Talk about the partnership between australia and the u. S. About partnerships sharing. It is expected to start shortly. This hearing of the Senate Foreign Relations Committee will come to order. In march, President Biden stood alongside leaders of the United Kingdom and australia to announce an opportunity to enhance u. S. Security interests by transforming our alliances and deterring aggression from the peoples republic of china. Xi jinpings hyper nationalist government has been laying claim to territory in International Waters and have built islands with runways for military aircraft and ballistic missiles. At the same time they are trying to influence australian politics, buying Critical Infrastructure like port facilities and making political donations. Even hacking the Australian Parliament and Major Political parties. This is a critical moment in which the United States needs to show that we are serious to our commitment to a free indo pacific. Congress has a vital wrote role to play and time is of the essence. Unfortunately, necessary codification has not gone as smoothly as some of us might have hoped. Senator risch and i were trying to codify the central pillars i wanted to acknowledge senator kaines part to the initiative. Part one is selling Nuclear Powered submarines to australia, making them the only country aside from the United Kingdom that we share this with. Training the crew and significant contributions from australia to expand our own pub submarine production capabilities. We offered legislation with all of these elements and they moved with strong bipartisan support. I want to thank senator risch for his partnership. It did not make it into the senates version of the authorization act. In addition to the French Submarine industry, some of our colleagues expressed concerns about the primary purpose, the transfer and support. If we failed to move forward with full congressional support looting the Nuclear Powered submarines, we are doing beijings job for them. China is against this because it complicates their population across the pacific. This will give australia the ability to protect security interest from thousands of miles away. We will be able to cruise submarines that operate directly out of naval bases together, further enhancing the deep bilateral relationship. And, enhancing our reach into the region. Congress needs to play its part of the agreement is going to work. We need to send the message that the United States can be relied upon. Australia and our partners are watching. President xi is watching. Thousands of americans employed in shipyards would build these submarines and benefit from the australian contributions to support and expand our submarine infrastructure are watching. I hope our witnesses will help us understand why both pillars will improve the National Security interests of the United States, australia, and the United Kingdom. Because based on mission requirements, the United States and australia need the submarines faster than currently being produced. I think it would be helpful if you could quote clarify how you would go to make 1. 4 million subs a year to three subs a year. I hope that you could said some shed some light on that perspective, what will the steel mean for our alliance and what is the cost of an action. Finally, secretary lewis, as we codevelop advanced the terry technologies with australia, are proprietary products will be safe from chinese espionage. While this approach does require changes to export controls to protect military technology and the military technology that we developed through this new partnership. On the support of the codevelopment of advanced military technology which will include streamlining controls around the partners. I do not want this to be used by a trojan horse to undermine u. S. Export controls for the sake of commercial and industrial interests that are unrelated. It should be about modernizing historic alliances with two of our closest partners who have fought alongside the United States the fence in defense of democracy and freedom. Sen. Risch thank you and i will associate myself with those remarks about how important this is and we are anxious to see it move forward, and certainly, there have been some disappointment so far. That does not mean we cannot do better in the future. And that is the purpose of this hearing, to get this thing on track and move it more quickly and efficiently. As the United States enters into a period of strategic strategic rivalry with china, that include military competition. China has undertaken a Nuclear Breakout and fields Worlds Largest navy and modernized airports. We must move quickly to expand resilience and Industrial Base. The u. S. Should be allies and this partnership is the first step. The defense trade partnership is meant to bolster collaboration and joint advanced military capabilities. In particular our goals include increased Technology Sharing, codevelopment and expedited export licensing processes. I want to focus on australias acquisition of conventionally Armed Nuclear submarines. This is bold, essential, and contingent on supply and unlikely to improve the increase of submarine capabilities. Many of the capabilities needed to fully implement this including cruise missiles, combat said stem systems or computing capabilities will be heavily dependent on pillar two. This offers the potential to produce full meaningful results this decade and we could also build resilience across the supply chain in a period, given the lingering impact of covid and the exposure of u. S. Weakness following the invasion of ukraine. The export business treats our closest allies as if they were the new or emerging partners. Australia and the United Kingdom have legal and Regulatory Technology control regimes comparable to the United States. Demands that the australia and the u. K. Undertake reform is rankly condescending and highlights the need for a change in the attitude of defense cooperation with allies. I appreciate not want to open the doors to a trojan horse. I have served on this committee for 15 years now that i have been in the senate. At the same time i served on the intelligence committee. I would like to report to this committee, one of the very first things ive noticed between the two, is that there is a very distinct difference between the way we treat allies in intelligence field versus how we treat them on other things like export. And, i think, probably it would burn who behoove the state and department of defense spent some time with the intelligence community. We send sensitive and important material with the five is. Here, i do not have the concerns that some have. As far as the chairman is concerned, i am using this as a trojan horse, it certainly does deserve attention. But having said that, there might be an overreach. I think that we really ought to take a deep breath, and sit down and review how we could reconcile how we treat our allies in intelligence field, and make it more compatible with how we treat them in trade and industrial matters. The department of state, the department of defense and commerce should clearly communicate our requirements to ensure Robust Technology and export control measures and then adhere to them. In addition the agencies should reduce queries with the governments and the partners of United Kingdom and australia. If this lies is its potential incentivize similar agreements with other close allies. We need to get this right before we add other partners. These agreements are necessary if we are to prevail in the long term competition with china, russia, and their partners. If this fails to achieve its goals, it would not only show us as an unreliable ally put say we are fundamentally unserious about competing with china. Chair menendez let us turn to our witnesses. It is my privilege to welcome back the secretary for military affairs, jessica lewis. Prior to this, she served as a democratic staff director for five years, the most glorious years of her career. From 2007 to 2014, she was the national guaranteed National Security adviser to harry reid. We also welcome assistant secretary of defense for strategy and capabilities, dr. Marla carlin karlin. She is now working for her six secretary of defense where she has advised the department on policy, strategic planning, budgeting, future conflicts and security affairs. She has deviously performed the under second the under deputy of security and prior served as accurate acting secretary of defense affairs. We are pleased to welcome kin moy who has been serving as Principal Deputy and assistant secretary for asian and Asian Affairs is june 16. He has been in the Foreign Service for 29 years and his diplomatic stops include taipei, beijing and prior to this role, he was he acting assistant secretary of state in the bureau of intelligence and research. Welcome to you all and i would want thank the witnesses in their participation and their service to the country. The full statement will be included in the record without objection and i would ask you to summarize them so the committee can have a conversation with you. And then we will start off with assistant secretary lewis. Sec. Lewis thank you so much for the kind introduction. Ranking member risch and members of the community, i would like to thank you for the opportunity to testify today. Im excited to talk about the role of the state department. One of this administrations hallmark National Security and Foreign Policy initiatives. I want to start, first, by thanking the chairman, Ranking Member, an entire committee for your leadership role in making this possible. Through your support for the legislation passed by this committee and the state authorization act and much of which was included in the Defense Authorization act passed in july. I want to give an overview and then discuss legislation and interim plan we are putting in place. One month ago, i was with secretary blinken and secretary austin as they met with their australian counterparts. During our time, our leaders emphasized that aukus is a transformational initiative, perhaps the best in a generation. By matter modernizing, this will strengthen our defense, enhance deterrents and contribute to peace in the Indo Pacific Region and beyond. It comprises of two pillars, one we are working to provide australia with Nuclear Armed capability