The AUKUS Deal and Australia’s Unique Role in Strengthening Deterrence in the Indo-Pacific

BY DAVID BAKER

Commentary

Australia is well placed to fill a strategic void in the United States-led coalition against the PRC through the AUKUS deal. Many other states in the region are either unable or unwilling to pursue advanced undersea capabilities, particularly nuclear-powered ones, to the same extent as Australia. However, these developments have and will continue to contribute to further tensions with the PRC, which views the AUKUS deal as a direct threat to its naval forces.

There has been a strategic pivot in the United States' focus on containing the People’s Republic of China’s (PRC) rising power in the Western-Pacific. US allies in the region, particularly the Philippines and Taiwan, have been unable to deter aggressive PRC actions at sea effectively. 

That could change with the Trilateral security partnership between Australia, the United Kingdom, and the United States, otherwise known as the AUKUS deal, focused at developing an advanced nuclear submarine for Australia. 

China’s Control of the South China Sea 

The AUKUS nations—Australia, the United States, and the United Kingdom— see their nuclear submarine deal as a reaction to the PRC’s more aggressive People’s Liberation Navy, which seeks to assert its dominance in the Western Pacific. The PRC has several reasons for wanting greater influence in the Western Pacific: control over large fisheries, influence over the $3.37 trillion in trade that transits the South China Sea, and securing the roughly 190 trillion cubic feet of natural gas and 11 billion barrels of oil beneath the South China Sea. 

The PRC claims sole control over the area and its resources as it claims it lies within the geographic limits of the Chinese Exclusive Economic Zone. The PRC’s construction of several military bases on artificial islands and incursions into other nations' Exclusive Economic Zones have angered other nations in the South China Sea, like the Philippines and Vietnam, whose Naval capabilities are inadequate to deter such moves.

AUKUS, and the Importance of Australia

AUKUS is a trilateral security alliance among Australia, the United Kingdom, and the United States, focusing on the further development of its capabilities in several key warfighting domains, primarily electronic and undersea warfare. The key area of the AUKUS alliance most relevant to Pacific naval and maritime operations is the SSN-AUKUS program. This program aims to develop a new nuclear-powered submarine, called the AUKUS class, to be built and commanded by Australia and the United Kingdom in the region. The United States will assist with technical and training support for the program. The United States hopes these vessels will shift the geopolitical dynamics of the Pacific in its favor, strengthening the US-led coalition looking to counter China’s expansion. 

Australia is uniquely politically positioned to partner with the United States. Australia is a member of the Five Eyes, an intelligence-sharing network between Australia, Canada, New Zealand, the United Kingdom, and the United States. This has eased the difficulties inherent in multi-lateral projects and facilitated the united effort of AUKUS.

Australia also has the advantage of not facing the political constraints or other security commitments that many Western Pacific nations face. The other two Pacific nations with the capital and industry to increase their submarine fleets and potentially build nuclear submarines, Japan and South Korea, both have political prohibitions against using nuclear technology for military applications. Japan’s forces are limited by its constitution, while South Korea's primary military focus is preparing for a potential resumption of war with North Korea. 

Japan’s military forces are restrained by law to only act in self-defense, preventing it from investing heavily in its defense forces. Japan has also long been a leader in nuclear non-proliferation, as it remains the only nation to have been attacked with a nuclear weapon. As such, Japan has long been unwilling to develop nuclear reactors or weapons, instead relying on its conventional navy and air force for defense. 

South Korea, in contrast, has no constitutional limits on nuclear proliferation. South Korea maintains some of the largest shipyards in the world, and the newly built Dosan Ahn Changho class of diesel electric submarines are one of the world’s most advanced. So why hasn’t South Korea built nuclear-powered submarines? Like Japan, South Korea has a treaty with the US that restricts it from building and refining uranium to potentially create a nuclear weapon. 

Thus, the only Pacific nation willing and able to build nuclear-powered submarines today is Australia. Through AUKUS, Australia will be joining an elite club of undersea nuclear nations, with only nine nations building or operating nuclear submarines. The timeline for Australian built nuclear subs is “into the 2040s”. In the meantime, Australia will purchase three US-built Virginia-class nuclear attack submarines to operate and train their crews for future operations with the AUKUS class. 

The role of the AUKUS-class submarines will be to stealthily operate in the Western Pacific, adding another layer of deterrence against the PRC, complicating any military plans they may have in the region.

The Implications for the Future of Pacific Security

The United States hopes that the AUKUS deal will enable Australia to take a larger role in deterring the PRC’s expansionism by equipping the Pacific ally with an advanced undersea force. The current United States strategy against China has been to deter its naval expansion within the allied first island chain, which stretches from Japan and South Korea to the Philippines and Australia. Adding another nuclear undersea force to this group would strengthen the joint deterrence of the US-led coalition.

However, for non-proliferation efforts, AUKUS could backfire by increasing the number of nations with advanced nuclear propulsion plants that require enriched uranium. The reactors found in nuclear submarines use enriched uranium. The enrichment process for nuclear reactors is similar to creating weapons-grade uranium. The uranium found in submarine reactors is only a small step away from weapons-grade, increasing fears that the AUKUS agreement could encourage greater nuclear proliferation in the Pacific. If Western Pacific nations see that the threat of nuclear-powered vessels deters the PRC, others may develop their own nuclear-powered submarine fleet. 

Australia’s involvement in AUKUS also has substantial economic and diplomatic implications for itself. The PRC is one of Australia’s key trading partners, with 26 percent of Australia’s exports destined for the PRC, or approximately $219 billion. Australia sends metals, natural gas, and coal to the PRC in exchange for manufactured goods like computers and cars. The AUKUS deal could irrevocably strain their economic relationship. 
The PRC is not the only nation discontented by the AUKUS deal. The deal also enraged the French. They were angling for a contract to build diesel-electric powered submarines for Australia, only to be subbed in favor of the AUKUS Deal, losing a €31 billion pound contract. 

Conclusion

The AUKUS deal capitalized on Australia’s ties to the United States and its institutional willingness to develop nuclear-powered submarines, which is unique among US allies in the region. The AUKUS deal aims to elevate another Pacific nation to the highest level of undersea warfare, thereby deterring the PRC’s expansionism in the area and tilting the strategic balance of power in favor of the United States and its allies. However, with the addition of another nuclear-powered submarine force in the Pacific, the risk of nuclear proliferation and the potential for large-scale conflict grow. The goal of this deal was to achieve peace through deterrence, and it remains to be seen whether this can be accomplished.

David Baker is the Director of Diplomacy & Security at the Rainier Institute