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Bush, for example, shifted from the lofty language of former president Bill Clinton about how science and technology would be at the forefront of U. The two governments had touched on such subjects in the past primarily regarding energy, but, in , they launched a new Dialogue on the Internet Economy to consider the policy implications for these new technological markets and how they might affect businesses.
Similarly, Tokyo and Washington created companion-type dialogues in by way of the U. The bilateral Comprehensive Dialogue on Space began that same year. In , Abe replaced a virtual ban on the export of Japanese-made military hardware with new guidelines that permit the limited export of defense equipment to select countries that have sufficient rules in place to prevent proliferation—including the United States.
When it comes to U. A total of 1, Some obstacles are inherent, such as difficulties with communicating in different languages, misaligned fiscal and academic calendars, different models for evaluating program efficacy, and a big disparity in terms of the role that defense-related spending supports basic and applied scientific research.
These limitations are both a legacy of the U. For example, the United States has security-of-supply arrangements with nine other countries but not with Japan. There are other examples too. Most recently, in , Japan was not included on a short list Washington drafted of countries that are excused from heightened levels of scrutiny with regard to FDI, although the door was left open for possible inclusion in the future.
In contrast, offensive tools are designed to proactively promote the competitiveness of domestic industries. At a certain level, defensive policies are always in place, usually to protect military technologies and secrets by employing a tiered classification system that limits access to specific individuals and companies that undergo an extensive clearance process overseen by central governments. Additionally, governments use special licensing requirements, export controls, and investment constraints to enforce a desired level of foreign access to intellectual property, products, or corporate control.
Companies must comply with the minimum standards and approval processes that governments set, and they also can employ their own industrial security practices to protect trade secrets that in some cases go beyond government requirements. The United States and Japan have used a variety of regulatory means to manage export controls for military and dual-use products during the technoglobalist era.
For decades, the United States has governed defense-related exports with a munitions list that requires special licensing for certain products, services, and related data. The oversight of this regime makes commercial transactions more complex and secure, but there is an important tradeoff: it can also limit sales of such products. When Congress placed U. Department of Commerce. These export rules are not as cumbersome as ITAR, but such products still attract greater scrutiny depending on the import country and the specific import company or individuals involved.
In this case, the proposed end use and end user are the primary concerns, rather than the product being sold. Finally, for certain end uses and users linked to possible cases of weapons proliferation, many countries—including the United States and Japan—use a catch-all system to make sure even unlisted items are not exported to certain people and places that might try to use the products for nuclear, chemical, or other weapons programs.
Like the United States, Japan uses a list approach for its high-tech exports arms and dual-use items and catch-all provisions. Both countries, along with forty others, implement their export rules in line with the Wassenaar Arrangement, an international agreement to apply certain standards of control and transparency related to arms and dual-use trade.
In addition to its own classified information management system, the U. This manual also outlines a minimum level of investments in physical security, the management of subcontracts, and a wide range of other security-related details. Japan generally handles such contract requirements on a ministry-by-ministry basis rather than a national basis , a point that has generated some alliance friction when government-protected information is at stake and private companies are involved.
Overall, Japanese companies have a good track record of concluding SSAs when necessary over the past two decades. Both U. They also wanted the U. Other companies stressed the need to avoid restricting intracompany research collaboration that might take place across borders or involve joint venture partners based in other countries. Many Japanese and U. Such firms also often have facilities in India and other countries.
Would these ventures all be treated the same way under this proposal? On a related note, several companies recommended that the Commerce Department avoid unilateral definitions of these technologies and seek broader multilateral consensus with other parties, including the European Union EU , Japan, and others, so that market conditions would be optimized and private sector competition around the world would be fair and consistent.
This public criticism resonated with some Trump administration officials, leading to intense debates that lengthened the decisionmaking process. Instead of restricting AI-enabled software generally, for example, the rule was limited to the use of such software for digesting satellite imagery so that the stipulation would impact fewer firms and should allow for more timely license application reviews.
While Trump has continued issuing temporary general licenses that have exempt most transactions from the Entity List restrictions and have kept sales flowing through the early summer of , these exemptions are being revisited every ninety days and could be rescinded whenever the administration chooses to stop issuing them. These exemptions allowed Huawei, for example, to actually boost its purchases from U.
S suppliers by 70 percent in , despite the nominal Entity List designation. The Commerce Department currently applies its ruling to products with 25 percent or more of U. When China hawks in the Trump administration proposed lowering this de minimis rule to 10 percent for Huawei specifically a level that frequently applies to a few sanctioned countries like Iran and North Korea , U. Department of Defense. Losing this market could be damaging, although with supply chains in flux, it is possible that the firms that utilize these chips will disperse their manufacturing operations across more countries in the future.
In addition to the Entity List designation and the new amendment on restricting overseas chip exports to Huawei mentioned above, the U. Japanese private firms seemed to understand the subtext, however, as mobile carrier and tech investor SoftBank subsequently took expensive steps to remove Huawei equipment from its own networks in Japan.
