Although Japanese government and industry would prefer indigenous programs or international collaboration that results in a one-way, inward technology flow, a future of constrained defense budgets could make them amenable to more reciprocal U.S.-Japan cooperation. This is particularly true if technology transfer to the United States is structured into collaboration as a necessary element of doing business.

The United States has a continuing interest in furnishing Japan with major weapons systems and in certain aspects of the Japanese defense budget, such as host-nation support. U.S. defense contractors and suppliers are contracting, consolidating, or diversifying in the current climate of declining defense budgets. In the past, export sales and licensed production programs with allies have contributed to maintaining the U.S. defense industrial base by spreading fixed costs and providing additional income for U.S. contractors. Japan is likely to remain a major market for advanced weapons systems. Although potential sales to Japan or other allies should not be a primary driver of what systems and technologies are developed in the United States, prudently managed sales to Japan and other allies can continue to bring benefits to the United States, as they have in the past.

Although Japan has few dedicated defense technologies of interest to the United States, Japanese capabilities are sufficient to allow for more reciprocal technological relationships in collaborative defense programs. Japanese commercial technologies could make a significant contribution to U.S. defense systems, and this potential contribution will rise in the future.

In the judgement of the Defense Task Force, the time has passed when defense cooperation featuring primarily one-way transfers of technology from the United States to Japan could be justified by U.S. security interests. Therefore, to the extent that Japan desires the transfer of U.S. defense technologies, the United States has leverage that can be used to structure more reciprocal relationships.

The United States needs to manage dependencies on foreign sources of critical equipment and components for defense systems. Although the negative trend of increasing dependence in areas such as electronics appears to have abated, at least for the time being, dependence on foreign sources and technologies is a fact of life. Japan is likely to continue to be a major source of these dependencies.

GENERAL PATTERNS OF INTERACTION AND IMPLICATIONS FOR U.S. INTERESTS

From its study, the Defense Task Force believes that there are several possible scenarios for future patterns of U.S.-Japan cooperation in defense and dual-use technology. They are described below in order of their desirability in terms of U.S. interests.

  • In terms of U.S. interests, the most preferred scenario for the future is expanded U.S.-Japan defense technology collaboration featuring reciprocal technology flows within the context of a strengthened U.S.-Japan alliance. If both governments and industries make a focused, long-term effort to overcome the barriers to cooperation described in this report and summarized below, expanded reciprocal defense technology interaction that helps to meet U.S. and mutual defense needs in the emerging environment is achievable. An enhanced, reciprocal U.S.-Japan partnership in technology to meet defense and security needs could feature cooperation in such areas as upgrading and improving existing systems, adapting commercial technologies to defense



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