Japan-U.S. Cooperation on Ballistic Missile Defense: Issues and Prospects
Released: 2002-03-19T00:00:00

Issue Overview

Japan's August 1999 agreement to engage in ballistic missile defense cooperation with theUnited States has the potential for contributing materially to the ability of the U.S. Navy to field anAsian regional defense against intermediate-range ballistic missiles, a goal that has long receivedstrong support from Congress. Although Japan has committed to research and development (R&D)cooperation on four elements of a Navy interceptor missile, Tokyo has not made a decision toacquire a missile defense capability. It is even less clear how far Japan might be prepared to movein the direction of an integrated regional missile defense cooperation arrangement. The extent ofJapan's future participation in missile defense will be governed by a number of considerations,including its threat perceptions, overall national defense strategy, regional relationships,constitutional constraints, domestic political impact, technical feasibility, and cost. The relativeimportance of these factors cannot be established with any precision -- any one or combination ofthem could have a make or break effect on Japanese decisionmaking. To date, these considerationshave had a mixed and sometimes contradictory effect on Japanese policy.

Focus and Scope of This Report

This report documents and analyzes Japanese perspectives on ballistic missile defense andon participation in the U.S. missile defense R&D program, with particular attention to current trendsin Japanese security thinking, major actors in the policymaking process, and political andconstitutional constraints. It notes areas of convergence as well as issues on which American andJapanese perspectives tend to diverge. Finally, the report briefly addresses a number of policyconsiderations for Congress and the Bush Administration in light of ongoing uncertainties aboutJapan's participation. For broader background on U.S.-Japan relations and security cooperation, seeIssue Brief IB97004, Japan-U.S. Relations: Issues for Congress (regularly updated).

Congressional Support for An "Asian" Missile Defense Capability

Since the mid-1990s, Congress has supported the development of a missile defense capability to protect forward-deployed U.S. forces in the Asia-Pacific area, regional allies, and Taiwan fromshort- and medium-range missiles, a goal that requires some level of Japanese support--if onlyhosting U.S. missile defense forces. The 1991 Persian Gulf War highlighted the threat of short-rangeScud ballistic missiles and the inadequacy of the Army's Patriot missile defense system to protectU.S. ground forces and facilities. Similar concerns have been expressed regarding the U.S. Navy'scurrent lack of a defense against both short- and intermediate-, or "theater"-range, ballistic missiles,and cruise missiles. Testimony by numerous defense and intelligence officials highlighted thegrowing threat posed by the development of intermediate-range ballistic missiles capable of carryingweapons of mass destruction (WMD) by anti-U.S. regimes ranging such as North Korea and Iraq.

Congressional Reaction to China's 1996 Missile "Tests" in theDirection of Taiwan. Following China's firing of ballistic missiles in the vicinityof Taiwan during a Taiwan Strait confrontation in early 1996, Congress acted to support thedevelopment and deployment of a missile defense system explicitly oriented towards Asia and thewestern Pacific. Section 1533 of the FY1999 National Defense Authorization Act ( P.L. 105-261 ,signed into law on October 17, 1998) required the Secretary of Defense to "carry out a study of thearchitecture requirements for the establishment and operation of a theater ballistic missile defensesystem in the Asia-Pacific region that would have the capability to protect key regional allies of theUnited States," and to submit a report to Congress not later than January 1, 1999. The report wasto describe any U.S. missile defense system either currently deployed or being developed "that couldbe transferred to key allies of the United States in the Asia-Pacific region to provide for theirself-defense against limited ballistic missile attacks." It was to be submitted in both classified andunclassified versions. Congress clarified the term "key regional allies" in the conference report( H.Rept. 105-736 ), identifying these as Japan, South Korea, and Taiwan. (1)

The Department of Defense (DoD) delivered a 15-page unclassified version of thecongressionally mandated Theater Missile Defense (TMD) report in May 1999. The report focusedon five ballistic missile defense systems currently under development for U.S. forces, and describedoptions for the defense of South Korea, Japan, and Taiwan against an attack by fewer than fivemissiles of under 3,500 km (2,170) range. The report assumed that the missiles would not employspecial measures to evade destruction, such as the use of decoys or altered trajectories. Theunclassified version of the DoD report addressed hypothetical architectures for each country'ssituation, but did not attempt to suggest or describe any region-wide system architecture, nor did itaddress the most challenging types of threats. (2)

Changing Context of Congressional Support for Missile Defensein the 107th Congress. Congress continued to show support for developing anddeploying a "theater" level missile defense capability in 2001, but also for more ambitiousdevelopment objectives that might allow TMD systems--especially the Navy's sea-based TMDcapability to serve as a basis for an early national missile defense capability. (3) For instance, on March 28,2001, Rep. Vitter introduced two related bills expressing strong support for an Asian missile defensecapability but also for upgrading the planned speed of the Navy Theater-Wide (NTW) interceptormissile to give it the ability to intercept North Korea's Taepo Dong I missile and Iran's Shahab 5missile, and requiring the Department of Defense to conduct at least one test against an incomingmissile with the flight characteristics, including velocity, of the Taepo Dong I. (4) Rep. Vitter also introduceda companion bill, the Defense Against Regional Threats Act of 2001, Sec. 2 of which would makeit U.S. policy "to provide for deployment as soon as is technically possible of effective missiledefense systems capable of defending Israel, Japan, the Republic of Korea, Taiwan, and all membernations of the North Atlantic Treaty Organization against ballistic missile attack." Sec. 3 of the billwould make it U.S. policy "to seek continued negotiated burdensharing agreements with the nationsspecified in section 2 to share the costs of development and deployment of ballistic missile defensesystems."

Both H.R. 1282/1283 appeared to reflected impatience on the part of a number of Membersof Congress at the determination of the Clinton Administration to avoid testing or deploying missiledefense systems that would violate the ABM treaty. Although neither bill went beyond referral tothe Armed Services Committee, the proposed legislation implicitly supported the decision of theBush Administration to radically revamp the U.S. BMD program, with the goal of applying variousABM technologies across a range of missions, including the early deployment of a capability todefend U.S. territory against limited attacks by intercontinental-range ballistic missiles that mightbe launched by "rogue" states.

BMD, NMD, and TMD -- What is the Difference?

The United States military uses the term Ballistic Missile Defense (BMD) as a genericdesignation for systems designed to defend against ballistic missiles of whatever range--fromshort-range "Scud" type missiles to intercontinental ballistic missiles (ICBMs). Thus, both TMDand National Missile Defense (NMD) systems are BMD systems. TMD systems are intended to bedeployed in a military theater of operations to defend against short-range and theater-range (up to3,500 km) ballistic missiles; NMD systems are intended to defend U.S. national territory againstcontinent-spanning missiles, i.e., ICBMs. Currently, both the U.S. Army and the U.S. Navy aredeveloping anti-missile systems for theater-wide defense, but the U.S. Defense Department haschosen the former Navy Theater Wide (NTW) anti-ballistic missile system, now designatedSea-Based Midcourse Defense (SMD), as the most appropriate system for an "Asian" TMD.

Recent Bush Administration Policy Changes Related to U.S. NMD and TMD Programs

In a series of policy statements beginning with a speech by the President at the NationalDefense University on May 1, 2001, the Bush Administration indicated an intention to enlarge andredirect current BMD programs in a way that tends to erase the clear distinction between TMD andNMD. The reasoning behind this decision appears to be at least two-fold. First, the relevanttechnologies are applicable across the whole range of BMD threats. Second, and relatedly, certainprograms currently in development for lower tier threats are deemed to have the potential, if suitablyenhanced, of serving as a stop-gap, near-term NMD capability in the absence of a full-scope NMDsystem.

This reasoning applies particularly to the former Navy Theater Wide (NTW) program, whichhas been the focus of U.S.-Japan TMD cooperation. One possible sea-based option would buildupon the technologies being developed in the former NTW program to develop a system that couldbe deployed on the Navy's Aegis cruisers stationed off the U.S. Pacific coast, with the mission of intercepting ICBMs in mid-course, outside the atmosphere. Another concept is to deploy a sea-basedsystem in the Sea of Japan with a capability to intercept North Korean intercontinental missiles intheir assent, or "boost" phase, when they are most vulnerable. (5) A more technologicallyambitious concept under active consideration involves deploying aircraft with laser systems capableof destroying missiles in their boost phase.

