AUKUS Submarine Deal

What happened?
On 13 March, 18 months after the pact of AUKUS was signed in September 2021, the plan to build a new fleet of nuclear-powered submarines was revealed by the US, UK, and Australia. President Biden hosted the Prime Ministers of UK and Australia at San Diego naval base on the same day. Following this, a defence official revealed to the European media that Australia’s nuclear-powered submarine program with the US and UK might cost up to AUD 368 billion (USD 245 billion) over the next three decades, making it the largest single-defence project in Australian history. This investment is being seen as a significant move to confront China’s naval buildup in the Indo-Pacific, by supplying Australia with nuclear-powered attack submarines. On 18 March, as part of the same pact, the Pentagon approved the sale of up to 220 of the Tomahawk missiles at a cost of $1.3 billion in a deal that will also include technical support.

In response to this, the Russian Foreign Minister stated that the AUKUS nuclear submarine cooperation is the advancement of NATO military infrastructure into Asia, while making a serious bet on many years of confrontation in the region. On 17 March, Chinese foreign ministry spokesperson Wang Wenbin at a press conference said the US, the UK and Australia are putting up an Anglo-Saxon clique and creating the so-called AUKUS trilateral security partnership to advance nuclear submarine cooperation and other cutting-edge military technology cooperation and stated, "this is typical Cold War mentality and a move that opens a Pandora's box, which will seriously impact regional and global peace and security,”

What is the background?
First, the submarine deal and the long-term geopolitical agenda. In the next three decades, the Australian nuclear submarine program is projected to cost AUD 368 billion, with a four-step plan in place. In the first phase, the US would sell three used Virginia-class nuclear-powered submarines to Australia during the early 2030s, with an option for Australia to purchase two more if needed. This is accompanied by a joint US-UK submarine construction initiative, as well as efforts to train Australian sailors. In the second phase, design and development work on a brand-new submarine, called the SSN (Submersible Submarine Nuclear)-AUKUS would continue with an aim to replace their Astute-class submarines from the work already done by the British. Four US and one UK submarine will start rotating through Western Australia, to be known as the Submarine Rotational Forces West by 2027. The third phase would involve the transfer of Virginia-class SSNs to Australia under the agreement that Canberra will invest in the US shipbuilding industry. By the fourth phase, the AUKUS-class submarines will be operated by both the UK and Australia, using American combat systems. where one submarine will be built every two years from the early 2040s through to the late 2050s with five SSN-AUKUS boats delivered to the Royal Australian Navy by the middle of the 2050s. Additionally, $8 billion will be spent on upgrading the naval base HMAS Stirling in Western Australia.

Second, the Indo-Pacific and the larger security framework. During the statement, Biden said, "AUKUS has one overriding objective: to enhance the stability of the Indo-Pacific amid rapidly shifting global dynamics.” The military security partnership would boost the cooperation among the three countries in the security sphere. Once Australia’s nuclear-powered submarine capability is completed, it would join the already operating powers in nuclear-propelled submarines, in the region such as the U.K., India, France, the People’s Republic of China and Russia. AUKUS thus makes a vital component of the US Indo Pacific Strategy with a strong military focus.

Third, countering China in the region. "Going down a dangerous road", "disregarding the concerns of the international community" and even "risking a new arms race and nuclear proliferation" are some of the statements being made by observers who believe this to be a counter-China strategy. President Xi Jinping announced recently that China would accelerate the expansion of its defence spending and named national security as the primary concern of the coming years. Australia has always faced an economic dilemma with the Chinese. This pact places Australia on the frontline of US-China rivalry. One could expect the submarine pact to further Australian interests of defending key choke points, and help patrol the Western Pacific and eastern Indian Ocean. In his statement, the Chinese foreign ministry spokesperson called on the three countries to stop pursuing bloc politics and to refrain from coercing the IAEA into endorsing their nuclear submarine deal. He also mentioned that the AUKUS mediated military agenda would disrupt the ASEAN-centred regional cooperation by severely undercutting their efforts to establish a Southeast Asia Nuclear Weapon Free Zone.

What does it mean?
The pact is extremely costly but is certainly escalatory with the risk of overstretching capabilities and diverting resources. However, the nuclear submarine deal and the tomahawks deal are significant indicators of an Indo Pacific tilt.

First, the emergence of bloc politics in the Indo Pacific. AUKUS is among the few other initiatives of the US in the Indo Pacific region with an underlying focus on deterring China’s growth. The three countries are also active members of the Five Eyes intelligence sharing group. Together with the Quad, the changes in Japan’s security strategy and the AUKUS deal, there seem to be two strong blocs emerging in the Indo Pacific.

Second, time for new IAEA standards. A loophole in the 1968 Nuclear Non-Proliferation treaty that allows nuclear fuel used for non-explosive military uses like naval propulsion to be exempted from IAEA inspections, has enabled the AUKUS pact. IAEA has announced that it would check fuel usage in sealed power units to ensure it does not conflict with its non-proliferation obligations. With seven countries already possessing these submarine capabilities, a case-by-case verification would not be an effective method in the long-run.