U.S. Military Coproduction Programs Assist Japan in Developing Its Civil Aircraft Industry

ID-82-23: Published: Mar 18, 1982. Publicly Released: Mar 18, 1982.

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Military coproducton refers to programs by which the United States and other countries join together in producing a military system or item. GAO was asked to review military coproduction arrangements with Japan, with an emphasis on the F-15 aircraft coproduction agreement.

The United States enters into military coproduction arrangements primarily to achieve national security objectives, but it receives some economic benefits as well. Military coproduction improves our allies' military readiness and promotes the standardization and the interoperability of military equipment. Japan's objectives in entering into military coproduction arrangements are: obtaining advanced technology; enhancing its high-technology employment base; developing future export industries; and increasing its military self-sufficiency. Even though coproduction of certain items costs Japan two to three times as much as purchasing the equipment from U.S. production lines, Japan considers the cost worth the investment in future industrial capability and increased military self-sufficiency. In recent years, Japan has progressed in some areas to the point where some officials feel that the United States can benefit from Japan's technological achievements. Japan's aircraft industry has grown and developed largely through U.S. military aircraft coproduction programs. Building on the experience and technology gained through these programs, the Japanese Government is assisting in the development of Japan's civil aircraft industry. As a result, Japan could become a major competitor in the world civil aircraft market. In pursuing the political and military objectives of coproduction, the United States has not devoted adequate attention to the impact that these arrangements could have on the U.S. economy.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The recommendation remains valid. However, the agency does not intend to implement it. An expanded followup review is warranted.

    Recommendation: The Secretary of State should take the lead and, in cooperation with the United States Trade Representative and the Secretaries of Defense, Commerce, Treasury, Labor, and other relevant agencies, form a clear and more comprehensive military coproduction policy. This policy should fully recognize the trade and economic implications of military coproduction, as well as the political and military goals to be achieved.

    Agency Affected: Department of State

  2. Status: Closed - Not Implemented

    Comments: The recommendation remains valid. However, the agency does not intend to implement it. An expanded followup review is warranted.

    Recommendation: The Secretary of State should take the lead and, in cooperation with the United States Trade Representative and the Secretaries of Defense, Commerce, Treasury, Labor, and other relevant agencies, establish procedures requiring coordination between the Office of the United States Trade Representative and the Departments of State, Defense, Commerce, Treasury, Labor, and other relevant agencies when considering coproduction requests involving high-technology items.

    Agency Affected: Department of State

  3. Status: Closed - Not Implemented

    Comments: The recommendation remains valid. However, the agency does not intend to implement it. An expanded followup review is warranted.

    Recommendation: The Secretary of State should take the lead and, in cooperation with the United States Trade Representative and the Secretaries of Defense, Commerce, Treasury, Labor, and other relevant agencies, develop, with input from industry, criteria for conducting economic assessments to include the impact of impending technology transfers on U.S. industry before approving and negotiating coproduction agreements.

    Agency Affected: Department of State

  4. Status: Closed - Not Implemented

    Comments: The recommendation remains valid. However, the agency does not intend to implement it. An expanded followup review is warranted.

    Recommendation: The Secretary of State should take the lead and, in cooperation with the United States Trade Representative and the Secretaries of Defense, Commerce, Treasury, Labor, and other relevant agencies, participate with the Department of Defense in determining the releasability of high technology originally denied in memorandums of understanding.

    Agency Affected: Department of State

 

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