This report discusses and analyses the Administration's approach to missile defense and itsimplications for U.S.-Japan cooperation on missile defense, but the report's point of departure is thetraditional delineation of types of anti-missile systems based on the characteristics of the specificballistic missile threats that they seek to counter. In other words, the main ballistic missile threat toU.S. forward-deployed forces in the Asia-Pacific region, and to Japan, South Korea, and Taiwan, isfrom short- and medium-range, or "theater" range ballistic missiles.

Continuing Technological Distinctions

Another reason not to lose sight of the NMD/TMD distinction is that from a technologicalperspective, the challenges involved in attacking ICBMs and theater-range missiles remain markedlydifferent. Even though some of the technology being developed in the NTW program would berelevant to the defense against strategic missiles, the design characteristics for Standard SM-3interceptor missile being developed for the NTW are deficient in speed and range for the task ofintercepting an ICBM. This is especially the case if the interceptor missile is launched from aposition that requires it to chase down an ICBM from behind. (6) Hence, if the United Statesdecides to deploy a sea-based system to protect the United States against ICBMs in their mid-courseor terminal phase, it may have to develop a more capable interceptor missile than is currently beingdeveloped to defend U.S. ships, bases, and port facilities against short-and medium-range ballisticmissiles. In addition to having a higher velocity and longer range, the job of intercepting anddestroying an ICBM may require a different kinetic kill vehicle (KKV) -- the cannister-shapedprojectile that smashes into the missile warhead. It also may need an upgraded sensor.

How challenging this requirement would be is a matter of some dispute. Critics of theClinton Administration's approach to TMD argued that the designed velocity of the interceptormissile had been artificially kept below 5 km/second in order to comply with 1972 Anti-BallisticMissile (ABM) Treaty with the former Soviet Union. They asserted that with relatively minortechnical changes the planned velocity of interceptor missile could and should be upgraded to betterdeal both with medium-range missile threats as well as ICBMs. (7) Others, including somesupporters of an early national or global defense capability based on the NTW/SMD technology, areconvinced that intercepting an ICBM will require a larger and faster missile than can be achievedby upgrading the Navy's Standard missile. (8)

As for other proposed "contingency" BMD systems aimed at defending U.S. territory againststrategic missiles, the relevance of the current technology cooperation between the United States andJapan is unclear. Some analysts argue that in theory, attacking missiles close to the point of launch-- as in the proposed boost-phase interceptor -- would require different sensors than those beingdesigned for the SMD. In action on the FY2002 defense authorization bill, both the House andSenate Armed Services Committees reduced the Defense Department's request for boost-phaseinterceptor testing on grounds that the concept design had not been completed. The Senate Reportnoted that "Boost-phase technology is extremely challenging ...." (9) Reportedly, the Departmentof Defense plans to seek Japanese cooperation on a Sea-based boost-phase interceptor in order togain access to Japanese sensor and early detection technology, (10) but such intention is notmentioned in the FY2003 Budget Justification of the Missile Defense Agency that was released atthe end of February 2002. (11)

Cancellation of the Navy's "Lower-Tier" Missile Defense Program

Until the end of 2001, the U.S. Navy had been developing two missile defense systems forshipboard deployment. Both were intended to defend against short- and medium-range ballisticmissiles, but at different points in their flight path. The Navy Area Defense (NAD) system, was tobe the Navy's "lower tier" BMD program, providing local-area defense against ballistic missiles byintercepting them within the atmosphere. The NAD was roughly analogous to the Army's Patriot-3(PAC-3), also a lower tier system to protect military forces against high value targets from short-andmedium-ballistic missiles, such as the ubiquitous Scuds and their variants. The NAD was cancelledby the Pentagon in December 2001 because of poor performance of components and related unit costincreased which exceeded limits established by Congress. The Defense Department declined to useit authority to certify the program for continued funding. (12) Cancellation of the NAD leaves the Navy, for the moment,anyway, without any program under development to provide "lower tier" defense against ballisticmissiles, and none against cruise missiles. (13)

The second Navy missile defense program, now called Sea-Based Midcourse Defense(SMD), which has been the object of U.S.-Japan cooperation, remains intact and may be accelerated. There are, however, several uncertainties about the future of this system. One is technological. Thebasic building block of the SMD is the same Standard Missile that was to be employed by the NAD,but with much higher performance characteristics than the cancelled lower tier system. Also, theformer NTW had been described as "the least mature" of the various systems under development bythe Pentagon by one expert. (14) Another uncertainty arises from the determination of thePentagon's Ballistic Missile Defense Office (BMDO) -- redesignated the Missile Defense Agency(MDA) in January 2002, to acquire an early sea-based NMD capability, and the eagerness of theNavy to provide the platform for an NMD capability. These changes raise some questions aboutorganizational lines of control between the MDA and the Navy, and mission priorities.

Navy plans had called for the NTW system to enter service around FY2010. As of February2002, the Pentagon anticipates that the Sea-Based Midcourse System could achieve initial capabilityfor short- and intermediate-range sea-based missile defense by about 2006, with an ICBM capabilityto come several years later. (15) In the past, these estimates have been subject to considerablechange, depending on test results and other factors.

The program called Sea-Based Midcourse Defense (SMD) is designed to achieve a capabilityto intercept short- and medium ballistic missiles in mid-course or in their early terminal phase, andto defend a much larger geographic area than the canceled NAD. The SMD is designed to interceptenemy missiles at altitudes above the atmosphere (i.e., exo-atmospheric intercept) and destroy themwith a hit-to-kill kinetic kill vehicle (KKV) called the Lightweight Exo-Atmospheric Projectile(LEAP).

Intercepting a ballistic missile in midcourse, i.e. above the atmosphere, requires differenttechnology than intercepting a missile in its terminal phase, when it has reentered the atmosphere. A missile within the atmosphere follows a flight path that is affected by air pressure on its reentryvehicle (nose cone with warhead), whereas a missile in mid-course--above the atmosphere--followsa more predictable ballistic trajectory.

Figure 1 shows the different areas of coverage that would be provided by the now-cancelledNAD system--or any replacement terminal missile defense system, and the Sea-Based MidcourseDefense system. If the latter achieves its design objectives, an appropriately positionedAegis-equipped ship deploying the SMD could -- for instance -- shield most of Japan from an attackby a North Korean missile.

Figure 1. Comparison of Coverage of Former Naval Area Defense (NAD)and AEGIS Theater Ballistic Missile Defense (Formerly Designated NavyTheater Wide (NTW) and Now Designated Sea-Based Midcourse Defense(SMD) (Source: Department of the Navy)

Evolution of Japanese Interest in Ballistic Missile Defense Cooperation

Japanese interest in U.S. missile defense programs dates from the mid-1980s, when theDepartment of Defense solicited participation by allied countries in the Reagan Administration'sStrategic Defense Initiative (SDI), partly in order to bolster congressional support for the program. Japan declined to participate but did partly relax its post-World War II arms export ban to open theway for sharing military and dual use technology with the United States. Subsequently, Japan sharedtechnology with the United States for several weapons systems, including portable surface-air missile(SAM) systems, naval ship construction, a ducted rocket engine, and the controversial FS-X,next-generation fighter program.

The FS-X collaboration, which involved transfer of technology used in the USAF's F-16fighter, produced by what was then General Dynamics, proved a searing experience for the Japanese. It is widely accepted among students of US-Japan alliance relations that the Japanese government,backed by domestic industry and influential Diet Members, strongly preferred to develop anindigenous fighter aircraft to replace its ageing fleet of F-1 fighters, but decided reluctantly that themaintenance of smooth alliance relations required yielding to pressure from the ReaganAdministration for co-development. Among other considerations for the Nakasone government inTokyo, the Reagan Administration had imposed stiff sanctions on semiconductor imports as a resultof Japan's failure to meet the terms of a trade agreement, and Members of Congress were stronglycriticizing Japan and the Toshiba Corporation for the sale of some sensitive U.S. metal millingtechnology to the then-Soviet Union. (16)

Japan had barely signed the Memorandum of Understanding on the FS-X co-production dealwhen it was whipsawed by a high profile U.S. policy debate involving industry and labor interests,Members of Congress, the U.S. Commerce Department, and others, over the wisdom of technologycooperation with the United States' main high tech competitor. Opponents of the FS-X cooperationdeal were concerned that Japan might use U.S.-supplied technology to erode the U.S. lead inaerospace production, one of the few areas of U.S. high technology dominance that had not beenconquered by Japanese industry. In early February 1989 the newly inaugurated George H. W. Bushadministration yielded to these pressures and initiated a policy review that eventually required Japanto renegotiate the terms of technology transfer in the co-development project. (17) The product of the lattercollaboration has entered service with the Japanese Air Self-Defense Force as the F-2 Fighter, afterlong delays and huge cost overruns.