as soon as possible, we are partnering with australia and u. K. To develop advanced capabilities based on emerging technologies that are nation possessions. We have made significant progress on both pillars. In march 2023, the United States, australia and the United Kingdom announced a pathway to give australia a conventionally Armed Nuclear submarine capabilities. Modernizing the submarine fleet be a long term, multidecade undertaking and partners are moving forward to implement this approach. On pillar two, as recent experiments have demonstrated, we are leveraging the collective power of our Industrial Base to create a trilateral equals ecosystem that combines the competitive and comparative advantages of each nathan nation to strengthen joint capabilities. Let me turn to legislation. As was noted by the chairman and Ranking Member, for aukus to succeed you need to enable secure technology and information sharing between our countries. Earlier the administration submitted a legislative proposal to congress, and as i said we are great role to this committee to ensure that it was brought with bipartisan support and the substance was included in the national Defense Authorization bill. We look forward to working with congress and hoping that this final bill shows what we intend to deliver to the promise of aukus. Under the language, most defense items will move forward without eating a license. Improved entities within approve entities will be able to move items or retransfer without authorization. This approach will ensure that aukus pillar two can fulfill its True Potential while maintaining safeguards of the crown jewels of our defense technologies. While the legislation is being worked on, the department of state is lamenting a novel use of existing authorities to expedite and authorize Technology Sharing. The state departments authorization mechanism is an interim solution to streamline until authorization is enacted. We will continue to work closely with congress as we finalize our approach. We are also working with our stallion and british counterparts to offer equal opportunity and access to american firms within aukus efforts in alignment with our respective relations and International Trade obligations. We have a stake in the success of aukus. Australia and the United Kingdom are two of our proudest allies and we are proud to stand shoulder by shoulder as we strengthen our Longstanding Alliance and implement the partnership. I look forward to working with this committee and congress to promote Agile Defense trades between and among the aukus partners. Chair menendez secretary moy . Sec. Moy chairman and Ranking Member, thank you for the opportunity to testify before you today. Almost two years ago, President Biden, and the leaders of australia and the united system announced the creation of a trilateral partnership. Period aukus is a modernization of our longstanding partnerships to address security challenges of the future and support peace, prosperity and stability. Aukus deepens our Diplomatic Security and defense cooperation in line with President Bidens vision of working with allies and partners. It enhances United States security, that of our allies and partners and contributes to global peace and security. Much work has been done to realize this commitment. On march 13 as the assistant secretary noted, President Biden, and the australian and u. K. Prime minister announced a pathway for Nuclear Powered submarines. They are pursuing a multiphased approach with the goal to deliver submarine capability to australia at the earliest possible date. Under pillar two you to scope a variety of advanced capabilities and ensure that Defense Export systems are ready to meet this challenge. These commitments have critical implications for Foreign Policy and National Security. This is a critical effort to advance implementation of the National Security defense and indo pacific strategies. With the goal of advancing a free and open, connected, secure, and resilience prospering in the pacific. Aukus supports our vision of a world that is stable and prosperous where countries thrive, trades, and collaborate to address shared challenges and where all countries are empowered to make their own sovereign decisions. A free and open indo pacific is vital for security and post and prosperity which is why we need cooperation now. Like our other partners, these partners understand the Critical Role this trades this has in trade and prosperity. Economic growth requires prosperity and predictability, things that aukus seeks to provide their enhance deterrents and security. We have contributed a financial role for the last 70 years. Aukus is a complete, a complete commitment to strengthening these partnerships by strengthening partners in europe and asia, recognizing that the world is increasingly interconnected and the security of all regions and here at home in the United States are all linked. It reflects the Critical Role that both are european ended up with send indo Pacific Partners will have for enhancing peace and security in the pacific and around the world. Aukus will bolster the security of the United States to the development of cuttingedge edge defense and Security Capabilities but also by ensuring that the allied that are allies contribute to our own security and shared interest as a modernized the terry capabilities. It is more than submarines and defense projects, it is a general generational commitment to strengthen cooperation to meet the many challenges of the future. It is an unparalleled opportunity to boost capabilities, Industrial Bases and economies while increasing in prosperity at home. It will bring together sailors, scientists, and industries to show the best of American Ingenuity and technology along with that of our allies. With the optimal platform set, the scope and complexity of actualizing partnerships can not be understated or assumed, and the work must advance for capability to meet the moment as this rapidly changes. It will take the full support of the u. S. Government, congress and the American Worker working alongside the same constituencies in the u. K. , the continued bipartisan support is absolutely critical, passing relevant legislation is something we need to enable progress and to send a critical message received around the world. The United States industry to provide assurance to plan and succeed and demonstrate that we stand together as we advance a plan to bolster security. To our other allies and partners, demonstrating that the United States delivers to its commitment to demonstrate the seriousness of our intent and resolve to maintain continued International Peace and prosperity. Thank you. Chair menendez dr. Karlin. Dr. Karlin thank you for the opportunity to speak to you today, on this partnership which is an Unprecedented Community to deepen the security partnerships with our closest allies. I want to acknowledge that acknowledge the service of three marines who lost their lives on august 27. I want to express my condolences to the families of the three Service Personnel to lost their lives. I would like to thank the committee for its broad bipartisan support. It is vital to ensure that aukus delivers on the promise of this opportunity. As we approach the two Year Anniversary of our nations leaders announcing this part this partnership it is clear that we have made tremendous progress but we have far to go to realize the full potential of what it can achieve. I hope to reinforce three main topics, how it fits into an dances the 2020 do national Defense Strategy, how we seize the Generation Opportunity this presents an why we need to expand defense cooperation with our allies. First, how does it fit in with our Defense Strategy . Our Defense Strategy describes the peoples republic of china as our defense competitor, highlights the end of civic security and the fact that and underscores technologies to meet the shifting environment. Aukus is a critical part of how we meet these goals. It also describes a holistic response to strategies that competitors are in are pursuing and calls on the department of defense to aukus will help us realize the concepts laid out in National Security and Defense Strategy. Second, how are we seizing on the generational opportunities. Through pillar one, United States, not a kingdom, and australia have committed to conduct Naval Nuclear propulsion in a manner consistent with our legal obligations and we are moving swiftly. Since the announcement in march of this year, three australian officers have graduated from u. S. Clear power school and the uss North Carolina helped us increase our commitment. Through the capabilities line of effort, we are enhancing cooperation in other military capabilities. For example, under the auspices of the Artificial Intelligence working group, we demonstrated joint employment of Artificial Intelligence intelligence to detect military targets in real time to collaborative investments. We are insuring our ability to maintain a free and open indo effect with countries that have stated do children shoulder with United States. Third, need to expand cooperation more. The u. S. Network of alliances and promises is a strategic advance advantage. We have had partners in state and commerce who are working to create an enabling environment that streamlines and support deeper cooperation. We appreciate the continued support of congress to accomplish these objectives. As you are aware there are four areas in which the administration requires congressional action. First, the pathway requires ship transfer legislation to offer authorize the u. S. To sell virginia class submarines before aukus comes online. Legislation is required to accept australias investment into the United States. Third, australias submarine workforce requires legislation is required to allow the u. S. Government coordinate submarine workforce training. Finally, we request legislation to enable export licensing exemptions facilitating the goals of aukus, and raising our collective standards to protect the Critical Technologies that provide u. S. Forces with advantages. We cannot implement aukus without your critical support. Thank you for the opportunity to meet with you and i look forward to answering the questions you might have. Chair menendez thank you all for your testimony. Before we start the round of five minutes, i want to ask consent to include in the record an article entitled meet the teeny the tiny state Department Office clearing weapons for ukraine. It handled a 150 fold increase of work in a matter of months. We will start a series of fiveminute rounds. So, let me ask you, dr. Karlin, how are we going to increase our sub production. We do about 1. 