Will Australia Buy Japanese Submarines?

On February 20, Defense Minister Kevin Andrews outlined for the first time details of the acquisition strategy for Australia's future submarine program. An authoritative press statement was long overdue and sorely needed to provide some clarity given the recent debate and confusion on the submarine issue.

Effective communication with the Australian public about such a huge and expensive project spanning decades is essential if there is ever going to be anything like a consensus that spans the community and the political divide.

Until recently Japan looked set to be awarded this contract with an initial agreement between Prime Ministers Abbott and Abe expected some time this year. The “competitive evaluation process” seems certain to delay any such announcement at least until the end of the year and it also opens up the possibility that Japan may lose out to Germany or France.

Notwithstanding what are likely to be strong bids from Germany and France, there is good reason to think that, despite the forebodings of some commentators about the high risks of buying Japanese submarines, Japan could still be awarded the contract in partnership with ASC.

In fact the process outlined by Defense Minister Andrews makes it more politically manageable to award the contract to Japan than it was previously. This is because, if followed, the process outlined should help reduce public perceptions of any special deal.

Prior to the Defense Minister's announcement, there was certainly evidence of concern in Japan at recent developments in Australia. An article in the Nikkei Asian Review on February 20 penned by its Australia-based correspondent before the Andrews announcement reported that Japan is worried Prime Minister Abbott no longer wields the power he once did and that the closeness of relations between Japan and Australia seen during Mr. Abbott's term so far as prime minister could be affected, particularly if he were to lose the Liberal Party leadership or the next election.

But although the formal announcement of a competitive evaluation process for Australia's future submarine program may be a short-term setback for Japan's aspirations to develop its defense export industry, Tokyo is still well placed to be awarded the contract, provided it is able to meet the terms of the process.

Why? Firstly, regardless of what might happen politically in Australia, Japan can be confident in its submarine technology and should be reassured by the fact that there is now a clear process. Secondly, there is a high degree of mutual trust in the bilateral relationship. What is sometimes overlooked is that this trust exists across the political divide including on defense and security issues. In other words, the relationship with Japan has long enjoyed bipartisan support.

Australia's defense and security links with Japan have certainly advanced strongly since Mr. Abbott became prime minister, but this is taking place on the basis of ever-broadening cooperation that has been building up steadily over the past ten years or more. The Joint Declaration on Security Cooperation signed in March 2007 between prime ministers Howard and Abe (in Abe's first stint as prime minister) has provided the framework for rapidly expanding defense and security cooperation under not only the remaining months of the Howard Government but also under the six years of the Rudd and Gillard governments and now the Abbott Government. Australia is now solidly in position as Japan's second most important security partner. The respective alliance relationships which Australia and Japan have with the US underpin this growing security cooperation.

In Japan there is a similar degree of bipartisanship. Cooperation with Australia continued to grow strongly when the Democratic Party of Japan held office from 2009 to 2012. During this period the Acquisition and Cross-Servicing Agreement was signed and this facilitated the two countries working closely together in recovery from national disasters including the 2011 Japanese earthquake and tsunami.

There is no question that cooperation with Australia is being further facilitated by Prime Minister Abe's keen interest in regularizing Japan's defense posture to enable its armed forces to take action beyond self defense (in strictly limited circumstances), and so that Japan can export its defense materiel and technology. But Japan is taking these steps because it sees them as being in its national interest, not simply because of the closeness of the relationship between the two current prime ministers.

Australia will also keenly pursue its national interests, and if that means a decision to purchase Japanese submarines then this should not, as some commentators argue, risk affecting our relations with China. Australia's national interests dictate that Canberra place a high priority not only on relations with Japan but also with the US, China, India, Indonesia, and other key Asian countries. Management of these relationships is not a zero-sum game. Each can be developed on its own merits and in ways that maximize Australia's national interests without making one contingent upon the other 

Murray McLean AO is a Nonresident Fellow at the Lowy Institute. He focuses on China, Japan, and associated regional issues. Murray spent 42 years as an officer of the Department of Foreign Affairs and Trade until his retirement in 2012. Much of his career has been spent on the formulation of Australian policy towards Asia, with a particular focus on China, Japan and Korea.

This piece first appeared in the Lowy Interpreter here.