Debt-riddled Japan relaxes decades-old arms exports ban

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Debt-riddled Japan relaxes decades-old arms exports ban

Source:
http://news.yahoo.com/debt-riddled-japan-relaxes-decades-old-arms-exports-090832091.html

TOKYO (Reuters) - Debt-riddled Japan Tuesday relaxed its self-imposed decades-old ban on military equipment exports in a move that will open new markets to its defense contractors and help the nation squeeze more out of its defense budget.

The government's security council agreed to the relaxing of the ban to allow Japan to take part in the joint development and production of arms with other countries and to supply military equipment for humanitarian missions, Chief Cabinet Secretary Osamu Fujimura said at a news conference.

"The new standards (on weapons exports) are a result of the government considering measures that required attention amid recent changes to the environment surrounding international defense equipment," Fujimura said, referring to rising arms costs that could put strain on the government, with public debt twice the size of its economy.

The rule adopted in 1967 banned sales to communist countries, those involved in international conflicts or subject to United Nations sanctions.

It later became a blanket ban on exports and on the development and production of weapons with countries other than the United States, making it impossible for manufacturers to participate in multinational projects.

"The regulations on weapons exports are based on the concept that as a pacifist country Japan should aim to avoid fanning international conflicts, and we will keep a close watch on exports," Fujimura said.

The relaxing of the rules does not mean Japan will begin openly selling its military products to the world -- exports will be limited to strategic allies like the U.S.

The move could still allow companies such as Mitsubishi Heavy <7011.T> to join the development of Lockheed Martin's F-35, which Tokyo picked last week as its next frontline fighter, planning to buy 42 machines at an estimated cost of more than $7 billion.

MORE THAN DOUBLE

Although Japan is the world's sixth-biggest military spender, it often pays more than double other nations for the same equipment because local export-restricted manufacturers can only fill small orders at a high cost.

Removing the ban would stretch its defense purse further as military spending in neighboring China expands.

This year, Beijing raised military outlays by 12.7 percent. That included money for its own stealth fighter, the J-20, which made its maiden flight in January.

In contrast, Japan's defense budget has been shrinking in past years as ballooning costs for social security and servicing its growing debt pile squeeze other spending.

Given fiscal restraints, Tokyo is keen to make its defense program more efficient to maintain its military capability in the face of China's rise and growing uncertainties in the region.

The relaxation of the ban, that has been modified in the past to allow sharing of military technology with the U.S., could also be a boon for Japanese manufacturers as the strong yen weighs on their civilian exports and weak domestic demand and budget constraints restrict growth at home.

(Reporting by Shinichi Saoshiro; Writing by Tomasz Janowski; Editing by Joseph Radford)
 

Mitsubishi Electric Corp. signed a contract with the Philippine government to deliver four radar units in August 2020.

Three are fixed-site radar units, one of which is now completed, and one mobile radar unit.

The Japanese Air Self-Defense Force will host six personnel from the Philippines Air Force from Oct. 4 for training on operating and maintaining the radar units.
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From back in May:

When Ukraine asked Japan for assistance in response to the Russian invasion, the Defense Ministry took quick action.

It sent bulletproof vests, helmets, tents, emergency rations, medical kits and other supplies in mid-March. It also dispatched protective masks and suits against chemical weapons, as well as drones, in early April.

The government applied the Self-Defense Forces Law as a basis to provide such equipment.

Because the law stipulates that disused items excluding weapons can be transferred to developing countries, the latest bulletproof vests and drones purchased from the private sector are all regarded as "disused items" for shipment.

However, the Self-Defense Forces supplies include defense equipment not allowed to be transferred overseas, while drones could be used in attacks although they are exempt from restrictions.

EXPORT OF DEFENSE ITEMS ONCE BANNED

In 2014, the government agreed to allow the export of defense equipment if certain conditions were met, but an expert points out that its interpretation is unreasonable.

Originally, export of arms and related technologies outside of the country had been banned in Japan, in principle.

But the administration of then-Prime Minister Shinzo Abe adopted the Three Principles on Transfer of Defense Equipment and Technology at a Cabinet meeting in 2014, allowing arms exports under certain conditions.

The new principles were initially aimed at reducing the increasingly rising costs of defense equipment.

Until then, Japanese defense equipment were banned from export. Major suppliers were unable to mass-produce them, leading to higher unit prices and placing a financial burden on defense budgets.

Japan was also excluded from international co-development projects in which member countries pooled their money and brought in their own technology, leading to increased development costs to develop defense equipment on its own.

To remedy the situation, the government came up with the new three principles under the banner of promoting international cooperation.

That year, the export of parts for surface-to-air missiles to the United States was approved for the first time under the new rules.

Japan also decided to launch a joint research program on an air-to-air missile with Britain on the pretext of exporting "technology" overseas.

