The dangers of sharing knowledge with friends: the FSX Controversy and the use of US export controls against Japan in the 1980s and 1990s

ABSTRACT

This article places the US–Japanese controversy over the co-development of the FSX jet fighter in the context of US debates about ‘economic security’. During the 1980s, this concept became the widely used shorthand for describing a new calculus of national security and foreign economic policy, closely linking defense economics, competitiveness in commercial global markets and the crucial role of dual-use technologies in both spheres. The article shows that the dangers of sharing dual-use know-how were at the heart of the US security concerns in the FSX case, prompting the US government to use export controls – during the Cold War the sharpest economic weapon against the Eastern bloc – against its close ally Japan.

KEYWORDS:

• Economic security
• export controls
• US–Japanese relations
• knowledge sharing
• aircraft industry

In fall 1989, the Department of Defense, headed by Secretary Dick Cheney, published for the eighth time since 1981 its report ‘Soviet Military Power’. Once again, this report, as always lavishly and colorfully illustrated, offered a broad assessment of the threat that the Soviet Union posed to the United States and the Western world. The end of the Cold War was in the air, though, and the report reflected on the new world in the making.

The overall US lead in technology relative to the rest of the world has eroded over the last 20 years, and the outlook is of even greater technological competition in the future. In the years ahead, the United States will confront new challenges, perhaps from a revitalized and restructured Soviet economy, but almost certainly from a unified Europe, a dynamic Japanese economy, rapidly developing countries like South Korea and Singapore, and an unstable Third World armed with increasingly sophisticated weapons.¹

These global changes demanded to rethink the postwar alliance as well as the role of the US government in regard to economic and technological policy. ‘It is somewhat ironic’, the DoD observed, ‘that, although the Soviet Union constitutes the greatest threat to US security, the greatest challenge to the US technology and industrial base will come from the United States’ own allies. Thus, the United States must succeed in this “friendly competition” with advanced Western industrial states if its economic power, and the West’s system of collective security, is to endure’. The report warned in stern words that ‘If the United States proves unable to compete effectively in the areas of advanced technologies, it would incur the most severe economic and security consequences: markets would be lost, the US industrial base would erode, and the United States would become increasingly dependent upon offshore technologies for its defense at the same time as its economic health weakens’. To avoid such a decline, the DoD demanded that the state become more active. To the Department, it was ‘evident that the United States cannot persist in its current laissez-faire approach to the competition in advanced technologies without incurring major economic and security problems of its own in the future’.²

Clearly, the DoD’s understanding of the world had shifted from a bipolar global order shaped by concerns of military security to a new competitive world in which economics and security were uncomfortably intertwined – even, indeed especially, on the Western side of the Cold War divide. During the 1980s, a new term, ‘economic security’, became the widely used shorthand for describing a new calculus of national security and foreign economic policy, closely linking defense economics, competitiveness on commercial global markets and the crucial role of dual-use technologies in both spheres.³

The concept had far-reaching implications for the political economy of dual-use knowledge sharing among Cold War allies. The US began to reassess the distribution of relative gains in knowledge sharing relationships within the West and increasingly perceived them as disadvantageous and unfair to the US. The Congressional Office of Technology Assessment (OTA), for example, stated in May 1990 that ‘the reasons the United States collaborated with its allies in defense technology are not as valid as they once were, and the policies on armaments cooperation, broadly conceived, must be considered’.⁴ The OTA outlined a rough course the US should follow:

In the 1990s, some international collaboration in defense technology will be unavoidable and probably desirable. Ultimately, Congress will have to decide how much interdependence in defense technology and industry is prudent and supportable; which allies should be favored and to what extent; what the United States should expect or demand in return for its technology; how best to support domestic development of critical technologies; and what kind of domestic industrial structure must be maintained to meet the future security needs of the United States.⁵

This did not mean that the US was willing to abandon its allies or cut them off completely from US knowledge. But this line of thinking paved the way towards more careful deliberations over what knowledge could be shared and what should be denied because it would diminish the relative US technological position vis-à-vis its Western allies/competitors.

These concerns focused first and foremost on Japan. Its economic and technological rise since the end of the World War Two had turned Japanese high-tech companies by the late 1970s into the most formidable competitors of US producers on the American and global markets. This had far-reaching economic and political effects. The US car, consumer electronics, the computer and the semiconductor industries – sectors in which the US had at least since 1945 a dominant market position – were thrown into disarray and – as many pundits, politicians and government officials feared – on their way to oblivion, being replaced by Japanese competitors. In the US political and scholarly discourse of the 1980s, the shifts on globalizing markets were widely interpreted as a clash of competing, starkly different national forms of capitalism and innovation systems. The active role of the Japanese state in the implementation of industrial policies for the targeted development of industries and technologies appeared to be a direct challenge to the US free-market ideology and international order. Adding to the complexities of these conflicts was Japan’s status as a US client state since 1945. The erstwhile junior partner seemed to undermine the very US hegemony it had depended on for its national security and its economic development for so long.⁶

Accordingly, the powerful influence of ‘economic security’ thinking was a function of Japan’s growing industrial power and its implications for the US dominance in the political, security and economic system of the postwar era. Few instances bring this constellation better into focus than the cause célèbre of the US–Japanese FSX jet fighter co-development. The FSX debate revolved around US concerns over Japan’s ambitions to develop and build a national military aircraft that would replace its imports of US F-15 fighters. The FSX issue at first sight appeared to be a matter of military and foreign relations that stood in the tradition of a firmly established US–Japanese military technology partnership that went as far back as the 1950s. But in the political climate of the 1980s, it turned into an acrimonious debate about the economic and national security dangers of sharing dual-use technologies with the Japanese ally. One of the main concerns was that Japan could use knowledge acquired for military purposes for the development of commercial passenger airplanes and thus become a competitor to the worldwide leading US airplane builders like Boeing. As Joan McIntee, Deputy Under Secretary of Commerce, pointed out before Congress:

The essential interrelationship between our economic and defense security interests is fundamental to understanding our approach to the FSX project. […] One of the key questions for the Department of Commerce thus became whether the knowledge transferred to Japan under the FSX project would be sufficient to allow it to narrow the gap with the US in commercial aerospace production. Would it give Japan sufficient design and integration data to create an independent capability which might ultimately challenge US preeminence in this field?⁷

This focus ‘on issues of industrial base and competitiveness in [the] context of security objectives’⁸ was the main reason why the FSX issue became one of the most heated controversies in the incredibly tense US–Japanese relations of the late 1980s.

