Asia Defense | Security | East Asia

Japan Rethinks Its Approach to Arms Deals With the United States

Recent decisions suggest Tokyo is fundamentally reconsidering how it engages with Washington on arms procurement.

By Tom Corben for
Japan Rethinks Its Approach to Arms Deals With the United States
Credit: U.S. Air Force Photo by Mr. John Schwab

Fresh reports have surfaced that the Japanese government may move to cancel the acquisition of three RQ-4 Global Hawk surveillance drones from the United States, slated for procurement through Washington’s Foreign Military Sales (FMS) system. While ostensibly driven by cost concerns and operational shortcomings, this latest incident underscores that Japan is conducting a wider reassessment of how it goes about dealing and developing arms with its chief ally.

This is not the first time that Japan’s Global Hawk order has come under scrutiny. Having been cleared to buy the system in 2015, in 2017 the Japanese government was prompted to consider cancelling the project after the original $480 million price tag for the platform increased by 23 percent, a spike attributed to the fact that the company had already ceased production of the aircraft for the U.S. Air Force. Even though the potential for future shortages in spare parts meant that further program costs increases could not be ruled out, at the time these concerns were seemingly insufficient to prompt Tokyo to cancel the project.

Considering these preexisting reservations, fresh speculation over the acquisition is rather unsurprising. The Trump administration’s FY21 defense budget request proposed retiring 21 of the U.S. Air Force’s 35 Global Hawks, keeping only the most modern Block 40 airframes in service and meaning that only allies would fly the older variants. While Congress has moved to temper any mass retirement of platforms in the near future, any future reductions to the U.S. fleet would nevertheless invariably increase the maintenance costs footed by other countries flying the platform. The concern for Japan is that based on current projections, there is a high likelihood that it would be left with a disproportionately large share of those costs.

Scrapping the Global Hawk program would follow soon after the cancellation of another major FMS contract. In June, Defense Minister Taro Kono announced that Japan would suspend the planned purchase of two Aegis Ashore missile defense batteries, citing technical issues regarding the system’s interceptor boosters and cost blowouts amounting to nearly $2 billion.

Operationally, the (potential) cancellation of both projects certainly raises important questions about how Japan plans to use its military in the future. Yet these developments also speak to wider trends that suggest Tokyo is fundamentally reconsidering how it engages with Washington on arms procurement matters. While domestic politics and questions over the tactical relevance of platforms are important factors, the government’s fresh emphasis on cost-cutting measures and the desire for greater national control over future weapons programs are especially significant.

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A recent report showed that the percentage of Japan’s total defense budget devoted to U.S. FMS has climbed from less than 1 percent in FY11 to nearly 10 percent in FY20. Notable increases since 2017 have been largely attributed to alliance management, specifically Japanese Prime Minister Abe Shinzo’s efforts to charm U.S. President Donald Trump. Yet Japan has recently applied a new level of scrutiny to the terms of its FMS contracts. Indeed, Japanese and U.S. defense officials have been engaged in discussions regarding revisions to FMS procedures since the beginning of 2020, specifically in relation to addressing pricing opacity, procurement delays, and unpaid reimbursements. While Tokyo has traditionally accepted large arms purchases as necessary to sustain a strong defense commitment from Washington, Japanese officials and politicians have appeared increasingly willing to question the conventional wisdom of sustaining financially unfavorable models of defense procurement for the sake of alliance politics.

Kono has been instrumental in driving that push. Even before assuming the defense portfolio in September 2019, Kono had earned a reputation as a so-called “maverick” for his willingness to challenge the policy positions of his party, as well as for his apparent preference for engaging in open policy debates rather than closeting government discussions. Kono has placed particular emphasis on the need to cut wasteful defense spending, and was quick to order a broad review into FMS shortly after making the switch from the foreign ministry, instigating the aforementioned alliance consultations. Spiraling costs were at the core of the argument Kono used to justify the cancellation of Aegis Ashore. More broadly, the decision also demonstrated his willingness to accept sunk financial and political costs, make tough calls on Japan’s future military capability mix, and risk alliance friction only months out from potentially tricky cost-sharing negotiations. Cancelling the Global Hawk program would confirm Kono’s commitment to such an approach.

Price tags aside, the reassessment of FMS contracts also speaks to Japan’s concerns over the lack of control the country has had over certain major defense capability projects in the past. Restrictions on the sharing of intellectual property and technical data have prevented, or at least impeded, deep maintenance or modification and upgrade work on Japanese platforms purchased from or primarily developed by the United States, even in instances where Japanese firms have been involved in those projects. For example, these barriers have allegedly affected the usability of much of Japan’s fleet of F-2 fighters, and in fact prompted Tokyo to select a domestic design for its next generation F-3/F-X fighter. Though it will still cooperate with U.S. defense firms over the life of the program, Japan will nevertheless shoulder the majority of the projected research and development costs in order to keep as much technical expertise in-country as possible, in an attempt to make maintenance and modifications easier and cheaper if and when required. Indeed, Tokyo made this decision despite Lockheed Martin’s pitch of a hybrid between the F-22 Raptor and F-35 Lightning, an offer that could have included the transfer of confidential information about the F-35’s software package.

Considering the above, seemingly abrupt decisions to rethink major FMS contracts actually appear far more calculated. Indeed, observers noted that the Aegis cancellation may have the effect of improving Japan’s bargaining position in negotiations over alternative missile options with the United States, and could even result in new co-development projects over which the Japanese government and defense industry could exercise greater control. Whether or not the same logic could apply to a prospective alternative to the Global Hawk remains to be seen, but the requirement for a long-endurance UAV outlined in Japan’s Defense Program Guidelines is unlikely to change. Tokyo could conceivably seek to purchase the MQ-4C Triton platform from the United States, given its better suitability to maritime operations than the Global Hawk (an issue cited by Japanese officials). However, the U.S. FY21 defense budget request also proposed a two-year freeze on Triton production, a decision that leaves Australia with similar worries to Japan in terms of footing the through-life cost burdens of the program should the U.S. decide to prematurely retire its own fleet. As such, it would not be at all surprising were Tokyo to explore options to cooperatively or independently develop an alternative

Ultimately, what is clear is that Japan is seriously rethinking how it approaches arms dealing and development with the United States. Only time will tell whether or not recent — and impending — decisions will result in lasting changes.

Tom Corben is a resident Lloyd and Lilian Vasey Fellow with Pacific Forum.