Japan’s New Arms Export Policy: An Unfinished Breakthrough

On December 22, 2023, the cabinet of Prime Minister Kishida Fumio loosened restrictions on Japanese arms exports with a revision of the 2014 Three Principles on Transfer of Defense Equipment and Technology and their implementation guidelines.

Originally adopted in 1967, the Three Principles on Arms Exports (as they were known then) prohibited the transfer of arms to communist bloc countries, countries under UN arms embargoes, and countries involved in or likely to be involved in international conflicts. In 1976, the Japanese government banned arms exports across the board, although an exception was made for the transfer of military technologies to the United States. The 2014 Three Principles on Defense Equipment Transfers and guidelines for their implementation, adopted by the government of Prime Minister Abe Shinzō, extended the scope of transfers exempted from the ban. The revisions of December 22, 2023, have opened the door to the export of lethal weapons to the United States and beyond.

Concrete Policy Changes

The specific policy changes introduced by the revision are contained in the amended implementation guidelines. The key changes are as follows.

1. Defense equipment manufactured in Japan under license from foreign defense firms, including finished products, can now be exported to the licensing country and from there to third countries.
2. Finished defense equipment, including equipment armed with lethal weapons, can now be exported to other countries providing it falls under one of five designated categories: rescue, transport, warning, surveillance, and minesweeping.
3. Certain types of nonlethal defense equipment can now be exported to countries that are victims of illegal aggression, expanding the exemption previously applied only to Ukraine.
4. Components needed for repair and maintenance of equipment co-developed with other countries can be exported from those partners to third countries. (Thus far, no decision has been reached on re-export of finished products.)

The most important of these changes is the one pertaining to the reverse export of defense equipment manufactured in Japan under license from foreign companies. Where the previous guidelines allowed only the reverse export of US-licensed components, the new guidelines allow the transfer of finished products as well as components to the licensing country. The Japanese government immediately made use of the revision to grant Washington’s request for Patriot Advanced Capability-3 (PAC-3) surface-to-air guided missiles. US inventories of interceptor missiles had been depleted as a result of American military aid to Ukraine.

Purpose and Implications

The revised principles and guidelines follow the recommendations submitted by a “working team” composed of lawmakers from the ruling Liberal Democratic Party and its junior coalition partner Kōmeitō. Tasked with forging a bipartisan consensus on revisions proposed by the government, the team submitted its recommendations on December 13 without reaching agreement on certain items (such as allowing the transfer of co-developed products to third countries). As a result, those items have been omitted from the revised principles and guidelines pending further deliberation. In other words, the current version of the Three Principles and guidelines should be seen as part of an ongoing process aimed at a more sweeping policy change.

In the introduction to its report, the LDP-Kōmeitō working team characterized the transfer of defense equipment overseas as a “key policy instrument” for the creation of “a desirable security environment for Japan” and for “provision of assistance to countries that are subject to aggression in violation of international law, use of force, or threat of force.” The revised Three Principles incorporates the same wording.

With regard to the purpose of defense equipment transfer, the revised statement has retained the three objectives articulated in the 2014 document: contributing more actively to the maintenance of international peace and security; strengthening security and defense cooperation with the United States and other like-minded countries; and maintaining and enhancing Japan’s defense industrial and technology base in order to boost the nation’s defense capability. In addition, the new document introduces the idea of “strengthening regional deterrence,” which did not appear in the 2014 document. How the transfer of conventional weaponry is supposed to contribute to regional deterrence is not entirely clear, but when juxtaposed with the policy goal of “creating a desirable security environment,” this addition reinforces the impression that Japan has embarked decisively on the path of mobilizing defense equipment transfers for purposes of national security.

Like previous versions, the revised Three Principles emphasizes Japan’s consistent postwar record as a peace-loving nation and its determination to adhere to that path. While the latest revision supports the active transfer of defense equipment as an instrument of security policy, restraint will doubtless remain the rule in arms exports. After all, even after the relaxation of restrictions in 2014, caution prevailed; in the end, the only significant outcomes were a decision to engage in joint development and transfer of components with the United States and limited transfer of nonlethal arms to certain Southeast Asian countries. (Indeed, this was a bitter disappointment to those who had hailed the 2014 revision as a bold shift in security policy.)

But the security environment has changed dramatically over the past decade. Moreover, in just the past few years, the war in Ukraine (which precipitated an amendment to the implementation guidelines to enable Japan to supply aid), the 2022 revision of Japan’s National Defense Strategy, and ongoing changes in the international arms ecosystem have highlighted the need for Japan to update the principles and guidelines in order to pursue a rational and coherent security policy.

Toward an International Supply Network

To begin with, the war in Ukraine drove home the need for more extensive international coordination of military assistance and defense transfers among like-minded countries.

One basic approach to the challenge of ensuring adequate supplies of weapons and ammunition in wartime is to build up stockpiles during peacetime. The problem with this is that there is no guarantee a nation’s stockpiles will prove adequate in the event of a protracted war. And if war is avoided, the unused arms and ammunition will eventually end up on the scrap heap.

Another alternative is to maintain the capacity to quickly ramp up domestic production in the event of a contingency. But this is an expensive option, and in a defense industry that operates on a commercial basis, private corporations have little economic incentive to maintain a manufacturing capacity they may never be called on to use.

