Commentary / Japan | SENTAKU MAGAZINE

Abe's failed submarine bid

Prime Minister Shinzo Abe’s trumpeted plan to export conventionally powered submarines to Australia suddenly came to an unsuccessful end when Canberra decided to place the order with a French maker.

This was not merely a transitory case of Japan failing to sell a piece of defense-related equipment abroad. Abe had treated the submarine export deal as a top priority in his attempts both to counter China’s maritime ambitions and to push his economic growth strategy.

It is no exaggeration to say that Abe stumbled in a touchstone test of his foreign policy. There are two essential points behind this failure. One was Abe’s obsession with exporting submarines to Australia, far removed from strategic diplomatic thinking, and the other was the attitudes of government agencies and private enterprises characterized by their blindly following Abe’s single-minded pursuit.

Japan’s claim that its submarines have “the world’s highest standards in performance characteristics and technologies” was shaken and the country will suffer greatly as a result.

In his speech before the Australian Parliament in July 2014, Abe declared that the two countries had overcome past differences and that the time had come to use their mutual trust to promote cooperation in the field of security. Japan and Australia, he added, had now shed the skin of history to build a new and special relationship.

Shortly afterward, he and his Australian counterpart, Tony Abbott, signed an agreement on transferring defense equipment and technologies. An ultimate aim of the accord was to advance cooperation over the technologies used in the Soryu-class submarines built by Mitsubishi Heavy Industries and Kawasaki Heavy Industries, and to eventually export the subs to Australia. The Defense Ministry was quite confident that Japan would win this contract.

But things began to change when France and Germany entered the fray. Japan’s hope for technological cooperation or export of completed submarines to Australia faced all-out counterattacks from the two European nations, which involved both the government and private sectors. Both countries offered to construct submarines in South Australia and create employment opportunities.

Abbott came to have no other choice but to mention the issues of local production and employment, and moving in this direction became decisive when he was succeeded by Malcolm Turnbull last September.

Strong bonds united Abe and Abbott because of their tough stance against China. In fact, rumors arose in Australia that Abbott gave Abe a secret promise that the submarine contract would be awarded to Japan. But with Abbott’s resignation, the situation completely changed. The strong bonds between Abe and Abbott backfired partly because of Canberra’s consideration of its relations with Beijing.

Because Abbott was not very popular even within his Liberal Party, Japan should have taken a step designed to cope with a possible leadership change in the Australian ruling party, such as expediting Australia’s screening process. Japan relied simply on the close ties between Abe and Abbott and their common stands against China. Nobody in Tokyo took a multifaceted approach and nobody dared to provide Abe with a dissenting view on the submarine deal’s prospects.

According to a local press report, Australia selected the French offer because Canberra has an eye on eventually possessing nuclear submarines. This speculation was dismissed by a former high-ranking officer of the Maritime Self-Defense Force, who said that it is impossible that Australia, which is incapable of building conventionally powered subs on its own, would introduce nuclear powered subs. That, he said, would be totally unrealistic for a country that doesn’t even have a nuclear power plant.

Another Defense Ministry source said that the press report in question was nothing but an excuse for Australia not selecting a Japanese or German maker.

While the axis of Australia’s security policy is its alliance with the United States, the country, which is a large exporter of natural resources, maintains a mutually dependent relationship with China. An Australian government insider said that Abbott lost his popularity because of his anti-China stance. It was only logical, he added, that the submarine contract had to go to either France or Germany not only to create local employment opportunities but also to avoid the risk of exacerbating friction with Beijing through strengthening of the trilateral cooperation among Australia, Japan and the U.S.

As the focal point of the submarine issue shifted from technological cooperation to exporting completed vessels and further to local construction, Abe attempted to recover from a setback by telling Turnbull last November that both the public and private sectors of Japan were seriously studying local manufacturing of submarines in Australia.

Ironically, however, this only served to bolster the position of France, which had long offered to create a large number of jobs in Australia.

Even though Japan is eager to make a full entry into the defense equipment market, its behavior must have looked quite puerile in the eyes of France and Germany, which have long been known as “weapons merchants.”

Japan claimed to be able to offer outstanding submarine performance and technologies. But it did not have marketing know-how or strategy, or the ability to analyze a potential importer’s political and economic situations, not to mention its public opinion.

A fact not widely known is that Australia sought to obtain submarine-related technologies from Japan when Yoshihiko Noda headed the administration of the Democratic Party of Japan. In December 2011, his government relaxed the weapons export ban so as to enable Japan to engage in international cooperation to develop and produce fighter planes and other weapons.

In June 2012, at the Asian Security Summit in Singapore, known as the IISS Shangri-La Dialogue, Australian Defense Minister Stephen Smith met with Vice Defense Minister Shu Watanabe and asked Japan to provide submarine-related technologies. Tokyo declined, however, out of fear that these technologies might be leaked to other nations.

The Australian military wanted to get its hands on Japan’s submarine technologies. But its wish was dashed by public opinion in Australia favoring creation of domestic employment opportunities, and the ruling party’s pandering to this sentiment. The Self-Defense Forces were apprehensive about the technologies leaking to other countries. This worry was ignored by Abe, who was obsessed with the idea of exporting Japanese submarines to Australia, and the Foreign Ministry, which attached importance to countering China.

Submarines require such sophisticated technologies that they serve as a barometer of a nation’s strength. Both Mitsubishi and Kawasaki possess the highest levels of submarine technologies by global standards. But due to the peculiar nature of the technologies, the number of their engineers specializing in them is limited. Thus the companies do not have enough human resources to cope with transferring their highly specialized know-how to other countries.

Businesses have to make a profit. Doing business without regard to profitability in order to please Abe is to confuse the order of things. That is why the Japanese makers started becoming hesitant about the submarine deal as the French and German firms began cutting prices.

Even so, the Abe administration continued to harbor the faint hope that the U.S. will help Japan with its bid because an American combat system will be installed on submarines used by Australia. This proved to be mere fantasy. Rather, Japan’s failure in the bid pleased China as a sign that the otherwise solid Japan-U.S. alliance had been shaken.

“Everything went wrong,” said a government insider. What happened is a kabuki play in which people concerned shook their fists to the pipe played by Abe. Although Abe has lifted the weapons exports ban, Japan is far behind other weapons exporting nations, which are experienced veterans in the business, as proven by the case with Australia. China is also very hard to deal with.

As long as Japan relies on the fictitious guise of unified collaboration between the private and public sectors, there is no guarantee that it will not repeat this failure.

This is an abridged translation of an article from the June issue of Sentaku, a monthly magazine covering political, social and economic scenes.