Poor Substitute

The announcement last week that Australia will replace its aging submarine fleet with Shortfin Barracuda submarines from France is an enormous missed opportunity, not only for Australia, but also for its most important allies, Japan and the United States. Had Canberra opted for a modified version of Japan’s Soryu-class vessel, it would have not only altered the way Washington interacts with its allies and the way its allies interact with one another, but also compelled Beijing to reassess the determination of all three to maintain a favorable balance of power in East Asia. Japanese-Australian cooperation on submarine procurement made both strategic and military-industrial sense, and could have reoriented regional security and defense industrial dynamics for decades to come.

 

To be sure, whether French or Japanese, additional maritime capabilities will give Australia important operational benefits. State-of-the art submarines capable of long-distance operations in the Asia-Pacific will replace Australia’s aging and high-maintenance Collins-class boats. The new subs will extend patrol range and enhance intelligence, surveillance, and reconnaissance operations, as well as the surveying capacities of the Australian fleet. From a design standpoint, the French boat appears to offer newer technology, whereas the modified Soryu was effectively built off a proven design. Although all of the boats on offer (Germany’s ThyssenKrupp was also in the competition with its Type 214 class submarine) would have offered a marked improvement on the Collins, only the Japanese choice would have strengthened strategic cooperation between America’s two most important partners in East Asia. 

 

Trilateral ties have developed rapidly since a security dialogue was established among Australia, Japan, and the United States in 2002. Australia, which shares Japan’s concerns about Chinese provocations, was the first country after the United States to which Tokyo reached out to secure a military agreement. In March 2007, Tokyo and Canberra signed a Joint Declaration on Security, a framework agreement to “strengthen cooperation and consultation on issues of common strategic interest.” The two countries initiated joint training and personnel exchanges, and the following year, they jointly adopted a Memorandum on Defense Cooperation to operationalize cooperation. In May 2010, the two approved an Acquisition and Cross-Servicing Agreement that became effective in January 2013. Then, in July 2015, Japan joined the United States and Australia in a military exercise for the first time, participating in the two-week “Talisman Sabre” exercise in the Northern Territory and Queensland state. 

 

In other words, from a strategic perspective, there is no question that it would have made sense to opt for the Soryu. It would have made economic sense as well. Large-scale procurement agreements often create important and longstanding military bonds, and the Soryu would likely have stayed in service with the Royal Australian Navy into the 2040s. The deal could have generated knock-on collaboration and efficiencies as well. Both nations have committed to purchase F-35s and both are slated to conduct regional maintenance for the aircraft. They could have potentially agreed to divide that labor to boost defense industrial cooperation and enhance interoperability among all three allies. 

 

Of course, the sale to Australia would have also provided a huge boost for Japan’s defense industry, which has long been capable of producing world-class military products, especially naval systems, but which had been battered by self-imposed limitations on exports, flat defense budgets at home, and rising Self-Defense Force maintenance costs. Thanks to the mergers in Japan’s shipbuilding industry, the number of firms in the country has been halved. Japan’s defense industry and conservative politicians long recognized these problems, but they didn't lift the export ban until China’s rise dramatically shifted the regional strategic environment. 

 

The Abe cabinet framed the elimination of restraints primarily as “a way in” for Japan’s defense contractors to joint development and co-production projects with the United States and other partners. The new guidelines would, advocates claimed, make it easier for Japan to take part in multinational development projects for expensive new weapons such as the U.S.-led effort to build the F-35 stealth fighter. The Japanese public remained somewhere between opposed and unenthusiastic, but in the context of a rising China and persuaded by economic arguments for benefits from new industrial development, they accepted “international armament cooperation” without much fuss. As the ban was lifted, Japanese defense contractors moved quickly to negotiate sales of components: sensors to the United States, tank technology to Turkey, air-to-air missile interceptors to the United Kingdom, and plans to export Japanese made parts for the F-35. 

 

But attention soon shifted to the export of complex weapons platforms—unmanned underwater mine hunting vehicles to France; C-2 transport aircraft to Southeast Asian militaries; and 12 US-2 amphibious planes to India for a reported $1.65 billion. The sale of Soryu-class submarines to Australia would have been about 20 times larger, making it the first major success in this strategy. At a time when Japan’s procurement budget has been declining, the ability to sell to multiple militaries and to manufacture at higher volumes promised to make unit costs cheaper for all customers. It would have enabled Japanese submarine manufacturers Mitsubishi and Kawasaki Heavy Industry to improve design and production capabilities (benefits that will now go to France’s DCNS). And it would have improved the attractiveness of Japanese industrial participation in a range of other co-development and co-production projects with foreign partners. 

 

Finally, the deal would have resulted in significant strategic and economic benefits for the United States. China’s rise is shifting the balance of power in Asia, a development only partially mitigated by the United States’ realignment to the region. It is not enough just to pivot to Asia; the United States also needs to adjust its footprint there and become more nimble and resilient. To do so it will need capable regional allies more than ever. So anything rendering those allies more muscular—and potentially interoperable—would be most welcome. 

 

Submarines provide a particularly potent deterrent for the United States’ Pacific allies. The United States now ports 60 percent of its 57 nuclear submarines in the Pacific. But although several subs may operate in the Western Pacific at any one time, only four are based in the Pacific West of Hawaii (all at Naval Base Guam). In 2010 Japan announced it would boost its own submarine force from 16 to 22 boats. This very substantial force boasts high operational readiness and is engaged in active patrolling of an archipelago, stretching almost 2,000 miles from Hokkaido to Yonaguni, which is increasingly transited by Chinese Naval forces departing for the Western Pacific. 

 

Australian submarine forces, too, have been highly capable, performing well in recent simulations, both with and against U.S. warships. Maintenance of the deficient Collins class, however, has been a major problem, with between zero and two boats operationally ready at any one time despite enormous outlays for their upkeep. The acquisition of a dozen far more reliable boats from Japan could have significantly added to allied submarine strength in the Asia–Pacific, and especially in the most relevant waters where carriers now are vulnerable. 

 

At the end of the day, the United States must respect Australia’s decision, which was reportedly based purely on technical grounds, and we certainly hope that the technical differences in proposals (and ultimate performance) justify the strategic opportunity costs. China’s rise and the shift in the regional balance of power have created anxiety in Japan and Australia, motivating Tokyo and Canberra to deepen their security partnership in parallel with the United States. For now though, the first significant steps beyond the United States’ Cold War “hub and spokes” architecture toward a more mutually-reinforcing latticed alliance, might have to wait.