Japan's recent failure to clinch a deal to sell submarines to Australia
was a major disappointment for the country. Julian Ryall reports from
Tokyo about the impact of the setback on the nation's defense industry.
The announcement at the end of April that Canberra had chosen to spend
A$50 billion ($38 billion) on submarines made by French contractor DCNS
clearly caught the Japanese government by surprise, understandable given
that ministers and the media had expressed absolute certainty that the
Japanese bid, based on its Soryu class of vessels, held an
"insurmountable lead" over the rival proposals.
The depth of that disappointment was voiced by Gen Nakatani, the
Japanese defense minister, who told reporters in Tokyo, "I want to seek
an explanation of why [the Japanese bid] was not chosen and have the
findings reflected [in future export proposals]."
Much of the blame for the Japanese bid's failure has been directed
toward the apparent change of heart in Canberra, where Malcolm Turnbull
went back on the supposed "gentlemen's agreement" that Japanese Prime
Minister Shinzo Abe believed he had with Tony Abbott - who stepped down
as Australian leader in September 2015 - to purchase the Japanese
vessels.
Emphasis on jobs
Turnbull placed more emphasis on ensuring that jobs in Australian
shipyards are safeguarded - particularly given that this is an election
year - Japanese media reported, while there are also suggestions that
Canberra came under pressure from China. Beijing is one of Australia's
most important trading partners in a whole host of sectors and China has
no desire to see Tokyo and Canberra forging closer security ties.
But blame for the missed opportunity must also be laid at the door of
the Japanese government and the companies that were bidding for the
project, both for overconfidence that the deal was as good as signed and
for failing to go the extra mile when it was clear that the French and
German bids were gaining traction.
"The defense export sector is an important one to the Abe administration
and he sees it as a way to exploit Japan's technological knowhow and
give the economy a boost," said Stephen Nagy, an associate professor in
the department of politics and international relations at Tokyo's
International Christian University.
"But this setback demonstrates that Japan needs to improve its sales
pitch when it is bidding for major international contracts like this,"
he said. "Even if they have the best technology and products, it is
possible that Japan overestimated the strength of its relationship with
Australia."
Robert Dujarric, director of the Institute of Contemporary Asian Studies
at the Tokyo campus of Temple University, says Japanese companies faced
a number of disadvantages in the bidding process. But they can learn
from the experience, he added.
Not tested in battle
"Japan does not have systems that are battle tested, a legacy of more
than 70 years of peace and the self-imposed rule on not exporting
weapons systems, which may have harmed their bid," he told DW.
"There has been a limited market for Japanese warships and military
aircraft - their own - in those seven decades, while Japan's defense
attaches overseas are not trained in selling Japanese defense
equipment," he pointed out.
There is also a degree of reluctance on the part of the country's major
defense makers - companies such as Mitsubishi Heavy Industries, who bid
for the Australian submarines - to promote the military side of what
they do.
"Mitsubishi Heavy would be much happier of the Japanese public thought
of it as a maker of civilian passenger jets rather than as a 'merchant
of death,'" Dujarric said. "So while it's acceptable for companies in
Europe and the US to be associated with 'killing machines,' Japanese
firms would not like that label."
'Bigger fish to fry'
Still, Nagy says the failure of the Australian submarine deal will have
little impact on Japan's defense industry as there are plenty of
opportunities in the increasingly uncertain Asia-Pacific region. "In
spite of this loss, Japan has bigger fish to fry with potential deals
with India, Vietnam and the other nations of Southeast Asia," he said.
That is underlined by the deal between Tokyo and New Delhi for the sale
of long-range Shinmaywa US-2 amphibious patrol aircraft. "Japan has
already deployed some very advanced surveillance equipment, as well as
search-and-rescue vehicles, that are ready to be sold, while its first
stealth aircraft has recently had its maiden flight," Nagy noted.
"But it could be argued that building close defense sector relationships
is the most important part of these deals," he said. "These are
developing nations with a need to build up their defense capabilities as
tensions rise in the region - due to China's efforts to develop the
disputed islands of the South China Sea.
"So if Japan provides defense systems to a number of nations in the
region, they will keep coming back to Japan for upgrades and newer
versions as that is cheaper than buying entirely new systems," he said.
As it has done successfully in other industrial sectors, Japan appears
to be playing the long game with its defense deals, although it will not
be in a position to challenge the world's largest arms exporters for
many years to come.