The existing considerable literature, mostly written shortly after the FSX controversy, has carefully analyzed the diplomatic, economic, and technological dimensions of the case.⁹ However, this article goes beyond these analyses by arguing that questions of dual-use knowledge sharing and denial were at the heart of the technological issues of the FSX controversy. All the existing studies discuss technology but treat the policies and practices of knowledge sharing, if at all, only as a secondary aspect and not, as I do, as a central concern of the US national security community.

Moreover, the existing studies stop at the point when the FSX agreement was finally signed and do not discuss how it was translated into practice in the 1990s. I will shed light on its implementation and show that it was all about controlling flows of knowledge and know-how with the goal of keeping Japanese from learning too much from Americans. I argue that the direct result of the growing influence of economic security thinking among US government officials, who closely tracked the public debate among pundits and analysts, was the use of export controls – during the Cold War the sharpest economic weapon against the Eastern bloc – against its close ally Japan. Indeed, when the FSX agreement was finally signed, it included elaborate export control stipulations whose main goal was to deny Japan knowledge and to keep the US technological and competitive leads. In practice, export control mechanisms determined the way how US and Japanese firms cooperated in the FSX project. This development was densely intertwined with the parallel integration of national security screenings of foreign direct investments into the export control system. The Exon-Florio Amendment of 1988 was the answer to growing concerns about Japanese companies investing in US companies and designed to forestall the export of valuable technology through acquisitions and mergers. Since allied, and not Soviet, companies were the main investors in the US, the new legislation, implemented by the Committee on Foreign Investment in the United States (CFIUS), was yet another expression of the new competitive world that followed the Cold War.¹⁰

Moreover, I will show that the debate about jet fighter technology and export controls increasingly focused specifically on the dangers of sharing information and know-how: the applied knowledge of how to do things, usually shared in face-to-face communication. This approach bore a striking resemblance with the concepts of the ‘Bucy Report’, a highly influential DoD policy paper that marked a distinct turn away from the regulation of goods towards targeting intangible knowledge in US anti-Soviet bloc export control policy in the mid-1970s.¹¹

Indeed, it is not sufficient to limit the analysis of the FSX to the mid- and late 1980s as most FSX scholars have done so far. I will show that the FSX, economic security and knowledge sharing debates had a longer pre-history. They were rooted in the 1970s, took a more concrete shape as early as 1982 in a report by the Government Accounting Office, and constantly picked up steam before they reached a strident high pitch in spring 1989.¹² At every turn, concerns over the implications of the sharing of dual-use knowledge for US ‘economic security’ took center stage.

A short history of US–Japanese technological cooperation

The FSX controversy marked a sharp contrast to the close military technology cooperation the US had established with Japan since the end of World War Two. Two treaties formed the basis of this relationship, the Mutual Defense Assistance Agreement of 1954 and the Mutual Cooperation and Security Treaty of 1960.¹³ They were part of broader US institution-building efforts to establish firm ties between the United States and its Cold War allies against the enemy in the East. One of the key instruments for forging the Western alliance was the sharing of military technology and weapons systems.¹⁴ The main driver of these transfers was strategic considerations as they were supposed to speed up the recovery and buildup of the defense industrial bases in the Western countries still struggling with the economic effects of the war. Technological standardization would also allow for a more efficient pooling of Western resources. Thus, technology transfers were embedded in the overall strategy of conventional deterrence against an attack from the Soviet Union and its satellites.¹⁵

At the same time, Japan was reincorporated into the international flows of technology within the ‘Free World’ and Japanese companies enthusiastically took advantage of having access to foreign knowledge sources: between 1950 and 1972 they signed 12,000 technical assistance contracts with partners abroad. The US government participated in the 1950s by sending technical consultants who implemented a program similar to the Marshall Plan productivity campaigns in Europe.¹⁶ In short, technology sharing was a key component of US military, foreign and economic recovery policies aiming to forge a powerful alliance against the Soviet enemy. For a large part of the postwar era, Japan was not seen as a security threat or a serious economic competitor, but rather as a technological backwater, a catcher-upper in need of US guidance and simply a market for American products.¹⁷

This also went for the aircraft industry. In the wake of the war, the US occupation forces dismantled the considerable airpower of the Japanese empire and prohibited any aircraft production and R&D in Japan as they did in Germany at the same time.¹⁸ But in the early 1950s, the Japanese aircraft industry began its revival – with American support. During the Korean War, the US military gave aircraft maintenance and repair contracts to Japanese companies. After the war, the Department of Defense offered the production of US airplanes under a production license. The Japanese government supported the buildup with industrial policy legislation, the ‘Aircraft Industry Promotion Laws’ of 1954 and 1958.¹⁹ In this early period, the US military was the biggest customer, buying 60–80 percent of Japan’s aircraft production in the years 1953–54. By the late 1950s, when the country had established its small Japan Defense Agency, the Japanese military bought more than four-fifths of the domestic airplane production. The technology, however, was mostly of American origin. Between the 1950s and the late 1980s, the Japanese Self Defense Forces deployed 36 different aircraft types; nine of them were bought off the shelf from the US, sixteen coproduced with US companies, while some were copies of older US models.²⁰

Japan climbed up the technological ladder at the same time – from maintenance services to the assembly of imported airplane kits to the coproduction of more sophisticated planes and components, acquiring more and more technological knowledge and expertise by mastering each new level. The more complex the production on the Japanese end grew, the more American technology had to be transferred, and for strategic and economic reasons, the US government and American aircraft builders like Boeing and McDonnell Douglas were willing partners. This way, the US supported the Japanese industrial strategy of technological ‘indigenization’ whose long-term goal was indeed to catch up with the American technological state of the art. This was not at all a Japanese ‘Sonderweg’. The aircraft industries in Western Europe subscribed to similar approaches.²¹

The success of the Japanese indigenization strategy was, however, limited. During the 1970s, Japan began several domestic airplane development programs but all of them were, for one reason or the other, commercial and technological failures. The Mitsubishi F-1 fighter jet, for example, was technologically already obsolete when it went into production.²² Japan’s civilian planes did not fare any better. The YS-11, a small turbo-prop airliner for up to 60 passengers, which was built during the 1960s and into the early 1970s was a commercial flop, while the 1970s attempt to develop a larger twin-jet airliner for 200 passengers did not lead anywhere because it proved itself to be ‘both financially and technologically too difficult for the Japanese aviation industry’. Even though the Ministry of International Trade and Industry (MITI) had during the 1970s singled out aircrafts as one of the technologies deserving national support, by 1980 the industry was still ‘minuscule’ and an ‘unimportant sector’ in the Japanese economy and, even much more so, on the world markets. In 1978, for example, the value of the output of engines and airframes – most of them based on imported designs – was only roughly 5 percent of the US output.²³