Negative Effect of the FS-X Joint Development Program

The FS-X collaboration proved highly frustrating both to Japan and to the Department ofDefense and U.S. defense contractors because technology transfer issues had become entangled inthe political reaction to the large U.S.-Japan trade deficit. Whatever the merits of the objections ofU.S. critics, the experience created an aversion in Japan to joint development and productionagreements with the United States, and bolstered the case of proponents of national self-sufficiencyin defense production. The frustrating FS-X experience, as will be seen, could play a significant rolein future Japanese decisionmaking regarding the acquisition of a BMD capability.

Japanese Participation in the WestPac Study

In 1990, notwithstanding Japan's dissatisfaction with cooperation on development of the FS-X fighter, Japanese and U.S. industries initiated a major missile defense system study under theSDI initiative entitled Western Pacific Basin Architecture Study (WestPac). The Japanesegovernment kept its role to the minimum in this four-year study to avoid sensitive political issuessuch as the weaponization of space and nuclear weapons related research associated with theso-called "Star Wars" program of the Reagan Administration. Additionally, some sources say thatthe Japanese government was wary of U.S. interest in Japanese technology, and concerned that theUnited States might try to pressure Japan to purchase a missile defense capability "off the shelf" asa means of partially redressing the large U.S.-Japan trade deficit. (18) Subsequent to thecompletion of the WestPac study in October 1994, the United States and Japan embarked on a"Bilateral Study on BMD" to better understand the ballistic missile threat to Japan and to studyalternative architectures for a Japanese missile defense system. A BMD Study Office wasestablished within the Japan Defense Agency (JDA), and Japan's activities and R&D spending, whilemodest by U.S. standards, began to increase steadily.

Growing Japanese Concerns About Proliferation of Ballistic Missiles in Asia

One factor influencing Japan to participate in the WestPac Study was growing concern aboutChina's medium range CSS-2 and CSS-5 medium-range ballistic missiles. (19) North Korea's expandingmissile capabilities also long have been a concern to Tokyo. Even before it introduced ballisticmissiles with on-board guidance systems in the early 1990s, Pyongyang test-fired Scud-B missileswith ranges of 250 km to 300 km in the Sea of Japan. Concern about North Korea's missilecapability grew significantly with the test firing of North Korea's No-Dong 1 missile in May 1994. The No-Dong 1 was a new and more threatening ballistic missile with an estimated range of about1,000 km -- enough to threaten most of Japan, including major population areas and key U.S. andJapanese military bases. (20)

North Korea's Taepo Dong-1 Missile Launch -- Its Impact upon Japan's TMD Policy

Despite pre-existing missile threats, it was North Korea's test-firing of its Taepo Dong-1ballistic missile in August 1998 that ignited public concern about the country's vulnerability toballistic missile attacks. The solid-fuel three-stage missile launching illuminated Japan'svulnerability to North Korea's missile threat, as its third stage flew over Japan and landed in thePacific Ocean. Japan's 1999 Defense White Paper dedicated separate sections to the Taepo Dongincident of 1998, and devoted five times more pages to North Korea's military affairs than previouswhite papers. (21) Subsequently, national sentiments against the missile launch and regional missile proliferationpushed the TMD issue to the center of a growing policy debate in Japanese society, where publicdiscussions of military issues generally had been avoided since the end of the World War II.

In December 1998, about four months after North Korea launched a Taepo Dong-I ballisticmissile that passed over Japanese territory, the Japanese government made an internal decision toengage with the United States in cooperative research and development of a ballistic missile defensesystem. Less than a year later, in August 1999, the U.S. and Japanese governments signed amemorandum of understanding (MOU) covering a five-year program of joint research anddevelopment on the then U.S. Navy Theater Wide (NTW) ballistic missile defense program, butJapan has made no decision about acquisition of a missile defense capability and currentconstitutional interpretations appear to rule out the integration of any such Japanese capability withthat of the U.S. Navy.

Implications of the Bush Administration's Redirection of the U.S. Approach to Missile Defense on U.S.-Japan Cooperation

The decision of the Bush Administration in the Summer of 2001 to eliminate the distinctionbetween national missile defense and other BMD programs, and to redesignate the NTW project asthe sea-based "mid-course" defense element of a seamless BMD capability, has created additionaluncertainty in Japan about the benefits and constitutionality of participating in joint missile defensetechnology research. In particular, the Japanese government has serious qualms about theconstitutionality of cooperating on the development of technology that effectively could become partof a system to defend U.S. territory from third countries. Japan's constitution established the rightof collective self defense under international law, but disallows the exercise of that right. (See afuller discussion of this issue below.)

To date these changes in the U.S. program have created consternation, but have not affectedTokyo's interest in cooperation. For the time being, Japanese officials have avoided addressing thecollective defense issue arising out of the changed U.S. missile defense strategy and haveconcentrated on protecting Japan's option to acquire a BMD capability. Towards that end, Japan hascontinued to budget funds for BMD cooperation in line with an existing five year plan, and alsocommitted funds to acquire the technology that could support a BMD capability on the two newAegis destroyers that are under construction. (22)

Significance of Japanese Cooperation on BMD

Japan inevitably will play a key role in the ability of the United States to deploy a BMDsystem in Asia, either to protect U.S. forces or to shield American allies and friends. The exactnature of Japan's role, however, is highly dependent on still unpredictable political and nationalsecurity policy factors. Under different scenarios, Japan's role could greatly enhance theeffectiveness of an American missile defense capability, passively support it, or, under certaincircumstances, seek to impose restraints on U.S. options.

Geographical Centrality and Military Potential

Japan is host to the U.S. 7th Fleet on whose AEGIS cruisers the U.S. Navy plans to deploya sea-based BMD system. Because of its location, Japan's participation would be especiallyimportant if the United States were to seek to develop an integrated regional missile defensearchitecture, since a sea-based capability against medium-range missiles, if deployed in the JapaneseIslands, could put a defensive umbrella over Japan, South Korea, and Taiwan. The Sea of Japanwould be an ideal location for the deployment of a boost-phase intercept capability to guard againstmissile launches from North Korea, while a capability deployed in or near the southern JapaneseIslands, such as the U.S. Navy Base at Sasebo, on Kyushu, would be well-positioned to interceptmissiles launched from coastal China. In addition to its favorable geographic location, Japan'ssophisticated communications infrastructure, and possession of Aegis-equipped vessels with thecapability of sharing data with U.S. counterparts, make it a potentially valuable collaborator.

Figure 2. Japan and East Asia (Distances in 500 Km Increments)

Potential Technological Contribution

Japan's potential technological and financial contributions to the NTW program are lessclear-cut. Department of Defense officials stress that Japan has technologies that could make animportant contribution. Some non-governmental analysts with knowledge of the technologiesinvolved tend to describe the potential Japanese contribution more in terms of technology riskreduction. Reportedly, as of early 2002, the Pentagon intends to seek expanded Japanesecooperation, including research and development work on a boost-phase interceptor. The Pentagonis said to be particularly interested in Japanese sensor and early detection technology, since differenttechnology may be required for boost-phase intercept than the sensor technology employed in theNavy's upper-tier SMD system. (23)

Financial Contribution

Japan's financial participation in the research and development phase is modest -- only afraction of U.S. spending on the SMD program -- but Tokyo's financial contribution could besignificant if it chooses to deploy a BMD capability by purchasing U.S. missiles and othercomponents. In the words of the U.S. Missile Defense Agency budget request to Congress forFY2003, "the project leverages the established and demonstrated industrial and engineering strengthsof Japan and allows a significant degree of cost sharing." (24) Japan's financial contribution would be most important if itdecided to purchase U.S. hardware, but less so if it only participates in the research and developmentphase or uses jointly developed technology to build its own missile defense system.

