Exploring Exports: Prime Ministers Manmohan Singh of India, left, and Shinzo Abe of Japan, meeting in May, agreed to consider the possible export of amphibious aircraft to India. (agence france-presse)
TOKYO — International defense deals that followed the partial relaxation of Japanís longstanding ban on weapon exports may signal that Japanís defense industry is beginning to stretch its wings in the global market.
But projected boosts in defense spending combined with a more assertive defense policy is not expected to quickly transform Japanís defense industry into a world player unless important legal, administrative and structural issues are solved, experts say.
This May, following talks between Japanese Prime Minister Shinzo Abe and his Indian counterpart, Manmohan Singh, the two countries agreed to explore a deal for Japan to export up to 15 US-2 amphibious aircraft built by Japanís ShinMaywa to India.
In July, Japan and the UK signed agreements for research, development and production of defense equipment, and collaboration on information security, initially on chemical, biological, radiological and nuclear protection equipment.
Until a 2011 revision of restrictions that largely banned Japan from selling defense equipment internationally, Japan couldnít even contemplate such deals. Now, itís starting to stretch its legs, largely led by top-level diplomatic efforts with business support, said Satoshi Tsuzukibashi, director of the Office of Defense Production, Nippon Keidanren (Japan Business Federation), Japanís most powerful industrial and business lobby, which promoted the UK deal.
ďItís a reality, ... and the UK vice minister will visit Japan next week, and we will hold meetings with him to listen to his explanation. The UK has a keen interest with deepening cooperation with Japan,Ē Tsuzukibashi said.
Yuzo Murayama, a professor at Doshinsha Universityís business school and an expert on Japanís defense production industry, said the deals were the result of political initiatives. Since December, the Abe administration has strongly promoted defense cooperation, particularly in southeast Asia, partially to counter China. Such moves should be seen as a framework for expanding defense technology cooperation beyond the Japan-US alliance, he said.
ďIn countering the rise of China, Japan is really urged to develop defense technology relations with such countries as Australia and ASEAN [Association of Southeast Asian Nations] countries. The current movement is only a small beginning,Ē Murayama said.
But unresolved legal and structural issues still hamper industryís ability to push broader cooperation, analysts said.
Legally, restrictions on arms sales remain tight and regulations are opaque. Japan still bans exports that could fuel international conflicts while maintaining strict control over transferring parts to third countries. For example, Japanese industry required a special exemption even to participate in the F-35 Autonomic Logistics Global Sustainment program to pass on components to F-35 partner countries.
Structurally, Defense Ministry figures show Japanese procurement is dominated by a handful of major electronics and industrial machinery companies for which weapons and related equipment remain only a small subset, averaging only about 4 percent of total sales.
Reliant on small-lot purchases, companies here are unable to achieve the economies of scale needed to compete internationally.
A June 2012 ďFinal Report of the Study Group on Defense Production and Technological Bases,Ē written by Murayama and others, recommended that industry consider restructuring defense divisions into specialist companies to solve this, but such efforts have stalled, he said.