Japan’s answer to this sobering experience of the 1970s was to step up its efforts at forging international industrial alliances. They exploited the fertile ground of a global aircraft market that experienced a vigorous push towards more cross-border cooperation. Indeed, there was a lot of movement in this market. The European Airbus consortium introduced its A300 in 1975 and would become the prime competitor of Boeing in the next decades. In the United States, research and development expenditures by NASA and the Department of Defense were declining at the same time as the deregulation of the commercial interstate air traffic by the federal Civil Aeronautics Board stimulated technological competition. US companies tried to offset the risks of rising development costs by cooperating with European and Japanese partners. Compared to other high-tech sectors like the semiconductor or the computer industry, the aircraft industry spread its international wings relatively late and rather slowly, but internationalize it did.²⁴ And Japan played a very active role in this process. At the end of the 1970s, European and Japanese companies signed a whole series of cooperation agreements, and Boeing began in 1979 to cooperate in a co-development, coproduction and co-investment joint venture with Italy’s Alitalia and the Japan’s three biggest aircraft builders, Mitsubishi, Kawasaki and Fuji Heavy Industries to produce the B 767 and 777.²⁵ Boeing’s Japanese partners evolved in these agreements from production subcontractors in the late 1960s to risk-sharing partners who were engaged in development and production, thus gaining increasing access to new technologies.²⁶

A similar trend unfolded at the same time in US–Japanese military technology relations. In the context of deteriorating post-détente East–West relations, the Department of Defense promoted through ‘generous’ coproduction agreement the modernization of Japan’s aging air force and missile systems. The most prominent project was the coproduction of the F-15 as of 1978, but in the next few years the US would also share technologies related to the P-3C antisubmarine aircraft and to the ‘Patriot’ surface-to-air missiles.²⁷ Between 1 January 1976 and 15 June 1980, the US government authorized no less than 100 aircraft-related coproduction agreements between American and Japanese companies.²⁸

That the United States and Japan closely cooperated does of course not imply that technology was openly and indiscriminately shared. It was no secret that the Japanese government and aircraft industry had a strong interest in acquiring state-of-the-art technologies, and co-development appeared to MITI officials (as to many Western European governments) the best way to reach this goal, thus taking the next step up the technological ladder.²⁹ Hence, the more numerous and the closer the working relationship became, the more the US national security community and also companies feared that Japan would learn too much – and tightened up the measures to regulate knowledge sharing.

US companies like Boeing carefully guarded their intellectual property. When, during the development process of the B 767 and 777, the Japanese partners sent several hundred of their engineers to Seattle, Boeing safeguarded its most sensitive technologies by a secrecy regime established on a need-to-know basis.³⁰ Similarly, the US Department of Defense applied classification to withhold certain sensitive technologies from America’s close ally. When in 1978 the US and Japan agreed on coproducing McDonnell Douglas’ F-15 jet fighter, the memorandum of understanding (MOU) limited the transfer of advanced electronic components, fire control software, radar technology and information on the compounds used in the body of the plane. Such technologies were only shared in ‘black boxes’ which could not be opened by Japanese engineers. This form of denial was not entirely new. The F-4 jet fighter, for example, which Japan had procured from the United States since the late 1960s, also carried black-boxed technology. But in the case of the F-15 the denial was more extensive, and arguably for the ‘first time, the United States exhibited a significant caution about massive transfers of advanced technology to Japan’.³¹ Accordingly, similar decisions would follow and pave the way towards the FSX controversy 10 years later. When, for example, the Japanese in the late 1970s coproduced the Pratt and Whitney turbofan jet engine, the United States did not release the technology of the hot section and the engine fuel control – even 10 years later, in 1989, this knowledge was still being withheld.³² And in the mid-1980s, the Department of Defense kept all software from the Japan Defense Agency in the coproduction of the ‘Patriot’ missile.³³

Another case that foreshadowed the FSX debates, and also reflected deepening concerns about foreign direct investment years before the Exon-Florio Amendment, was the plan of Allegheny International, Inc., to sell its branch ‘Specialty Metals Corporation’ (New Hartford, New York) to Nippon Steel Corporation, one of Japan’s largest steel producers, in April 1983. The Specialty Metals Corporation produced, among other things, powdered metal alloys for Pratt and Whitney’s and General Electric’s high-pressure jet engines and also for rocket motors. This deal ran into opposition from the Department of Defense, especially the Air Force, and was also discussed in pre-Exon-Florio CFIUS. Because of these ‘unforeseen’ objections, Allegheny International pulled out of the deal in July 1983.³⁴

The opposition against the transaction argued along ‘economic security’ lines and pointed at some of the problems the implementation of the FSX export controls would address. The Air Force spoke up against the transfer of alloy production technology to Japan, interpreting it as a loss to the US defense industrial base and leading to foreign dependency. The US jet engine manufacturers ‘vigorously’ chimed in as they worried about the rise of Japanese competition.³⁵ More importantly, the metal powder technology in question was export controlled, and the DoD pointed out the challenging implications of foreign direct investments in technological areas that were not classified and hence under strict DoD supervision. The DoD ‘claimed that since the technology had never been allowed to be exported and was not included in US–Japan technology sharing agreements, the Japanese firm should not be allowed simply to purchase the manufacturer’.³⁶ Before the Exon-Florio Amendment was enacted, there was, however, no legal basis to stop this. As far as the DoD was concerned, the existing export controls were insufficient. Their biggest weakness was seen in the monitoring of face-to-face communication. Even though export controls covered foreign plant visits, ‘the DoD believed that the technology could be transferred because of the difficulty in keeping the Japanese firm’s scientists isolated from the US firm’s experts’. An additional danger was ‘that the technology might leak to the Soviet Union’. The DoD had concerns ‘as to whether Japan had procedures to protect the technology’.³⁷ At the core of the controversy were, however, the economic security implications of sharing knowledge with the ally, even though it seems that CFIUS was divided over the Allegheny-Nippon deal.³⁸ In the end, the DoD prevailed. On the one hand, it communicated (in no uncertain terms, one assumes) its concerns to both companies. On the other hand, the Air Force simply classified the power metal technology (called VADER) and effectively shut out Nippon, ‘because Japan does not have any national secrecy system and cannot sign reciprocal security agreements with the United States’.³⁹

And yet, despite these and other interventions against technology transfers,⁴⁰ the traditional Cold War security interests in stable and reliable military alliances overall outweighed economic security concerns about giving away technology. Coproduction was seen as a boon to American and Japanese defense programs. Commercial considerations played only a ‘secondary role’ in the DoD’s Japan policy.⁴¹ The ‘economic security’ paradigm had not developed its full impact yet. But increasingly, the technology transfers to Japan were seen skeptically as the US–Japanese trade relations deteriorated over the massive influx of cars, computers and consumer electronics into the US market, putting painful pressure on the respective American industrial sectors. Even though the aircraft industry was not one of them, the upsurge of international cooperation beginning in the late 1970s caused some backlash. It was given an official voice in March 1982 by the Comptroller General of the United States and his General Accounting Office (GAO).