For fiscal year 2002, which begins April 1, 2002, the Japanese Diet has appropriated about6.9 billion yen ($53.1 million at Â¥ 130/US $1) for design and trial manufacturing activities. Becauseof changes in the trial manufacturing program and budgetary constraints, the Japanese DefenseAgency (JDA) request was cut by Â¥ 1.3, or about $100,000. (25) U.S. Department ofDefense spending specifically for the Japan/U.S. Cooperative BMD Research Project programelement will total $37.6 million in FY2002. For FY2003, the Defense Department has requested$31.9 million for the same program element. (26)

Conflicting U.S. Perspectives on Missile Defense Cooperation with Japan

Despite strong support for the program among officials concerned with alliance relationsboth in the Department of State and the Department of Defense, some in the Pentagon's MissileDefense Administration (MDA) reportedly have opposed to research and development cooperationwith Japan. Opposition in the MDA appears related to the comparatively small payoff that someexpect from Japan as compared with the bureaucratic and other complications inherent in jointbilateral cooperation. The Bush Administration and its predecessors, and the U.S. Navy, on the otherhand, have consistently viewed Japanese participation in the U.S. missile defense program as apotentially significant "alliance builder"and force capability enhancement. In response to the allegedlack of support for joint development in the then BMDO, Deputy Secretary of Defense PaulWolfowitz reportedly issued a program budget decision (PDB) on December 9, 2001, directing theorganization to continue the cooperative effort and include funding as a separate line item in theFY2003 budget. (27) (Seemore details in section on the status of the program, below.)

Current Status of BMD Cooperation

The North Korean missile launch brought about a breakthrough in Japan's consideration ofthe long-standing U.S. request for joint cooperation on BMD research and development. TheJapanese Defense Agency already favored cooperation, but the effect of the Taepo Dong missileflying over the main island of Honshu greatly raised the level of interest within the Japanesegovernment and among the public.

Agreement on the Joint Technology Research

In December 1998, the two governments agreed on the Naval Theater Wide (NTW) systemconcept as the architecture for which they would jointly conduct analysis, preliminary design, andcertain risk reduction experiments. (28) The four components selected for joint research are: lightweightnose cone; stage-two rocket engine; advanced kinetic warhead; and two-color infrared sensor. Theseare consistent with the risk reduction initiatives that have been pursued by the U.S. Navy for itsBMD systems. A substantial Japanese contribution is expected on sensors and advanced kineticwarheads. The NTW/SMD also is seen as a natural choice for the joint research, since Japan alreadypossesses four Aegis-equipped destroyers that could be upgraded with a BMD capability. (29) In fact, the Japanesegovernment has earmarked funds for two additional Aegis destroyers with enhanced electronics andradar systems in the next Mid-Term Defense Program covering fiscal years 2001-2005, with an eyetowards acquiring a sea-based TMD capability. (30)

Figure 3. Japanese Participation in NTW/Sea-Based Midcourse Interceptor Missile

Possible U.S. Request for Expanded Cooperation. On June 4, 2001, the Japanese press reported that the United States had asked Japan for additionalcooperation on BMD research and development related to interceptor ship-borne radar trackingtechnology. Reportedly the U.S. request was related to U.S. national missile defense, not just TMD. Because of the ban on collective self-defense and budgetary constraints, Japanese officials were saidto be "divided over how to respond" to the U.S. request. (31) As of March 2002, no concrete information about expandedBMD research and development has emerged in public sources. Accounts of the Bush-Koizumisummit meeting in mid-February suggest that the leaders discussed the issue of BMD cooperation,but only in general terms.

Japanese Perspectives on TMD

Because of the implications for Japan's relations with the United States and the People'sRepublic of China, which opposes many aspects of U.S.-Japan defense cooperation, the issues ofwhether Japan will acquire a missile defense capability and the extent to which such capabilitywould be integrated with that of the U.S. Navy, have assumed major national policy significance forTokyo. Because of the stakes, Japanese views on the development and deployment of a TMD systemvary widely, even within government and political circles. These differences appear deep enoughto make the political uncertainties surrounding TMD cooperation as significant as the technologicalchallenges.

Japanese Government Perspectives

During the early years of joint U.S.-Japan initiatives on BMD, support within theGovernment of Japan (GOJ) was tentative and sporadic, with the strongest advocacy coming fromwithin the Japan Defense Agency (JDA). However, the JDA position found increasing support afterNorth Korea's Taepo Dong launch. Some note that the Ministry of Foreign Affairs (MOFA) stilloffers only a reserved support, for it is concerned that Japan's TMD deployment would negativelyaffect the future of Japan-China relations. The Ministry of Finance (MOF) traditionally has beenespecially reluctant to commit funds for a program with no reliable long-term cost estimate norduration of the program, (32) but nonetheless agreed to a multi-year commitment once theprogram became a high priority to the Prime Minister and defense policymakers. The MOF hasagreed in principle to allow expenditures anticipated in the current Five-year Defense ProgramOutline. (33)

Constitutional Considerations and the Implications of the New U.S. BMD Policy

Blurring the lines between national and theater missile defense has added to the Governmentof Japan's burden of selling TMD cooperation to a skeptical Japanese public, particularly with regardto public attitudes towards arms control and the constitution. Two aspects of the BushAdministration's new BMD strategy could have significant implications for future Japanese missiledefense cooperation.

ABM Treaty. One aspect is the fact that asea-based system designed to attack ICBMs violates the 1972 ABM Treaty -- a reality graphically acknowledged by the Bush Administration's decision to exercise the U.S. right to withdraw from thetreaty. Japan was not a party to the treaty but has regarded the agreement as a fundamental pillar ofnuclear stability. The abandonment of the treaty by the United States troubled Japan, but -- ironically-- also removed one barrier to participation.

Ban on Collective Defense. Second, any use ofJapanese technology for an American NMD system would violate both Japan's post-World War IIanti-nuclear policy, which forbids participation in U.S. nuclear strategy, and a long-standing legalinterpretation that Article 9 of the Japanese constitution forbids participation in collectiveself-defense. Under this interpretation, formulated by the Cabinet Affairs Legal Office in 1981, itis acknowledged that Japan has such a right under international law, but cannot exercise it becausethe constitution provides that the exercise of the right of self-defense must be limited to theminimum level necessary to defend Japanese territory.

The U.S.-Japan Security Treaty is deemed constitutional under this interpretation becauseJapan's responsibilities relate only to the defense of Japan itself. Japan is not obligated under theU.S.-Japan Defense Treaty to participate in the defense of the United States or U.S. forces, let aloneparticipate in security cooperation involving third countries. (34) Thus, under present andforeseeable circumstances, only a system that is designed for the defense of Japanese territory andis not in violation of the ABM Treaty would appear to be able to pass political and constitutionalmuster.

Japanese officials, political leaders, and opinion makers have universally expressed concernabout the new U.S. approach to missile defense. During a visit to Japan in early May 2001 to briefJapanese leaders on the Bush Administration's new policy, Deputy Secretary of State RichardArmitage reportedly received an ambiguous response. Japanese leaders expressed their"understanding" of the U.S. position -- a classic Japanese formulation for avoiding assent. Japaneseofficials appeared to agree with the view of Japanese defense analysts who complained thatsupporting the U.S. initiative would link Japan to U.S. global nuclear strategy in a way that wasincompatible with Japan's non-nuclear principles. (35)

For the time being, the Japanese government has indicated that the new Bush Administrationstrategy will not affect joint research and development activities on the NTW interceptor, and alsothat Japan's stance may be more relaxed than originally suggested. In a May 9, 2001 press article,a senior official of the Japan Defense Agency (JDA) reportedly explained, "We can understand U.S.thinking about regarding NMD and TMD as a comprehensive package, but our position will notchange: we will only carry on joint research on the TMD." The same article expressed the Japanesegovernment's position that Japan could give no more than "moral support" by expressing"understanding" of the U.S. NMD program, since it was for the purpose of defending the UnitedStates and not Japan. (36) The Director General of the Japan Defense Agency (JDA), told reporters on May 11 that "The UnitedStates has just completed producing a blueprint, and it is too early to assess it at this point."Reportedly, however, a senior official of the JDA judged that regardless of the decision of the BushAdministration not to distinguish between NMD and TMD, it was a "fact" that there was "a cleardifference in technologies between long- and short- range missiles." In any event, the official said,Japan's research cooperation would continue. (37)

Political Parties(38)

The stance of Japan's political parties on missile defense cooperation underscores the depthof feeling against missile defense cooperation, especially at present, when Koizumi's LiberalDemocratic Party (LDP) depends on two coalition allies to sustain its legislative program. Throughout most of the post-World War II era, the long-ruling LDP was the only political party inJapan that supported a strong military capability and the alliance with the United States. The partyfractured in July 1993 and currently lacks a majority in the upper house of the Diet (parliament) andonly a bare majority in the lower house. (See Figure 4 .) The Koizumi-led LDP retains power byvirtue of a coalition with the New Komeito and the tiny New Conservative Party, an LDP splintergroup.

