In December, Prime Minister Yoshihiko Noda relaxed Japan’s ban on exporting weapons and related-technology. The self-imposed ban, a legacy of Japan’s postwar pacifist movement, was introduced in 1967. While not a law, it prohibited Japan from selling weapons to communist states, countries subject to U.N. embargoes, and nations involved in international conflicts. In 1976, it was expanded to all countries, although the United States was granted exemptions.
Noda’s relaxation allows Japan to participate in international joint development and production of military equipment and technology with a limited set of countries. Additionally, it enables transfer of finished equipment to countries where Japan’s military deploys during U.N. peacekeeping operations. This includes helmets, protective vests, and heavy machinery.
While in principle, Japan can now export weapons, this isn’t likely as the government aims to assist in peaceful activity. Quite simply, the new standards allow Japan to do more with some countries, but it will continue to abide by the 1967 ban.
Important is the motivation, which was economic. The ban restricted Japanese companies from joining production of equipment and technology with other countries. Not being able to enjoy the benefits of economies of scale, domestic production costs have been extremely high. Worse, although Japan is technologically advanced, developing state-of-the-art defense equipment is expensive, leaving Japan to buy expensive overseas equipment. This has fueled fears that Japan’s hi-tech weaponry is falling behind. Faced with these expensive costs against a declining defense budget, the Defense Ministry desperately wanted the relaxation.
Another factor was the state of Japan’s defense industry. Although companies like Mitsubishi Heavy Industries (MHI), Kawasaki Heavy Industries, and Ishikawajima-Harima Heavy Industries (IHI) depend on defense contracts for only a small percentage of their revenue, their subcontractors depend on such contracts for almost their entire revenue. With limited contracts, these subcontractors were shrinking and some collapsing. This prompted the Defense Ministry and the Ministry of Economy, Trade and Industry to push for the relaxation to expand the production markets.
This brings us to Japan’s choice of its next generation fighter for its Air Self-Defense Forces. Relaxing the ban allows Japanese companies to join joint development projects. This proved timely, given that the government was deciding on its next generation fighter to replace Japan’s 40-year-old fleet of McDonnell Douglas F-4 Phantom fighters. Although two other options existed that are currently available and promised to involve Japanese companies in production at a much higher rate (Boeing’s F/A-18E/F Super Hornet and BAE Systems’ Eurofighter Typhoon), the Defense Ministry chose to procure 42 Lockheed Martin F-35 Lightening II Joint Strike Fighters.
This decision was due to it outscoring the other jets in terms of cost, ease of maintenance and repair and, most importantly, its performance capabilities. Specifically, its stealth technology and situational awareness capabilities. What it didn’t score highly on was the level of participation of Japanese firms. While companies like MHI and IHI will assemble the F-35 and Mitsubishi Electric Corporation will be responsible for wiring, there’s little opportunity for Japanese firms to contribute technology or obtain new technology.
Although the F-35 was the only 5th generation jet, the Defense Ministry’s choice was a gamble. Ongoing problems with the plane, such as cracks in the fuselage, fuel concerns over not only its performance and safety, but successful completion of its development. Persistent problems mean falling behind the development schedule and increases in the final cost. Worse, U.S. defense spending cuts and the European debt crisis could lead to reduced orders or even participation by some of the planes’ developers since four of the partner nations are EU members. Fewer orders or resources could lead to further spikes in costs.