Arms dealers down under? Australia plans to make waves in defense exporting

Australia Prime Minister Malcolm Turnbull walks in front of military trucks during a visit to Thales Underwater Systems in Sydney, Monday, Jan. 29, 2018. (Daniel Munoz/AAP Image via AP)

CANBERRA, Australia — Australia's government announced a strategy Monday to create high-tech jobs and become one of the top 10 defense-industry-exporting countries within a decade through arms sales to liked-minded nations while also keeping those weapons from rogue regimes.

Australia will create a 3.8 billion Australian dollar ($3.1 billion) fund to lend to exporters that banks are reluctant to finance, a central defense export office and expand the roles of defense attaches in Australian embassies around the world.

Prime Minister Malcom Turnbull said that with a $200 billion budgeted to increase Australian defense capabilities in the next decade, Australia should rank higher than 20th among arms-exporting countries. The planned Australian military build-up was the largest in its peace-time history, he said.

"Given the size of our defense budget, we should be a lot higher up the scale than that. So the goal is to get into the top 10," Turnbull told reporters.

Defense Industry Minister Christopher Pyne said Australia would focus on growing sales to its biggest markets including the United States, Britain, Canada and New Zealand, which already import Australian-made equipment including the Bushmaster armored vehicle and the Nulka missile decoy. The five nations belong to an intelligence-sharing network known as the Five Eyes.

"We want to support the United States, the U.K., New Zealand, Canada, our European friends and allies, Japan, South Korea, et cetera, in what is a building up of the global military capability of countries like ourself who support the rules-based international order," Pyne said.

"The defense export strategy is not designed to get into markets where we don't want to be. It's designed to maximize the markets where we perhaps haven't been making the most of our opportunities," he added.

Turnbull said the strategy was about creating hi-tech Australian jobs and not a response to any national threat, such as increasing tensions and the Chinese military build-up in the South China Sea over competing territorial claims.

"Apart from North Korea, there is no country in the region that shows any hostile intent toward Australia," Turnbull said. "We don't see threats from our neighbors in the region, but, nonetheless, every country must always plan ahead and you need to build the capabilities to defend yourself, not just today, but in 10 years or 20 years hence. "

The push to increase Australian defense manufacturing jobs came after General Motors Co. in October became the last automaker to quit building Australian cars.

Most of the new Australian defense spending is on submarines and frigates that will be largely built in Australia.

Australia and France in 2016 signed an agreement to build a fleet of 12 of the world's largest diesel-electric submarines for AU$56 billion.

DCNS, a French state majority-owned company, will begin building the first sub in the Australian city of Adelaide in 2022.

Australia will soon announce whether BAE Systems, Fincantiere or Navantia has won a AU$35 billion contract to build a fleet of nine navy frigates starting in 2020.

Australian law prohibits military exports that are inconsistent with Australia's international obligations or national interests.

Prospective exports are assessed in areas including impacts on human rights, regional security and Australian foreign policy.

"We've got strict controls and those controls make sure we only supply defense assets in the future to like-minded countries that have a strong human rights record and have protections in place." Trade Minister Steve Ciobo told Nine Network television.