Wednesday, February 20, 2013

Japanese Media Now Openly Talking about Japan-Australia Soryu Deal

Today the Nikkei featured an article (日) that raised once again the possibility of Japan transferring the technology underpinning the prized Soryu submarine to Australia. The article did not offer much additional detail about how the process from here is likely to unfold, although it did frame the technology transfer as part of a supposedly mutual desire to balance against Chinese naval activities. It nevertheless suggests that defense officials are still considering the plan and that the chances are good that something will come out of the process notwithstanding any domestic or international backlash. The main issue for the Japanese side likely revolves what level of information and access to provide to the Royal Australian Navy.
As for the back story, the process appeared to be initiated in May 2012 when a senior Australian official inspected the Soryu at the MSDF’s Kure Base in Hiroshima Prefecture. Then in June 2012 the issue was further discussed during a visit to Australia by Admiral Masahiko Sugimoto. Soon after that in July 2012 Rear-Admiral Rowan Moffitt, head of the Future Submarine Program, and Dr Alexander Zelinsky, the Chief Defense Scientist, traveled to Japan to further inspect the Soryu. Then in September 2012 Defense Minister Stephen Smith confirmed that Australia was indeed considering at least the submarine’s propulsion systems as part of a technology deal.

All things being equal it would seem like this deal is likely to be done as it offers strategic benefits for both sides. However, both sides may still need to be somewhat flexible as the two sides have bottom lines that may stand in the way of deep collaboration. First, the Australian side will demand that the subs be built in Australia to enhance Australia’s shipbuilding industry centred on Adelaide, as well as to keep Australian tax dollars and jobs onshore. While Japan in December 2011 relaxed its arms export restrictions, which has allowed this deal to be considered in the first place, these restrictions were however ostensibly relaxed to allow Japanese defense manufacturers to engage in the joint development of sophisticated weapons systems with other partners. A simple one-way transfer of technology was not necessarily envisaged, and in any respect, the technology that gave birth to the Soryu has been nurtured over the last 30 to 40 years in Japan and the Japanese government, MHI, and Kawasaki are not likely to let go of the full suite of technologies and design specifications without considerable benefits being extracted in return. If Japan was unable to extract any offsets from the transfer of the technology then it might get cold feet at the last minute and back out of the deal. More likely is that the two sides might only come to an agreement on a partial transfer, perhaps of AIP system technologies only. This would still be a big deal nevertheless, especially coming on the back of similar hardware-related collaborative developments in the UK-Japan defense relationship, and with something similar with India surely not being too far away.

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