AUKUS and Australia’s nuclear submarines

While nuclear-powered submarines steal much of the media limelight, the AUKUS security partnership between Australia, the United Kingdom and the United States is about much more than the submersible warships. And it is headed for a critical phase.

The partnership will include additional cooperation in defence-related science and technology, industrial production and supply chains, and cyber and AI capability. This will involve significant contributions from the private sector of each partner economy and require ongoing intellectual property (IP) transfers between partners. Such transfers and storage of highly sensitive data will require information security and network resilience. In the contemporary era of strategic competition between economically interdependent nations, IP theft poses unique challenges that AUKUS partners must overcome.

The economic cost of IP theft is difficult to calculate, with official US economic losses due to Chinese actions estimated at between US$225 billion and US$600 billion. Even the lower end of this estimate is vast. While there seems to be no comparable official estimate for Australia, there are high-profile examples of IP theft (here, here and here), as well as Australia serving as legal jurisdiction for the adjudication of an IP theft case involving Motorola and Chinese firm Hytera. The Chinese state is recognised by AUKUS governments as the single most active global actor in conducting and/or sponsoring malicious cyber operations with the aim of transforming stolen IP into defence capabilities and private sector products. It is well documented that China’s legal system actively enables IP theft, which is made possible by a politically dependent judicial system subject to Chinese Communist Party (CCP) directives.

Yet it may surprise some that another significant contributing factor to Chinese economic espionage is the unwillingness of victimised private businesses to take legal action against Chinese firms or the state. A recent investigation of IP theft in the world’s most targeted economy, the United States, found that it was “allowed to quietly continue because US companies had too much money at stake to make waves”. For example, in 2010, when Google revealed a major China hack, 33 other American businesses that were also hacked refused to make public statements.

One reason for their silence relates to the CCP’s willingness to use its vast domestic market access as both carrot and stick, punishing firms that make statements on issues the Party views as politically sensitive. Private businesses operating in China are therefore right to fear they will suffer potentially serious financial costs if they displease Beijing. Their ultimate concern is making profits for owners and shareholders, resulting in micro-motives that have the unintended effect of undermining national security imperatives around safeguarding IP. Wendy Cutler, an experienced negotiator at the Office of the US Trade Representative notes, “We are not as effective [combating IP theft] if we don't have the US business community supporting us”.

The issue of private firms wishing to remain anonymous when targeted by Chinese IP theft will become increasingly important for AUKUS members operating within the context of economically entangled strategic competition. At present, a key issue is the lack of a universal mandatory duty of corporations to report cyberattacks. A duty to report, enforced by financial penalties, would be a good initial step to improve corporate cyber governance. At present, only firms listed on the Australian stock exchange (ASX) are obliged to report a cyberattack.

Breach of disclosure obligations can lead to large financial penalties if discovered by the Australian Securities and Investment Commission (ASIC). The rationale is that such information could be crucial for assessing the market value of the targeted company. However, given that Australia’s defence economy relies mostly on small businesses across the country, notwithstanding a few large defence contractors, the limitation of relying on ASX disclosure rules becomes clear.

From an Australian perspective, Canberra should engage in policy-learning from Washington’s recent initiatives by following suit on two fronts. The first involves an Australian version of the US Commission on the Theft of American Intellectual Property. Others have already made convincing arguments for that institutional development, to which the authors of this article add their support. Such a commission is a much-needed step to fully understand the threat posed by IP theft to Australia. A second proposal is to create a parliamentary committee with a mandate similar to the recently established Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party. The remit of this committee includes a focus on US corporate relationships with China, and how these impact issues of national security.   

While the US example is mostly bi-partisan in nature and calls for the private sector to play its part in terms of awareness and alertness, one of Australia’s challenges is to establish a whole-of-government approach that allows for engagement between the business community, national security community and academia by way of co-opted membership of respective organisational bodies. This would allow better cross-understanding of each group’s risks and goals, as well as how these intersect dynamically.

“Australia is facing an unprecedented challenge from espionage and foreign interference”, the Australian Security Intelligence Organisation’s Director-General pointed out during last week’s presentation of ASIO’s fourth Annual Threat Assessment. And China is central to those challenges. As a result, the valuable economic gains Australia and China both harvest from their bilateral trade relationship should not be used to justify a policy of “softened” vigilance concerning China’s clear and present danger to the nation’s democracy and economy. AUKUS supply chains and private defence contractors across the partner economies are clearly in the firing line. It is the government’s job to reduce their exposure.

China was expected to be furious about the recently signed AUKUS security pact. After all, it is generally believed that the deal to provide Australia with technology to build nuclear submarines and the associated cooperation with the United States and United Kingdom amounts to a significant security pact to contain China’s growing assertiveness in the Indo-Pacific region.

But China in truth responded to the pact moderately. That sort of behaviour that might be ordinarily assumed to be on display by an angry China did not occur.

Beijing has so far responded chiefly with words rather than deeds. At the regular press conference on 16 September, the day of the AUKUS announcement, China’s Foreign Ministry spokesperson Zhao Lijian said “nuclear submarine cooperation between the United States, the United Kingdom and Australia has seriously undermined regional peace and stability, intensified the arms race and undermined international non-proliferation efforts”. Condemnation, indeed, but hardly fire and fury.

On 29 September, in phone conversations with his Malaysian and Bruneian counterparts, China’s Foreign Minister Wang Yi reiterated that the AUKUS arrangement “may trigger the risk of nuclear proliferation, induce a new round of arms race, and undermine regional prosperity and stability”. Beijing made its comments on AUKUS with disapproval and suspicion, but it cannot veto or disintegrate the pact. Nor did Beijing move to impose any kind of sanctions on the three AUKUS countries following the launch.

The diplomatic language amounted to a mild rebuke. Beijing’s wrath is usually expressed through much stronger phrases, highly charged with paranoia. For example, in response to the South China Sea arbitration case initiated by the Philippines in 2013, Beijing issued a series of position papers, one of which stated that “[t]he unilateral initiation of arbitration by the Philippines is out of bad faith. It aims not to resolve the relevant disputes between China and the Philippines…but to deny China’s territorial sovereignty and maritime rights and interests in the South China Sea.” China’s outrage was clear. Beijing completely rejected the arbitration and accused the Philippines of sabotaging China’s claims in the South China Sea.