3 and we need to get it to at least three. One of the issues that was raised during the whole ndaa is the concern about giving our subs at a time that we are not producing sufficiently at a rate to replace them. How do we meet that concern . Dr. Karlin senator, as you know, we have two important advantages, the undersea capability and Historic Network of alliances and partnerships. I want to hold in on the first. There is me and said production. Need to make sure we are investing in all of those to make sure to have more operationally available submarines particularly in the indo pacific, given our focus. With congresss leadership and support, the administration has been able to put in billions of dollars, approximately 4 billion in the latest budget for both production and maintenance of submarines. There is a lot of really hard work to help increase numbers. If i could hone in on maintenance, the navy has been doing good work to increase the availability of submarines. Since may, that has gone up from 60 to 67 . The goal is to get to 80 which they are on track to do in 2027, allowing they are to be seven more operationally available submarines. This is important. Chair menendez you are suggesting that a significant increase in maintenance opens up more subs to be put at sea. Dr. Karlin indeed. Chair menendez what happens if we do not improve do not approve pillar one . Dr. Karlin as in approve the request . Chair menendez if we do not make pillar one as a transfer of submarines to the australian as part of a very broad deal, what happens if we do not do that . Dr. Karlin we think it is a priority to keep investing in the submarine Industrial Base, and that is a separate issue. Australia has demonstrated a commit and to purchasing these commitment to purchasing these conventionally nuclear arms submarines and said that they would treated sponsor bully. There is a crawl, walk, run approach to doing this. Getting submariners and workforce trained. It builds on pieces so that aukus can deliver deterrents at every phase. Chair menendez if we were not to do that, it would be consequences for us, not only with the australians but with the indo pacific and the message we would send was one of unreliability and our reach would be significantly limited. So i hope that those who have a concern about this will find their way to be supportive. I am supportive, as of evidence by the by the fact that we passed in a bipartisan way. Having said that i do have questions. Secretary lewis, i understand that the u. K. And australias export control regimes are not reliably reliably comparable to the United States. That means that there is a greater risk that u. S. Military technology that is exported could be compromised by iver therese adversaries. Could you confirm for me that the british and australian governments, if they were owed if they would make certain adjustments and enforcement of safeguards that their regimes could be comparable to the u. S. System . Dr. Karlin let me start by saying that yes, we are confident that australia and the u. K. , and the United States will andy up with comparable will end up with comparable standards. The reason we need those standards is to make sure that adversaries or others who are trying to gain control, access to our i. T. And most stiff technologies cannot do so. We are very confident that the australia and the u. K. Will move forward and we will end up with comparable standards. And we are committed to making sure that we are protecting our technology. Chair menendez has either country committed to bringing export controls up to u. S. Standards and protect u. S. Defense goods, technologies, and services . Sec. Lewis my understanding is that each country is looking at changes that they might decide to make. I will not speak for them, but i am confident they will be able to do so. Chair menendez one last question. We if we lower our comparability standards for australia and the u. K. Significant the, which senator risch pointed out, very longterm reliable allies, i get that, what to we do when other partners tell us that they want the same lower standards. And they will not be can allies as well, in terms of their longterm relationship. Should we use this opportunity to leverage enhanced allied expert export controls so we are protecting our own taxpayerfunded terry to elegy . Sec. Lewis i think you are right. Chair menendez you can stop the answer there. I am just kidding. We like to have a little fun around here. Sec. Lewis i think the bottom line is is and make the system work so that we create alliances and partnerships we are providing our most highly sensitive and he fell defense articles to other countries, we want everybody to have the best, best possible standards. This is an example of the kinds of things that we could be concerned about. Full exhibit for example. We have seen some chinese pilots getting training and some other countries including pilots here in the u. S. We need to be able to prosecute those. We want partners and allies to do the same. We want to make sure that is a country if a country is trying to acquire a particular to elegy it cannot get around the system by going into a place with more room and export controls. To me, this is common sense to Work Together to bring all of us to similar standard, and i would say it is not just to protect companies and the i. T. That they produce, let it is fundamentally to protect the war fighter. If these technologies are exploited against our war fighter, they would also be affected. Sen. Risch i am proud that this committee has done its job in terms of producing legislation and coming to agreement on it. I want to thank the chairman for working in partnership. As always, the devil is in the details, and i hope no one gets the idea that we might have some different views on how we handle this technology transfer, that somehow there is daylight between us, there is not. We are on the same page. And so i hope that we can move forward in that regard. Interestingly enough, you mentioned the Pilot Training of chinese citizens. We have the same problem, even with our standards we have the exact same problem. That is not a good example. There are other examples, but that is not a good one. The other thing that i find ironic, me back up. You are aware that the other parties to the aukus agreement are groaning a bit at the United States and testing that they make certain changes in their standards. You are aware of that, are you not . Sec. Lewis i will start by saying i wanted to go back to what you started with, this committees work put us on a chat session on a path to achieving our goals. I know how much work goes into that both by you and your staff, so thanks you for that. I will actually say that i was just in australia with both the secretary of state, defense, and their equivalents. Acrosstheboard we heard broad support for what we are doing together. I have to tell you that i spent a lot of time eating with other countries and it was one of the most positive meetings that i have participated in. I think the australians, and of course they speak for themselves. They are very committed to pillar two in particular on how we can look at the comparable advantages that they might have, for example, and production of certain items as they work with our defense Industrial Base. Really the conversation that i participated in was how do we take advantage and how do we bring companies and Research Institutions together to work on pillar two. Sen. Risch my experience in talking to the australians and brits is the same as yours. It is incredibly positive, certainly you do not always agree on everything, but everyone has been rolling up their sleeves and has been committed to get this done. It is a little ironic that we are beating the drum about a higher or different literary changes when in fact regulatory changes, when in fact we are the victims of chinese laughs, thefts, espionage and what have you. I am not aware of any publicly reported in the dense to of that happening to the australians or brits. Is that an accurate statement . Sec. Lewis because we have our laws in place we are actually able to prosecute the chinese, those who are training the chinese pilots. While i was in australia i learned that an australian pilot also participated, and we are looking to extradite the pilot under our laws to deal with that issue. Again, is kinds of issues, that is not the only one. I am concerned also about what we talked about, unknown unknown, the other ways we might those challenges coming forward. Sen. Risch i agree and none of this is existential to the failure of this program, these are things that we can work through and things that we can and should. I would really hope that you do not you this as a solution to the problem. It is temporary and there has to be more to it and that. Number one, we need to get it finalized, fair enough. Sec. Lewis i agree, the purpose is to be an interim measure to have something in place while the legislative process is being needed. And so, absolutely agree that we will continue to work on it. I think, those of you who are not living in the world of state department acronyms, this is our interim measure that we are working on while we are waiting for a elation to pass. The good news is that a lot of the work we are doing to put this measure together will be helpful, hopefully when the final legislation is passed. Sen. Risch i appreciate that and i would push the finalization to get be to be given the highest authority and have everyone understand that this is only interim, because it will take more than this. My time is up. Chair menendez thank you. Before i turned to senator clark, we share intelligence with government officials, export controls however, controlled u. S. Defendant technology to nongovernment persons. So, our bill requires comparable comparability only on u. S. Origin defense item, not all of their own agendas products. It is important to know a note that australia warned about the