The Weekly Wire: For Your Situational Awareness 12/18/20

 In Weekly Wire

The Future of US-Australian Defense Cooperation

Jesse Berman, Market Analyst

Since World War II, Australia has emerged as one of the United States’ most reliable defense partners, contributing to nearly every subsequent US-led military effort in a meaningful capacity. This intimate relationship was borne, not merely out of common historical and cultural characteristics, but of shared threat perceptions and strategic interests, particularly in the Middle East and Indo-Pacific regions. While relationships with traditional American allies have been strained during the Trump administration, particularly in Europe, the US-Australian partnership has remained relatively stable due in large part to the unprecedented, and accelerating, threat emerging from China. This distressing dynamic, coupled with an expected “return to normalcy” under the incoming Biden administration, foreshadows a coming era of deep and persistent bilateral defense cooperation involving troop basing, joint exercises, and research and development on technologies vital to 21st century military dominance.

The United States and Australia are both eager to refocus their alliance away from peripheral counter-insurgency operations in the Middle East and Afghanistan toward the Indo-Pacific region. The US-Australian communique from this year’s annual Australia-United States Ministerial Consultations (AUSMIN) summit underscored this desire, as it became the first such document in the post-9/11 era not to explicitly mention Afghanistan, Iraq, Syria, or Iran by name. Most importantly, the rhetoric of the alliance has been accompanied by action. In the last year alone, both Canberra and Washington have pursued significant steps to limit Chinese influence by banning Huawei 5G networks, calling for international investigations into the origins of the COVID-19 outbreak, and condemning a range of destabilizing and anti-democratic activities. For its part, China has responded to these perceived Australian affronts by imposing billions in tariffs, putting a once rosy economic relationship on a collision course.

Regardless of the economic fallout, Australia’s willingness to hold Beijing to account is all but certain to persist into Biden’s presidency. If anything, there are some in Australia that fret about Biden’s inclination to pursue a policy “reset” with Beijing. Indeed, Biden might be more willing than his predecessor to cooperate with China on issues related to climate change and North Korea. However, the simple truth is that Beijing’s recent behavior, be they military aggression in the Indo-Pacific, subversion of the rule of lawin Hong Kong, or perpetration of human rights abuses in Xinjiang, pose significant short and long-term security threats to the United States, Australia, and countless others. Chinese sanctions on Australian industry may even push the US-Australian economic relationship closer. The Sino-Australian rift presents an even clearer opportunity for unprecedented military cooperation, which would reinvigorate the decades-long tradition of Washington and Canberra working in tandem to confront mutual strategic threats.

Future military cooperation could take the form of more frequent joint exercises and even an expansion of the US Marine presence in Darwin. However, research and development initiatives are primed to be the most robust avenue of cooperation, as both sides strive to master the technologies that will define the 21st Century while preparing for any potential conflict involving China. At this year’s AUSMIN conference, Australia’s delegation pledged to “further deepen defense science and technology and industrial cooperation with the United States” to include, specifically, hypersonics, electronic warfare systems, and space-based capabilities. One notable R&D collaboration, ongoing since 2017, is the multimillion-dollar development of the Next Generation Jammer, which Australia is expected to incorporate into its fleet of 11 EA-18G Growlers in the mid-2020s. And in the past month alone, both sides have agreed to jointly develop a virtual cyber training platform and hypersonics technologies in what is likely the start of deep cooperation in these fields. These announcements follow the release of Australia’s 2020 Defence Strategic Update, which outlined Canberra’s intention to invest upwards of $11 billion and $3 billion in cyber resilience and hypersonics, respectively, through 2030.

In sum, the coalescence of American and Australian threat perceptions away from the Middle East toward China will guide future bilateral defense cooperation throughout the Biden administration and beyond. Indeed, this strategic realignment is one that has been underway for nearly a decade and has only accelerated recently under the Trump administration. This dynamic, coupled with Biden’s outspoken support for traditional American alliances, positions Australia to become one of the United States’ most vital defense partners not only in the Indo-Pacific region, but globally. What remains to be seen is the scope and breadth of military innovation the two countries can produce together in the coming years.