‘Economic security’ backlash against technological cooperation

The GAO criticized the way the DoD and the State Department had approached the F-15 coproduction agreement with Japan four years before and also pointed a finger at the general flaws of US coproduction agreements with Japan ‘as well as with other countries’. The two Departments, GAO claimed, had ‘pursued political and military objectives’ but had ‘not devoted adequate attention to the trade and economic implications of these programs. When entering into military coproduction programs, national security objectives are of prime consideration, but there is a need to balance these objectives against any potentially adverse impacts these arrangements could have on the US economy’.⁴² The core of this critique was that the US military agreements led to the sharing of knowledge, which Japan diverted to commercial uses in order to catch up technologically and become a serious competitor to US producers. The knowledge concept the GAO subscribed to was broad and went far beyond mere information sharing by stressing the importance of industrial know-how: the skills of making things that are the result of complex first-hand learning processes and depend on the accumulation of experience by a person or a social collective over time. Coproduction, the report explained, enabled the receiver to ‘acquire the know-how to manufacture or assemble, repair, maintain and operate, in whole or in part, a specific weapon’. This knowledge had a decidedly national hue: ‘The know-how furnished by the United States is the product of US research and development […], and may include data on manufacturing, machinery or tools, the processing and use of raw or finished materials, the production of components or major subassemblies, managerial skills, procurement assistance, or quality control procedures’.⁴³

It is not by accident that GAO’s understanding of the crucial role of know-how had a lot in common with the concepts and the recommendations of the DoD’s influential ‘Bucy Report’ written in 1976. Back then the main concern had been to stop the outflow of US technology to the Soviet Union, even though the report had already questioned some aspects of technology sharing within the West. Airframes and jet engines had been among the four technological fields the Bucy commission had focused on.⁴⁴ Indeed, the GAO quoted directly one of the key takeaways of this central export control reform text: ‘The release of know-how is an irreversible decision. Once released, it can neither be taken back nor controlled. The receiver of know-how gains competence which serves as a basis for many subsequent gains’.⁴⁵ GAO directly and unambiguously applied Bucy’s export control principles to Japan.

Focusing on the commercial dangers of know-how sharing, the report took a revisionist view of the entire US postwar technology policy towards Japan (and, by extension, the Western alliance):

In the post-World War II period, Japan’s aircraft industry grew and developed largely through US military coproduction programs. Much of the technology transferred through these programs has commercial application. Now, building on the experience and technology gained […] the Government of Japan is assisting in the development of the civil aircraft industry, along with other high-technology export industries.⁴⁶

In short, the Japanese competitor was a US creation, the result of unguarded knowledge sharing over the course of three decades. Now, the US had to pay the price for this careless generosity.

The report claimed that the Japan had systematically exploited the dual-use characteristics of aircraft technology to enhance its ‘production and technology base’. Quoting an MITI official, GAO pointed out ‘the development and manufacturing techniques’ of military, and civilian aircrafts were ‘closely related and technological spin-offs can be mutually anticipated’.⁴⁷ The report went into more detail: ‘For example, composites, avionics, instrumentation, and propulsion technologies transferred through the F-15 program can be applied to civil aircraft production. […] Furthermore, much of the same tooling and machining technologies are used to produce civil and military aircraft’. Indeed, Japan did not follow the US epistemological, institutional and political separation of the two spheres of dual-use technologies: ‘In Japan, we observed production of F-15 and civil aircraft parts on the same equipment and production lines. We were told by Japanese aircraft industry representatives that military and civil aircraft are mixed throughout the production process’.⁴⁸ Moreover, MITI’s development strategy capitalized on the idea that different high technologies were elements of a larger knowledge system. Linking separate technological strands promised far-reaching synergy effects for innovation, as GAO made clear: ‘Technological innovations in the aircraft industry, electronics, communication, and alloy and composite materials production and processing are considered mutually complementary. Aircraft production represents an integration of these new technologies’.⁴⁹ In short, whoever mastered the system integration challenge of high-tech aircraft learned much more than just how to build a plane. The entire national technological environment would be lifted to a higher level.

Clearly, GAO did not perceive the exploitation of US dual-use technology as a market problem but as a conflict between the US economic, political and military system and the Japanese state, especially MITI. Japan had through political steering and targeted investment strategies enhanced its technology base by ‘steadily reducing the importance of its lower technology industries and favoring the development of high-technology export industries’.⁵⁰ And the key element of this strategy was that Japan’s state-private sector alliance obtained ‘advanced technology and manufacturing know-how’ from the US and Europe. Moreover, Japan’s planners promoted coproduction over simply buying technology, because the national collective would learn more by cooperation with knowledgeable partners.⁵¹

The gist of GAO’s report was a stern warning:

Japan can and eventually will become a serious competitor in the world’s civil aircraft market; the remaining questions are when, and how much Japan’s share will be. This will depend at least as much on the vitality of the US industry as on Japanese actions.

In 1982, Japan was compared to the dominant US aircraft industry a dwarf, with three to four percent market share of global aircraft sales. But GAO saw a dangerous giant in the making.⁵²

To slow down the Japanese giant’s growth and to promote and protect the US industry’s vitality, GAO suggested the US government should control the sharing of technological knowledge more closely. Indeed, sharing was an inherently dangerous exercise that demanded careful judgment. Because the communication of dual-use technology ‘could contribute to the erosion of our technology based comparative advantage’ there was an urgent need for a more effective bureaucratic mechanism that assessed the ‘long-term adverse effects on the US economy’ of the relationship with Japan. Since the State and the Defense departments’ technology transfer policies had so far exclusively been shaped by security and foreign policy considerations, GAO advocated for reining them in through a new interagency screening process that, led by the State Department, routinely included the economic assessments of the Commerce, Treasury and Labor departments as well as the US Trade Representative (USTR). GAO made sure to stress that it did not claim that coproduction like in the F-15 case was not in the US interest. But it wanted a general balance test. Therefore, it called for interagency procedures that assessed ‘the impact of impending technology transfers on US industry before approving and negotiating coproduction agreements’. If coproduction was under way, the DoD should call upon the same agencies in making the decisions which of the technologies ‘originally denied in MOUs’ should be released to the cooperation partners.⁵³

