Japan Mulls Exports to U.S. of ‘Licensed Defense Equipment’

The Yomiuri Shimbun

12:12 JST, November 12, 2023

The government and the ruling parties intend to approve, in principle, exports to the United States of “licensed defense equipment” manufactured by Japanese firms and for which patent fees have been paid to U.S. companies, according to sources.

The arrangement, which is intended to relax the rules related to defense equipment exports, will cover such items as completed Patriot Advanced Capability-2 (PAC-2) surface-to-air missile interceptors held by the Air Self-Defense Force. The government and ruling parties plan to carefully determine which equipment can be exported based on their policies.

The government and the ruling parties are considering working out a concrete system design, including measures to address appropriate post-export management, and reviewing the operational guidelines of the Three Principles on Transfer of Defense Equipment and Technology, which restrict the nation’s defense equipment exports.

On Friday, a working team of the Liberal Democratic Party and Komeito — set up to discuss measures aimed at easing defense equipment exports — held a meeting in the Diet to hear the government’s view on issues surrounding licensed products.

The government explained that if the United States — an ally of Japan — requests the export of such equipment, there is a possibility that “Japan’s failure to meet the requests could have a negative impact on Tokyo-Washington relations.”

According to ruling party sources, the working team generally agreed on the need to allow exports to the United States, in principle. The team now plans to hasten discussions on the post-export management conditions to be imposed on the United States.

Komeito has expressed caution regarding a total lifting of the ban on licensed product exports, but is likely to approve the move as long as destinations are limited to the United States, on the grounds that the exports are “directly related to Japan’s security environment.” Whether the United States will be allowed to provide such products to other countries remains a matter for future debate.

The operational guidelines of the three principles strictly restrict exports of licensed products. Parts produced under U.S. licenses can be exported to the United States and third countries, but finished products cannot. Meanwhile, neither parts nor finished products made under licenses of countries other than the U.S. can be exported. In the past, exports have been limited to parts for PAC-2 missiles, among other items.

As U.S. support for Ukraine becomes more protracted, Washington is looking to Tokyo to help address the increasingly serious shortage of arms and ammunition.

The export of licensed products would improve the deterrence of the Japan-U.S. alliance, while providing indirect support for Ukraine.

With possible crises in mind, including a contingency in Taiwan, an ex-defense minister said there are growing concerns within the government and the LDP that “if Japan were to call upon the United States for help, Washington would find it hard to comply if Tokyo had provided virtually no assistance.”