Feb. 27, 2017 —
1. Introduction: Defining a Research Objective
In 2014, Japan made a high-profile policy reversal toward the export policy of major most
technologically and militarily advanced nations, that permits the export of defense
equipment, articles and services, involving technology transfer.1 Since then, however, Japan
has made little substantial progress to date, except several bi-national research and
development (R&D) projects for individual element technologies as well as some limited
legal-administrative instruments thereof.2 For several decades, Japanese defense firms have
produced arms mostly for domestic use, with some under manufacturing agreements of U.S.
defense contractors. Unsurprisingly, Japanese arms do not sell well overseas, due to their low
international price competitiveness consequent upon the nature of domestic defense markets
that are generally closed, highly monopsonistic, and comparatively small-sized; and due to
the total lack of battlefield operational experience and combat-proven performance that
results from the postwar pacifist constitution.
The veiled rationale of the reversal, therefore, lies in facilitating multi-national R&D
for a major weapon system, without which major Japanese defense firms will suffer further
technological atrophy. Also, the reversal aims at sharing financial burdens and technological
risks with project partners as well as at outcompeting emergent arms-export rivals, such as
South Korea. The rationale makes sense when Japan under perennial fiscal austerity faces
rapidly growing regional security uncertainties and threats, both present and potential. Thus
the current state of affairs does not satisfy a high priority on multi-national R&D as set by
that three major policy documents: the first full-fledged Japan’s National Security Strategy of
2013,3 the Strategy of Defense Production and Technological Bases of 2014,4 the Three
Principles on Transfer of Defense Equipment and Technology of 2014. This circumstance
constitutes a typical policy failure.
This study aims to identify underlying impediments to Japan’s participation in
multi-national defense R&D and then specific measures to remove or at least alleviate them
toward the successful formation and implementation thereof.
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