Maximizing U.S. Interests: Conclusions and Policy Recommendations 1
Importance and Context of the U.S.-Japan Alliance
A strong U.S.-Japan security alliance continues to serve the fundamental interests of the United States and Japan. The alliance contributes to advancing U.S. interests in the Asia-Pacific region and the world, such as ensuring stability in the region and preventing the rise of a hegemonic power. For Japan maintaining its alliance with the United States is a vital interest because it provides a strategic umbrella, substitutes for a much more expensive independent defense capability, and facilitates friendly relations with its Asian neighbors. The United States continues to have a great deal of leverage in the relationship, which can and should be used to advance U.S. technological and other interests.
The Role of Science and Technology
Science and technology will continue to play an important role in the U.S.-Japan security relationship, but this role will be different than it has been in the past. The United States has a continuing interest in furnishing Japan with major weapons systems and in aspects of the Japanese defense budget, such as host-nation support. However, the Defense Task Force believes that 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. In order for U.S.-Japan cooperation to advance U.S. interests in the future, it must feature greatly expanded Japanese technological contributions to meeting U.S. and common defense needs.
Japanese Defense and Technological Needs
The Defense Task Force believes that Japan’s government and industry will continue to seek access to foreign technological capabilities to support its defense needs; will continue to maximize the commercial benefits of defense technology and manufacturing activities, including international collaboration; and will continue focused efforts to upgrade international competitiveness in areas of defense-commercial spinoff such as commercial aircraft, space (both launch and satellites), and applications of advanced computing and electronics.
The purpose of this chapter is to present the conclusions and recommendations in a concise way. Further discussion of the reasoning behind the conclusions and recommendations, including consideration of alternative approaches considered by the Defense Task Force, is provided in Chapter 6. The Executive Summary presents the highlights of the conclusions and recommendations within the context of the entire study.
U.S. Interests in Japanese Technology and Reciprocity
The Technology-for-Technology (TFT) initiative that has been pursued by the U.S. Department of Defense (DoD) articulates an important principle: no significant transfers of U.S. military technology to Japan without a reciprocal flow of Japanese technology to the United States. Japan has had only limited indigenous capabilities in dedicated defense technology. Japanese technologies, particularly commercial technologies, could make a significant contribution to U.S. defense systems, and this potential contribution will rise in the future. However, a number of barriers prevent an optimal flow. Even though an evenly balanced flow is perhaps not possible in the foreseeable future, greater reciprocity must be pursued. A persistent long-term effort will be required to build a more balanced U.S.-Japan technology relationship.
Results of Past Efforts
Despite several U.S.-Japan agreements and DoD initiatives over the past 15 years, transfer of both military and commercial technologies from Japan to the United States to support U.S. national security has been minimal.
Japanese Industry and Government Roles
Although some Japanese groups have expressed support for the TFT initiative, there has been no strong constituency in Japan for expanded technology transfer to the United States—in defense or commercial areas. The Defense Task Force believes that ongoing changes in the environment should lead to greater incentives for cooperation on both sides. Still, without recognition on the part of Japanese government and industry that reciprocal technology relationships will strengthen the alliance—and thereby serve Japan’s interests—results will be very difficult or impossible to come by. This could erode the alliance in the long term.
U.S. Industry and Government Roles
U.S. industry needs to be intimately involved in building overall strategy toward technology relationships with Japan and in planning U.S.-Japan collaboration in major systems. Although increased sales, rather than technology acquisition, have been the main goal of U.S. defense companies collaborating with Japanese industry, this report documents a number of specific Japanese technologies and broad areas of technical achievement of interest to U.S. industry. However, national strategy cannot be built around the specific technological needs of U.S. companies for two reasons: (1) the strongest U.S. companies can often pursue their interests by themselves, and (2) some U.S. companies may find it difficult to apply Japanese technologies developed for high-volume consumer markets to lower-volume defense applications. The larger context is that transfer and application of Japanese technologies are in the broader national security interest. Therefore, the effort to achieve greater reciprocity in this area cannot be solely industry led. U.S. government initiative and leadership will be necessary to achieve real results.