So why did Beijing respond to the launch of AUKUS with relative self-control and restraint? Has the AUKUS deal successfully blunted China’s assertiveness? Or is there some other explanation?

Some clues might be found in another high-profile case unfolding around the same time. Barely a week after the AUKUS launch, Meng Wanzhou’s return to China swamped the news. The CFO of Chinese tech giant Huawei had been arrested and detained in Canada from December 2018 at the request of the United States over fraud charges of circumventing US sanctions against Iran. On 24 September this year, she was freed and boarded a flight chartered by the Chinese government for China under a deferred prosecution agreement, in which the US Department of Justice agreed to dismiss the fraud charges in December 2022 on condition of her compliance with certain rules, including not to further challenge the factual allegations made by the US government.

Meng’s case has been a barometer for US-China relations, which deteriorated rapidly during Donald Trump’s presidency. During a July 2021 meeting in Chinese port city Tianjin between senior diplomats from both countries, the Chinese side handed two lists to the US officials for consideration: one a “List of US Wrongdoings that Must Stop” and the other a “List of Key Individual Cases that China Has Concerns with.” In the first, China urged the Biden administration to reverse the hard-line policies towards China implemented by his predecessor, including by dropping the pursuit of Meng.

In China, Meng’s release has been seen as a diplomatic victory for Beijing. It implies that the United States has given due consideration to the two lists and that there can be a turning point in bilateral relations, despite the continuing rivalry between the two powers.

It seems likely that the United States has been seeking China’s cooperation and the decision relating to Meng was a goodwill gesture. On 1 September, for example, US Special Presidential Envoy for Climate John Kerry and Wang Yi held an online meeting to discuss climate change, reportedly in a bid to solicit a further commitment from Chinese leaders to curb the country’s greenhouse gas emissions. Wang responded with a metaphor that while the United States wanted cooperation on climate change to be an “oasis” in the bilateral relations, “if the oasis is all surrounded by deserts, then sooner or later the ‘oasis’ will be desertified.” The message was that the United States needed to repair the damaged relations first before seeking feasible cooperation with China.

So with Washington about to extend an olive branch by dropping the pursuit of Meng, Beijing knew that it would be inappropriate to react aggressively to the launch of AUKUS. Meng returned to China about ten days after the three-way partnership centred on the nuclear submarines was launched. It must have taken some time for the United States and China to organise Meng’s release and return – arrangements that seem unlikely to be accomplished in just ten days – suggesting an improvement in US-China ties occurred before the launch of AUKUS. It also seems reasonable to conclude that the changing atmosphere between the United States and China had an effect on China’s response to AUKUS.

What’s the implication then? It means that should US-China relations cycle to another low point, China may yet respond to AUKUS tensely. China is a pragmatic actor. Beijing tends to continuously adjust its (re)actions in accordance with changes in circumstances.

When Barack Obama announced the rebalance to Asia in 2011, he also revealed the rotational deployment of US Marines to Darwin. In the intervening decade, however, additional changes to US regional posture have been few and far between. As a result, leading US defence expert Michèle Flournoy has observed, “Washington has not delivered on its promised ‘pivot’ to Asia.” Australian experts have expressed concern that “the Biden administration lacks a sense of urgency about China as a near-term military competitor”.

In light of these critiques, the AUKUS deal, the tripartite agreement for the sharing of sensitive nuclear technology between Australia, the United Kingdom and the United States, sends a badly needed signal that the United States is serious about rebalancing to Asia.

Critics of AUKUS have expressed a number of valid concerns. They worry that eighteen months is a long time to wait for clarity on the plan, and eighteen years would be too long to wait for submarines. Nuclear-powered submarines will prove difficult and expensive for Australia to master, and could create non-proliferation concerns. Washington, Canberra, and London will have to mend ties with Paris as well as concerned friends in Southeast Asia, especially Jakarta. Others have argued that the deal ties Australia too closely to the United States or creates unnecessary tensions with China (although we would dispute these last two assertions).

Despite these concerns, we still believe that the strategic logic of Australia acquiring nuclear-powered submarines justified the agreement. But for those who disagree about the value of the submarines, this should not by itself obviate the logic of the larger AUKUS deal. Australia and many other US allies and partners in the Indo-Pacific have long sought a clearer US commitment to the region and to their defence. That is what AUKUS provides. This is not only about nuclear-powered submarines; it is about a strengthened US commitment to Australia, and a more robust shared capability for defending Australian and American interests.

Urgent action has been required because China has modernised its military at an impressive rate over the past two decades. The People’s Liberation Army has grown from “a sizable but mostly archaic military” which “lacked the capabilities, organisation, and readiness for modern warfare” to one that could take on the United States in regional contingencies, in particular Taiwan. As a result, US conventional deterrence against China has eroded. Part of the challenge is that the United States is not a resident power in Asia – it largely relies on its allies for its ability to project power there. To bolster its regional military posture, it needs more base access and fewer restrictions on the use of those facilities.

The United States has prioritised interoperability with its allies since the Cold War, as the ability to fight together against a common adversary could determine victory or defeat. But Washington still prefers to keep much of its most sensitive information, including advanced technology, close hold. To achieve deep interoperability and ensure that allied forces can not only operate together but be truly interchangeable, the United States needs to share more and establish infrastructure for cooperation on emerging technologies such as artificial intelligence. But none of this is possible if US partners aren’t willing to take the risk of upsetting Beijing. Countries in the region need to show China that they will not give in to its attempts at coercion – whether political, economic, or military.

The AUKUS agreement is a significant step towards meeting these demands. Australia will host US bombers on its territory and consider supporting US vessels at HMAS Stirling, two items that have long been on Washington’s wish list. Australia is also the first country to receive access to US naval reactors since the technology transfer to the United Kingdom in 1958 – a sign that the United States is shifting its mentality on sharing sensitive information with its closest allies. This is a critical step toward “pooling resources and integrating supply chains for defence-related science, industry, and supply chains” to ensure a technological edge over China. Through these efforts to build “federated” defences, the Biden administration may finally be taking US alliances into the 21st century.

