Jan 1, 1995
The FS-X Case
For various reasons, the United States has generally tried to discourage its allies from developing their own major weapon systems. Perhaps the most prominent example of this policy was America's insistence on cooperative development in the case of Japan's FS-X fighter aircraft. Did the outcome of the divisive struggle over the FS-X serve U.S. aims? What can be learned for future interaction on the FS-X program in particular and cooperative development in general? Recent Project AIR FORCE research by Mark Lorell sought to answer these questions.
In the summer of 1985, senior U.S. government officials began efforts to reverse Japan's decision to independently develop its first world-class fighter since World War II. They urged Japan to join the United States in the cooperative development of a modified version of an existing U.S. fighter. In doing so, DoD hoped to promote weapon system interoperability and to avoid the diversion of scarce Japanese defense resources from efficiently supporting the security alliance with the United States. U.S. officials also wanted to forestall the emergence of an independent Japanese defense industrial capability that could contribute to a more autonomous security policy.
After several years of difficult negotiations, Japan agreed to cooperatively develop a modified General Dynamics (now Lockheed) F-16. Despite Japanese concessions, however, submission of the agreement to Congress in early 1989 led to a long, acrimonious debate, driven mainly by economic concerns over technology transfer and U.S. industrial competitiveness. Critics in Congress and elsewhere believed that the FS-X represented a "giveaway" of advanced aerospace technology to America's most relentless economic rival, with few guarantees of anything significant in return. Ultimately, the domestic debate forced the Bush administration to insist on further clarifications to the agreement, causing considerable anger and frustration in Japan.
Actual R&D for the FS-X fighter did not get under way until April 1990, nearly a year and a half after the signing of the original agreements and almost five years after the start of the original negotiations. Since then, U.S policymakers have focused on guaranteeing access to and flowback of Japanese technology. Meanwhile, extensive changes to the baseline F-16 design have been quietly carried out in Japan.
Despite years of haggling and stacks of signed agreements, the FS-X program is not meeting many of the initial expectations of the Pentagon negotiators when it was agreed to in 1987. Most important, the aircraft has evolved away from the original concept of a minimally modified F-16 to a virtually all-new Japanese-developed fighter broadly based on the F-16. As a result, the FS-X is providing Japanese industry with an entree into the highly exclusive world club of developers of advanced fighter aircraft, a development with long-term implications for the U.S. military aerospace industry and for U.S. security policy. The FS-X will do little to promote the development of a commercial aircraft industry in Japan, but it will greatly increase Japanese military R&D capabilities. How did this happen? The research points to five key U.S. policy errors:
Now that R&D is nearly complete, ensuring full series production of the FS-X is of critical importance for the United States. The bulk of the potential economic, technological, and political benefits to the United States depend on series production. Therefore, U.S. officials should adopt a flexible approach towards questions of work-share, technology transfer, and access to Japanese technology during negotiations for a production agreement. Although cancellation is unlikely, it would be the worst outcome from the U.S. point of view, particularly since the Japanese would in all likelihood go ahead and develop and all-national next-generation fighter.
Perhaps the most important lesson of the FS-X is that the U.S. government needs to formulate and implement a single, coordinated policy on weapon system procurement collaboration that harmonizes U.S. military and economic objectives. This policy should recognize that two-way technology transfer in codevelopment arrangements works best when industry on each side expects significant net technological gain. In such cases, both participants will make technological and financial contributions to the joint effort that complement each other and directly assist each side in achieving its own objectives.