The following year, in 2015, the government decided to export software and parts for the display system used for Aegis-equipped ships to the United States with an intention to jointly produce the system.

But in recent years, the purpose of the new rules is not limited to reducing costs.

In 2017, Japan leased aircraft previously used by the Maritime Self-Defense Force to train its pilots to the Philippines for a fee.

But Tokyo later revised the public finance law to add an exception rule for the SDF to transfer the ownership of the airplanes to Manila.

Japan also donated helicopter parts to the Philippines in 2019.

These offerings are intended to bolster the Philippines' warning and surveillance capabilities to keep China in check in the South China Sea where Beijing is militarizing islands.

In 2020, Mitsubishi Electric Corp. struck a deal with the Philippine government to export air defense systems. The move is also aimed at cultivating the Japanese defense industry.

EQUIPMENT SENT INTO WAR ZONE

But unlike previous cases, Japan is now providing equipment to a location where two countries are at war with one another.

Transfer of defense equipment and technology to countries that are "party to a conflict" is not permitted under the new three principles.

However, the principles define such countries as those "against which the United Nations Security Council is taking measures to maintain or restore international peace and security in the event of an armed attack."

The government concluded it could provide equipment to Ukraine because the term can only be applied to North Korea at the time of the Korean War and Iraq at the time of the Gulf War.

In addition, defense equipment whose export is banned under the new principles are detailed in a list attached to the Export Trade Control Order based on the Foreign Exchange and Foreign Trade Law.

In the latest case, only bulletproof vests, protective chemical masks and suits are restricted under the new principles.

As for drones, which are not applicable to the principles and are also exempt from examination, are believed to be operated by civilians in Ukraine to scout the positions of Russian forces and provide information for Ukraine troops to attack their enemies.

As for bulletproof vests and other equipment already provided to Ukraine, a senior SDF official had said that it would be impossible to gain understanding from the public if Japan were to export highly lethal weapons.

In addition, the official said that the equipment sent to Ukraine was narrowly within the limit of those the SDF can provide.

However, some Defense Ministry officials have raised concerns over the provision of drones. They said it was a form of support completely different from conventional ones and that it could contradict previous policies.

Military commentator Tetsuo Maeda expressed understanding for the provision of defense equipment, saying that it was permissible in light of the Three Principles on Transfer of Defense Equipment and Technology.

But he pointed out that drones could be used in attacks, adding, "Ukraine is clearly a party to war, and the government's interpretation is unreasonable in any way."

He continued, "After all, it is up to the government to determine how much it wants to expand its arms export. Taking this opportunity, we need to deepen discussions on what we think about weapons."
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Grey Havoc said:
Japan completes radar unit for delivery to the Philippines | The Asahi Shimbun: Breaking News, Japan News and Analysis
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Regarding that contract, from back in 2020:
In the first sale of full defense equipment under Japan's "three principles of arms transfer," approved in 2014, Mitsubishi Electric Co. will sell four air defense radar systems to the Philippines, sources said.

Mitsubishi Electric won a bid to export the improved version of the three J/FPS-3 and one J/TPS-P14 air defense systems, which are used by the Self-Defense Forces.

The former has been placed in the mountains along coastal areas in Japan to detect incoming fighter jets or missiles. The system has been used as a missile defense system against North Korea and for other purposes.

The latter can be loaded on a truck and other locations to detect incoming aircraft or helicopters.

Four export contracts have been made under the Abe administration's Three Principles on Transfer of Defense Equipment and Technology, which allows arms exports with conditions.

But the items were limited to parts, such as sensors for PAC-2 surface-to-air missiles manufactured by Mitsubishi Electric.

The Philippines government had approached the United States and other countries about purchasing air defense radar systems, sources said.

Mitsubishi Electric was notified of the selection in March. The company is expected to receive the formal order by May, for a total amount of about 10 billion yen ($90 million).

The Philippines faces the South China Sea, which is an important shipping route for Japan. But in recent years, China's military has increased its stronghold and influence over the region.

The National Security Council has apparently approved the export of an air defense radar system to the Philippines as a deterrent against China.

Mitsubishi Electric’s successful bid was a result of sales efforts made by the public-private partnership, sources said.

The administration of Prime Minister Shinzo Abe in April 2014 adopted the three principles at a Cabinet meeting, replacing the Three Principles on Arms Exports, which had banned the export of arms.

The new principles allow arms exports as long as such a transfer is deemed “contributing to international peace” and “benefiting national security” among other conditions.

With the change, the administration aims to work with other countries to develop arms to enhance national security, reduce defense costs and strengthen the Japanese defense industry.