It is unsurprising that China responded to AUKUS with a canned claim that it harms regional stability, encourages arms races, undermines nonproliferation efforts, and reflects “an outdated zero-sum Cold War mentality”. But Chinese commentators also recognise that Australia plays a critical role in Asia, and view this as a sign that countries are willing to come together to push back against Beijing. Social media postings more directly express concern that a counterbalancing coalition is forming despite economic dependence on China. After all, rather than kowtowing to Chinese economic pressure, Australia has cooperated with the United States in two of the most sensitive military areas – nuclear-power and undersea warfare.

As the United States, Australia, and other countries work to build resiliency against Chinese coercion and bolster deterrence against Chinese aggression, there are going to be tradeoffs. AUKUS is by no means perfect, but it demonstrates the Biden administration’s commitment to rebalancing its efforts towards Asia, and adjusting to a new strategic environment. Although the agreement will not change Chinese behaviour, it is sets Washington, Canberra, and London on an important course. Allied leaders should examine ways to strengthen the deal and build on it, lest this be seen as another false start in America’s long-promised rebalance to the region.

Are nuclear-powered submarines better – more cost-effective – for Australia’s operational needs than conventionally-powered ones? This is one of the many questions that deserve a bit more attention than they have received since Scott Morrison’s AUKUS coup. Let’s agree that the French project was an irredeemable dud, which had to be abandoned. But are nuclear-powered submarines (SSNs in clunky but convenient navy-speak) the right way to go, or should Australia be looking for a new and better way to buy a new fleet of conventionally-powered boats (SSKs)?

The answer is not simple, but it is far from clear that SSNs are a better bet operationally than SSKs for Australia in the decades ahead. Their relative merits depend on four key questions.

First, it depends what Australia is buying subs to do. If their primary role is to support America in a war with China then SSNs are probably the way to go, because they are unbeatable in the main task that America would want Australian subs to help perform, which would be to help find and kill China’s subs near their home bases. But if the main role of the new boats is to defend Australia and its near neighbours independently, then it is not so clear.

This is not the place to argue the merits of these competing versions of Australian national strategy (I’ve done that here). But it is worth noting that the time Australia would really rely on subs would be when facing China (or another great power) alone. If America remains a major power in Asia, it doesn’t really matter what subs Australia has because America will be there. If it doesn’t remain a major power, subs will be a vital part of all that stands between Australia and the People’s Liberation Army. So it makes sense to optimise Australia’s subs for Australia’s defence.

The second question concerns how Australia would use subs in defending itself. Subs can do a lot of things, but their core role is to sink the adversary’s ships and submarines. What kind of subs do this best depends on whether ships or subs are the primary targets. That in turn depends on whether Australia’s overall maritime operational aim is sea control or sea denial. If Australia wants to project power by sea itself, then it needs to achieve sea control, and the best way subs can contribute to that is by sinking the adversary’s submarines.

They do that by deploying as close as possible to the adversary’s submarine bases, because that is where their subs are easiest to find. That means Australia’s subs must do long transits to the operational area. SSN’s have the advantage, both because their higher speed means they can do those long transits faster, and because not having to snort to charge their batteries allows them more easily to evade the high-intensity anti-submarine warfare (ASW) operations that the adversary would maintain around their submarine bases.

But things are different if the main aim is not to project force against the adversary but to stop them projecting force against Australia, and that must be the reality for a middle power facing a great power. The aim then is sea denial not sea control, and the primary role for subs is not to sink their subs but to sink their ships. Ships are easy to find so there is no need to hunt them near their bases. They can effectively be attacked in choke points such as those that punctuate the archipelago to Australia’s north, which are a lot closer to Australian bases, so transit times are less.

Whether SSNs are more cost-effective than SSKs depends on a third issue. It is a question of how many submarines Australia can keep on station in the key areas of operations (AO) for every billion dollars that is spent. SSNs and SSKs carry essentially the same weapons and sensors, so either kind of boat is equally capable of sinking a ship once the targets are in range. Thus how many ships Australia can sink depends a lot on how many boats it has on station, and that in turn depends on several factors; how many boats are in the fleet, how many of those are available for operations at any one time, and how long it takes them to get to and from the AO.

On fleet size, SSKs are (or should be) clear winners. It seems from the Morrison government’s very sketchy statements that Australia will get eight SSNs for somewhere about the $80–90 billion (through-life costs) that it was expecting to pay for the 12 Attack-class boats under the old deal. Let’s say then that Australia will pay $100 billion for eight SSNs. In 2016, the Germans were reportedly offering an SSK meeting the needs of the Royal Australian Navy (RAN) for around $4 billion through-life each. If so, Australia could buy 25 SSKs for the same cost as eight SSNs.

It is hard to judge which kind of submarine has better operational availability, but there is no reason at all to assume that SSNs have an advantage here. On the contrary, the technical and safety demands of running a nuclear power plant suggest that they would spend more time in maintenance than SSKs.

But then SSNs are clear winners on transit times. They can travel much faster underwater than SSKs, so they can reach a distant AO sooner. In theory, once there, an SSN can stay on station longer because it does not need to refuel, but in practice the length of time it can spend at sea is no greater than an SSK, because the key limits to endurance are not fuel but crew fatigue, food and in a hot war, weapon stocks.

The key question then is whether an SSN’s faster deployment time makes up for the fact that Australia would have fewer of them. It depends on how distant the AO is from base, and on their difference in deployment speeds. Let’s do a quick back-of-the-envelope on this. Say for the sake of argument that the AO is in the archipelago, 2000 nautical miles from the main base at HMAS Stirling in Western Australia.

An SSK transiting at around four knots takes say 20 days to get to the AO and 20 days back, so it spends 40 days of a 90-day mission in transit and 50 days on station ready to fight. An SSN transiting at 20 knots only takes five days there and five days back, so it is on station for 80 days of a 90-day mission. Eighty days versus 50 days looks like a big advantage. But if Australia had three times as many SSKs available, it’d get a lot more submarine-days on station from a $100 billion investment in SSKs than in SSNs. That means Australia would have more subs in more places, able to find and sink more ships.