Without ever using the term, GAO advocated here an export control system that targeted specifically Japan. Its proposal for a review process was modeled after the export controls against the communist world, which were also based on an interagency process with the ‘triumvirate’ of State, Defense and Commerce at its center. While GAO shied away from making the connection to the anti-Soviet technology restrictions, the Department of Commerce made them more explicit. Being at the forefront of the Reagan administration’s large-scale campaign against technology transfers to the East, it obviously irked Commerce that it was left out of the US-Japan technological relations. Lionel Olmer, Under Secretary for International Trade and one of the most prominent anti-Soviet hardliners, emphasized that ‘Commerce has been very concerned for some time with the ease with which Japan obtains a broad range of US technology’ and that the ‘issues are much broader than the foreign policy issues currently addressed by State and DOD’. But Olmer did not want just a seat at the table: ‘Since the issues raised under coproduction are close to those dealt with in Commerce’s export administration and COCOM programs, we would suggest that Commerce, not State as recommended by GAO, lead an expanded interagency group’.⁵⁴ To Olmer, export controls were supposed to be at the center of US–Japanese relations. And without using the term ‘economic security’, the DoC subscribed to the concept. After pointing out the importance of production and management know-how to the US economy, Commerce wrote: ‘Today the pressing need exists for more systematic consideration of the total economic dimension, commercial and military. On high technology products, the US faces increasing foreign competition in third country markets; also growing penetration of the domestic market’.⁵⁵

Knowledge loss fears in high gear: The twisted path toward the FSX agreement(s)

GAO’s F-15 report of 1982 was the dress rehearsal for the much more public, acrimonious and broader FSX debate of the late 1980s. The fact that the FSX controversy followed the same path suggests that GAO’s recommendations for institutional and procedural reform were not heeded. The Department of Defense was against any incursion on its political turf and asserted that ‘a formal mechanism’ of coproduction screenings was ‘neither necessary nor desirable’.⁵⁶ The Department of Commerce did not get a seat at the table, much less the lead, but in the FSX debate it would make another, this time successful bid for its export control agenda for inter-west technology transfers.

The FSX controversy had its origins in Japanese debates in the early 1980s about replacing its aging F-1 by a jet fighter developed by Japanese companies without the involvement of the United States. Such a departure from the decade-long tradition of coproduction was not uncontroversial within the Japanese government. The Ministries of Finance and Foreign affairs argued against it and warned of the political fallout of ‘going it alone’ would cause in American–Japanese relations. They feared that the US would interpret such a move as a statement against the military alliance and as an economic affront in the context of growing trade imbalances between Japan and the United States. But MITI hoped that developing a jet fighter from scratch would help Japanese engineers acquire ‘by doing’ new knowledge especially in the field of systems integration, which then could also be applied to the production of civilian airplanes. MITI had the support of the Japan Defense Agency that not only believed that a domestically developed plane would benefit national security but also saw such a project as a source of national prestige. In 1985, the national development of the FSX became Japan’s official policy.⁵⁷

This new direction in military technology and procurement policy immediately raised concerns among US government officials, not least because it could easily be understood as a political step that distanced Japan from the US. The Department of Defense was worried about the implications of Japan’s abandoning of coproduction for the common defense strategy but also for the US defense industry. Searching for a compromise, DoD’s Mutual Defense Assistance Office, in charge of Foreign Military Sales (FMS) and coproduction agreements, came up with the idea of co-developing a plane. Co-development would still allow the Japanese to acquire know-how, but it would avert larger political damage to the well-established military relations and kept the door open for US companies. The problem was, however, that the dominant actors in the Japanese government simply did not want the US to be a part of the new airplane project. Moreover, ‘co-development’ was in the mid-1980s a new practice to the DoD, and it was therefore not clearly defined. Obviously, it was supposed to be a qualitative step up from coproduction. But how was the development work to be divided up? Who would reap which economic benefits? And, most importantly, what would the rules for knowledge sharing be?⁵⁸ This was not only a challenge in regard to the technologies that were the results of R&D cooperation. The FSX negotiations increasingly focused on the dangers of sharing US knowledge with the Japanese.

The clash of political interests and the technological ambiguities ushered in complicated and often acrimonious negotiations that spanned more than two years, unfolding against the backdrop of constantly deteriorating economic relations. It took persistent and at times massive pressure from the US government to sway Japan’s position towards co-development.⁵⁹ On 29 November 1988, the two governments signed a Memorandum of Understanding that outlined a $1.2 billion development program that would lead to the production of at least 130 aircraft, worth $5 billion in production contracts. Japan would foot the entire bill, but US companies would receive 40 percent of the development and 35–45 percent of the production funds. Mitsubishi Heavy Industries was identified as the lead company of the project. The FSX would be based on the airframe design of the existing F-16C, which was ‘roughly equivalent’ to the F-15 airframe the Japanese had already coproduced. The company behind the F-16, General Dynamics, would be the main beneficiary of the deal. But Japan also planned to buy the aircraft engines from an American company, either General Electric or Pratt and Whitney. Technology that was ‘derived’ from the F-16C design during the R&D phase would be shared with the US at no cost; other technological results that were not related to F-16C would be made available to US companies on the basis of common license agreements. Moreover, General Dynamics would participate in the manufacturing and testing of new Japanese composite aircraft wings and phased-radar technology that included gallium-arsenide semiconductors, which were in the late 1980s on the cutting edge of computer chip technology. In these fields, some experts argued, Americans had a lot to learn from Japan.⁶⁰ The government-to-government MOU was complemented in January 1989 by an agreement between the companies involved. General Dynamics agreed to share engine design and manufacturing know-how as well as software source codes.⁶¹

These agreements included few specific stipulations for the control of technology transfers. Only the release of the source code was specifically ‘subject to Pentagon review’.⁶² The FSX agreement was, like every other inter-government military cooperation or Foreign Military Sale, generally regulated through the Arms Export Control Act of 1976 (AECA) and its detailed International Traffic in Arms Regulations (ITAR).⁶³ But there were few signs in early 1989 that the US government was keen on tightly controlling technology. The FSX agreement was about sharing knowledge, not denying it, and the AECA was not much more than one of the standard legal frameworks for this kind of agreement among allies.

To the FSX opponents in the US this was dangerous negligence. They claimed that the Japanese would reap huge economic benefits, while the US ended up with the short end of the stick, giving up much for almost nothing. This seemed especially true in regard to technology. In a typical statement, Senator John Heinz (R-Pennsylvania) attacked the FSX agreement in the Washington Post as a ‘fire sale on advanced US technology’ and a ‘bad deal’ that was nothing but a ‘sop to cutting the trade deficit in the near term’ by less than a meager deficit reduction of one percent in the next few years. Heinz zeroed in on the loss of US know-how without effective safeguards. ‘Under the agreement’, he claimed, ‘Japan will have access to any and all technology derived from the F-16, regardless of model’. And, Heinz added,

[there] was nothing to stop the Japanese from scrapping the FSX altogether, only to resume a similar project later without us. Regardless, Japan gets to keep the technological know-how acquired during the first phase for the paltry sum of $500 million. It cost General Dynamics more than $7 billion (in current dollars) over the life of the F-16 to develop and produce it.