extent of chinese espionage directed at australia. I think we all agreed on what we want to achieve and the concerns are legitimate. Senator cardin. Sen. Cardin i want to add my thanks to you and the Ranking Member in which in the manner with which our community has committee has been engaged. Iraqi eyes that Congress Needs to act. And i want to thank our witnesses. I want to start with the realities of the budget. You talk about leasing our capacity on me to get more subs and increasing production. Senator wicker has asked for additional submarines. You also mentioned the fact that australia will contribute to these causes. We have tough budgets. Give me an idea as to whether the implementation of tier one will require Additional Resources from the united date. Sec. Lewis thank you for highlighting the issue. We have for years thanks to the great report of congress been investing in the submarine Industrial Base and wants to continue to do so given that undersea capabilities are such an unparalleled advantage. As it relates to aukus, to the extent that legislation passes, australia has offered an unprecedented and historic investment into it to help ensure that Submarine Base can be as strong as possible. We will want to investing unit, and aukus is aps of that. More broadly, having that undersea advantage is critical. Sen. Cardin i understand, i am trying to get a bottom line whether it will required additional allocations in our Defense Budget. Dr. Karlin i see pillar one increasing collaboration building out investments that we have made to date and will want to continue to do in the spirit of National Defense rather g focus on pacing the nationalist that national Defense Strategy on the pacing. Sen. Cardin you are saying there is no increase in the resources necessary or do you believe that they will be additional stress on the Defense Budget . Dr. Karlin i do not see additional stress on the Defense Budget due to aukus. I see on the strategic level aukus being helpful for what we are trying to achieve strategically and trying to ensure that we have deterrents in the indo pacific. Sen. Cardin i think this discussion has been helpful in trying to understand how we will Share Technology and the able to advance the next generations as they come along. We know that there are many other allies interested in pillar two, both in the asianPacific Region and the nato partners who are interested in being engaged. What standards will the administration use in order to deal with the requests we will be receiving from other allies. Dr. Karlin thank you for raising this issue. Start by saying that right now we are focused on getting australia and the u. K. Over the line. And you can see this if it cant amount of work that that is taking. We have not made plans to bring others in. Sen. Cardin as our ranking chairman has mentioned, what is being done here will be used by allies to say why are we not getting comparable considerations . Dr. Karlin if i may, be helpful to talk a little bit about exactly what we are putting in place. I think for any kind of exemption that allows faster defense trade between as the chairman pointed out, not only between governments but to companies, and universities, it is important to understand that. What we are asking for is that we know who is going to be receiving the items, for obvious reason. You want to know who is the recipient. You want to know that this is not an item prohibited under one of our proliferation regimes. And that you want to make sure that once you have that formation, that wanted lands in the country, they will have their own protections and plays so it does not get transferred to a bad actor. So, those are the kind of requirements. The technicalities are in the weeds, but that is what we are looking for. We have that shared community, we know where things are going. We have an understanding that some things will still to move with a license and still need to be looked at carefully. And that all countries participating have those things standard. And so, i think that is the president we are setting moving forward precedent we are setting moving forward. We want to be sure and to talk about the transformational bed. We are talking about license Free Movement of defense articles. That means if you were on the list to receive it, you do not have to ask permission to export a lease weapon. You can receive it. That is why this is so important to make sure that when that at the university or Company Receives it that nothing will happen in the next that where we end up having it exported to a backpacker or someone who wants to exploit it. Those of the standards we need across the board. Chair menendez senator ricketts. Sen. Ricketts thank you very much. We talked a lot today about the people republic of china, they have the largest navy in the world. They are extending their cape expanding the capabilities and this is all part of the plan to dominate the world by 2049. In some areas they are outpacing us. What area they cannot do that in is our allies, which is why this agreement is important. It is important that we get our ducks in a row to meet the commitment. The navy has a requirement to have 66 Fast Attack Nuclear submarines to defend the nation. Right now we are sitting at 49 and dr. Karlin, you mentioned 49 were not available due to maintenance issues, and they of gotten it down to 33 not available. They are hoping to improve upon that. By 2030, we will be dropping down to 46 submarines. Even adding additional summer real submarines through availability through maintenance you will not have close to 46 submarines. I think it was pointed out you are producing 1. 3 submarines and we need to get up to 2. 5 or maybe three to do that. So, we have to make sure how this will get done. My understanding is that some months ago, the navy produced a detailed plan for how to meet a detailed plan and funding requirements on how to meet the aukus requirements. Is that accurate, has this study been done . Dr. Karlin there has been a lot of study of what we can do to make sure we are prioritizing this undersea advantage. Sen. Ricketts it has been done . Dr. Karlin there has been a lot of studying on what to do to ensure we are investing as much as possible. Sen. Ricketts is the osd study done . Dr. Karlin they have been working on a study. Sen. Ricketts is it finished . Dr. Karlin i do not think that they that i should represent them. They are working on the study and if it was helpful i would welcome asking my colleagues. Sen. Ricketts this is the crop the crux of the problem. One thing that we have asked is australia is obvious making a generational vestment in the submarine Industrial Base and ours, and we ought to be doing the same. I agree that this is a huge advantage for us. The question is what is that number that it will take . I think senator cardin was asking the same question. Obviously that we are great will that the australians want to invest 3 billion. What will we invest . Can we supply the congress with the study and when will it be done . Dr. Karlin thank you for raising this issue, postclose war we close down a lot of the simmering Industrial Base and and consolidated. There has been really important investments by this congress and the administration to build it up and make sure that we can put it the right places and see what fruits will grow from that in terms of workforce, talent management, and supply. There has been a lot going on. It is a priority and it continued to be going forward. Sen. Ricketts when we are talking about how we will make this happen, we actually have to have plans. It is not sufficient to say we are working on it. This is part of the concern, we want to make it a success. I think that aukus is important. If we want to make it a success to know your investing. As he administration going to ask is the the admitted administration going to ask for a study . What would be the timing and are we going to get a study. These are the questions we would like to know. Does anyone have an answer to that . We want to make sure we are robustly sharing information because we know how important bipartisan congressional support has been in aukus and the marine Industrial Base. Sen. Ricketts so share the information. I keep hearing that you want to share the information but i am not getting information. As a study that says yes, this is what we need to do and how much money it will cost. I am guessing it is not a small number. We have been able to share a lot of information over the past month about what we are doing on aukus and the submarine Industrial Base. I am aware of 45 to members and staff over the last seven or eight months. I would be delighted to take this back and work with colleagues in the office of the secretary of defense share the information you are requesting. Sen. Ricketts is are going to be a supplemental requesting more dollars to invest in our submarine Industrial Base . Dr. Karlin i am not able to speak to that, i will have to defer to my colleague as well. Sen. Ricketts does anyone else know . No. Chair menendez i will say that whether in public or classified, if the numbers have some classified consequence, i think the question is wellplaced. All of us would be interested in knowing that answer and if you could take that back i would enjoy that. Sen. Shaheen thank you and i would like to followup on senator ricketts questions. Dr. Karlin, talked about the main of maintenance peice of our capacity and Optimization Plan which are making a huge impact on that. I can speak from the port smith Portsmouth Naval shipyard that they are going to double their drydock which will allow them to maintain Nuclear Submarines and get them out in an expeditious way. And i would agree that we have made substantial investments in our defense Industrial Base that in a way contributing to our ability to produce the submarines that we need. I talked to suppliers in New Hampshire who are beneficiaries of that investment, but, it is still seeming clear to me that despite all of that vestment we do not yet have the capacity and that Industrial Base to build the submarines that we need to meet the aukus agreement. Is that an accurate assessment, or do you see Something Different . I think i might take a wider look at that. We absolutely need to be able to produce and maintain more submarines for our strategic strategic