Several bi-election victories in October 2001 allowed the LDP to regain a majority in the480-seat Lower House, but the party still lacks a majority in the Upper House, which is less powerfulbut still necessary to pass legislation. Consequently, it remains dependant on its two coalitionpartners to be assured that legislation will pass.

Stance of the LDP and its Coalition Allies. Themissile defense issue is a sensitive one for the LDP-led coalition government. The LDP itselfgenerally remains broadly supportive of the U.S.-Japan alliance, but an ideologically nationalist

wing increasingly has expressed the desire for a more self-sufficient defense posture. The party'smainstream factions appear to have become increasingly more conservative as a result of defectionsby centrist members and seat losses in urban areas, a development with mixed implications forU.S.-Japan alliance relations. Generally, the LDP works closely with officials in the Ministry ofForeign Affairs and the Japan Defense Agency, both of which are strongly pro-alliance, but itspositions are constrained by the need to placate its New Komeito coalition ally, a small but awell-organized and disciplined party that is affiliated with the Buddhist Soka Gakkai ("ValueCreation Society") organization. The New Komeito generally supports the status quo on domesticsocial issues but traditionally has strongly opposed the expansion of the role of the Japanese military.

Both the tiny Conservative Party, which is currently part of the governing coalition, and thesmall Liberal Party, headed by a conservative former LDP leader, Ichiro Ozawa, support missiledefense cooperation. Ozawa has progressively lost public and political support since he played a keyrole in splitting the LDP in 1993 and later splitting the successor non-LDP coalition, but hiswell-articulated defense and foreign policy positions command considerable respect. His position,which seems colored by his own political agenda, is that the line against collective defense shouldbe addressed directly via constitutional change, rather than by a formal or de facto reinterpretation.

Beginning with the North Korean Taepo Dong launch in August 1998, and continuing sincethe September 11, 2001, terrorist attacks on the United States, a number of political parties havebegun to re-examine their defense policy positions. Several have agreed on the necessity for somemeasures to strengthen alliance cooperation and Japan's own defense capabilities, but not necessarilyto the extent of acquiring a BMD capability. The New Komeito, for instance, reportedly hasacknowledged the possible deterrent value of BMD-related technology cooperation with the UnitedStates. (39)

Ambiguous Stance of the Opposition DemocraticParty. The leading opposition party, the Minshuto, has kept its missile defensepolicy ambiguous. As it consists of both former members of the LDP and the Japan Socialist Party(JSP), the Minshuto is careful not to create an internal rift over the TMD issue. The attitude of the Minshuto could be the most uncertain factor in Japan's decision on the deployment of a missiledefense system.

Parties on the Left. The strongest opponents ofmissile defense cooperation include the Japan Communist Party and the Japan Social DemocraticParty (JSDP), formerly the Japan Socialist Party (JSP). Japan's major opposition party until the early1990s, the Socialists have abandoned their past opposition to the alliance but still oppose theexpansion of the role of the Self-Defense Forces. Despite their efforts to adjust to the post-Cold Warera, the Socialists have steadily lost support and are now a marginal political force.

Figure 4

(Prepared by Mark Manyin, Foreign Affairs, Defense, and TradeDivision, CRS)

Japanese Industry

Despite some bitter experiences in defense technology cooperation with the United States,notably negative impact of cooperation on the FS-X fighter program noted above, Japanese defenseindustry appears generally enthusiastic about joint cooperation on missile defense. Apart from thegoal of acquiring valuable technology, Japanese defense contractors are eager to find new businessafter more

than a decade of little or no national economic growth. (40) Believing that Japan alone is unlikely to develop its own BMDsystems, companies that engage in defense work reportedly see cooperation with the United Statesas a rare opportunity for large-scale contracts. (41) This applies especially to Japan's largest defense contractors,notably including Mitsubishi Heavy Industries, the primary BMD contractor, and electronicscompanies that produce related equipment such as Aegis radar components, satellites, andtelecommunications gear.

Because of the FS-X experience, Japan's defense industry is expected to prefer licenseproduction or co-production to preserve its industrial base, and oppose off-the-shelf purchase fromthe United States. At one point some manufacturers of civilian, dual-use high technology reportedlywere uneasy about cooperation on the BMD systems out of concern that such cooperation may harmtheir corporate image. (42) With the deepening of Japan's economic slump, however, and changing public attitudes towardsdefense issues, these concerns are not likely to deter industry participants.

Media/Public Opinion

Since the Taepo Dong launch, the Japanese media have shown unprecedented interest incovering BMD-related issues. The Yomiuri Shimbun , a daily paper with the largest circulation, and Sankei Shimbun, and the Nihon Keizai Shimbun are three major newspapers that traditionallysupport the country's military programs. Their positions on BMD are no exception.

In the aftermath of North Korea's Taepo Dong launch, the Yomiuri editorially urged thegovernments of Japan and the United States to expedite their cooperation on BMD research anddevelopment. (43) Morerecently, following ambiguous indications that North Korea might be prepared to give up its missiledevelopment program, the Yomiuri editorialized that North Korea's existing shorter-range Nodongmissiles also were a problem that Japan had to deal with, even if some countries objected to Japan'sacquisition of a missile defense capability. (44) The Sankei has advocated Japan's timely participation in theBMD deployment to deter missile attacks and provide the public with a greater sense ofsecurity." (45)

On the opposition side is Asahi Shimbun , another major daily newspaper in Japan with amore "liberal" stance and more critical view of government actions and policies than most of themajor newspapers. Asahi has repeatedly warned that participating in the U.S. BMD program wouldgreatly strain Japan's relationships with China and Russia. (46)

Media support for missile defense appeared to soften somewhat following President Bush'sMay 1, 2001, speech outlining the Administration's more comprehensive concept of national missiledefense. Predictably, the Asahi pointedly underscored the discomfort of Japanese officials aboutblurring the distinctions between BMD and NMD by the United States, and editorialized that Japanshould clearly reject the U.S. missile defense proposal. (47) Even the generally conservative Yomiuri indicated a morecautious stance, noting the costs and technological challenges of the joint BMD project, and callingon the Japanese government to seek additional information from the United States about its revisedapproach to missile defense. (48) Going against this trend, the Nihon Keizai Shimbun , Japan'scounterpart to the Wall Street Journal , noted various objections to acquiring a BMD capability butconcluded that on balance "missile defense will help promote nuclear disarmament." The NihonKeizai Shimbun noted the Bush Administration's announcement that it would unilaterally makereductions in the U.S. nuclear arsenal, and also argued that missile defense, if effective, would"potentially make the possession of nuclear weapons meaningless." (49)

Acute concern about a growing missile threat to Japan has been increasingly evident amongthe Japanese public. A January 2000 poll by the Office of Prime Minister indicated high levels ofconcern about the situation on the Korean Peninsula (56.7%) and arms control regarding weaponsof mass destruction and missiles (35.2%). (50) Nevertheless, there seems to be a persistent lack of consensuson the desirability of cooperation with the U.S. on BMD development. A poll by the United StatesInformation Agency, published in November 1998, and taken shortly after North Korea's TaepoDong launch, showed that only 43% of the respondents supported cooperating with the United Statesin the development of a ballistic missile defense system, while 32% opposed to it. (51) Subsequently, when asimilar question was posed in May 2000, 41% of the respondents favored cooperating with the U.S.on BMD development, 46% opposed, and 14% answered "I don't know." (52) Among other objections,many Japanese citizens have indicated apprehension about both the substantive and symbolicimplications of the deployment of a BMD in terms of the role and status of Japan's Self-DefenseForces.