Managing Collaboration in Major Systems
A coordinated strategic approach to possible U.S.-Japan collaboration in future systems must be developed and refined by the United States prior to bilateral negotiations. The appropriate lessons need to be extracted from the FS-X experience and applied to future cooperative programs. Although industry-to-industry relationships have gone smoothly in the development phase, strains were put on the alliance during the FS-X negotiations. DoD and other responsible agencies need to ensure that this experience is not repeated.
Despite a recent resurgence by U.S. industry in electronics and several other high technology sectors vis-à-vis Japan, there is no indication that dependence on Japan for a number of critical components and production machinery has decreased significantly. Foreign sourcing, including dependence on Japan, will be a long-term fact of life. Since U.S. defense acquisition policy is moving in the direction of higher reliance on commercial technologies and components, the long-term trend of increased foreign sourcing and dependence is likely to continue and perhaps accelerate. A focused effort is needed to manage this dependence in order to ensure U.S. access to critical technologies and products.
Reducing and Eliminating Barriers to Cooperation
The Department of Defense should pursue technology reciprocity in the defense relationship with Japan as a major goal. Efforts to increase Japanese technological contributions to U.S. national security should focus on reducing the barriers on the supply and demand sides identified in this report.
The U.S. government should seek to reduce or eliminate barriers to technology flow that result from Japanese policies. Japan’s continued adherence to its arms export control principles is consistent with U.S. interests. However, specific factors in interpretation and implementation have constituted barriers to greater Japanese technological contribution to U.S. national security. The United States should seek from the Japanese government (1) a clarification of the arms export principles and a public statement to the effect that export of items embodying substantially commercial technology that undergo minor modifications for defense applications are not restricted and (2) a change to the 1983 exchange of notes stating that Japanese military technologies transferred to the United States are exempt from retransfer restrictions, with changes addressing legitimate Japanese concerns and including provisions for the payment of royalties.
The Department of Defense should develop new mechanisms for facilitating technological collaboration between U.S. and Japanese companies to address common defense needs. One promising approach would be a program to fund U.S.-Japan industry research and development (R&D) on specific enabling technologies—including the adaptation of commercial
technologies—targeted at applications in future weapons systems. This could perhaps be undertaken as an extension of the Systems and Technology Forum. This program should be jointly funded and managed by the two governments, possibly with cost sharing by U.S.-Japan industry teams, and should begin with sufficient funding to support four or five individual projects.
Integrating Enhanced Technology Cooperation and Alliance Management
The United States and Japan should initiate a comprehensive security dialogue featuring an integrated discussion of the political-military, economic, technological, and other aspects of the alliance. To maximize the benefits of this dialogue it should (1) be coordinated by special designees of the president and prime minister, (2) establish a common understanding of mutual interests for a vital U.S.-Japan security alliance appropriate to Cold War realities, including roles and missions, defense capabilities and enhanced reciprocal technology cooperation, (3) incorporate discussion of economic as well as political-military issues, and involve the agencies responsible for managing the economic relationship, and (4) include active private-sector participation on both sides.
Organizing to Maximize U.S. Interests
The Department of Defense should ensure a coordinated approach in future collaborative defense programs with Japan. The imperatives are to achieve greater continuity in U.S. policies and implementation, to achieve coordination in pursuing various U.S. interests, and to build strategies for implementation and reciprocal technology flow before bilateral negotiations are launched. One approach that might be adopted as a minimum is designating a single authority with the responsibility for coordinating strategies toward major systems in which collaboration with Japan is under discussion. In the future if the level of international collaborative activities warrants it, DoD might consider a more formal mechanism such as an International Programs Coordinating Council analogous to the Joint Requirements Oversight Council.
The Department of Defense, in cooperation with the Department of Commerce and other appropriate agencies, should continue to build capabilities to monitor and manage dependence on foreign sources of critical technologies, with the goal of ensuring U.S. access. The correct approach to managing this dependence will vary according to the situation. For example, where a high reliance on Japanese sources brings benefits without undue risks, it may make sense to pursue explicit understandings with Japanese industry and government to ensure that U.S. defense needs are met during contingencies. In other cases it might make sense to encourage Japanese sources to establish a U.S. manufacturing facility or to collaborate with U.S. companies. In cases where access to Japanese technologies cannot be ensured, steps could be taken to build a competitive U.S.-owned and -based capability.