for Treaty in the changed environment of the introduc- submarines. tion of new restrictions and exclusions, Wylie points Wylie points out that the ‘List A’ exclusions out such developments have thrown up a conflict appear likely to have the effect of “reinforcing with Rudd Government statements as to “the im- the appeal of the US Defense Department’s portance to Australian defence self-reliance of selec- Foreign Military Sales (FMS) program” to an tive Australian industry involvement in the supply Australian Defence customer he observes is and support of defence materiel.” “already predisposed to buy proven equipment The commitment is all the more important given already in-service. It is also likely to encourage recent industry consolidations mean the majority of US companies to market military-off-the-shelf the Australian defence market is now substantively solutions to Australian capability requirements ... controlled by overseas-owned companies, and recent (and is) likely to inhibit Australian industry involvement in the supply and new entrants (eg: Ultra Electronics, QinetiQ, Cobham, etc) all hark from support of platforms involved.” the UK. As Wylie notes, the UK and Australian treaties broke important In respect of ‘List B’ exclusions, the paper notes that while such tech- ground on creating trusted communities ‘to share advanced technology nologies will not be the subject of technology access benefits provided pursuant to common political and strategic interests’. for under the Treaty, “such technologies are expected to continue to However, changing political and economic circumstances over 2009 be subject to the existing ITAR licensing processes.” In short, this will associated with a re-emergence of trade protectionism, suggest the Unit- force a reconsideration of the utility of the Treaty from the Australian ed States will be most likely to act first in pursuit of its own interests, side, with Wylie warning, “Australian stakeholders should bear in mind above those of others. Australian defence firms might accordingly look that (the treaty) seems unlikely to contribute materially to the realisation to persisting with the ‘devil we know’ – in terms of the existing ITAR ar- of Australia’s key capability development objective” in network enabled rangements – and just get on with doing business. operations. ADBR FCS technology progressing as NLOS cannon fired The tests were described as In a related development, the its on-board computers and con- Canberra Bureau Report representing “a significant step in FCS program also successfully fired trols. design verification” testing for the the first artillery projectile from the The NLOS-C has the ability to rap- R aytheon, working in partner ship with the US Army, and the Future Combat System (FCS) system, which includes defeating manned ground vehicle non-line- idly deliver precision munitions in both urban and conventional battle multiple incoming of-sight cannon space, and is the lead prototype in Lead Systems Integration team (ie: projectiles simul- (NLOS-C) proto- the US Army’s family of eight FCS comprising Boeing, Science Appli- taneously while type on 24 Sep- manned ground vehicles. Soldiers cations International and BAE Sys- on the move - a tember, marking at the Army’s Evaluation Task Force tems), reported 7 October it had unique capability the first 155mm are scheduled to receive the first of successfully completed stationary for the provision round fired from a 18 NLOS-C platforms at the start and moving target intercept tests of active protection for Future fully automated howitzer mounted of 2010. for the new FCS Active Protection Combat System manned ground on an FCS hybrid-electric chassis ADBR System (APS). vehicles. and remotely commanded through 32 Australian Defence Business Review September-October 2008
"With Congress now shut down for the November presidential"