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Editorial: Steadily develop sales channels to expand defense equipment exports

  • May 8, 2020
  • , The Japan News , 12:58 p.m.
  • English Press

It is important to accurately understand the needs and security environment of each country in order to export defense equipment.

 

The government plans to export domestically produced air defense radars capable of detecting fighter jets and so on to the Philippines. The government is making final arrangements for the contract. If realized, it will be the first defense equipment to be exported as a finished product.

 

The challenge for the Philippines is to strengthen its monitoring and surveillance capabilities against China’s efforts to accelerate its use of the South China Sea as a military hub. The significance of cooperation between Japan and the Philippines, both U.S. allies, is not small.

 

For many years, the government has restricted the export of defense equipment, but in 2014, it decided on the “three principles on transfer of defense equipment and technology” to allow the export of such equipment in cases that contribute to Japan’s security.

 

The main objective is to deepen security cooperation with friendly nations and improve deterrence. Joint development of defense equipment, mainly by the United States and Europe, has become the mainstream. By participating in the joint development framework, the government also aims to reduce the cost of developing such equipment.

 

The defense industry, which supports Japan’s security, has so far had its customer base limited to the Self-Defense Forces. It is important to expand sales channels and maintain and strengthen companies’ production and technological bases.

 

The export initiative has not progressed as expected. The Defense Ministry proposed to Australia to jointly develop a new type of submarine, but failed to win an order. Australia signed a contract with France, which promised local employment.

 

Japan is also promoting sales of defense equipment to India and the United Arab Emirates, but problems have arisen in terms of not being able to reach agreements on equipment performance specs and prices.

 

It is urged to build up a record of exports by taking measures, such as increasing the proportion of local production to boost economic growth in partner countries, to steadily improve performance.

 

The Acquisition, Technology and Logistics Agency was established in 2015 as an organization responsible for the development, procurement and export of defense equipment. In cooperation with the Foreign Ministry and the Economy, Trade and Industry Ministry, the government as a whole needs to improve its bargaining power.

 

Last autumn, the Defense Ministry set up a meeting with the Japan Business Federation (Keidanren) to discuss ways to strengthen the competitiveness of the nation’s defense industry. In Japan, there are about 1,000 companies involved in the manufacturing of equipment such as ships and fighter jets. The government and the private sector should cooperate to improve technological capabilities.

 

Procurement reform is also an urgent task. The purchase of the latest equipment through the U.S. government under that country’s Foreign Military Sales program tends to be expensive because the U.S. side dominates the setting of prices.

 

Given Japan’s limited defense budget, if imports swell, procurement from domestic companies could decrease.

 

The government should patiently negotiate with the United States to increase the transparency of equipment prices. The government must purchase equipment strategically with a view to nurturing domestic companies.

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