Japan has signed an agreement to make that possible with nine countries including the United States, Britain and Australia.
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japannews.yomiuri.co.jp

Govt Expert Panel’s Report Recommends Exporting Defense Equipment ‘Without Restrictions’

<p>An expert panel of the Defense Ministry suggested in a report finalized Friday that exporting defense equipment without restrictions to friendly countries facing external threats could be an option.</p>
japannews.yomiuri.co.jp japannews.yomiuri.co.jp

The Yomiuri Shimbun

17:35 JST, September 19, 2025

An expert panel of the Defense Ministry suggested in a report finalized Friday that exporting defense equipment without restrictions to friendly countries facing external threats could be an option.

The report, which outlines recommendations for enhancing defense capabilities, was submitted to Defense Minister Gen Nakatani on the same day.

The report emphasized that efforts to strengthen deterrence “should be reviewed habitually” in light of changing international circumstances. It also called for unrestricted exports of defense equipment to friendly nations under threat from other nations, flexible revisions to the nation’s Defense Buildup Program and the introduction of new strategic equipment.

The report cited ongoing Russian aggression against Ukraine, military cooperation between Russia and North Korea and Chinese military pressure in the area around Taiwan, noting, “Competition among nations is growing increasingly complex, and domination by force is becoming rampant.” It mentioned that advances in technology “have already significantly changed how battles are fought on the battlefield.”

It added, “Further reinforcement of deterrence and response capabilities is a time-sensitive matter.”

The report also suggested moving up the schedule for revising the Defense Buildup Program, which stipulates equipment procurement plans for fiscal 2023-2027. “Consideration should be given to mechanisms to increase the flexibility of things such as the target periods and the cycle on which [these plans] are formulated and revised,” it stated.

Japan aims to increase its security-related expenditures to an amount equivalent to 2% of the nation’s gross domestic product. The report argued that this goal is “important as a demonstration of national will” and pointed to the necessity of securing financial resources, stating, “[The government] should explain about the measures that are needed to further enhance defense capabilities, giving clear reasons.” However, they did not lay out any specific numerical targets.

The report advised that equipment exports “should be actively promoted” as they “lead to growth through the expansion of the defense industry’s sales channels.”

The Implementation Guidelines for Japan’s Three Principles on Transfer of Defense Equipment and Technology stipulate that finished defense equipment may be exported for use in only five types of activities — rescue, transport, warning, surveillance and minesweeping. The report suggested that “an approach of not imposing restrictions on exports” to countries friendly with Japan that face threats from other nations is “one option.”

The report cited several potential concrete measures to strengthen deterrence, including introducing unmanned equipment, submarines equipped with vertical launching systems (VLS) for missiles and equipment contributing to building a defense posture on the Pacific side.

It suggested exploring the use of “next-generation power” for long-range, long-duration operations by VLS-equipped submarines, envisioning using solid-state batteries and nuclear power, which have longer lifespans than current mainstream lithium-ion batteries.

As many private companies are now withdrawing from the defense sector, the report proposed introducing state-owned defense factories. It also suggested promoting consolidation among small and medium-sized enterprises with weak management foundations as a way to strengthen the country’s defense industrial base.

The 17-member expert panel was established in February 2024 chaired by Sadayuki Sakakibara, former chairman of Keidanren (Japan Business Federation), along with University of Tokyo Prof. Emeritus Shinichi Kitaoka and The Yomiuri Shimbun Holdings President Toshikazu Yamaguchi.
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With a Japan-U.S. summit set for Oct. 28, the government aims to clearly signal Japan’s commitment to raising its defense budget to 2 percent and beyond, which would be music to the ears of U.S. President Donald Trump who has griped that America’s allies are not paying their way.

On arms exports, the agreement goes so far as to pledge the abolition of the current five-category restriction during the ordinary Diet session in 2026.

The government and the LDP have long sought to scrap the restriction, which limits the purposes for which exported defense equipment can be used to “rescue, transportation, vigilance, surveillance and minesweeping.”

But Komeito, which brands itself as the “party of peace,” was always leery, leading the LDP to repeatedly shelve the matter in consultations with its coalition partner.

Additionally, the agreement calls for promoting the introduction of submarines powered by “next-generation propulsion systems,” such as nuclear technology.

The issue refers to submarines equipped with vertical launching systems for missiles that would provide counterstrike capabilities, which are currently under research by the Maritime Self-Defense Force.

This aligns with recommendations in a report compiled in September by a Defense Ministry expert panel on ways for Japan to fundamentally reinforce its defense capabilities.

All these foreign and security policies were sought by Nippon Ishin during coalition negotiations, and they also resonate with Takaichi’s hawkish views.

The two parties even considered explicitly stating “nuclear-powered submarines” at Nippon Ishin’s request at one point during the negotiations, according to a government source.

“This is practically a wholesale acceptance of Nippon Ishin’s demands,” the source said.
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