Heinz decried the fact that there was also no protection against the use of F-16 technology for Japan’s commercial aircraft sector. He warned that Japan could share US technology with adversaries. He did not refer to the 1987 Toshiba-Kongsberg scandal revolving around the illegal sale of export-controlled technology to the Soviet Union even though that certainly was still on everybody’s mind. Instead, he pointed to ‘recent revelations that Mitsubishi Heavy industries helped Libya to build its chemical weapons plant’: ‘only the latest in a series of incidents that cast serious doubt on Japan’s ability – or willingness – to protect the sensitive technical data and manufacturing technology transferred under the agreement’.⁶⁴

Heinz was the former chairman of the Senate subcommittee on export control and technology transfer and had co-written the Export Control Act of 1988. In the first half of 1989, technology transfer issues took center stage in the FSX debate. Indeed, even though the agreements had been signed, the FSX controversy did not stop. On the contrary, the critics jumped into higher gear and used the change of administrations from Ronald Reagan to George H.W. Bush as a window of opportunity to attack, and finally even unravel, the Memorandum of Understanding.

It was a rather small, but very vocal group that accomplished this feat. Officials of the USTR, the Departments of Labor, Energy, and Treasury Departments, of the CIA, NASA, the Office of Science and Technology Policy and a group of Congress members banded together to undo or at least revise the FSX deal because they feared it would help Japan to become a competitor on the civilian and also military airplane world market. The members of this heterogeneous opposition group did not necessarily agree on every detail, but they were united by the conviction that the FSX review process had not paid sufficient attention to the economic implications of the defense deal. They pushed for an ‘economic security’ approach that integrated national security with competitiveness, industrial base, job market and trade policies. The Department of Commerce became the leader of this opposition movement.⁶⁵

The constellation for the FSX controversy of 1989 was similar to the one seven years before when GAO had published its report. The Department of Commerce’s coalition faced off against the Departments of Defense and State, backed by the National Security Council. They argued along familiar lines, defending the FSX as an important building block of the Western defense alliance and an important project of US–Japanese cooperation. They also emphasized the importance of cooperation to ensure technological compatibility of weapons systems within the alliance. Finally, they pointed out the benefits that the US economy and especially General Dynamics would derive from the agreement. Clearly, besides different interpretations of the costs and benefits of the agreement, this political clash showed divergent ideological convictions within the US government about the scope and direction of national security, foreign and trade policies. But equally important was that the Department of Commerce in particular saw in the FSX issue an ideal vehicle for a turf war for political competencies, process and influence. After being left out of the FSX negotiations, the Department of Commerce wanted, once again, a seat at the table and presented itself as the agency that should be in charge of implementing and overseeing ‘economic security’ policy, not least in the negotiation of agreements like the FSX Memorandum of Understanding.⁶⁶

Commerce succeeded. When in February 1989 President Bush ordered an NSC interagency review framework of the FSX agreement, the Secretary of Commerce, Robert Mosbacher, forced his way in by threatening to conduct an independent study. Commerce joined the Pentagon and the State Department and could insert its economic security agenda into the review process, a central part of which was a re-assessment of all technologies the US had agreed to transfer to Japan.⁶⁷ But this success went beyond the NSC review. After longer deliberations, in which some members of the administration spoke up for keeping the deal, while others wanted to completely scrap it, President Bush opted for the line the Pentagon and Commerce had developed together. They recommended to renegotiate the Memorandum of Understanding in order to reach ‘clarification’ of its stipulations and particularly additional and specific safeguards for US technologies. The Pentagon not only agreed to Commerce playing a major role in ‘clarifiying’ the deal, it would also be consulted in future negotiations of defense trade deals like the FSX.⁶⁸

The US forced Japan into renegotiation of the Memorandum of Understanding. After almost two months, a new agreement was signed in late April 1989 that clearly showed the influence of the Department of Commerce and its economic security concept. In addition to a binding clarification that the US companies would receive a share of approximately 40 percent of all R&D and production contracts, the main changes in the new MOU pertained to technology sharing. Added were stipulations about the technology flow from Japan to the United States. Joan McEntee, the Deputy Undersecretary of Commerce, celebrated as an accomplishment that the Japanese government had made a ‘clear commitment […] that there will be significant technology flow-back. We identified specific technologies of interest to us and established conditions of access’.⁶⁹ The technologies McEntee referred to were, once again, radar and composite wing materials. Indeed, what she presented here to Congress a few days after signing the agreement with Japan, were ‘clarifications’ and not profound changes of the MOU. But the added details addressed the FSX opponents’ central criticism that the deal was a technological one-way street, transferring valuable US knowledge without getting anything in return from Japan.⁷⁰

The implementation of FSX export controls

The most significant change to the MOU – and not just a small clarification – was, however, the addition of a layer of export controls to the co-development project to guarantee, that ‘technology transferred to Japan will be appropriately limited and carefully controlled’.⁷¹ For this purpose, the MOU envisioned at first an institution that diverged from the regular export control mechanism. A ‘Technical Steering Committee’ was established that was co-chaired by high-ranking military officers from the US and Japan. It was supposed to be the responsible board ‘for all requests for technical data made by Japan during the course of the development program’. These requests would be reviewed by technical experts in the Air Force or, if technologies were requested that fell outside the Air Forces’ responsibility, by other branches, the Department of Defense and the Department of Commerce. ‘According to the DOD, this process will elevate technology releasability issues to better ensure adequate reviews and reduce the opportunities for imprudent disclosures’.⁷²

The US technology the FSX debate increasingly focused on was software source codes. Two different kinds of codes were a bone of contention in the Japanese-American MOU renegotiations: the codes of the plane’s fire control computer, and the flight control computer’s software. They were seen as especially sensitive and became shorthand for the US technological lead that had to be protected.⁷³ GAO stated that the FSX was to ‘involve a greater deal of technical data flow to Japan than previous coproduction programs, particularly in the areas of software and other design data’. Hence, the DoD screened the source codes carefully and released them ‘only after critical deletions had been made, limiting Japan’s access to how the codes or programmer operations were developed’.⁷⁴ Reverse engineering would thus be impossible.⁷⁵ GAO commended the Department of Defense already in May 1989 for having ‘done a pretty good job in scrubbing the technology. They seem to sincerely want to limit the release to that which is necessary’ for the Japanese ‘to do the prototypes’.⁷⁶