interests. For our ability to deter the indo pacific and bubbly. Sen. Shaheen i do not think that was an answer to my question. My question was, based on what i know about our situation at present, do not yet have that can pass. That capacity. Dr. Karlin i want to make sure i understand which capacity you are talking about. The way aukus is set up we wouldnt be selling submarines to australia for at least a few years in terms of delivery. We continue on the trajectory with maintenance we have several more submarines operationally available at that time. When i look at that operationally available picture, it is more satisfying to be able to ensure the strategic intent of aukus. Sen. Shaheen if we continue to invest at the rate we are investing, by the time our commitment to provide those submarines comes due, we will have that capacity . Dr. Karlin at this stage, with the information we have, it appears we are on that right trajectory in terms of the impacts of investments. This is an area that one needs to monitor closely. Im delighted to hear your case studies on the impacts of investments to date, but we will all need to watch that closely. Sen. Shaheen i have heard from our Industry Partners that they face challenges realizing aukus related Defense Technology transports. Not at the senior level, because we have gotten those assurances, but more at the action officer and manager level. Can either of you speak to that and whether you are seeing that move as we hoped . Absolutely. We are in regular conversation with industry across the board on these kinds of issues. Let me talk a little about what will be different assuming the legislation moves forward. I think this will help presumably some of the concerns you are hearing. When it comes to australia and the u. K. , companies who, again, we know where they are sending an item to and we know it is not prohibited under an international agreement, they will be able to move without actually coming to the state department for a license. That is a very significant change. The second piece, which i havent talked about as much, which we hear more from countries about, is right now if you have a u. S. Defense article, like a weapon, and you want to transfer it between one company and another among the three countries you have to get, in essence, authorization to do that. Among and between the three countries, u. S. Defense items within the caveats that i laid out are going to be able to move. When i sit down and talk with companies that i met with, when i was just in australia, when we talked through those issues, those tend to be the core of their concerns. There are always specific things we have to work through. That is why what we are doing here is so significant. We are doing it with australia and the u. K. Because they are some of our closest allies and because of a long history working with them on defense trade. I welcome our guest today. I would like to say our friends in australia and britain ought to know aukus enjoys very strong bipartisan support in congress. I cannot think of a Single Member of congress, republican or democrat, that doesnt support aukus. At least the objective of aukus. The question before the present congress right now is how to implement aukus quickly, also effectively, for everyone concerned. Part of the First Submarine pillar, the administrations put forward a plan for the United States to sell and transfer three to five Nuclear Attack submarines into australia and the 20 30s but hasnt put forward a longterm plan to make sure that our navy can make sure it has its requirement of 66 attack subs in a reasonable timeframe. Today, the navy has 49 attack submarines, roughly 25 short of the goal of 66 submarines. The pace of making 1. 2 submarines per year. Getting them to australia will put us three to four years behind in our production process. Looking at the navys most optimistic rejection, they dont see the goal of 66 attack subs before 2049 not taking into account the submarines we would send to australia. I understand there is talk about maintenance being some sort of fix for this. Maybe extending the life of the submarines we have inservice, but we are only at 75 of our goal in terms of how many submarines we have. This is a bandaid fix. We have to look at our capacity. There is no substitute for having a strong Industrial Base to build the submarines and meet our deterrence goals. Assistant secretary cardin, do you agree or disagree in any way . Dr. Karlin i appreciate aukus and our undersea capability. It is a noncomparative advantage and priority of the national Defense Strategy that underscores this as well. The points that i making on maintenance is no way to ignore the importance of production as well. It is that we are working through congress important support and prioritization to build up an Industrial Base that, frankly, was not as strong as i think anyone would like it to be. Sen. Hagerty speaking of that cooperation, i look forward to the president working with congress to make the necessary hard choices and work the regular order to get this done so we are prioritizing resources rather than coming to some emergency situation. We need to implement this in a way that office works to make both America First interests and our allies interests first as well when it comes to Nuclear Powered submarines. I would like to turn to pillar two. It focuses on trilateral cooperation on advanced capabilities. Advanced capabilities include undersea technologies, quantum technologies, artificial technologies, at autonomous systems, hypersonic capabilities, electronic warfare, information sharing. These are critical. I would be encouraged to hear your thoughts. You know that i serve as ambassador to japan. I got to see firsthand japans superior capabilities when it comes to Artificial Intelligence and quantum computing. Our allies in south korea have similar strengths. My question, i will put this to assistant secretary lewis and assistant secretary karlin, do you agree in having to incorporate allies such as japan and south korea into pillar two down the line . Let me thank you for your leadership on defense trade. We have had a lot of conversations and i 100 percent agree on the bipartisan need and strength and consensus around these issues. To get to your question, first things first. We are focused on getting this right for the u. K. And australia. Then we can look if there may be other countries who want to come and to bring capabilities for other projects. Sen. Hagerty i can assure you they want to. Dr. Karlin once we get this right we can look at discrete partners for discrete projects. Thank you for your leadership on the u. S. Japan alliance which is flourishing in extraordinary ways. Sen. Hagerty i want to reiterate how aukus is important to our own and that we keep advancing this. Chair menendez senator van hollen . Sen. Van hollen i want to applaud the Biden Administration for striking the aukus agreement to begin with. It is an important move in achieving our goal of ensuring a free and open indo pacific. I agree with the chairmans remarks that we should move forward expeditiously in implementing it. Further delay will undermine our credibility in terms of the strategy and with partners that we enter two agreements with. I hope that we can overcome the current delay on that front. I support the idea of streamlining export control provisions with respect to these two allies. I also share the chairmans view that that should be accompanied by applying the highest standards with respect to protecting our technologies, and it will be important that these two partners, the u. K. And australia, adopt a very strong export controls. As has been said, we need to make sure that hours are as strong as possible. The pilot issue was raised here. We need to look at the ways we can do it. At the same time, providing some flexibility when we are talking about these kinds of partners. I want to talk about another piece of the Technology Sharing and coproduction piece. Dr. Karlin, maybe this is for you or assistant secretary lewis. As i read this, it does envision Technology Sharing and coproduction. Is that correct . It does indeed look at that. Sen. Van hollen im looking at a series of potential Weapons Systems that we may be coproducing, autonomous underwater vehicles, quantum vehicles for positioning, navigation, and timing. Those are the kinds of things that this envisions . That is correct. Part of why we are talking about these advanced technologies, and dr. Karlin may want to add more, is we think that this is a unique opportunity to leverage the different capabilities and strengths that the three countries bring to this problem set. That is why we are talking about coproduction and why the defense trade needs to be smooth. Sen. Van hollen you dont need to convince me of that. Here is my question and concern. This is going to be important with respect to precedent. A hypothetical coproduction agreement of an autonomous underwater vehicle where the United States invests the lions share of production, 80 , whatever it may be. Does australia or the u. K. Have the ability to veto a decision by the United States to transfer that system to, say, our ukrainian friends fighting russian aggression as we speak . I think it is very important that we dont give up our ability and authority to transfer a system where we have done the lions share of production to other allies in need . Can you talk to that, either of you . Let me make sure i get you the correct answer. Coproduction and codevelopment agreements very significantly. We do these with other countries without office, so i need to be careful of not getting ahead of what may be written into these agreements. Fundamentally, if a u. S. Company would own a certain kind of technology, then we would still be able to control the export of that technology. Again, i need to be careful to not get ahead of the way these agreements are written, because they tend to be slightly different. Sen. Van hollen i understand. My concerns are raised by some of the current coproduction agreements and the fact that some other countries are limiting our ability today to transfer our own systems to the fighters in ukraine. It is sort of opening the door to the larger question. When we enter into a codevelopment agreement and coproduction agreement, where the United States