But would the SSNs be more effective in their missions once they were in the AO? This is the fourth question Australia needs to consider. SSNs have important tactical advantages over SSKs. Their speed means they can chase their targets, while an SSK must wait for the target to come within range, which is a big plus. An SSN can also run from danger if it is being hunted, and it is less likely to be detected because it does not have to snort. But these advantages weigh less if Australia does not intend to operate on the adversary’s doorstep. In a well-planned and -executed attack on an adversary task group far from the adversary’s home bases, the ASW is unlikely to be good enough to detect an SSK anyway. If so, the SSNs advantage in survivability would not outweigh the SSKs advantage in numbers. “Only numbers annihilate,” as Admiral Nelson once said.

So let’s not assume that, all other things being equal, an SSN fleet is necessarily better operationally than an SSK fleet. And, of course, all other things are not equal. Issues of risk, schedule, local content and sovereign control also come into it, and on all those grounds the SSK should win hands down, if Australia could only manage their acquisition with a modicum of common sense.

The debut of AUKUS – the trilateral military grouping between Australia, the United Kingdom and the United States – has sent a shockwave across the Indo-Pacific. Prime Minister Scott Morrison’s government seems to have turned its back on Australia’s newer partners in Asia in favour of older bonds with historical allies in the Anglosphere.

In response, Indonesia’s Ministry of Foreign Affairs issued a five-point statement in which it claimed to be “deeply concerned over the continuing arms race and power projection in the region”. Such statements are de rigueur for Indonesia and cast little light on how the new arrangement will impact the country.

Since President Sukarno’s fall in 1967, Indonesia has adhered to the foreign policy doctrine of “free and active” and will not by choice align itself to any regional or global superpower. But this does not exclude pursuing its perceived interests from time to time with one great power or another.

Indonesia’s present needs under Joko Widodo, better known as Jokowi, are complex and nuanced, but mainly centre on the economy. The US and China are equally indispensable for Indonesia. Despite China’s position as Indonesia’s largest economic partner, the US remains economically and strategically crucial to Indonesia, especially as a counter-balance to China’s influence and might.

Given that Indonesia will not be seen to align itself with either the US or China, AUKUS presents both challenges as well as opportunities. Strategically, Australia’s participation in the new grouping may even benefit Indonesia in defending its territorial integrity in the Natuna Sea against Chinese encroachment, albeit indirectly.    

Australia was no doubt partially pushed into AUKUS by China’s various punitive trade sanctions following Morrison’s support for an inquiry into the origin of the coronavirus. AUKUS should therefore be a lesson for China that harsh tactics may just drive a regional power, like Australia, further from its orbit.

For Australia, AUKUS’ tactical advantages may be delayed since the nuclear-powered submarines will not be built until the 2030s, but its symbolism as Australia’s answer to China’s attempts to cow it into submission is unmistakable. The proposed eight submarines stand in contrast to China’s six vessels of the same specifications.

Beijing’s almost muted reaction to the new partnership is an indication that it may have recognised this.

China may want to rethink the highhanded tactics it used against Australia when it comes to other regional players such as Indonesia, which has repeatedly shown that the issue of sovereignty over the Natuna Islands and its surrounding waters is non-negotiable, even in the face of economic coercion.

Singapore, long under pressure from Beijing to choose a side, seems cognisant of what Australia’s accession to AUKUS means for other countries within the context of US-China rivalry. Prime Minister Lee Hsien Loong said he hoped that AUKUS would “contribute constructively to the peace and stability of the region”.

Indonesia may have felt it needed to caution against a possible arms race following the declaration of AUKUS because, realistically, Indonesia will not be part of that race. The April incident in which an ageing Indonesian Cakra-class naval submarine was lost at sea illustrates the country’s lack of readiness.

Nevertheless, AUKUS may influence Indonesia’s defence procurement, the country having vacillated between various manufacturers of fighter jets in an attempt to upgrade its air force. For a time, Russian Su-35 fighters were considered before Defence Minister Prabowo Subianto reportedly became keen on American F-35 jets and French Rafale fighters. Indonesia will likely settle on those fighter jets least likely to incense either China or the US, giving France’s Rafale bid an advantage over the others, unless a new contender appears on the horizon.

Strategically, Australia’s augmented military capabilities under AUKUS may alarm the ultra-nationalist faction within the Indonesian establishment, which has perpetuated the belief that Australia was instrumental in the secession of East Timor, now Timor Leste, from Indonesia. It has also popularised concerns that Australia might do the same for West Papua.

In any escalation of US-China rivalry created by AUKUS, however, the Indonesian government may be hoping to benefit from windfall investment and trade opportunities that the change of dynamics presents. The economic angle remains Indonesia’s paramount interest under Jokowi. The number one mission of any Indonesian diplomat overseas is to increase trade between Indonesia and the country he or she is posted to.

Already, there are signs that the US-China rivalry has given Indonesia an economic edge. In March, Facebook and Google announced plans to build undersea internet cables to connect North America and Indonesia. The news came after plans for similar cables between North America and Hong Kong were scrapped following US government concerns over spying. US tech giant Microsoft built its first Indonesian data centre in 2020, with a second currently under construction.

As the US-bound Scott Morrison prepared for his first face-to-face meetings with his fellow “Quad” leaders last week, the ABC reported that he had phoned Jokowi during his flight, presumably to brief him on AUKUS and reassure him of Australia’s continuing commitment to Indonesia.

While AUKUS may present new challenges to Australia’s relationship with the Indo-Pacific, there is little reason to assume that it will negatively impact its ties with Indonesia in the long run. However, the new alliance will be a source of both angst and opportunity for Jakarta in equal measure.

Whether Australia leases, buys or builds nuclear-fuelled submarines, it will be the first non-nuclear state to do so. The recent announcement of AUKUS – the Trilateral Agreement between Australia, the United Kingdom and the United States – to procure this technology brings into focus the question of the continued health of Australia’s nuclear “grand bargain”.

The grand bargain, established in the late 1970s in the wake of the Ranger Uranium Inquiry, and enunciated by then Prime Minister Malcolm Fraser, determined that Australia while abjuring the development of a full civil nuclear industry, would meet its obligations as a non-nuclear weapons state (NNWS) member of the Non-Proliferation Treaty (NPT) by only exporting uranium subject to strict International Atomic Energy Agency (IAEA) safeguards and conditioned by the NPT status of recipient countries.

