{"id":3807,"date":"2013-02-07T05:00:37","date_gmt":"2013-02-06T19:00:37","guid":{"rendered":"http:\/\/www.aspistrategist.ru\/?p=3807"},"modified":"2013-02-08T07:43:04","modified_gmt":"2013-02-07T21:43:04","slug":"defence-industry-cooperation-in-asia-bad-and-good-news","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/defence-industry-cooperation-in-asia-bad-and-good-news\/","title":{"rendered":"Defence industry cooperation in Asia: bad and good news"},"content":{"rendered":"

\"Like<\/a><\/p>\n

Two big developments last week highlighted both the difficulties and the opportunities for Australian defence industry to make headway (as Australia sees it) in the so-called Asian century. The first development relates to a lost opportunity with a South Korean firm, the other to a potentially huge opportunity with Japan. To give these stories a bit of context, it\u2019s worth highlighting how the Asian Century White Paper<\/em><\/a> described prospects for cooperation with our current second and sixth biggest trading partners<\/a>:<\/p>\n

\n

The more advanced economies in the region\u2014particularly Japan and South Korea\u2014will remain important drivers of economic activity, especially as suppliers of critical, high\u2011value elements of the region\u2019s production networks and as consumers of final goods.<\/p>\n<\/blockquote>\n

Imagine the disappointment the report\u2019s authors would have felt last week to learn that a major South Korean firm, the Poongsan Corporation, had pulled out of an arrangement with Raytheon Australia and Chemring Australia<\/a> to tender for our domestic munitions manufacturing. The managing Director of Poongsan was quoted in the Australian Financial Review<\/em><\/a> (paywalled) expressing concerned about the \u2018acquisition system in Australia\u2019 and that \u2018the sovereign risk \u2026 the Australian program represents to Korean companies has become too large to ignore\u2019.<\/p>\n

We might never know if the business case for Poongsan\u2019s involvement in domestic munitions manufacture would have been attractive, but the possibility of linking Australia\u2019s production needs into a global supply chain would potentially have offered a more promising future to a domestic business that looks barely viable at the moment.<\/p>\n

It\u2019s a major problem when a big company from a trading partner as important as South Korea chooses not to compete for business in Australia on the basis of \u2018sovereign risk\u2019\u2014a term indicating serious lack of confidence in our policy settings. Let\u2019s not forget the last-minute decision by the Australian government in May 2012 not to proceed with a $220 million acquisition of self-propelled howitzers from South Korea\u2019s Samsung Techwin<\/a>. Samsung was reported<\/a> as saying the Australian government was \u2018disingenuous and dishonourable\u2019 in its dealings with the firm.<\/p>\n

These developments provide some sober context for the aspirations<\/a> of the National Security Statement to \u2018enhance our dialogues with Japan and South Korea on areas of common security interest\u2019.<\/p>\n

A more encouraging piece of news came from Japan, where serious consideration is reportedly being given in the Japanese Ministry of Defence<\/a> to share submarine technology with Australia. There\u2019s great potential in this possibility. Both countries have significant plans for submarine acquisition, both will remain focussed on conventional diesel-electric power for propulsion and both are close allies of the United States. Late in 2011, Japan relaxed its export controls on military technology, and in April 2012 agreed to increase defence industry cooperation with that (re)emerging player in Asian security, the United Kingdom<\/a>.<\/p>\n

Close cooperation between Australia and Japan on submarine technology has the potential to save money and indeed in Australia\u2019s case save SEA1000 from the ignominy of being unaffordable and unachievable. But we shouldn\u2019t expect that the Japanese will open access to such cooperation without them making a few judgements of their own about sovereign risk. As this Asahi Shimbun<\/em> article<\/a> makes clear, there\u2019s a still hurdle Australia must clear:<\/p>\n

\u2026 an issue that still has to be addressed is the nature of technology being provided only one-way instead of mutual sharing.<\/p><\/blockquote>\n

In other words, the Japanese want to know what\u2019s in it for them\u2014just as we would if they were eyeing a piece of our technology. So an urgent task for Australia should be to demonstrate to Japan that the benefits of collaboration will run both ways. There are some real possibilities here: the Defence Capability Plan (Public Version)<\/a><\/em> (PDF) of 2012 lists a number of \u2018priority industry capabilities\u2019 which are highly relevant to future submarine capability development. These include acoustic technologies and systems, electronic warfare, high end system and \u2018system of systems\u2019 integration, signature management and the in-service support of the Collins Class submarine. There\u2019ll always be some areas of technology that both countries will want to keep to themselves, but in other respects the aim should be to collaborate\u2014not least as a way to support the survival of these industries in Australia.<\/p>\n

Here then is an early opportunity for Australia\u2019s new Minister for Defence Materiel, Dr Mike Kelly<\/a>: an early visit to Japan to further the dialogue on technology cooperation, as foreshadowed by Stephen Smith last September. That visit needs a heavy emphasis on what our defence industry base can do for Japan. And while he\u2019s in that part of the world, Dr Kelly could also drop into Seoul to undertake a badly-needed repair job about prospects for defence industry cooperation.<\/p>\n

Peter Jennings is executive director of the Australian Strategic Policy Institute. Image courtesy of Flickr user pasukaru76<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Two big developments last week highlighted both the difficulties and the opportunities for Australian defence industry to make headway (as Australia sees it) in the so-called Asian century. The first development relates to a lost …<\/p>\n","protected":false},"author":9,"featured_media":3830,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[17,126,135,331,332],"class_list":["post-3807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-australia","tag-defence-industry","tag-japan","tag-korea","tag-technology"],"acf":[],"yoast_head":"\nDefence industry cooperation in Asia: bad and good news | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/defence-industry-cooperation-in-asia-bad-and-good-news\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Defence industry cooperation in Asia: bad and good news | The Strategist\" \/>\n<meta property=\"og:description\" content=\"Two big developments last week highlighted both the difficulties and the opportunities for Australian defence industry to make headway (as Australia sees it) in the so-called Asian century. 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