Key National Interest Considerations of Japanese Policymakers

The extent of future cooperation with the United States on BMD is one of the most importantforeign and security policy decisions facing Japanese policymakers. In addition to being importantto the future of the U.S.-Japan alliance, cooperative research and the deployment of a BMD systemwould have major ramifications for Japanese security and its relations with China and other Asianneighbors, as well as with Russia.

U.S.-Japan Alliance Considerations

The Japanese Government appears to place alliance considerations high on the list of reasonsfor taking a positive stance towards missile defense cooperation with the United States. Some U.S.analysts portray missile defense cooperation as "a solid alliance-builder" with Japan," albeit only if"properly carried out." (53) Whether Japanese officials fully share this view is uncertain, butclearly the goal of strengthening the alliance has been a significant factor in their decision to pressahead with the program despite public criticisms that have been leveled at the Bush Administration'srevised missile defense policy. Joint development also has been seen as an opportunity for Japanto favorably respond to some congressional demands for greater responsibility in burden-sharing byTokyo.

Conflicting Concerns About China

Although normally unspoken in public, the potential ballistic missile threat from Chinaappears to be both a fundamental reason for Japan's desire to acquire a BMD capability and the mainsource of its cautious approach to the participation in the U.S. plan. Some believe that possessionof a BMD capability could devalue the role of theater ballistic missiles in regional conflict andcounter or even deter the further development and modernization of Chinese missiles.

Others in Japan have registered concerns that the BMD program may destabilize theMainland's relations with Taiwan, as well as Japan, and trigger a regional arms race. China has beenadamantly opposed to the inclusion of Taiwan in the area covered by U.S.-Japan DefenseCooperation Guidelines and the BMD. Should the Bush Administration make progress inrestraining North Korea's ballistic missile program, the Chinese missile threat will stand out as themost obvious motive for Japanese cooperation on the development of a BMD system -- a fact thatcould induce new strains in Sino-Japanese relations. Thus far, however, although North Korea hasagreed to suspend tests of its long-range Taepo Dong missiles, Pyongyang has failed to respond toBush Administration statements of intent to hold unconditional discussions on missile and otherissues. Also, since the September 11 attacks, China has tended to downplay its opposition to theU.S. missile defense program in the interests of putting U.S.-China relations on a more cooperativefooting. The relaxation of tensions in U.S.-China relations has had the effect of also taking someof the edge off Sino-Japanese relations.

Other Foreign Policy Considerations

Strains in Japan's relations with China are just part of a wider problem of reassuring Asianneighbors about Japan's intentions. Regional reaction was muted towards Japan's decision to sendships to the Indian Ocean to provide logistical support to U.S. forces participating in the anti-terroristcampaign in Afghanistan, but Japan has not succeeded in putting to rest regional concern that itaspires to play a larger military role. Much of this concern stems from Japan's failure to overcomelingering resentment of its colonial role and aggression in World War II.

Continued Friction in Japan-South KoreaRelations. Japan seemed to make a breakthrough in its relations with South Koreain October 1998, during an October 1998 visit to Tokyo by South Korean President Kim Dae Jung,when the late Prime Minister Keizo Obuchi's gave Japan's first written apology for its pastaggression. Since that time, however, a number of incidents have kept Japan-South Korean relationson edge, including a visit to the Yasukuni War Memorial by Prime Minister Junichiro Koizumi inAugust 2002.

As a beneficiary of U.S. presence in the region, South Korea may eventually condone theintroduction of a U.S.-Japan BMD capability that would shield U.S. bases in Japan against a NorthKorean missile threat. To date, however, South Korean leaders and media commentators havecontinued to express suspicion of Japan's interest in missile defense.

South Korea's own preferred response to North Korea's ballistic missile capability has beento develop missiles capable of attacking North Korean missile sites, rather than supporting thedeployment of a BMD system. Since 1979, this strategy has been constrained by a commitment tothe United States that South Korea would not deploy missiles of more than 180 kilometers (112miles) range -- enough to attack North Korean targets near the Demilitarized Zone (DMZ) but notenough to reach Pyongyang. In mid-2000, however, reportedly after five years of negotiations, theClinton Administration agreed to allow South Korea to develop missiles with ranges up to 300kilometers (186 miles) and corresponding payloads of up to 500 kilograms. The U.S. StateDepartment formally announced the policy change in mid-January 2001. (54) Reportedly the UnitedStates also agreed that South Korea could conduct research on missiles with up to 500 kilometersrange. (55)

Thus far, South Korea appears not to have acted on the agreement because of President KimDae Jung's "Sunshine" policy that seeks North-South engagement (56) Nonetheless, because ofcontinuing criticism of Japan by both North and South Korea, and the aspirations of Koreans forreunification, the apparent desire of Seoul to develop an offensive ballistic missile capability isanother source of Japanese uneasiness.

Concerns about Perceptions of Japan's Southeast AsianNeighbors. Japan is also aware of negative ramifications that deployment of aBMD system could have on its diplomatic profile in Asia, especially among its Association ofSoutheast Asian Nations (ASEAN) neighbors. As past victims of Japanese World War IIaggression, many of the countries of Southeast Asia still harbor fears of Japanese remilitarization. Hence, many if not most countries in Southeast Asia view the U.S.-Japan alliance in a favorablelight, for it signifies a continuing U.S. engagement in regional security and deters Japan fromre-emerging as an independent military power. In this respect, joint deployment of a BMD systemwould tend to be less worrisome to most Southeast Asian countries than would Japan's acquisitionof an independent capability, but some Japanese policymakers are concerned that even this wouldbe unduly provocative, and would partly negate Tokyo's effort to improve its relations in the contextof a de facto rivalry with China for influence in an area Japan once viewed as its "backyard."

Legal and Constitutional Constraints

Foreign Japan-watchers and the Japanese themselves have given great attention to theconstitutional issue, especially the question of whether the constitution can be reinterpreted to allowfor collective defense arrangements, or whether the seriousness of the question requires aconstitutional revision. A number of study groups within the Diet have considered the issue, butwithout coming to any clear conclusions. Generally, however, a large majority of the Japaneseofficials and the public have taken the position that reinterpreting the constitution to allow forcollective defense is a step too far. Prime Minister Koizumi himself has argued for a more flexibleinterpretation, but this appears to be a minority view even within his own party. Many among theJapanese public are less concerned about collective defense, per se, than with the concomitantexpansion of the roles of the Japanese military. From this perspective, Article 9 is viewed as a kindof Talisman protecting Japan from the revival of militarism.

Possible Bellwether for the Future? Japan's Response to the U.S.War on Terrorism. One aspect of Japan's response to the request of the UnitedStates that Japan "show the flag" with logistical support of U.S. forces deployed in the Indian Oceanafter the September 11 terrorist attacks, could be a bellwether of how much effect the constitutionalissue has on future Japanese BMD cooperation. After first indicating that the government wouldsend an Aegis destroyer as part of a small naval contingent that it sent to the Indian Ocean in October2001, Prime Minister Koizumi was forced to give way to vocal objections from within the LDP, theNew Komeito, a coalition partner, and the opposition Democratic Party that sending an Aegis shipwould be unconstitutional. Critics argued that because the Aegis ship would be establishing a datalink with U.S. Aegis ships, Japan would be a party to any military action by those ships. Perhaps themost significant aspect of this opposition was that within the LDP objections to sending an Aegisdestroyer came from a number of leaders generally viewed as politically conservative, if notnationalistic. (57)

The maintenance of this line of argument against deploying Aegis ships could be fatal to anumber of possible BMD cooperation scenarios, but it remains to be seen if the position will stand. Some analysts and commentators have suggested that when the current six-ship naval contingent isrotated home, an Aegis destroyer will be sent with the relief force. From this perspective, Koizumi'sretreat was just a tactical one, temporarily saving the face of his critics, but without being deflectedfrom his ultimate purposes. Alternatively, Koizumi's forced retreat on this issue may accuratelyreflect what is politically possible for the foreseeable future.

Ban on the Use of Outer Space for MilitaryPurposes. Some in Japan oppose participation in the U.S. BMD program ongrounds that joint research and development goes against a 1969 parliamentary resolution on thepeaceful use of space that prohibits the SDF's direct use of space for killing, injuring or destruction. For now, this issue seems to be resolved in favor of BMD. The Japanese government declared inDecember 1999 that the Japanese involvement in the NTW program is in accordance with the upperhouse resolution on the peaceful use of outer space. (58)

Since North Korea's August 1998 Taepo Dong missile launch, public opinion generally hasbeen supportive of the deployment of an independent national reconnaissance system, (59) but the employment ofspace-based sensors raises questions about the militarization of space, which Japan has pledged toavoid.