is the primary actor and primary financial backer, in my view we should not be giving up our sovereign right to transfer those Weapons Systems to other allies in need. For example, today, to the ukrainians. I will want to pursue that question going forward. Part of the reason we are doing this with australia and the u. K. Is they are among our closest allies where we would not anticipate those issues. The coproduction agreements to do vary. I am happy to followup with you on that. Chair menendez sen. Coons . Sen. Coons it is so important to have a hearing where the two of you are pulling in the same direction and leading the senate in a positive, important direction for our country and have unification across the three witnesses. This is a strategic moment for the United States. As our president has repeatedly said, our Global Network of allies is our critical, competitive, economic, development, political advantage, and nothing has strengthened and deepened that partnership in the indo pacific like the aukus announcement. It is up to congress to deliver on the legal frameworks, funding that you need to fully take advantage and accelerate it. I recently had dinner with the australian ambassador to the United States, an observer of australian politics given his former service as Prime Minister and knowledge of challenges posed by the prc. Senator murphy and two other republican senators and others on a trip to the United Kingdom where we had a series of meetings about aukus, i am very interested in pillar two and the question senator van hollen raised. Let me briefly at the outset, secretary lewis, can you be specific . Are there any Legal Authority is required from this congress that you think have not been precisely defined in the previous rounds of questioning back and forth with you . Sec. Lewis i think, to make a point of clarification, as you know there are quatro different pieces of legislation that we are looking to move. One of them is focused on pillar two, the export controls. I would say, and i will take that one to talk about, the reason that we need that legislation is because of what you just laid out. The countries and companies maturity about how these defense articles are going to move, and we need confidence that they are going to move legally and safely, so it is Mission Critical for us to have this legislation. Dr. Karlin may want to add more on the other two, but the ship transfer legislation is missioncritical for achieving pillar one. Im happy to go into more detail that would be helpful. Let me sen. Coons let me add a simple observation i made in the United Kingdom. Any list of the top 10 Research Universities in the world include two from the u. K. , cambridge and oxford, if not others. They are focusing on their particular capabilities in Artificial Intelligence and quantum computing. Pillar two has a greater significance that it may align our three nations more closely in terms of developing really challenging and important new technologies, autonomous underwater drones, for example. Our defense procurement system is antiquated, slowmoving, pick your favorite multisyllable description. I dont think anyone says that our Defense Innovation and procurement and deployment system is moving at the speed of technology and at the same speed of our pacing threat, the prc. Is it possible that through the pillar to partnership with australia or the United Kingdom, given that they are smaller militaries and may have different legal constraints or operational constraints, that we would find in them a research, development, deployment partner able to move with more agility in emerging Technology Areas . Dr. Karlin that is quite conceivable. Our procurement system, expert control system, this is designed for a different world, one where we, the United States, had uncontested military and technological dominance and the security environment has changed in a bunch of ways. We have an unparalleled network of allies and partners. It is our center of gravity. As our system is able to learn and move in different ways, so too australia and of the u. K. On your trip you heard they have put aukus at the heart of what they are doing. Sen. Coons i am struck by how the ukrainians have demonstrated a remarkable ability to take off the shelf civilian products and modify them, deploy them, and take material from dozens of countries all over the world in a way that our system isnt capable of doing. It is my hope that out of aukus, pillar two, and the war in ukraine we are learning how to innovate in defense procurement. Chair menendez senator kaine. Sen. Kaine i want to start where you did to acknowledge the marines killed in the osprey accident in australia. I want to mention their names. Corporal spencer from arlington, virginia. The captain from belleville, illinois. Major tobin lewis, 27 years old from jefferson, colorado. We have great partners in the aussies, but we are in a dangerous line of work. When people fall in that line of work they ought to be recognized particularly in a hearing like this, and i appreciate you began your testimony with that. Aukus is an example of how the u. S. Can work handinhand with allies to promote stability in the indo pacific and an example of how we do things globally. In europe we have nato. We dont have a nato equivalent but we do have networks of allies. I want to applaud the Biden Administration working with south korea and japan at the camp david meeting. A probably wasnt as big of a headline at home because we have good relations, but forging closer relationships between those nations. The relationship has been limited by challenges of political issues. That was an important summit and i want to applaud the Biden Administration on that. From my vantage point, this Aukus Partnership is exciting for me and is exciting because the virginia class submarines are built in virginia and connecticut. I had the opportunity to take a run to our shipyard a month ago to dig into the tremendous assets that we have, but also the challenges. Some questions have been directed about the current pace of production and how we can build up that pace to not only meet our own needs but to meet the needs and commitments that we made in aukus. I want to follow up on a question that senator menendez put in. What if we did not do pillar one . Pillar two everyone is excited about and pillar one we are asking detailed questions. There is a chicken no a chicken or an egg. Australia will make a historic investment in the Industrial Base but only willing if they know that during the 20 30s we will be willing to deliver to them three to five virginiaclass subs. If they make that investment it will help us increase our pace of production. If they dont, it will be harder to increase the pace of production. We would like to make good on our commitment, but we are saying we will only be good on our commitment if we are confident we can increase our pace of production. We will be able to do that with the Australian Investment. Without the Australian Investment, it will be harder. Each side has something we want to do and each side has resources to help each other, but we have to get the timing right. Australia is not going to make the investment unless they have a surety there will be a delivery for them. Imagine going to the parliament and saying, lets invest billions in the u. S. Submarine Industrial Base. The question is, what are the guarantees the virginia class subs will be there . We should use this historic opportunity of the Australian Investment to enhance our ability to meet the production goals we are talking about. Obviously, that isnt just an Australian Investment. We have been investing in the australian Submarine Base and we have more to do and how much more are fair questions. On your crawl, walk, run, if we were not to do the virginia class transfers, the ultimate goal is australia, which has no nuclear at all, the only nuclear is medical isotopes, if we dont have this interim step of the transfer of virginia class subs the ultimate goal that australia will build their own nuclear subs off of a u. K. Design chockfull of american technology, they would be significantly delayed in their ability to develop a domestic submarine manufacturing capability if there was not a Timely Delivery of this interim step. With the virginia class subs they are already training their officers in the United States to operate nuclear subs. The virginia class sub transfer would happen after we had done significant training with our workforce. With the virginia class subs they are learning to operate and maintain nuclear subs, possibly to refuel nuclear subs. All of those skill sets are needed before they begin to be a worldclass producer of their own nuclear subs in the 20 40s and beyond. So, the aukus framework, and im just talking about pillar one, is train them, except their investments so we can expand our Industrial Base, ramp up our production, deliver assets to australia that they can use and learn on so they can develop their own capacity. That capacity would be fantastic for the United States and for all of the nations in the indo pacific who care about stability. I think the crawl, walk, run analogy which i didnt about until you said it is important. We want to get the ozzies to a place where they have their own production capacity. The only way we can do that in a timely way is through the first step of the virginia class deliverables. Their investment in our Industrial Base with their own investment will get us there and benefit American Security of australia and regions in the nation. Dr. Karlin you said it more beautifully than i could. Sen. Kaine i dont know about that, but i will yield back. Chair menendez more beautifully . What a complement. Dr. Karlin i meant it as a complement, to be clear. Chair menendez i was echoing your complement. I wasnt questioning it. Which submarine did you see . Sen. Kaine i brought back a hat from the uss new jersey and delivered it to the committee chairman. Chair menendez senator duckworth. Sen. Duckworth thank you to the witnesses being here today. Last month i went to indonesia, the philippines, and thailand to see our opportunities to collaborate in the Indo Pacific Region. The white house touted aukus as a new partnership that would promote a free and open indo pacific that is secure and stable. The positive impact