US defense officials are reportedly willing to sell Indonesia F-15 and F-18 fighters, following Acting US Secretary of Defense Christopher Miller’s visit to Jakarta. These two fighters are the latest in a series of expressions of interest for a significant Indonesian fighter buy. Other fighters that could potentially be procured include the Su-35, F-16V, Rafale, and Typhoon. Indonesia retired its fleet of F-5s and originally selected the Su-35 to replace them. The Su-35 deal has stalled amid potential US sanctions and payment issues, though there has yet to be an official cancellation. Since Indonesia already operates the Su-27 and Su-30, the Su-35 would be easier to integrate into the Indonesian Air Force from a training and logistics perspective.

Delays in the Su-35 buy mean that the upcoming fighter procurement could also serve to replace the aging Hawk 200. The F-16V has also been another strong future fighter candidate, as the Air Force already operates over 30 F-16s brought up to C/D standards. The Rafale would be an expensive option, particularly from a logistics perspective since Indonesia has no experience operating the type. However, a Rafale buy would fall in line with Indonesian political tendencies to reduce reliance on any single defense supplier. A potential purchase of ex-Austrian Typhoons would then appear to be a back-up option, though there appears to be some opposition to this in Jakarta. Interest in the F-15 and F-18 would then appear to be a move by Indonesia to strengthen its negotiating position when negotiating contracts with the various contractors. Indonesia aims to operate 128 fighters by 2024, but this goal is likely too ambitious considering it operates only 50 fighters today (light fighters like the Hawk 200 not included).


On December 15, the Israeli Missile Defense Organization (IMDO) successfully completed a series of live interception trials in order to validate its multi-tier air defense system. The trials, in co-operation with the US Missile Defense Agency, were primarily to test the latest version of Rafael’s David’s Sling system however they also demonstrated for the first time the interoperability of Israel’s ground-based air and missile defense systems. During the exercise, command and control and target identification was carried out by a unit operating the Arrow upper tier missile defense system while interceptions were carried out by units operating both David’s Sling with the Stunner missile and Iron Dome with the Tamir interceptor. Using the three systems together, the IMDO is able to deal with a variety of threats from short-range rockets, cruise missiles, short- and medium-range ballistic missiles, and potentially inter-continental missiles.

South Korea

These last few months have been dynamic on the military helicopter side of the business in South Korea. Domestic developments such as the KUH-1 Surion or the future Light Attack Helicopter (LAH), both designed by Korean Aerospace Industries (KAI) in collaboration with Airbus Helicopters, have recently made the headlines. The KUH Surion is expected to replace the current South Korean Army’s UH-60A in the Future Army Utility Helicopter Program. The latter, the LAH, reached a developmental milestone earlier this week and has been declared fit for combat. It is progressing well against its development timeframe launched in 2015 and initiated in 2018. The South Korean Army is expected to order more than 200 units by 2023 to replace the current AH-1F and MD500 helicopters.

This leaves little room for foreign helicopter OEMs and it makes market access more challenging for others. On December 15, the South Korean Defense Acquisition Program Administration confirmed the acquisition of 12 MH-60R anti-submarine helicopter for 960 billion won ($878 million) to be delivered by 2025 through the foreign military sales (FMS) channel. Lockheed Martin’s Sea Hawks were competing against Leonardo’s AW159 wildcats, that were already in service since 2012 and presented for a while as frontrunners for the second batch deal. If this award may have come as a surprise, the Sea Hawks lower price via FMS is addressing the country’s austerity measures for military spending and sends a positive signal to Lockheed Martin that the Surion may win in the Army.


On December 15, the Unite States’ Department of State approved the potential sale of Airborne Intelligence, Surveillance, Reconnaissance, (ISR) and Electronic Warfare mission systems to Italy. For this sale, these systems would be integrated into two of Italy’s Gulfstream G550 aircraft. The contract is valued at $500 million, and includes embedded GPS/INS systems, Multifunctional Information Distribution Systems – Joint Tactical Radio Systems, and communications intelligence systems, as well as missile warning systems, countermeasure dispensers, and active electronically scanned array radars systems. The goal of the sale is to improve Italy’s airborne ISR and electronic warfare capabilities, and to improve interoperability between Italy and the United States. However, the sale has not yet been finalized and could change prior to a contract being signed.


Turkish Aerospace Industries has signed a deal with the Tunisian Air Force for the provision for three Anka MALE UAVs and ground control systems to the country. The deal is the first export of the drone. This announcement is likely a refinement of the March 2020 announcement by TAI that Tunisia planned to procure six Anka-S and three ground control stations for $240 million, rather than a follow-on order. The deal will be financed by Turk Eximbank, who is loaning Tunisia $80 million for the deal.

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