Ban on Arms Exports. Japanese critics also arguethat participation in the U.S. BMD program violates a long-standing ban on arms exports. TheJapanese government also has asserted that military technology transfer deriving from the jointresearch would stay within the preexisting lawful framework of military technology transfer to theUnited States. (60) However, exports of military hardware and components are viewed by some as going beyond currentpolicy. Consequently, some LDP members with defense industry ties reportedly have called for achange in Japan's current ban on arms exports to make sure that Japanese contractors can participatein the production of BMD components for export to the United States. (61)

Cost Concerns

Acquisition of a BMD capability would present a major a financial challenge to today'sJapan, which is struggling with a faltering economy and proportionately the largest public fiscal debtin the industrialized world. Although climbing for most of the 1990s, Japan's military budgets beganleveling off around 1998. The share of the research and development budget has been shrinking inrelation to the procurement budget. (62) BMD procurement would have to compete for funds with theplanned procurement of such systems as F-2 fighter aircraft, air-refueling tankers, two new AEGISdestroyers (which could serve as platforms for an eventual BMD system), a replacement for Japan'sfleet of PC-3 maritime reconnaissance aircraft, and information gathering satellites.

The costs of Japan's participation in research and development related to four parts of theStandard-3 interceptor missile are relatively small, but acquisition of a BMD capability wouldunquestionably present the Koizumi government and the JDA and Self-Defense Forces (SDF) withmajor defense budget decisions. In both FY2001 and FY2002, the Japanese government allowedless than a 1% increase in defense spending. Japan's prolonged economic slump has seriouslylimited new arms acquisitions. Some analysts estimate that it could cost Japan as much as $50billion over a number of years to develop and deploy a robust ballistic missile defense. (63) Considering that Japan'sFY2001 budget for procurement for military hardware only totaled Â¥ 767 billion (about $7.1 billionat then prevailing exchange rates), and that the entire budget was less than $40 billion, the JDAlikely will face extremely difficult choices in deciding between BMD and other weapons systemmodernization programs.

Japanese officials say that the current Five-Year Defense Outline that began with FY2001has sufficient funding for currently planned procurement programs only. Because the five-year plantraditionally does not allow for major revisions, Japanese officials indicate that a procurementdecision could not take place until about FY2006. (64)

A decision by Japan to acquire a BMD capability would have costs and significance far inexcess of the U.S. decision to push forward with missile defense, even though the actual monetarycost to Japan would be far less, both in comparative and absolute terms. Practically speaking, inview of other acute spending priorities and budgetary constraints associated with its mountain of badloans, unfunded liabilities of hundreds of quasi-governmental corporations and pension funds, risingand unprecedented levels of unemployment, and falling tax revenues, Japan cannot opt foracquisition of a BMD capability without jettisoning the informal 1% of GDP limitation on defensespending. To do so, however, would likely generate significant criticism from both Japan'sneighbors and a large section of the Japanese public.

A decision not to deploy a BMD system would likely have its own set of costs for U.S.-Japansecurity relations. Because a BMD system deployed in Japan could help protect U.S. troopsstationed in Japan, as well as Japanese lives and assets, many in the Congress and the ExecutiveBranch, and among the U.S. public, tend to see Japan's participation in BMD as a fully warrantedexercise in alliance burden-sharing. Currently, Japan's burden-sharing in the form of host-nationsupport of U.S. forces amounts to $4 to $5 billion annually, taking into account direct support,foregone revenues, and in-kind contributions. (65) However, the host-nation support (HNS) -- also is in decline. During a presidential visit to Japan in July 2000, President Clinton and Prime Minister Mori agreedthat Japan would reduce by $30 million its annual host-nation support of U.S. troops stationed inJapan. (66)

This cut is largely symbolic, but the simple fact that it was deemed politically necessary bythe Japanese government underscores the difficulties that may be encountered in seeking to financethe cost of acquiring and deploying a BMD capability. Likewise, U.S. efforts to hold the reductionto the absolute minimum indicate the limits of American sympathy for the Japanese government'spolitical situation.

Implications for U.S. Policy

As the U.S. BMD program progresses, a number of uncertainties concerning Japan's futureparticipation are likely to emerge as executive branch and congressional concerns. Assumingdevelopment proceeds as U.S. planners hope, Japan may have to address the issue within the currentterm of the Bush Administration. Japan's decisions are not likely to have a significant impact on theU.S. program, but could affect the size and effectiveness of a U.S. BMD capability in Asia, as wellas on U.S.-Japan alliance cooperation more generally.

Japanese decisions either for or against the acquisition of a BMD capability raise separatesets of subsidiary issues. The following discussion analyzes some implications of alternateoutcomes.

1) Burden-Sharing Issues. Because the Japanesecommitment on the U.S. BMD project to date is only for technology research on four specificcomponents for Sea-Based Midcourse Defense, the U.S. Department of Defense anticipates asignificant, but not crucial, Japanese technological contribution. If Japanese cooperation ends at thejoint technology research level, however, Japan still will be a major beneficiary if a BMD capability-- assuming, as is likely, that such a capability is deployed with the U.S. 7th fleet, home-ported inJapan. If Japan does not develop or deploy the system with the United States, what kinds ofcompensation, if any, would the United States expect of Japan?

At the moment, this is still a hypothetical question. A number of signs indicate that Japanwants to acquire a BMD capability. These indicators include not only the funds that the Japanesegovernment is committing to cooperative R&D, but also the fact that two new Aegis destroyers andfunds for the most current radar and communications suite have been included in the current fiveyear defense plan. If, however, Japan decided not to acquire a BMD capability, the decision wouldplay into the broader issue of defense burden-sharing. At a minimum, a decision not to acquire aBMD capability could revive congressional concerns about whether Japan is shouldering enough ofthe burden of regional stability and its own defense.

2) Utility of a Jointly Deployed U.S.-Japan BMD Capability toU.S. Military Operations in the Event of a Regional Conflict. Although theJapanese government has rarely issued objections to the U.S. military's joint operations with Japanin the past, prior to the recent response to the U.S.-led anti-terrorist campaign in Afghanistan, suchactivities have been carefully restricted to training exercises having limited objectives such assea-lane defense, air defense, or peacekeeping support. Current rules of engagement governing theoperations of the Japanese Navy rule out activities that could be construed as combat support of U.S.forces for any missions not involving the defense of Japanese territory.

If a missile defense capability were deployed on Japan's Aegis destroyers and a conflicterupted on the Korean Peninsula on between China and Taiwan, the United States might put pressureon Japan to deploy some missile defense capability outside its own territory. Under prevailingJapanese rules of engagement and constitutional interpretations, a favorable Japanese response wouldappear all but impossible.

Less clear is whether in a crisis situation the exchange of real-time data between JapaneseAegis ships equipped with a BMD capability could pass political or constitutional muster. Forinstance, could Japanese ships equipped with the Sea-Based Midcourse System back up moreforward-deployed U.S. units with supplementary target information? Presumably they could, so longas Japanese territory or U.S. bases in Japan were possible targets of a missile attack. Under currentJapanese constitutional constraints, however, the U.S. military would likely find it prudent not tocount on Japanese participation in anything short of a clear and present threat to Japanese territory. The example of Prime Minister Koizumi reversing his decision to send an Aegis-equipped destroyerto the Indian Ocean is a case in point.

In summary, an integrated binational BMD capability could be highly useful in situations thatalso threatened Japanese territory, but might be of little utility to U.S. forces in situations outsideJapanese territorial waters or not involving an attack on Japanese territory. In these cases, U.S.forces presumably would have to operate independently. Since BMD capable ships are beingdesigned to be self-supporting, if necessary, these limitations are not critical, but they raise questionsabout the ultimate value to U.S. security of a Japanese BMD capability.

