Japan and the United States considered jointly upgrading the Aegis naval air-defense system in fiscal 2010 but abandoned the idea later that year after Washington objected to a demand from Tokyo, a source in the Japanese government said Sunday.
The setback in the defense cooperation plan with the United States, Japan's closest ally, likely contributed to Tokyo's decision to review its self-imposed restrictions on arms exports.
The government of Prime Minister Shinzo Abe is reviewing the arms export curbs with an eye to bolstering security ties with Japan's allies, signaling a major change to its long-held "three principles" on arms exports.
Tokyo adopted the three principles in 1967 to block the transfer of weapons to communist states, countries under U.N. embargoes and those embroiled in international conflicts. The rules became a virtual blanket ban in 1976.
Although the Aegis upgrade project suggested a relatively limited technological contribution from Japan, Japanese officials demanded that Washington seek Tokyo's consent before providing jointly developed technologies to other countries, the source said.
The U.S. side rejected the request, the source said. The discussions were then dropped, and the fiscal 2010 budget earmarked for the Aegis plan was left unspent, the source said.
Warships with the Aegis system can defend against multiple airborne targets using sophisticated radar and are also used by South Korea, Spain and Norway.
The joint project centered on parts that can be converted for commercial applications in an effort to cut manufacturing costs. If Tokyo and Washington had agreed to cooperate, Lockheed Martin Corp. and Mitsubishi Heavy Industries Ltd. would have led the project through fiscal 2015, which ends on March 2016, the source said.