In light of these challenges, it is now widely agreed that the most efficient approach is to distribute the burden by building an international network for the transfer of arms among allies and like-minded countries. Under such a system, a country that has discontinued manufacture of an older generation of weapon might rely on supplies from a country that has continued producing that weapon under license. Moreover, from the standpoint of wartime logistics, it makes sense to acquire the arms needed in a given area from the nearest production base.

As mentioned above, upon adoption of the new Three Principles, the Japanese government immediately announced its decision to export Patriot missiles to the United States at Washington’s request. Underlying this move is the changing strategy of the US Army and Marine Corps as they strengthen interoperational capability with allies and friends in the Indo-Pacific. The new strategy assumes that combat operations will be launched from within the range of enemy missiles, and in those circumstances, operational efficiency can best be achieved by tapping regional sources for the deployed troops’ means of defense. It is only natural for Japan to provide such support for US forces acting to preserve the peace and security of the region, in accordance with the Japan-US security arrangements and Washington’s Pacific Deterrence Initiative.

Fortifying the Industrial Base

A revision of the Three Principles was already anticipated in Japan’s revised National Defense Strategy, adopted in December 2022. Describing the defense industrial base and technology base as integral to Japan’s defense capability, the NDS states that “Japan will work to build the strong and sustainable defense industry needed for a new style of fighting, minimize various risks, and expand sales channels.” It stresses that the transfer of defense equipment should adhere to the policy objectives outlined in the Three Principles, while recommending a review of that document and accompanying guidelines.

Meanwhile, citing the need to strengthen Japan’s technology base, the NDS promises to “take active measures to hasten the utilization of [defense] companies’ technology and research, as well as technologies held by non-defense industries that can be effectively incorporated in defense equipment.” This can be read as a policy of making full use of Japan’s technology base for the development and production of defense equipment.

While emphasizing the need to strengthen Japan’s domestic defense industry and technology base, the NDS also stresses the importance of cooperation and collaboration with allies and like-minded countries and the need to “actively leverage civilian technologies from start-up companies and from domestic research and academic institutions.” In accordance with these changes in the nation’s defense strategy, the revised guidelines seek to facilitate the transfer of defense equipment and technology, broadly defined, between Japan and its security partners worldwide.

The revision of the Three Principles and implementation guidelines also dovetails with America’s first National Defense Industrial Strategy, released by the Department of Defense in January 2024. The new strategy calls attention to the limited supply capacity of the domestic defense industry and highlights the need for extensive cooperation to make maximum use of the industrial assets of US allies and partners. (The change in thinking also reflects the fact that the United States has long since ceased to hold a monopoly on the manufacturing technology needed to produce advanced weaponry.)

Accordingly, for the first time, Japan’s guidelines for the transfer of defense equipment permit the export of licensed products to licensing countries other than the United States. They also permit the provision of repair and similar services to other security partners, in recognition of the growing likelihood that they will be deploying ships and aircraft in the region and participating in joint exercises in the area around Japan.

Unresolved Issues

As noted above, the new Three Principles should be viewed as a work in progress; it remains for the coalition partners to come to terms on the issues that the working team was unable to resolve. At the heart of the debate is the relevance of continuing curbs on arms exports in the context of the government’s policy of utilizing defense equipment transfers as a tool of security policy in general and regional deterrence in particular.

A key matter currently under discussion is whether to allow equipment co-developed with other countries to be re-exported to countries outside that partnership. The outcome of that debate has major implications for the Global Combat Air Programme, a multinational initiative led by Japan, Britain, and Italy to jointly develop a sixth-generation stealth fighter.

There is no denying that many in Japan recoil at the possibility of people being killed by Japanese-made weapons of war. We should not be surprised, therefore, that some are opposed to a policy that could allow equipment co-developed under international frameworks like GCAP to be re-exported and used for purposes other than those intended. This opposition long pushed back decisions on the issues of whether to allow the transfer of weapons outside the five specified categories and whether to permit Japan’s development partners to re-export the developed products in accordance with their own policies. However, having opted to take part in joint arms development and production under GCAP, Japan needs to adapt its policies to the new realities of the international defense ecosystem. [On March 26, the Japanese cabinet approved the easing of export restrictions to clear the way for Japan’s participation in the project.—Ed.]

The new Three Principles also prescribes stricter conditions and procedures for the approval of exports that are not expressly prohibited under the guidelines. This focus on process reinforces the impression that Japan is laying the institutional foundations for a more proactive arms-export policy, based on the political decision to utilize defense equipment transfers as an instrument of security policy.

The revised Three Principles and guidelines have clarified the general aims of defense equipment transfer and the process for approving such transfers. But there is still a need to formulate clear policies on the use of defense exports in support of specific security objectives. Going forward, there will be growing pressure on the government and the two ruling parties to articulate their policies on defense exports in the context of a coherent vision for national security.

(Originally published in Japanese on March 15, 2024. Banner photo: The Japan Air Self-Defense Force’s PAC-3 MSE surface-to-air guided missile system, manufactured in Japan under license from Lockheed Martin, as photographed during deployment training at the National Defense Academy in Yokosuka, Kanagawa Prefecture, October 2021. © Jiji.)