Japanese perspectives on the limits of the collective security ban are in flux, and PrimeMinister Koizumi has speculated in public that Japan might have to have a more open mind abouta situation involving an attack on U.S. military forces in the region. (67) While campaigning forthe LDP presidency, Koizumi said that he would give high priority to constitutional revision, butsince taking office he has given first priority to his call for the direct election of the Prime Minister,and appears to have downgraded the urgency of revising Article 9, while calling for continueddiscussion of the issue. The Prime Minister's caution may reflect repeated polls consistently showingthat 70% or more of the respondents oppose revising Article 9. (68)

3) Impact of Japan's active involvement in regional deploymentof a BMD system on U.S. operational flexibility. Given the historical mistrust ofJapan's intentions and programs among its Asian neighbors, a highly visible involvement by Japanin missile defense, were it otherwise possible, could have negative implications for U.S. securityinterests in Asia. China, for instance, might see an integrated U.S.-Japan BMD capability as morethreatening to its interests than a U.S. system alone, because of the implication that Japan is joininga de facto collective security arrangement that is aimed at China, especially in a confrontationinvolving Taiwan. China and other neighboring countries may be less than convinced that Article9 will continue to inhibit Japan's participation in collective security with the United States, especiallybecause the restriction has become the target of nationalist opposition in Japan. Thus for China,North and South Korea, and some Southeast Asian countries, an integrated U.S.-Japan BMD systemcould be viewed as symbolizing the remilitarization of Japan under the cloak of alliance cooperationwith the United States. To the extent that joint BMD deployment generated fears of a rearmedJapan, it could detract from the acceptability of a U.S. BMD capability.

On the other side of the equation, Japan's neighbors are likely to regard an independentJapanese BMD with even greater concern. For some of Japan's neighbors, such as South Korea, aJapanese capability firmly linked to that of the United States would seem more desirable. China, onthe other hand, opposes both deployment options.

4) Command, control, communication, and intelligence (CÂ³I)issues. These could be critical issues in the case of an integrated U.S.-JapaneseBMD capability. To what degree would the United States be dependent on the decision-makingcapability of the Japanese Cabinet, which has yet to develop effective crisis managementcapabilities? Would, some ask, Japan allow a U.S. commander to control the "button" that wouldactivate a joint system? This would be most unlikely, according to Japanese sources? (69)

A similar dilemma could arise if U.S. and Japanese missiles were integrated into a jointsensor and command and control system. In scenarios that do not involve the defense of Japaneseterritory, such as the deployment of U.S. BMD systems to protect Taiwan, the question arises as towhether Japan could or would allow the involvement of jointly operated satellite and command andcontrol facilities. Several defense commentators and private analysts have suggested that thisproblem could be circumvented by the creation of a joint command and control system that wouldalso allow either party to act independently, if necessary. (70)

Japanese officials and defense analysts are well aware of the inadequacy of their current crisismanagement and CÂ³ capabilities. Prime Minister Koizumi reportedly hopes to succeed where hisrecent predecessors have failed in getting the Diet to approve legislation giving him the emergencypowers necessary for crisis decisionmaking. As of early 2002, however, the prospects for theintroduction of such legislation remain doubtful.

Conclusions

The United States and Japan have shared concerns about the proliferation of ballistic missilesin Asia and, therefore, a shared interest in the theater missile defense. The technological andfinancial contributions that Japan may bring into cooperative research on the Sea-Based MidcourseSystem element of the U.S. BMD program are potentially significant, although not critical. Japancontinues to keep its options open regarding the acquisition and deployment of a BMD capability. Subject to flexible enough rules of engagement and crisis management capabilities, Japan'spossession of an operationally compatible BMD capability would contribute importantly to theability of U.S. military forces to deploy an effective missile defense system in the Asian region, asseems to be envisioned by BMD supporters in Congress and the Bush Administration. Also, the veryfeasibility of deploying a BMD system in Asia depends on the availability of bases in Japan, mostnotably the U.S. naval base at Yokosuka, on Tokyo Bay, which is the home port for the U.S. SeventhFleet.

Considering the wide range of issues that the Japanese government must resolve beforeproceeding with a decision to acquire a BMD capability, the future of an interoperable U.S.-Japancapability cannot be taken for granted, let alone an integrated binational system. On the positiveside, Japanese defense officials seem clearly to be leaning in the direction of at least a national BMDcapability that would be interoperable with that of the United States. Even if Japan does opt toprocure and deploy an operationally compatible BMD system, however, it remains highlyquestionable whether Japan will agree to an integrated command and control arrangement. Atpresent, a substantial majority of the Japanese public appears opposed to constitutional changes thatwould allow collective self-defense, either for missile defense or other purposes.

Senior Bush Administration officials, most notably Deputy Secretary of Defense Armitage,have expressed a strong desire for Japan to address the constitutional constraints. Were Japan toamend or reinterpret Article 9, however, Japanese policy would still be based on its national interestperceptions. Thus any decision by Japan to opt for joint deployment of a BMD capability would itself raise additional foreign policy issues for Japan and operational challenges for U.S. forces.

Several of these foreign policy issues are trilateral rather than bilateral. For instance,Japanese policy could turn on the evolution of U.S. relations with the PRC and Taiwan, and whetheror not the United States succeeds in negotiations to eliminate the North Korean missile threat. NorthKorea's Taepo Dong launch of August 1998 provided an important public relations asset to BMDsupporters in Japan. On the other hand, a number of indicators suggest that the main concern amongdefense analysts and planners in Japan, and those in the political world who think about suchmatters, is fear that China may one day threaten Japan with ballistic missiles. From this perspective,a missile defense capability is one means to counter China's rising military power.

It is difficult to assess the impact of future political change on Japanese decisionmakingconcerning BMD cooperation, especially regarding any matters touching on the constitution. Ingeneral, political change since the split in the LDP in July 1993 seems not to have had muchperceptible impact on the trend towards a more assertive defense posture and increased U.S.-Japansecurity cooperation. Because of the steady decline of the Social Democratic Party of Japan (SDPJ),the two most likely alternatives to the status quo are a revitalized Democratic Party of Japan (DPJ),which remains divided between former members of the SDPJ and more conservative defectors fromthe LDP, and the more nationalistic wing of the LDP, as represented by Shintaro Ishiharo, thepopular, iconoclastic Governor the Tokyo Metropolitan Prefecture. For different reasons, neitherof these alternatives to the political status quo has been enthusiastic about missile defensecooperation with the United States. What stance they would take were they to attain power isdifficult to forecast with any confidence.

Another imponderable at this time is the longer term prospect for retaining U.S. bases inJapan. At present, the principal targets of public opposition to U.S. bases in Japan are facilities inOkinawa whose training and other operations have a large impact on the environment and qualityof life. These mainly involve the U.S. Marines stationed there. In general, U.S. Navy and Air Forcebases receive less criticism. Nonetheless, some of the same groups that support a defense buildupand closer alliance relations are ambivalent about hosting a major U.S. military presence more thanfive decades after the end of the U.S. post-World War II occupation. Already, Okinawans havesucceeded in getting the Japanese government to "relay" their desire to put a fifteen year limit on useby the U.S. Marines of a proposed replacement for the current Futenma Marine Air Station. Fornow, issues concerning U.S. access to bases in Japan are limited to Okinawa, and to forces that donot relate to BMD. Should this situation change, it would become more difficult for the United Statesto maintain an "Asian" BMD capability. (71)

Japan's involvement in joint development of the SMD element of the U.S. missile defenseprogram represents considerable progress by Japan towards greater alliance burden sharing, but itsfull implications remain to be seen. Neither Japan's participation in joint research and development,nor a decision by Japan for or against acquisition or deployment of a BMD capability, are likely tohave critical impact on the development of a U.S. missile defense capability or on the deploymentof an American sea-based capability in Asia. Nonetheless, Japan's participation in the research anddevelopment phase is viewed by U.S. officials as possibly contributing important technology, anda decision by Tokyo to acquire a BMD capability could have considerable foreign policy significancefor the United States and important military implications. Given the prevailing uncertainties aboutJapanese policy and the implications of its future decisions, Congress may decide to considercarefully the assumptions of the Administration and the terms of any further steps in BMDcooperation with Japan. Part of such consideration could be obtaining additional information on thethreat perceptions of the Japanese Defense Agency (JDA) and Self-Defense Forces (SDF), thepossible implications of a change in the perceived threat from North Korea's missiles, the attitudeof Japanese political leaders and Ministry of Foreign Affairs policymakers towards China, Japan'sfiscal situation and defense budget trends, public and political attitudes towards U.S.-Japan securitycooperation and U.S. bases in Japan, and the prospects for constitutional revision and the acquisitionof emergency powers by the Japanese national command authorities.