Export Control in Global Defense

Efforts to address the challenges of acquiring new generations of defense capabilities need to balance national industrial and technological capacity with available budgets and options for imported systems.  Most major countries want to develop and produce equipment essential to national security, but increasingly need to ensure compatibility with allied and partner countries.  As systems become more capable unit production has often reduced, making it prohibitively expensive to maintain capability across the whole range of defense and security.

Exports are a way to keep nationally produced equipment affordable.  Demand for capable and affordable defense equipment is both growing and very competitive.  There are substantial challenges to exporting defense equipment.  Governments need to ensure that exports align with their national security interests and that equipment will be responsibly used – assurances that their equipment will not be transferred to other countries without prior agreement.

To engage effectively in overseas markets defense companies need to understand local requirements and identify those areas in which they can effectively compete.  As defense requirements can take many years to emerge, companies need to be seen as relevant, with their capabilities understood, before competitions start.  They also need to have reasonable expectation that their government will provide export approval when needed. 

In 2014, Japan adjusted its long-standing policy on export of defense equipment through the Three Principles on Defense Equipment and Technology Transfer; these specify conditions under which the Japanese government may approve defense equipment exports.  Whilst the change was welcomed by Japan’s partners, there have been few export approvals.  Japan’s offer of submarines to Australia in 2015 was not successful; as has also been the case with efforts to market the P-1 maritime patrol, C-2 air transport and US-2 amphibious aircraft.  Exports of defense systems to Southeast Asia have so far been government-brokered transfers of surplus defense equipment.

What are the difficulties that Japan has faced in trying to enter global defense markets?  Are there regulatory or legislative changes that could help Japan become more competitive?  How can companies market capabilities whilst retaining controls to reassure the Japanese public that such efforts are responsibly managed?  Can Japanese companies be allowed to invest in overseas defense markets?  Will Japan welcome overseas defense companies to join its own defense market, as has proven necessary to encourage more cost-effective acquisition in many other countries?

This webinar will explore these issues with three outstanding experts of record.