This approach was based on a commitment to ensure that the desire to reap the potential economic benefits of exporting uranium were balanced by the country’s strategic and normative interests in limiting nuclear proliferation. In subsequent decades, Australia leveraged this commitment to strict export controls to extend the capacity of the non-proliferation regime through the development of supplementary agreements and institutions such as the Nuclear Suppliers Group (NSG) and the Comprehensive Test Ban Treaty (CTBT). 

There is no doubt that nuclear-fuelled submarines are the most lethal and revolutionary advances in underwater weaponry. The increase in performance, deployment and speed without the need to refuel cannot be overstated, but this does come with risk to Australia’s established nuclear policy and status. Highly enriched uranium (HEU) naval reactors are currently employed across four navies, putting Australia in line with its trilateral partners, but also with Russia and India. Most existing HEU naval nuclear reactors use weapons-grade uranium (enriched to over 90 per cent) or uranium enriched to at least 20 per cent U-235. For context, a typical civilian nuclear power reactor uses about 3.5 per cent enriched uranium.

For Australia, one of its greatest considerations must be balancing the risk of an HEU naval nuclear reactor with its commitment to the non-proliferation regime. Australia must initiate and adhere to additional strengthening of the production, use and disposal of HEU under the IAEA and NPT safeguards if HEU reactors will be employed in the new fleet. Australia has a rich history in influencing and shaping state behaviour within the nuclear regime and this new agreement could be the cornerstone for Australia to lead in addressing the proliferation and disarmament issues raised by the nuclear naval reactor. 

The naval reactor has long been seen as a loophole to the NPT and IAEA safeguards whereby a NNWS could divert materials from naval reactors and potentially use that material for weapons production. There is obviously a clear difference here with intent of purpose for Australia with the new fleet. Nonetheless, as James Acton has noted, the risk remains that Australia’s potential exploitation of this loophole to avoid IAEA oversight of HEU may be a precedent exploited by others. It would be an irony of some order of magnitude given Australia’s long record as a champion of IAEA safeguards and guardianship if its pursuit of this strategic capability was in fact to make it easier for others to avoid IAEA scrutiny.

Australia could be a leading NNWS with sensitive nuclear technology and be responsible for closing this loophole, thereby staying true to its commitment of non-proliferation and disarmament. As Thomas E. Shea, among others, proposed in a solution to this problem in 2017, Australia could and should be at the forefront of examining this scenario through the NPT.  In 2017, no NNWS was on the verge of acquiring or building nuclear-powered submarines, however clarification was needed then, as it is now. Of the points for consideration in Shea’s proposal, Australia should have transparency regarding the application of IAEA safeguards; have strict verification methods for the amounts of enriched uranium and its use; and pledge unambiguous assurances that a naval nuclear reactor is just that and not the precursor to anything more. This would be a watershed moment for Australia as the vanguard and model on which to base any other NNWS considering a sovereign or shared nuclear-fuelled vessel.

Indeed, if these measures were enacted through the nuclear regime, Australia could have nuclear-fuelled submarines while maintaining its position on non-proliferation, dismissing any notion of “floating Chernobyls” as alarmist and factual fallacy. Australia holds a strong position with exemplary credentials in the nuclear realm, and its past commitment to the nuclear non-proliferation regime – with abundant uranium reserves and export potential, and now with the capability of being the first NNWS with this type of technology – gives it further leverage to influence the behaviour of other states.

A question, however, remains over the longevity of Australia’s grand bargain. Advocating for capability over concept leaves Australia in a precarious position within the nuclear regime and prescribes a very particular strategic consideration. Ceding some strategic and defensive sovereignty to the United States in acquiring dual nuclear-use technology undeniably for military use, leaves many unanswered questions. For starters, where will the fuel come from? Will Australia eventually be required to process and enrich uranium?

This opens Australia up to scrutiny and it must be prepared for its position as a nuclear “white knight” in the non-proliferation regime to come under the microscope. Over the next 18 months, these questions in conjunction with Australia’s place of influence in the nuclear regime must remain a key driver in maintaining Australia’s nuclear grand bargain. 

Viewed in the context of Australia’s historical engagement with nuclear issues, the acquisition of nuclear-powered submarines and the potential risks they imply from a non-proliferation perspective should not be complacently bargained away.
 

The views expressed in this article are those of the author and not those of the Department of Defence.

Last week Australia, the United States, and the United Kingdom announced a new security partnership (AUKUS) and, in the process, put an end to the Attack class submarine program negotiated by France and Australia in 2016. After calling the decision “a stab in the back”, French Foreign Minister Jean-Yves Le Drian announced on 17 September that President Emmanuel Macron had requested the recall of the French ambassadors to Australia and the United States in order to conduct consultations on how to respond to “the exceptional seriousness” of the situation.

A perceived blow to France’s international status

While a response from the French was to be expected – we are, after all, talking about a $90 billion contract that would have allowed France to reinforce its status in the Indo Pacific – the recall took many by surprise, some describing it as a complete overreaction from the French government. Le Drian explained that the decision was justified because AUKUS amounted to “unacceptable behaviour among allies and partners”. France has since announced that its ambassador will soon return to Washington.

To fully understand the French response to AUKUS, it is important to realise that this is not only about the deal, but also about the way it was handled. For centuries, the French have been obsessed with the country’s international status or what they call its “rank in the world”. Justifiably or not, the idea that France is more than a middle-size power is a core part of its identity and has certainly been a core message of Macron’s presidency. Yet France was kept in the dark about AUKUS­ for months and excluded by some of its closest allies, including two NATO powers. The timing of the announcement could also not have been worse, taking place on the same day as the release of the European strategy for Cooperation in the Indo-Pacific, of which Macron had been a key advocate. In other words, AUKUS not only compromised France’s ambitions in the Indo-Pacific, it was perceived as a humiliation that undermined its international status.

A strategic response

That said, it is also important to acknowledge that the French response has undeniably contained an element of the dramatic and can in fact be thought of as a “strategic outcry”, with two audiences in mind. From a domestic point of view, the recall of ambassadors has helped Macron limit the damage done at home, especially with the presidential election coming up in April 2022.