extends beyond these three allied countries and i received quite a few positive comments in the three nations that i visited, indonesia, thailand, and the philippines to aukus and what we are doing. How does aukus and pillar two impact the Indo Pacific Region as a who beyond as a whole beyond the u. K. , australia, and the United States and how does asia benefit from a stronger trilateral relationship and enhanced indo pacific president s from australia, the United States, and United Kingdom . Sec. Moy i want to express appreciation for your investments in southeast asia. It really does matter. I see you have taken strong interest. Those countries and more countries in asia, where you have been, is we have invested a lot of time in diplomacy making sure all countries in asia understand in a transparent way what we are trying to achieve. We stated earlier that aukus is a modernization of longstanding partnerships that we will recognize the changes in the security environment for the future. When we talk to Southeast Asian countries like singapore, malaysia, they recognize these challenges and they believe that our transparency, our candor about the challenges that we see ahead that aukus will help address that. We are not trying to challenge centrality. We believe aukus can be complement tree to centrality. We look forward to more discussions in the future with our allies and partners in asia and around the world to make sure they understand the truth about aukus. To make sure the disinformation coming from other parties doesnt prevail. To make sure they have facts. When we provide those facts, we believe that we will prevail over them in ensuring the security of the east asia Pacific Region in the future. Sen. Duckworth thank you. Sec. Lewis i am going to agree. I think when we talk about aukus , it is not just about the alliance and strengthening of the alliance between australia and the u. K. It is the question. We say it a lot, but we mean it when we talk about a stable, secure, free, open indo pacific when that is what this alliance is about. Fundamentally, we believe that benefits the countries that you listed as well as others. Resilience is another term that we have been talking about, meaning that we are investing in a way that countries will be able to feel more secure and more resilient. I think dr. Karlin mentioned this earlier. Facing a new set of challenges and threats that we need to be able to respond to collectively as well as individually. Sen. Duckworth dr. Karlin . Dr. Karlin thank you, senator duckworth and i appreciate hearing reflections on your trip. That is heartening. The vision that we have of a secure, stable indo pacific i think is the vision manifested by aukus but also so many of our allies and partners around asia as well. To the extent that you have more partners who are actively involved in ensuring that security and stability can be realized through collaboration and cooperation, it becomes a better situation for all. This feels like a pretty positive and symbiotic effort. Sen. Duckworth i agree with you. I think the success of the use, whether it is aukus or the quad, can only help our interests in the Indo Pacific Region in particular. I yelled back, mr. Chairman. Yield back, mr. Chairman. Chair menendez senator murphy. Sen. Murphy thank you very much. I had the chance to travel to vietnam and indonesia earlier this year. There is a fair amount of confusion, i will say, as we talk about aukus, the quad, and reinforces centrality, as you put it, of aussie on. There are there are individual issues for vietnam and indonesia. They are different nations. We had positive reactions from the philippines, taiwan. A little of what this is about and how does it affect us. A work has been done to ensure that the word transparency has come up and thats important. In vietnam, there is a lot of appreciation for senator laheys programs of cooperation to heal the wounds from the vietnam war, including addressing the munitions that continue to explode in the docs and the docks and contamination from agent orange. Secretary lewis and secretary moy, do you feel like we have a ssauged the concerns from other nations . There is a concern of feeling left out, skepticism, that requires further work . Sec. Lewis thank you, sec. Moy thank you, senator for the question. It is important that we have those candid conversations with not just the countries you identified, but all partners, allies in asia. It is natural that something so new and novel would generate questions. What we have done is undertake a very expensive effort expansive effort to make sure countries in the region understand what this is and what this isnt. There are rivals out there. There are adversaries out there who will try to paint aukus in a different light. Suggesting perhaps that the u. S. Is a provocatuer. It is the opposite of that. We are recognizing the changing security environment in the future and taking steps with likeminded countries, with allies and partners, to address that. We will exercise, we will go to all efforts to inform others in the region, to reassure them of our intentions, what this is really about. Im glad our partners, our australian and u. K. Partners have also undertaken these efforts to make sure that regional friends and others are fully aware of our intentions and what this is. So, we are committed to this. It is not to say our work is done and we are satisfied. We will continue as aukus evolves to inform our friends and partners out there to make sure they understand what we are trying to achieve. Sec. Lewis i would like to add to something in addition to the aukus question and bring up something you raised. Part of what is important is our investment in the region is much rotter than aukus. What you pointed out, the demining and unexploded ordinance program, in some countries that is our largest assistance program. We consistently hear from countries about how important that work is. Senator lahey was a leader in this. His vision helped us achieve these goals. It is important to remember that as significant as aukus is, we are doing a lot of different kind of work investing and working with countries on issues that are critically important to them, and in this case helping save their populations from stepping on an unexploded ordinance. Once lands are cleared they can be used for other productive purposes. To support what moy said, thank you for raising that program. Sen. Murphy i will continue to advocate for those programs in the context of vietnam. There is a sense in the conversations that we really appreciate the counterweight to an aggressive china. We are concerned about our relationship with china because they are powerful and thereby reference the countries like vietnam and indonesia. We have both an opportunity and concern. As you recognized, secretary moy, china in particular accuses aukus of being an imperialist assault, a cold war version attack on china, if you will, to discredit it. There is a desire among a number of countries to have strengthened counterweight. I think we are working effectively in nation after nation with different issues, because each nation is so different. Good work. I missed you probably addressed this earlier, but if you did it, feel free to address it, that we dont have pillar one in the Defense Authorization act and what level of concern you might have about that. Dr. Karlin pillar one is critical to the success of aukus and the way the broader effort of aukus has been designed. It is a crawl, walk, run approach. It is important that congress is enthusiastic of and supportive of the key pieces of legislation for pillar one, like the ship transfer legislation, the training legislation, and legislation that would allow us to accept this investment by australia into our submarine Industrial Base. That can ensure that all of the right angst can happen so australia will be able to then responsibly operate conventionally armed Nuclear Powered submarines as soon as possible. The strategic picture is critical as well. As you no doubt heard from your travels, all eyes are on aukus. It is a spectacular effort showing that together these three allies can deliver deterrence in every phase and ensure the endo pacific remains secure and stable today and in the future is crucial. Sen. Murphy what state are the submarines being made in . Dr. Karlin i believe there are parts from a variety of states. Sen. Murphy i believe virginia is what you were searching for. Thank you chair menendez very much. Chair menendez you made it in time, senator young. I will give senator young a moment to get ready for his questions. As i do, let me ask one last question. This committee has demonstrated a willingness to provide legislative relief where required to facilitate Defense Exports under aukus. There is far more that will be needed to be done to make this a reality. As has been said, the u. S. Arms export system is convoluted and technical. It is not built to move quickly. Solutions demand these challenges do not require legislative relief. I know an aukus framework utilizing existing authorities, but this challenge goes beyond to taiwan and beyond. Can you update the members of the committee on efforts that are underway at state and dod to improve the efficacy of arms experts . Sec. Lewis you are absolutely correct. We have taken a number of steps to improve our system. Let me talk about the Foreign Military sales systems. We have been focused in this hearing on the commercial or commercial the government side. We have undertaken a plan called sms 2023, the goal of which is to streamline how we move cases forward selling between governments. On the good news front, we move 90 of cases within 24 to 48 hours, but it is the 5 to 10 of cases that we need to look at how we make changes. I wont go through every detail, but to give you a sense of what we are doing, i meet with my team every two weeks and met with them yesterday. How can we do a better job of prioritizing . How can we prioritize countries based on our National Security strategy and Defense Strategy . How can we better train the people who have to execute these programs . That sounds like a simple problem. It is actually quite significant. We are looking at improving and continuing to improve our work with congress, which is where you play a Critical Role as we come with congressional