This ‘scrubbing’ was only the beginning. In the next two years, the US government established a multi-layer export control regime over the FSX project, as laid out in a detailed GAO report from 1992. The main component of the FSX deal on the US side was the transmission of a huge data package related to the F-16, consisting of more than 10,500 technical documents and drawings and hundreds of supplemental documents. This package was reviewed by the Air Force’s ‘F-16 System Program Office’. It released no less than 92 percent of the package, but quite a number of documents were deemed too sensitive to be shared: 540 documents (5 percent) were categorized as ‘not releasable’ and 251 (2 percent) had to be modified before they could be given to the Japanese. The sharing practice after the cooperation of American and Japanese engineers had begun also points at very specific, targeted denial of information. When Mitsubishi requested in September 1990 the release of 250 formerly denied documents, the Program Office, consulting General Dynamics, released only 25 of them, 26 more after modification, and in the end declared 78 percent to be not releasable. The criteria for the Air Force Program Office screening followed directly the ‘economic security’ playbook and released only data that ‘would not compromise national security or provide Japan with a technology advantage’.⁷⁷

The Air Force had thus become by mid-1990 the US agency that carried the main burden of the export control process. The Technical Steering Committee, established a year before as the linchpin of technology control, did not participate in the everyday regulation of knowledge sharing. The DoD argued that the Committee met too infrequently to be a practical institutional anchor for the control activities. Thus, US officials used these Committee meetings only to ‘brief their Japanese counterparts on the status of data transfers from General Dynamics to Mitsubishi. US and Japanese officials also discuss and review data release policy and procedures’. Instead, existing export control institutions – next to the Air Force, the Defense Technology Security Administration and other DoD organizations – handled the routine business. The Department of Commerce, that was so keen on being involved during the FSX controversy, participated only in particularly important release decisions. In February 1991, for example, ‘DOD, Air Force, and Commerce jointly reviewed and coordinated a US government position on General Dynamics’ proposed use of composite materials for the FS-X aircraft’.⁷⁸

Not only the transmission of documents was tightly regulated but also the sharing of know-how in face-to-face communication between American engineers and their Japanese counterparts. Much of the FSX debate of the late-1980s had revolved around the dangers of sharing know-how, skills and hands-on knowledge. Now it was targeted by rules that curtailed what could be talked about in the laboratory and on the shop floor: ‘Complying with data releasability constraints while performing FS-X functions poses major challenges for General Dynamics engineers in Japan. The engineers are expected to transfer skills and know-how to the Japanese design team’ without disclosing officially denied knowledge. On both sides, engineers ‘expressed concern about the overly restrictive nature’ of the US government regulations.⁷⁹

Everyone involved had to walk a fine line. Given the complexity of the technological project, it was certainly not surprising that ‘the Japanese engineers ask a lot of questions’. But even though they did ‘not seem to be trying to extract restricted information’, the American engineers were supposed to be careful about what they explained to their colleagues: ‘General Dynamics officials said their engineers are expected to exercise good judgment and comply with applicable disclosure guidance when responding to requests from Japanese industry officials’. They were ‘encouraged to seek advice from senior-level engineers when they are uncertain about how much information to disclose’. Documents engineers produced in and for their everyday work, called ‘engineering interface memorandums’, could also only be given to Japanese nationals after Air Force review. These ‘supplemental data reviews’ were quite strict, as 18 percent of 631 individual screenings led to denial of information; in an additional nine percent of cases data was released only after modification.⁸⁰

To ensure compliance with the control rules, every employee involved in the FSX project had to attend ‘security awareness trainings’, considered an ‘essential’ tool ‘to reduce the possibility of inadvertent disclosures’. This approach bore fruit, as GAO ‘found a high degree of security awareness among General Dynamics engineers in Japan’.⁸¹

The functioning of the control system was closely monitored. Even small mistakes were registered, and measures were taken to avoid that these mistakes were made again. When, for example, a General Dynamics employee mistakenly shared composite test data ‘not related to the FSX program’, the Air Force ‘briefed this individual, as well as other General Dynamics employees, on this matter to reduce the chances for future inadvertent disclosures’. For this, it did not matter that the employee in question believed that the information already had been officially released and that General Dynamics pointed out that it had discussed the data with Mitsubishi already in 1987. In another case, when the Systems Program Office inadvertently authorized the release of only four documents, which the Air Force did not even consider sensitive, the administrative procedures were immediately changed after GAO had pointed out the error.⁸²

Even technical data needed for marketing presentations were subject to tight controls. US companies that applied for contracts for FSX subsystems had to leave out of their product presentations all ‘details of the design, development, and production’ or apply to the State Department for an ITAR license. Between January 1988 and March 1991, US firms submitted 141 license applications, and the State Department handled them with extraordinary scrutiny that betrayed the high political and technological sensitivity of the FSX project. Usually, State sent only about 20 percent of ITAR license applications to the Department of Defense for further screening. In case of the FSX, State was so keen on protecting technical data that it submitted all applications. Within the DoD, the applications were reviewed by no less than five different offices: the Defense Technology Security Division, the Defense Security Assistance Agency, and three Air Force entities: the Disclosure Implementation Division, the Directorate of Tactical Programs and the Disclosure Policy Division.⁸³

Clearly, the FSX controversy of the late-1980s had a huge impact on the knowledge sharing practices between Japan and the United States. The intense discussions about the negative effects of manufacturing know-how on US ‘economic security’ paved the way for strict regulations over the transmission of technical data, but also over the face-to-face communication between American engineers and their colleagues of Japanese nationality.

The extent and density of scrutiny that every act of technology transfer was subjected to certainly owed much to the high political visibility of the FSX case.⁸⁴ In combination with the Exon-Florio amendment, this case shows how much the rise of economic security thinking had changed the US concepts and practices of sharing knowledge with its Japanese ally. By the early 1990s, transferring technological know-how to Japan was seen as a danger to national security and national competitiveness. The US addressed this threat by applying the export control tools it had invented to fight the Soviet Union, its deadly Cold War enemy, to its friends. These were strong indicators that indeed the world had changed when the Berlin Wall fell in 1989 and that the new world would be shaped by the new US concept of ‘economic security’.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Department of Defense, Soviet Military Power 1989, 133.

2. Ibid., 139.

3. On the history of the concept of economic security see Daniels and Krige, Knowledge, ch. 7.

4. OTA, Arming Our Allies, 3.

5. Ibid., 12.

6. Pyle, Japan in the American Century, especially ch. 8. On Japans industrial policy see Okimoto, Between MITI and the Market. Johnson, MITI and the Japanese Miracle.