From a foreign policy point of view, it had two goals. First, it aimed to emphasise that France should be taken seriously, since as Le Drian put it, the French government believes that “when you have an ally of the stature of France, you don’t treat them like that”.  

Second, it aimed to “Europeanise” the crisis and help push Macron’s European sovereignty project by once again allowing France to argue that the United States, and also NATO, are not as reliable as they used to be. This message was unmistakable in the French communiqué published after the announcement of AUKUS, which stated that the partnership “only reinforces the need to make the issue of European strategic autonomy loud and clear”, and was reiterated when Le Drian compared­ – on several occasions – US President Joe Biden’s foreign policy to Donald Trump’s.

The implications of the outcry

Analysts have warned that the recall of ambassadors was only the “tip of the iceberg”,  while Le Drian has explained that France would now reflect on “the very concept we have of our alliances, our partnerships, and the importance of the Indo-Pacific for Europe”.

When it comes to the United States and Australia, two immediate impacts can be seen.

While it is undeniable that France and the United States are – and will­ remain­ – strong allies, it would be mistaken to underestimate “the intensity of the crisis today between [the] two countries”. Analysts have compared it to the tensions that followed Barack Obama’s U-turn on air strikes against Bashar al-Assad’s regime in 2013, or even to the crisis that followed France’s refusal to support the Iraq War in 2003. Le Drian has also warned that AUKUS only reinforced the concerns the French government has about NATO, by arguing that the most basic requirement – trust between its members – is no longer there.  

When it comes to Australia, while the friendship between the two countries took a hit, they will remain partners, especially since they need each other in the Indo-Pacific. But in the short term, France seems determined to make things tricky for Australia’s free trade agreement (FTA) negotiations with the European Union (EU). Even though France does not speak for the EU, some have already warned that the French parliament could refuse to ratify the FTA if it is formalised. While such a refusal is unlikely, French diplomats have indicated that France will no longer help Australia negotiate remaining issues of the Agreement and it will certainly stop promoting fast-track negotiations.

Moving forward

While some have welcomed Macron’s response, France must not take its “strategic outcry” too far if it wants it to pay off. Le Drian has been walking a very fine line in some of his press conferences, in one calling the UK the fifth wheel of the carriage.

It is now time for dialogue. Some progress is already underway, as illustrated by the announcement of the French ambassador’s return to the United States next week. The decision was taken following a discussion between Biden and Macron during which the presidents agreed to further consultations and Biden recognised the importance of European defence and the role of the EU in the Indo-Pacific, and committed to further American support of European anti-terrorist operations in the Sahel.

China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) just hours after announcement of the new tripartite AUKUS (Australia, United Kingdom and United States) security partnership may – or may not – have been coincidental. Regardless, both events illustrate the rapidly shifting geostrategic environment in the Indo-Pacific region.

AUKUS is a momentous agreement – for all three parties.

The “forever” partnership is especially consequential for Australia. For proponents, AUKUS is a prudent, practical and far-sighted response to the existential threat Australia perceives in the evolving and increasingly tense strategic environment emerging in the Indo-Pacific region. Like many, Australia is worried by the more bellicose approach being taken by Xi Jinping’s China. In responding to this challenge, the US remains for Canberra its indispensable partner.   

For the US, AUKUS is a win. It exemplifies the importance Washington attaches to deepening cooperation with key allies, and strengthening their military capabilities to assist in deterring the security challenges posed by China in the region. Australia, a long-time trusted and strategically located Indo-Pacific ally, looms large in Washington’s regional calculations. So does the Quad (US, Australia, Japan and India), whose leaders meet in Washington on 24 September.

And for the United Kingdom, AUKUS is a tangible expression of the global ambitions of post-Brexit Britain, reinforcing its renewed focus on the Indo-Pacific, complemented by trade deals with Japan, South Korea and Australia. AUKUS helpfully reaffirms too the UK’s standing as a close and trusted US partner.

International attention has focused on the commitment by the US and UK to cooperate in providing Australia with a nuclear-powered submarine fleet. 

This is unquestionably a significant move – with major strategic and operational implications for Australia. Together with planned acquisition of sea and air-launched cruise missiles, nuclear-powered submarines will substantially enhance the Australian Defence Force’s long-range strike capabilities. Nuclear submarines offer greater speed, stealth and range.    

Much flesh remains to be put on AUKUS’s bones. The nuclear-powered submarine deal is just the initial dividend. Even more important is the deeper tripartite cooperation AUKUS foreshadows in developing advanced capabilities in areas like cyber, artificial intelligence and quantum computing.

Early signs are that AUKUS will enjoy significant, if not full, bipartisan support in Australia. It seems remarkable, nonetheless, that Canberra signed up to this “historic” agreement without any prior parliamentary or public discussion. 

AUKUS is not without its critics and risks.   

It represents a decisive shift towards Australia’s closer military integration and foreign policy alignment with the US. At a time of continuing political division and uncertainty in the US, some argue that AUKUS is a gamble on US staying power in the Indo-Pacific. 

Acquiring nuclear-powered rather than conventional submarines will make Australia dependent on the US and UK to support the nuclear propulsion technology. AUKUS could heighten US expectations of closer alignment and support from Canberra – and not only on China. AUKUS may thus prove constraining for Australia in its wider foreign policy.

Especially if domestic production is prioritised, Australia’s new submarines will not arrive anytime soon. Meanwhile, any gap in capability will likely be filled by expanded deployments of US naval and air assets to Australia.

The submarine deal may raise proliferation hackles in some quarters, especially given the likely use of highly enriched uranium fuel (HEU). Australia’s acquisition of cruise missiles might be questioned under the Missile Technology Control Regime (MTCR). These issues are manageable in Australia’s case, although they risk setting unhelpful precedents. 

International reaction to AUKUS has been mixed.

China has, predictably, responded negatively to AUKUS. But since Australia will only be acquiring capabilities that China has itself developed at pace over recent years, Beijing is hardly well-placed to criticise Canberra. And warnings that AUKUS makes Australia a target for Chinese missiles in any conflict with America are unremarkable, since existing US strategic facilities in Australia entail this risk already.

