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INTERNATIONAL TRADE, TECHNOLOGY TRANSFER, NATIONAL SECURITY, AND 98 DIPLOMACY 1966), 749 Mitsubishi MU2 series turboprops have been sold. The Mitsubishi Diamond, a small turbojet, appeared in 1982. With the sale of nine aircraft, it obtained a 3 percent market penetration. It is likely, however, that the technology, materials, machine tools, and labor skills transferred through Japanese-American coproduction of military aircraft have strengthened the position of Japanese firms as subcontractors and/or vendors in future commercial jet transport projects. It appears that this is the policy being pursued by Japan. The real and projected impact of coproduction with Japan may be both to weaken the subcontractor infrastructure of the U.S. aircraft industry and to provide the base for future Japanese aircraft. It should be understood, however, that Japan has paid for this technology transfer through higher costs than would have been incurred in bringing aircraft from the United States. For example, the first lot of 90 F-15Js produced by Japan cost $45 million each. If purchased in the U.S. the aircraft would have been priced at $25 million each. Thus, it cost Japan $1.8 billion extra to produce the aircraft in Japan and to acquire associated skills. It is reasonable to assume that one objective in incurring the cost was to help develop an indigenous technology base. Interaction with Foreign Policy Exports of aircraft, as well as of other high-technology products, are controlled by the U.S. government, sometimes with the intent of influencing both the foreign and the domestic policies of other countries and of limiting the flow of advanced technology to Communist bloc countries. As a result, U.S. civil aircraft export controls are sometimes exercised in a manner that removes U.S. aircraft products from competition in some foreign markets. Other countries do the same, but the large U.S. share of aircraft exports makes U.S. activities more prominent. This situation obviously favors foreign competitors whose governments view security and trade relationships differently. It has important long-term implications; consequences need to be weighed carefully. This situation can have the following impacts: it can contribute to the growth and power of competitors and even foster the creation of competitors whose governments do not agree with or wish to support U.S. policy, or view commerce as independent of foreign policy; it can contribute to the image of U.S. companies as unreliable sources of supply, not only for initial purchases but perhaps more importantly, for continuing product support (as in the case of French efforts to "de-Americanize" the Airbus); it can also permanently remove some markets from U.S. participation by allowing foreign competitors to develop "ground
