The introduction of a bill in Parliament moves Australia a step closer to cutting red tape surrounding procurement from U.S. defense businesses.

If enacted, the Defense Trade Controls Bill 2011 will ratify the United States Defense Trade Cooperation Treaty signed by the U.S. and Australian governments four years ago in Sydney.

The consultations were begun when John Howard was Australia's prime minister and George W. Bush was U.S. president.

The U.S. Congress passed implementing legislation Sept. 28, 2010, and the treaty received ratification consent by the U.S. Senate the following day.

Australian Minister of Defense Materiel Jason Clare and Minister of Defense Stephen Smith jointly announced the introduction of bill into Parliament.

Once implemented, the treaty will create a framework for trade between Australia and the United States for certain defense equipment, technologies and services without the need for U.S. or Australian export licenses.

"Cooperation in defense capability and technology is one of the most important elements of Australia's alliance with the United States," Smith said.

Clare told Parliament that around half of Australia's war-fighting assets are sourced from the United States.

"We will replace or upgrade up to 85 percent of our military equipment over the next 10 to 15 years," he said. "Strengthening this area of our alliance cooperation is, therefore, clearly in our national interest."

Australian companies purchasing defense equipment and assets from U.S. companies need an export license from the U.S. Department of State in accordance with the U.S. International Traffic in Arms Regulations.

Clare said the treaty will remove the requirement for individual licenses for each export. There will be license-free movement of eligible defense articles on an approved list.

"This will save the Australian government and Australian industry time and money," Clare said.

"For the Australian (military) the treaty also will improve interoperability with U.S. forces by making it easier for both militaries to share common equipment and spares during exercises and operations."

The next step is the release of the draft regulations before the end of the year. This will involve further significant consultation with the Australian defense industry, including a review by the Defense Trade Cooperation Treaty Industry Advisory Panel.

Final implementation of the treat will bring Australia's procurement practices in line with two of the United State's other major defense buyers, Canada and the United Kingdom.

In practice, there will be an "approved community of companies" that are exempt from export licensing requirements. However, U.S. companies will have to advise the U.S. State Department that they have engaged in defense export activity with Australia.

The agreement will cover cooperative security and defense research work including development, production and support programs, as well as combined military and counter-terrorism operations.

There will be a compliance and audit regime to monitor the agreement. This will cover issues like facility clearance, business history, export licensing and compliance record and relationships to countries of concern.