On the other side of the ledger, Japan and Taiwan have strongly welcomed AUKUS as visible evidence of readiness to stand up to China’s assertiveness. 

Non-inclusion of Five Eyes partner New Zealand in AUKUS has been portrayed by Wellington and most commentators as unsurprising, given its nuclear-free status and limited military heft, although criticised by some as disappointing. Longer-term, AUKUS’s focus on developing leading-edge defence capabilities, such as cyber and AI, does risk potential interoperability gaps for New Zealand, given its close security ties with all three AUKUS partners, above all Australia.

AUKUS has provoked a sharply negative reaction from Paris, for commercial (Australia cancelling its contracted purchase of conventional submarines from France) and strategic reasons, since the Australian deal was a key element in France’s increased Indo-Pacific profile.  

Also caught unawares was the European Union, which released its own Indo-Pacific strategy the same day as the AUKUS announcement. Having been blindsided by the US’s hasty withdrawal from Afghanistan and earlier by the US volte-face on the Nord Stream 2 project to bring Arctic Russian gas to Germany, AUKUS raised eyebrows among US European allies, and inevitably fuelled calls for greater strategic autonomy.

In striking contrast to its hardline security approach in the region, Beijing portrays its bid to join the CPTPP as demonstrating China’s commitment to collaboration in promoting rules-based Asia-Pacific economic and trade cooperation. 

It’s ironic that the CPTPP – originally viewed by the US (if not other parties) in the context of countering China, but from which the Trump administration walked away – is now seen by China as a way of enhancing its economic weight and influence in the region. 

This comes on top, moreover, of conclusion of the Regional Comprehensive Economic Partnership (RCEP), an even wider trade agreement, also including China (but not the US), seeking to promote improved regional trade flows and supply chain connectivity. 

There is a mismatch between China’s coercive security posture and its espousal of multilateral economic cooperation in the region. 

Unfortunately, Washington’s non-engagement in these regional economic integration initiatives prevents the US from effectively challenging the inconsistency of Beijing’s approach. In focusing narrowly on security deterrence of China, while eschewing a broader path that encompasses economic and trade integration with East Asian states, Washington may be missing a trick.

Meanwhile, assuming CPTPP members agree to open accession talks with China (and the UK is ahead of Beijing in the queue), there will be tough issues to negotiate, such as state subsidies, dispute settlement and cross-border data flows. 

Buckle up then: with AUKUS and the CPTPP in play, the shifting and fast-moving geostrategic environment in the Indo-Pacific region is set to get even more fraught.

There is an old saying that if you find yourself in a hole, the best course of action is to stop digging. If only Australia understood this wisdom. Abandoning the French submarine project, the government has decided to double down and design a new nuclear-powered sub with technology and assistance from the United States and the United Kingdom. To continue the homespun metaphors, Australia has decided to go from the frying pan into the fire.

Many of the questions that previously cast doubt on the wisdom of the French boat deal and design remain unanswered in regard to its replacement. Just why does Australia require a submarine that has the range to operate in the South and East China Seas? What strategic need is met by these submarines? Can a relatively weak nation such as Australia realistically aspire to a three-ocean defence force? The best answer we have is the need to maintain the rules-based order, but certainly there are other ways to achieve this end instead of embracing the most technologically challenging warship ever created. One is reminded of the TV show Utopia and the episode which skewers a Defence plan to build a force to protect Australian trade routes from its own trading partner. Slightly off-topic, yes, but telling.

Worryingly, the operational theatre in which these boats are meant to sail, the waters off China’s coast, are relatively shallow and sit in the shadow of a considerable anti-submarine warfare (ASW) capacity. At present, the People’s Liberation Army Navy (PLAN) is reputed to be weak in ASW, but it is improving. By the time Australia’s boats arrive, in ten or 20 years, its capacity could be pretty robust. As it is, any Australian submarine that attempts to do something in these waters, such as launch a tomahawk missile, will reveal its position and shortly thereafter be destroyed. By, say, 2034, the PLAN’s ASW capability may well have reached the point that even attempting to penetrate these waters would require suicidal courage.

The drawn-out timeline is not in Australia’s favour. Eighteen months of consultation will precede a decision on requirements. Then there will be a design phase as Australia creates an entirely new class of boats. Workers will need to be trained and a nuclear industry built. It will be at least a decade before a single boat is in service, even if everything goes to plan, and there are plenty of points at which the plan can go off track. To meet this need, an off-the-shelf foreign built option would be safer and faster, but that option is off the table.   

Australia currently has an air force that is optimised to act as a wing of the US Air Force. An answer needs to be given on whether a similar decision has been taken for the Royal Australian Navy (RAN). Realistically, the only way an Australian boat could operate in these waters if the country were at war would be as a unit of a US Navy task force. In effect, two second-order decisions have been taken by Australia and it is not clear whether this has been understood by the government or the public. First, the RAN’s nuclear fleet will have to sail under the air cover provided by a US carrier task force if it is to survive. Second, if the United States is at war with China, so is Australia, since the Australian Defence Force will be integrated into the US force. Without any discussion by the Australian parliament or review by the Australian public, Australia will find itself as a minnow in a war between two nuclear-armed great powers.

By insisting on the need for a long-range boat, Australia has turned its back on other, more promising options with which to meet its security needs. Have no doubt, I believe Australia needs submarines. It just doesn’t need ones that are designed to operate at such distances.

The island chain to Australia’s north is pierced by several maritime choke points, principally the Lombok and Sunda Straits. Further north is the Makassar Strait. A fleet of smaller conventional subs could easily guard these waters. Moreover, coming on line are a host of uncrewed underwater vehicles as well as propelled mines. These are deployable from aircraft, small boats and even submarines. In fact, Australia could build a small submarine whose mission is to command and control a fleet of uncrewed vessels. The command boat would be relatively undetectable due to its small size, while the uncrewed platforms take the risks. The nuclear sub program’s great cost, whatever that ultimately may be, will soak up the monies that could have gone to this less risky option that embraces novel solutions.

