Japan eyes easing of joint arms development ban

TOKYO (Reuters) - Japanese Defence Minister Yasuo Ichikawa said on Tuesday he expects a government decision on the possible easing of a self-imposed ban on international joint arms development before long, a likely boon to Japanese defence contractors such as Mitsubishi Heavy Industries.

Ichikawa also said the Eurofighter Typhoon is not at a disadvantage in competing for Japan's new fighter jet deal, just because it is European-designed, and that one key factor in the selection is how new combat planes can benefit Japan's defence industry.

The decision on which new jets to buy is due by the end of year, and the deal that follows may be worth up to $8 billion (5.2 billion pounds).

Japan's arms export ban prohibits the nation's defence contractors joining multinational arms development and production projects, and makes it difficult for them to drive down costs and keep up with cutting-edge arms technologies.

"Amid technological development, improving capability of defence equipment, as well as budget constraints, there is a growing trend for cooperation (between countries) where possible," Ichikawa told Reuters in an interview.

Ichikawa said he does not see the decades-old ban putting a substantial strain on Japan's defence industry, but that the government is ready to fix what needs to be fixed.

Japan's National Defence Programme Guidelines, which lay out the country's defence policy for the next decade, last year stopped short of easing the restriction, but said the government needs to look into ways to respond to the shift to cross-border collaboration.

Asked if it takes a few years to reach a decision on the matter, he said, "It can be quicker."

Japan's major defence contractors include Kawasaki Heavy Industries and IHI as well as Mitsubishi Heavy.

EUROPEAN ORIGIN NO DISADVANTAGE

On the selection of the next-generation fighter jets Japan plans to pick, Ichikawa said the Eurofighter Typhoon, made by a consortium of European firms including EADS, BAE Systems and Italy's Finmeccanica, will not be disadvantaged because of its region of origin.

There is speculation that Tokyo's close security ties with Washington may give rival firms Lockheed Martin and Boeing of the United States a boost.

Asked whether being European-designed is a handicap to the Eurofighter Typhoon, he said, "That is not the case," and added he intended to ensure the selection process is fair and rigorous.

The Eurofighter Typhoon is competing against Lockheed Martin's F-35 Joint Strike Fighter and Boeing's F/A 18 Super Hornet to replace ageing F-4 Phantom fighters in Japan.

Ichikawa said key factors included the performance of each fighter jet, costs involved and how they can contribute to Japan's defence industry.

"The most important point is the capabilities of the fighter jet. We need to think about cost, too. Also, opportunities for Japan's defence industry need to be considered. So, we will take into account the whole picture," he said.

There has been great interest in how much of next-generation fighter jet-related jobs will be outsourced to the Japanese industry, which has been battered by gradual but consistent shrinkage of the defence budget.

Boeing executive Phillip Mills told Reuters last month local defence contractors might build F/A 18 Super Hornets under licence if Japan chose to buy them.

(Editing by Daniel Magnowski)