Friday, September 18, 2009

Resistance Grows To Japanese Export Barriers



Resistance Grows To Japanese Export Barriers


The notion of carefully loosening restrictions on Japanese arms exports, allowing arms makers to compete internationally and join multinational projects, is gaining support among Japanese government and industry officials.

Japanese companies have produced a wide array of military equipment, none of which can be exported. This includes Aegis-equipped ships; tanks; fighter, patrol and cargo aircraft; and a variety of infantry weapons. But Japan’s defense industry is hobbled by a policy called the “Three Principles on Arms Exports,” which many argue are outdated Cold War rules that have limited Japanese defense industry for decades to small orders from Japan’s military.

Mitsubishi appears to have the most to gain from the relaxation of restrictions. The firm’s recent military programs include the Harushio-class and Oyashio-class diesel attack submarines, the Type 89 Mechanized Infantry Combat Vehicle and the F-2 fighter aircraft. None can be exported.

Kawasaki’s research-and-development programs for the C-X cargo aircraft and the P-X maritime patrol aircraft program are limited to indigenous orders of 65 and 90 respectively.

Japan’s F-X fighter program was opened to international competition due to failures by the indigenous defense industry to create a competitive aircraft proposal.

The “three principles” ban is based on the interpretation of the constitution held by successive Cabinets in Japan.

“In 1967, Prime Minister Eisaku Sato first raised the so called ‘three principles,’ banning arms sales to the communist countries, the countries subjected to U.N. arms embargo, and the countries in or likely to enter international disputes,” said Yoichiro Sato of the Asia-Pacific Center for Security Studies, Honolulu. “The Takeo Miki Cabinet in 1976 expanded the ban, announcing that Japan ‘refrain from’ selling arms to the countries outside the three principles.”

Change has come slowly, said Christopher Hughes, author of the book, “Japan’s Re-emergence as a Normal Military Power.”

“The arms export ban has only been breached officially twice,” Hughes said. “Once was in 1984, when the government made exceptions for defense cooperation projects with the U.S., starting with SDI [Strategic Defense Initiative] but then involving 13 other projects since, such as the joint development of the F-2. The latest was then in 2004 when the government breached the ban again for cooperation with the U.S. in ballistic missile defense.

“Thus, Japan has only exported military technology [not whole weapon systems] to the U.S. on a case-by-case basis, with very careful oversight by the government. However, there have been cases of the export of dual-use technology that has been for civilian purposes but could be used for military purposes,” he said.

Despite slow change, there are efforts to open the door wider and allow the Japanese defense industry to expand manufacturing and compete for the international arms market.

“Based on this understanding, we have been and will be trying to reduce Japanese export regulation on military equipment to the level of international standards,” said Naoki Akiyama, director of the Tokyo-based Congressional National Security Research Group. “However, there is a huge number of utopian or abstract pacifists in Japan who prevent the government from changing its export policy and criticize the exportation of military equipment as ‘death merchants.’”

Hughes said the three principles will eventually be modified, in part due to pressure from local industry and in part due to fears Japan may become too dependent on U.S. military resources.

“A lot of Japanese industry is very keen for the ban to be lifted, especially the larger contractors,” he said. “The Japanese defense market has stagnated with the decline in defense expenditures [which have fallen for five consecutive years], and the lack of an export option closes off economies of scale and access to joint development projects with overseas partners, such as the F-35.”

Many worry that Japan’s defense industry is being left behind in scale and technology, Hughes said.

“However, there is still considerable political opposition to the ban,” he added, and elements of Japanese industry don’t want to open their relatively protected market to greater competition.

Lance Gatling, a consultant with Gatling Associates, Tokyo, agrees that both Japanese industry and the government want to revamp or eliminate the three principles.

“It already has a comprehensive arms-control regime outside the three principles, underpinned by Japan’s Foreign Exchange and Foreign Trade Law and Export Trade Control Ordinance. Commercially and technically, it will open many opportunities to Japanese defense industry; Japanese industry is finding it more and more difficult to stay abreast of the huge technical advances being made overseas,” said Gatling. “It may also be a boon to Japanese taxpayers if it opens up avenues to purchase advanced military equipment less expensively than the current defense procurement system, which results in extremely high costs.”

Changes in export restrictions are necessary if Japan wishes to modernize its military and reduce dependence on international suppliers. Still, says Sato, of the Asia-Pacific Center, the ban will be difficult to revamp or eliminate.

“Because of the ban, the Japanese defense manufacturers cannot achieve the scale-economy to be globally competitive. During the Junichiro Koizumi administration, relaxation of the ban was considered in response to the defense industry group lobbying, but the policy remains unchanged,” he said.

“The issue of indigenous defense production has also been associated with techno nationalism and more autonomous security policy — things that ring the alarm bell in Washington. Therefore, the Japanese government is careful in revising its arms sales policy.”