A nuclear sub only addresses one of Australia’s future security threats and, unfortunately, a less dangerous one. Climate change has been rightly described as an existential threat that risks destabilising nations across the Asia Pacific. A nuclear submarine is of no use in a conflict driven by climate tensions. Why is Australia determined to invest in a weapon system that only meets one aspect of its security needs? As I have written recently, Australia needs to take a different approach to the consideration of its security, one that meets the tensions that will result from the rebalance of power that is underway in the Indo-Pacific and that addresses climate change. To consider only a part of the defence requirement is even more short-sighted than buying nuclear subs.

The French word déception means disappointment rather than deception, making it one of the infamous “false friends” the French language abounds in for English speakers trying to learn it. But when Naval Group, the French company that just lost what has been described in France as “the contract of the century” for 12 Attack Class submarines, declared in a statement to the French press that this was “une grande déception,” the false meaning may, for once, have been the real one. 

Australia rarely makes the headlines in France but when it does, it’s usually for something bad. And from a French point of view, the Australian decision to turn its back on a done deal with France in favour of an offer of nuclear submarine technology from Britain and the United States is bad – very bad.

The French feel not just disappointed but deceived, betrayed.

Speaking on France Info, the French equivalent of ABC news radio, Foreign Affairs Minister Jean-Yves le Drian used the phrase “stab in the back”. Newspaper Le Parisien declared “in 48 hours, the ‘contract of the century’ has become the commercial snub of the century”, while according to French business weekly Challenges, it amounted to “a knife blow to the heart, that no one in France saw coming. A Trafalgar shot from which Naval Group will takes years to recover.”

The Battle of Trafalgar, of course, was the 1805 naval engagement that effectively put an end to Napoleon’s ambition to invade England and established British naval supremacy for the next century or so. Even allowing for the habitual hyperbole of the French press, and for the fact that the expression “Trafalgar shot” (coup de Trafalgar) can be used in many contexts in French, it is surely not insignificant that it has appeared more than once in French reactions to the cancellation of the contract as a result of a new pact between Britain, Australia and the United States.

The idea of the Anglosphere as something more than a bunch of people who speak the same language is widely mocked by Anglophones themselves. But to outsiders, and to the French in particular, it is a simple and obvious reality. What is the Five Eyes intelligence alliance, after all, but an alliance of “the Anglo-Saxon powers,” so much so that it excludes countries such as France and Japan while including New Zealand, which isn’t a power at all?

People in Naval Group, the French government and French journalists who cover defence issues have long been angry at what they see as bias against France in Australian media and the major political parties. Why else would Naval Group have been forced, in a series of tortuous negotiations that now look ludicrous in light of the ultimate cancellation of the contract, to spend at least 60 per cent of the value of the contract in Australia, when the American company Lockheed Martin, responsible for integrating the submarine’s combat system, did not face the same pressure?

For the French commune of Cherbourg-en-Cotentin, home of the Cherbourg Naval Base where part of the project was to be realised, the cancellation of the contract will be “a small social and economic earthquake,” said Ouest-France, the most read French-language newspaper in the world despite, or perhaps because of, its focus on regional issues.

The people of Cherbourg made a real effort to welcome the Australians and their families who came to work or train at the base. In 2019, as a symbol of what supposed to be a long-term partnership, the Australian artists Elizabeth Close and James Cochran were commissioned to paint one of the sides of the local police station with an enormous fresco inspired by Aboriginal art. The presence of the Australians was even a factor in the creation of the only public bilingual school in the region.

So this will hurt. It has already hurt. In particular, it is a slap in the face for President Emmanuel Macron – another one, after earlier this year he was literally slapped in the face while shaking hands with members of the public, by a man described in French media as a “medieval combat enthusiast”. That incident led to a typically French outburst of hand-wringing among intellectuals and media figures about “national decline”, more evidence of which many people will see in the Australian decision to go with the United States and Britain.

Macron put himself on the line to support the submarine deal, although it was inherited from a previous regime. In June, he met in Paris with Australian Prime Minister Scott Morrison on the latter’s way back from the G7 summit in England to discuss several matters including the ongoing problems with the project. This meeting was so successful, from a French point of view, that it was reported under headlines like “The contract of the century is saved”. Was something lost in translation, even though Macron speaks pretty good English? Or was the British-American offer of nuclear submarine technology a genuine surprise to the Australians?

Australia has inflicted a stinging personal blow and given ammunition to Macron’s domestic political opponents within a year of a presidential election, and, while it is unlikely to really influence the result, he certainly won’t forget it. Could this, or French resentment more generally, be a problem for Australia? France as an Indo-Pacific power is much like what Gandhi is supposed to have said of Western civilisation: it would be a good idea. But one of the reasons Australia did the now infamous submarine deal with France in the first place was that France does have a genuine stake in the region.

Certainly, “the Indo-Pacific space is for France a geographic reality”. This apparently tautological statement, taken from the introduction to the 2018 French Indo-Pacific strategy document, refers to the fact that 93% of France’s exclusive economic zone – the largest in the world – is situated in the Indian or Pacific oceans, while around 1.5 million French citizens and 8,000 soldiers reside there in French territories. Indeed, the curious term “Indo-Pacific” might have been invented to lend weight to France’s claim to be more than a European, and perhaps African, power. None of France’s overseas territories, taken singly, amount to much in the terms of power politics, but taken together, they at least appear to add up to the potential to play a real role in the region.

Of course, Australia’s generally very good relations with France are founded on much more than the submarine deal, and like all of the other members of any balancing coalition against China, it will be self-interest – or not – that really drives France to participate in it.

And it may be that the decision to scrap the deal was the right one, all things considered. You can’t spare everyone’s feelings all the time, the French will get over it, and Australia’s relationship with the United States is, after all, much more important than the relationship with France. I just hope it was worth it.

As for France’s relations with Britain and the US, let’s say this affair won’t help. Brexit has strained relations between London and Paris, but the French, rightly or wrongly, will now see the long arm of Uncle Sam in every event that led up to the decision to cancel the contract. Macron and Joe Biden don’t like each other much, not surprisingly considering the differences between them. And the unilateral decision to withdraw from Afghanistan still sticks in the throats of many Europeans.

Tension between Paris and Washington? Plus ça change.