Britain and Australia Seek Defense Collaboration

SOURCE: LIGNET

Top: Australian Defense Minister Stephen Smith (left) and British Defense Secretary Philip Hammond hold a press conference on January 18 in Perth, Australia during bilateral ministerial meetings on defense and foreign affairs. The two leaders agreed to explore cooperation in developing the next-generation Type 26 Global Combat Ship (bottom) that is being built by BAE Systems. (Paul Kane/Getty Images)

Summary

The decision by the UK and Australia to strengthen military ties and explore collaboration on weapon systems is a pragmatic response to fiscal and strategic challenges that impact the two allies in different ways. While the UK faces defense budget reductions, Australia is expanding its navy to answer China’s buildup. A significant element of the agreement is collaboration on the next-generation Type 26 Global Combat Ship (T26 GCS).

In addition to the joint naval procurement and possible burden sharing agreement, Australian and UK officials also agreed to focus cooperation on a myriad of security related elements including cyber security and technology. The move underscored the need to make the enduring bilateral alliance more relevant to today’s world, as China and India expand military capabilities in Asia. The focus is to jointly modernize while achieving national security economies of scale.

Background

During the recent annual Australia/UK Ministerial (AUKMIN) summit in Perth on January 18, Australian Defense Minister Stephen Smith and British Defense Secretary Philip Hammond announced that both countries agreed to work together on a series of defense related initiatives. Negotiations for the new defense pact have been secretly conducted for nearly two years.

The UK and Australia are close and longstanding security allies, but are a world apart geographically and economically. Thus China’s maritime ambitions are more immediate to Australia, which (unlike Britain) enjoys the fiscal resources necessary to expand its own navy in response. Australia has one of the fastest growing economies in the world with a growth rate of 4.3 percent while the UK’s GDP growth rate was -0.8 percent. Immigration figures showed a 35 percent drop in Australians coming to the UK for employment since 2010, as the demand for technically skilled employees increased back home.

Secretary Hammond visited the Royal Australian Navy’s primary base in Perth, the HMAS Stirling, the Henderson Shipyard in Western Australia and a BAE Systems shipyard. One of the most consequential elements of the new defense pact is the agreement to explore cooperation on a joint procurement effort of Britain’s next-generation Type 26 Global Combat Ship, to be built by BAE Systems. The preliminary design requirements and a phased construction plan for the T26, the future workhorse of the British Navy, were approved last August.

The Type 26 Global Combat Ship is Britain’s newest stealth frigate and is designed to be the most modern vessel in its naval arsenal. The current design focuses on built-in flexibility, allowing it to adapt to numerous mission profiles and to assume a greater role in the future of Britain’s naval force.

The new frigate will leverage stealth and unmanned drone components but it is also being developed with defense spending constraints in mind. The T26 is supposedly projected to cost around $350 million per ship. The U.S. version, the Littoral Combat Ship, although more advanced, is nearly twice as expensive at $700 million.

In addition to the T26, both Australia and British leaders discussed Australia’s ongoing effort to build 12 new submarines at a cost of $36 billion.

Secretary Hammond stated the rationale for an agreement: “In times of budget pressures for all nations, it makes sense to maximize economies of scale and work with our friends to get the best value for money on all sides.”

Analysis

The decision by Australia and Britain to sign a defense treaty serves to reaffirm their longstanding alliance, but it also demonstrates Australia’s emerging security concerns and the practical realities of declining military expenditures for Britain.

The British defense minister said that bilateral military cooperation was an effort to maximize economies of scale to the mutual benefit of both nations. This may be true, but fiscal pressures continue to mount on military planners and defense contractors, and the monetary incentive for a partnership is apparent.

Britain’s defense budget, which in 2012 represented 2.5 percent of GDP, is currently facing a reduction and could be decreased to 1.6 percent of GDP by 2017. Britain is also seeking to downsize the number of military personnel from a height of a little more than 160,000 during the peak of the Cold War, to approximately 100,000 by 2020.

With steep budget cuts looming, Britain is likely concerned about the viability and longevity of the T26 project. While the T26 estimated delivery costs are comparatively lower than other ships in that class, cost overruns may be part of the British thinking. The projected price tag of the T26 may have always been wishful thinking, and now in an era of austerity as well as shrinking military budgets, burden sharing may be the optimal scenario for the frigate’s development.

Besides budgetary implications, the effort to offset costs comes with its own set of unique challenges. The decision to explore a possible joint venture will likely complicate the development and construction of the T26. It is possible that the original 2020 service date will be delayed. This may be especially true if Australia decides to purchase some of the ships and requests customization for its own needs.

Australia’s interest in collaboration appears focused on the need to increase its naval capabilities to offset an increasingly ambitious China. Australia also may be seeking to boost its own domestic submarine and future shipbuilding capacities. By enhancing defense relations and deepening military procurement efforts, Australia will likely be better equipped to address growing regional security concerns.

The newly inked defense pact is about more than just the development of a new frigate, however. The new defense partnership also appears focused on longer-range cooperation and has broader implications. Both nations have said they will work together to ensure that their militaries are more interoperable with one another in order to maximize their respective competencies. Such collaboration potentially lays the groundwork for future cooperation on other military systems.

Conclusion

The new military agreement between Britain and Australia is significant. Britain desires not to see its military clout dwindle in Asia, especially in the face of austere budget cuts. At the same time, Australia is seeking to expand its military capabilities and improve its domestic production competencies. With fiscal pressures mounting and an expanding Chinese military, long-term allies are looking how best to ensure national security interests by banding together. The strengthening of military cooperation between Britain and Australia will likely be mutually beneficial, but conversely, could delay the deployment of the Type 26 Global Combat Ship.

Also check out:

Britain Looks to Stealth, Drones to Rebuild Naval Power (August 27, 2012)

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