notifications. We have a whole host of other pieces that we are working on, including things that i think are very important in terms of looking at questions of export ability from the beginning of the process. What we find with these complicated systems is that they are designed for our military, which they should be, for our own war fighter, but they need to be adapted or changed as we look to export them. We need to make the Decision Making about that earlier in the process so we are not slowing it down at the end. I want to give dr. Karlin a chance. Dr. Karlin three points of reforms that we have been trying to make to our part of it. One is working on pulling together a Security Cooperation common operating picture. Being able for folks to see from initiation until delivery, looking across the entire bucket of what is happening, seeing what is where and what needs to be moved, that is an important step for transparency and communication. Another piece that i want to highlight is the process improvement. Some of that is in line with not only can folks see the entire picture, but they can elevate the challenges and be able to figure out, hey, we need to deal with an accountability problem. Something isnt moving. The third piece that i want to highlight is secretary austen announced over the last two months the creation of the Defense Security Cooperation Service which gets at training. The folks in the u. S. Military were working in the countries, in our embassies, with our partners and allies trying to understand, what are they looking for, why are they looking for it, how does that fit within our National Security interests . We are setting up robust efforts to make sure we are organizing and training folks appropriately to make this as successful as possible. This is hand in glove with our colleagues at the state department. Sec. Lewis i know there are people at state and defense too who rallied against the informal process. I have to be honest with you. When my staff gives me the sales notice, i generally do it in the same day. It is very rare when the end user has problems. I am concerned about those problems, because i have no ideological problems in selling american weapons abroad. I am have a problem in the end user will use it wrongly against civilians and other entities. For our part, i know as chair, ive tried to expedite our responsibly can be quick. I think it would be a huge mistake if anybody tried to undo the informal process. Senator young . Sen. Young thank you. I think our witnesses for being here. I know it has been a long morning. We need to recognize pillar two will be impossible without a supply of Critical Minerals. Chinas dominant position in the sector with deep ties to a number of developing resourcerich nations has led it to account for approximately 60 of worldwide production and 85 of Global Production of critical mineral processing. Fortunately, australia is wellpositioned to help us reduce this dependency, especially for critical defense requirements. Including cobalt, tungsten, manganese, and lithium. I believe we need to ensure that aukus takes australias existing and potential role as a mineral supplier into consideration. This should start with the strategic decision to designate australia as a domestic source under the defense production act, as was included in daa, and if time permits i will ask dr. Karlin how the goals of aukus would be advanced by extending certain authorities under the defense production act such as the designation of domestic source to other trading partners with Critical Minerals that are not found in the u. S. In my time, i certainly want to get to secretary lewis and start by asking, what existing regulatory or statutory barriers might be hindering our foreign procurement of Critical Minerals and how will this impact the goals of aukus . Of course, defer to other witnesses if you like on this question. Sec. Moy thank you for the question. I am not an expert on Critical Minerals, but i can say that we have discussions on a number of countries about the availability of these Critical Minerals or rare earths. We do know there are a supply chain issues. We know it is of critical importance to get off reliance on specific countries that may have cornered the market or may have dominance in these areas. Those countries, including australia, but it could be indonesia or any number of countries in africa and other places in the world where there is availability. We are absolutely talking with governments to discover ways to stay off that kind of dependence on a single country or other country. Dr. Karlin thank you for raising this. Dpa and australia in particular, i would highlight adding the u. K. And australia as domestic sources would streamline technological and industrialbased collaboration, strengthen implementation, and tilled opportunities for coinvestment in the production and purchase of Critical Minerals as you note and also Critical Technologies and strategic sectors. I would see this as perhaps a complementary effort to the reform conversation that is happening. But probably not a substitute for that conversation. Sen. Young thanks. As much as anything else i keep bringing this issue up in the hopes that these critical mineral conversations are happening among almost all the stakeholders within our government with their counterparties and foreign governments as well. Because i believe, and feel free to correct me if i am wrong, that this is a risk factor in implementing priorities, including aukus. If it is not regarded as a risk factor i am concerned. I think one of the risks is this is so little discussed compared to other issues. So hopefully the administration will engage this committee on Critical Minerals, may be in other contexts. Given the central role of essential minerals, would it applied to Critical Minerals from australia . Dr. Karlin based on my understanding i dont think it would apply to Critical Minerals. The itar comes to items on the u. S. Munitions list, which fall into, generally speaking, weapons or things associated directly with weapons. Sen. Young given the importance, lastly, of Critical Minerals to aukus and economic prosperity, how should the United States be considering supply of minerals in response to the recent brick summit and its emphasis on Critical Minerals . Sec. Moy absolutely, senator. That is something that at the highest levels of the state department we have had discussions with a number of countries, including the ones that i just mentioned. The philippines and nickel, indonesia and cobalt, congo and other countries as well. It is a priority. This is of great importance. Maybe not known as well to the american public, but it is something that we definitely see that there are opportunities, again, to take action, where in the past we may have been over reliant on specific countries. Sen. Young as a followup, are there particular minerals that our government deems us disproportionately reliant on a bricks or bricks plus, as we think about expansion, country or countries . That need to concern us . Whatever the risk threshold might be for a particular mineral, i will leave it to the government to establish those, have we identified a mineral that could be cartelized in a bricks plus construct and we need to come up with alternative sourcing or Processing Capacity to address that vulnerability . Sec. Moy you actually put your finger on one of the main issues here, the processing part of this. Many countries have these Critical Minerals, but the experts on the processing are in another country. We know what that country is. I think it is our priority whenever possible to find or develop alternatives to what weve seen. Again, an overreliance on one country has put us in a vulnerable position, the world in a vulnerable position. Is there a plan to address this larger issue . Processing . Sec. Moy i am overseeing that area. I can ask a colleague who does have expertise on this area to consult with you and your team, members of this committee. Sen. Young thank you. This is a little beyond aukus, but we talked about the value of alliances. Talk a little about the value of this campaign, the summit that President Biden pulled together with korea and japan. I have been waiting for Something Like this the 10 years ive been in the senate. I was overjoyed. Talk about how this will help regional stability. Sec. Moy thank you for raising that. We who follow these issues in east asia have been waiting for a moment like this for a generation, really. The fact that this was the first time foreign leaders were invited to camp david since i think 2015 tells you about the significance of this. To bring together these partners, we know there are historical, painful history here. We have to applaud the courage of the rok president and the Prime Minister in taking up this challenge. They recognize the geostrategic conditions in east asia have changed and we have to recognize we have to respond to this. The best way is to unite or bring together these two democracies that have so much in common with us in terms of values. Bring them together in an effort to push back on some of what weve seen out there. When we talk about the Regional Security environment changing, we are not talking about one country. We talk about russias illegal and unprovoked attack on a sovereign nation. We have been talking about that since 2022. Nearly 100 launches of missiles from the dprk including four icbms this year. This environment created an opportunity for us to unite likeminded countries to protect our security. This is important. It is about American Security as well as the entire east asia Pacific Region. Absolutely significant. We look forward to more conversations. It is not the most popular thing. It will not win a lot of votes in each of these countries because of the shared painful history, but we think it is the first step in a significant change to the future of the security environment in the Indo Pacific Region. Sen. Young this has been a very helpful and robust hearing. The record will remain open until the close of business on friday, september 8. We will ask the panelists if they receive questions to respond to it in a substantive way. Thanks to the committee for your participation and insights. This committee is adjourned. [gavel falls]
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