Japan also quietly strengthened penalties for violating export controls in After Washington took steps to strengthen its FDI rules in a step that the European Commission later took too , Japan amended its Foreign Exchange and Foreign Trade Act in to lower the purchasing approval thresholds from 10 percent to 1 percent ownership of the company involved for transactions in certain sectors that could pose national security risks.
The biggest worry that triggered this policy shift has been the billions of dollars Chinese firms have sought to invest in innovative U. A similar action-reaction interplay between U. On this first point, U. Aegis radar system. Many Japanese defense specialists and security-minded politicians subsequently have pushed for stricter and more uniform rules.
Its provisions stiffened penalties for divulging designated secrets and made the clearance process for government officials and some contractors more uniform. But even this law has certain limitations. It did not centralize the clearance process, so each ministry has a degree of autonomy regarding how it follows the law.
Failing a clearance review is extremely rare, as the government reported just one failed evaluation out of more than , people from through One area that U. Moreover, the budgets of the firms overseeing the certification process come from fees submitted by applicant companies, creating some concerns about potential conflicts of interest. One U. Clearly, Japan has improved its information protection infrastructure and practices, and these improvements have enhanced information sharing between Washington and Tokyo.
In addition to the examples already mentioned, the Five Eyes intelligence network is reportedly expanding cooperation with a few other trusted countries—including Japan—to address certain shared interests related to China and North Korea. Department of Defense are strengthening information sharing about supply chains related to China, among other improvements.
But a variety of remaining challenges—some already mentioned—make effective U. Improving the Japanese clearance system and building a cadre of Japanese information security professionals would help significantly, because the hurdles to international collaboration are only getting higher. For example, the Department of Defense is elevating the cybersecurity requirements for companies that want to contract with the Pentagon, and these standards extend beyond primary contractors to include many of the subcontractors they enlist.
Pentagon officials say that all Department of Defense contracts will contain these new requirements by Japan also lacks a classified patent system, making it and Mexico the only two G20 nations without one. Their current operating model could unnecessarily limit the pool of potential partners by creating ever stricter security requirements and providing little flexibility in terms of how those requirements are met.
Industry executives from both countries complain that U. A final area worth mentioning is heightened U. In May , Trump further suspended the entry of Chinese nationals for graduate education or research if they had any history of military affiliation. In the fields of computer science, mathematics, and engineering, nearly 60 percent of the U. In fact, at least a few universities have even embraced this as an opportunity to attract top Chinese talent, if the United States decides to reject them.
Overall, U. The Trump administration is in danger of moving too aggressively and too unilaterally, and it would benefit from a more collaborative approach to designing and implementing these measures. Japan, for its part, will need to take more significant steps to upgrade its technological and information security if it wants to take full advantage of its alliance with the United States, and this includes investments in its intelligence and defense enterprises.
A high-profile but soon forgotten bilateral initiative during the Trump-Abe era was the Japan-U. Offensive Technonationalism Successfully implementing well-targeted defensive technonationalist policies can help protect valuable intellectual property and contribute to allied competitiveness, but over the long term these defensive policies will yield few benefits unless they are combined with the effective promotion of U.
This capacity should be considered in broad terms, encompassing education, research and infrastructure investment, economic efficiency and resiliency, and collaboration with capable partners. A more offensive mentality also includes leveraging cutting-edge commercial technology for national security purposes, something the Department of Defense tries to foster through its Defense Innovation Unit—started up in —with offices in Silicon Valley, in Boston, in Austin, and at the Pentagon.
Unlike before, these policy debates are trying to focus on multiple technological areas simultaneously even as the stakes and political tensions with China rise. The United States and Japan have produced multiple national strategies on AI, quantum science, cybersecurity, and space since , together with various road maps and investment initiatives developed in cooperation with private sector business groups.
But with government resources stretched by the response to the coronavirus pandemic and spread across so many different priorities simultaneously, it will be essential for Tokyo and Washington to build technology-based alliances and ecosystems and expand their intellectual, material, and financial resource bases. Government spending on basic science is emphasized because, unlike the private sector, it generally is more conducive to longer time horizons and is less directly concerned with near-term profitability.
Traditional U. The Trump administration has explored the idea of making it easier to control some fundamental research and its dissemination, but a report commissioned by the National Science Foundation on this issue reaffirmed the value of traditional U. The reason why the allies should consider expanding bilateral collaboration in government-funded research is because of the budget constraints they both face and the amount of funding catch-up they must do.
After all, government-funded research spending has dropped significantly since its Cold War peak, down to around 0. Japan is clearly an integral part of the U. These forms of collaboration are often facilitated by joint funding agreements—or memorandums of cooperation—that U. When such agreements are reached, the participating organizations issue a public call for joint proposals by U. Successful applicants are usually funded by their respective governments in a coordinated fashion and according to a proposed budget.
