UK seeks to develop defence trade agreement with Japan

British defence companies are hoping to exploit the recent relaxation of Japanese defence export laws in order to increase business between the two countries.

Prime minister David Cameron and several of the UK’s leading defence companies — including BAE Systems, Rolls-Royce and AgustaWestland — are on a trade mission to Japan, which is aiming to boost UK exports and secure investments into the UK.

Rees Ward, chief executive officer at trade body ADS, said: ‘Recent changes to Japanese laws have lifted wartime restrictions on the export of defence equipment to other nations and now allows Japan to forge a free trade agreement with the UK.

‘Japan has always bought US equipment so it is sensible, given the changed domestic circumstances in the country, that the UK prime minister is on the doorstep offering high-quality, battle-proven British defence technology to the Japanese.’

Dr John Swenson-Wright, an expert on Japan at Chatham House, explained that there are still constitutional prohibitions that could make trading difficult.

However, he maintains that there are certain fields where the Japanese might be particularly keen to collaborate.

He told The Engineer that the Japanese have traditionally had a comparative advantage in the area of missile defence. However, any escalation of North Korea’s satellite/missile capabilities could represent an opportunity for British companies.

This could be particularly pertinent given that Japan has allocated ¥57bn (£440m) of its 2012 defence budget to ballistic missile mitigation. This includes ¥0.7bn for Japan and the US to continue the development of an advanced ballistic missile defence (BMD) interceptor missile.

Similarly, Ward believes Japan could be persuaded to invest or become a partner in major defence programmes currently under development, such as future Lynx derivatives, the T26 global frigate or Typhoon peripherals.

Japan is the world’s third largest economy but it suffered as a result of last year’s earthquake and tsunami.

‘There’s also the last two decades of economic slowdown in Japan,’ said Swenson-Wright. ‘Defence is an area where I would have expected the Japanese government to be looking for new opportunities.’