Such collaboration allows each country to increase the number of active test beds or research platforms focused on an issue of shared interest, sometimes permits them to share data sets, and allows them to leverage a larger number of unique and expensive research assets such as supercomputers or special laser platforms.
Currently, China has nearly twice as many supercomputers as the United States; China, the United States, Japan, and the EU alike are all developing exascale computers next-generation supercomputers with different types of architecture.
Over the years, some of this joint funding has promoted enduring relationships between research institutions in Japan and the United States, such as cooperation between Osaka University and the Lawrence Livermore National Laboratory. For example, one study showed that U. Such changes would entail coordinating bilaterally and acting multilaterally by injecting new money into a small number of strategically important research areas.
It is possible that some of these areas would include applied research with military relevance that could be classified, but the majority of it would be open, perhaps carried out under a more broadly designed and rigorous concept of research integrity to which all participating partners would agree. The three partners could consider adding a jointly conceived goal or two that they could organize around as a collective moonshot initiative.
Boosting domestic education initiatives for science, technology, engineering, and mathematics at all levels is not controversial, even if policymakers disagree on the best way to do this and where the money should come from. But the role of foreign researchers is more hotly debated. Many in Congress and in the Trump administration, however, worry about the other 20 percent of graduates who leave the country, documenting many cases where Chinese talent recruitment has siphoned off the benefits of U.
The Trump administration created a new office at the White House in called the Office of American Innovation, and federal adjustments to talent-based immigration policies is one of the areas they are discussing with U. Meanwhile the Japanese government is also striving to make it easier for foreign students in Japan to start their own companies by expanding residency options and even subsidies from the Ministry of Economy, Trade and Industry for such new businesses. Japanese companies are more actively partnering up with universities and research institutes than they used to.
Since then, new multiyear initiatives have been launched between SoftBank and the University of Tokyo on AI, Hitachi and Kyoto University on smart cities, and between several other partners in other areas. Canada and Australia regularly rank among the highest in skilled labor migration permits, and, in early , the United Kingdom unveiled a new Global Talents visa program as it prepares to compete more vigorously with the EU for employees with special skills.
Allied governments need to establish a proper policy framework to accomplish these goals, again by coordinating bilaterally and acting multilaterally. A useful framework would provide some support for strengthening international institutional relationships including personnel exchanges, reciprocal access to certain high-value research assets, and pooled funding for such assets and related test beds among relevant national laboratories and specific universities and research organizations in key strategic areas.
Such a framework could include harmonized rules for researcher mobility and research integrity and transparency. Enabling Greater Private Sector Collaboration While government support for fundamental research is important, it is unlikely to ever approach the scale of private sector investment. About 70 percent of all U. For the allies to form an effective strategy to bolster their technological strength, they must involve the private sector and facilitate cross-fertilization—when appropriate—among partner nations and between the defense and commercial sectors.
Keeping U. Analysts note a dangerous shortage of software development talent in the U. In both cases, there are disincentives to overcome due to costly additional bureaucratic layers and commercial sensitivities to military applications of these technologies, but these barriers are more significant in Japan. It could be similar to the consultative, private sector—oriented Joint High-Level Advisory Panel established but later abandoned by the U.
During the earlier protectionism scare involving Japan in the s and s, private sector input was designed to reassure U. But today there is a better opportunity to align U. Many more U. This fact should not restrict either private or public sector bilateral basic research, even if the source of that funding is a defense agency.
Meanwhile, government-affiliated research institutions have picked up the slack and are carrying out this work, in many cases through joint appointments whereby university scientists can be affiliated with an outside research lab. In that respect, each side of the dual-use concept is as important to national security as the other. Accordingly, current technonationalist trends are raising the level of scrutiny and sensitivity over many nonmilitary technologies including communications, semiconductors, and encryption.
It might be possible for a pool of close allies to consider this kind of approach for a wider range of sensitive high-tech products. As a result, U. Treasury yields have risen with the two-year yield nearing 0. That in turn has bolstered the appeal of the greenback against its low-yielding peers. The dollar scaled a fresh six-year high of One of the worst performing major currencies this month would have to be the New Zealand dollar, which is down nearly 7 percent.
Data on Monday confirming the Reserve Bank of New Zealand had intervened to weaken the currency proved the central bank could talk the talk and walk the walk. Doing nearly as badly is its Australian peer.
This reemergence of great-power competition is coinciding with the so-called Fourth Industrial Revolution, in which an early lead in technological mastery of certain strategic fields like AI and quantum computing could put a country and its allies in an unassailable leadership position.
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| Bitcoin ticker widget android | However, such policies can easily swing out of balance if they are formed based on ideology rather than evidence and careful deliberations. Japan also quietly strengthened penalties for violating export controls in These two schools of thought offered largely alternative views about how governments should channel technology investment and shape the competitive playing field and supply chains for the benefit of their respective corporations and citizens. Boosting domestic education initiatives for science, technology, engineering, and mathematics at all levels is not controversial, even if policymakers disagree on the best way to do this and where the money should come from. The dollar scaled a fresh six-year high of |
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