7. Testimony of Deputy Under Secretary Joan McEntee, May 11, 1989, in FSX: Hearings before the Subcommittee on Investigations and Oversight and the Subcommittee on International Scientific Cooperation and the Subcommittee on Transportation, Aviation and Materials of the Committee on Science, Space and Technology, U.S. House of Representatives, April 6 and May 11, 1989, Washington, D.C.: Government Printing Office, 1989, 202–203.

8. Ibid., 203.

9. See, for example, Vernon, Spar, and Tobin, Iron Triangles, 58–59. Chapter 3 of this book is the best concise overview over the FSX controversy. Tuathail, Pearl Harbor. For a more detailed, albeit less balanced, account see Shear, The Keys to the Kingdom.

10. Daniels, Japanese Industrial Espionage. Jackson, Committee on Foreign Investment, 7–8.

11. On the Bucy Report see Daniels and Krige, Knowledge Regulation, ch. 4. Mastanduno, Economic Containment, 186–219.

12. Thus, the FSX controversy followed closely the more general timeline of the escalating deterioration of the US–Japanese economic and political relations. LaFeber, The Clash, ch. 12.

13. Office of Technology Assessment (OTA), Arming Our Allies, 61. For a detailed account of the US–Japanese political and economic relations see Forsberg, America and the Japanese Miracle.

14. Pach, Arming the Free World.

15. OTA, Arming Our Allies, 21.

16. Forsberg, America and the Japanese Miracle, 187–189. Boel, The European Productivity Agency, 21–59. Yamazaki, German Business Management, 17–35.

17. Forsberg, American and the Japanese Miracle, 189–190.

18. Samuels, Rich Nation, Strong Army, 198–199. National Research Council (NRC), High-Stakes Aviation, 14.

19. Samuels, Rich Nation, 204, 208, 212. NRC, High-Stakes Aviation, 15.

20. OTA, Arming Our Allies, 62, 22.

21. OTA, Arming Our Allies, 22. NRC, High-Stakes Aviation, 15.

22. Samuels, Rich Nation, 227.

23. United States-Japan Trade Council, Council Report No. 2, January 11, 1980, in Proposed Joint Development of the FSX Fighter with Japan: Hearings before the Subcommittee on Economic Stabilization of the Committee on Banking, Finance and Urban Affairs, House of Representatives, April 18 and May 5, 1989, Government Printing Office, 1989, 162–168, quotes at 162–163.

24. Moran and Mowery, Aerospace, 137–145.

25. United States-Japan Trade Council, Council Report No. 2, January 11, 1980, 165–167.

26. NRC, High-Stakes Aviation, 15, 37–38.

27. OTA, Arming Our Allies, 62.

28. General Accounting Office (GAO), U.S. Military Coproduction Programs, 29–37.

29. United States-Japan Trade Council, Council Report No. 2, 163. Moran and Mowery, Aerospace, 141.

30. NRC, High-Stakes Aviation, 37–38.

31. Samuels, Rich Nation, 230. NRC, High-Stakes Aviation, 43.

32. Proposed Joint Development of the FSX Fighter with Japan: Hearings, 1989, 44 (Statement Lieutenant General Ronald Yates, US Air Force).

33. OTA, Arming Our Allies, 63.

34. “Nippon to Buy U.S. Alloy Plant,” The Baltimore Sun, April 28, 1983, C16. “Allegheny Ends Nippon Steel Deal,” New York Times, July 4, 1983, 30. James B. Treece, “Japan’s Press Says Pentagon Pressured Mitsubishi Chemicals to Sell U.S. Unit,” Wall Street Journal, December 16, 1983, 35 (here the quote).

35. Bryen, National Security, 243, 257 (fn. 18).

36. GAO, Foreign Investment, 22. The US and Japan had in 1983 signed an agreement for more technology sharing in the defense sector.

37. Ibid.

38. The GAO report alludes to this. Ibid.

39. Bryen, Technology Security, 243.

40. Treece, “Japans Press Says Pentagon Pressured Mitsubishi Chemicals to Sell U.S. Unit.” There is a need for more research in the role of the DoD in monitoring foreign direct investment before the Exon-Florio amendment. It seems that the DoD interventions began well before the Fairchild case changed the game.

41. OTA, Arming Our Allies, 63.

42. GAO, U.S. Military Coproduction Programs, 19.

43. Ibid., 1.

44. Daniels and Krige, Knowledge, ch. 4.

45. Ibid., 9. For the original quote see Defense Science Board, An Analysis of Export Control, vi. On the technological focus of the Bucy report see ibid., v.

46. GAO, U.S. Military Coproduction Programs, title page.

47. Ibid., 11.

48. Ibid., 15.

49. Ibid., 13.

50. Ibid.

51. Ibid., 4–5.

52. Ibid., 17.

53. Ibid., 24. The GAO claimed that the DOD’s releasability reviews had in the past not paid any attention to economic criteria. Ibid., 23.

54. Department of Commerce, Under Secretary for International Trade, Lionel Olmer, to GAO, December 3, 1981, in ibid., 45.

55. Department of Commerce, Director of the Bureau of Industrial Economics, Beatrice N. Yacarra, to GAO, December 1981, in ibid., 49.

56. Ibid., 25.

57. Vernon, Spar, Tobin, Iron Triangles, 58–59.

58. Vernon, Spar, Tobin, Iron Triangles, 60–61.

59. Dauvergne, U.S.-Japan High-Tech Military Cooperation, 196. Richard Grimmett, Congressional Research Service, FSX Fighter Agreement with Japan, March 1989, in Proposed Joint Development of the FSX Fighter with Japan: Hearings, 221–223, quote at 223.

60. Grimmett, FSX Fighter Agreement, 222–223.

61. Dauvergne, U.S.-Japan High-Tech Military Cooperation, 196.

62. Ibid.

63. Grimmett, FSX Fighter Agreement, 222.

64. John Heinz, “The FSX Deal with Japan is a Fire Sale,” Washington Post, March 30, 1989, A23.

65. Dauvergne, “U.S.-Japan High-Tech Military Cooperation,” 196–197. Vernon, Spar, Tobin, Iron Triangles, 68–69, 72, 76.

66. Vernon, Spar, Tobin, Iron Triangles, 66–68, 76. Dauvergne, “U.S.-Japan High-Tech Military Cooperation,” 197–198.

67. Vernon, Spar, Tobin, Iron Triangles, 72–73.

68. Dauvergne, “U.S.-Japan High-Tech Military Cooperation,” 199.

69. Testimony of Deputy Under Secretary Joan McEntee, May 5, 1989, in Proposed Joint Development of the FSX Fighter with Japan: Hearings, 33.

70. John D. Moteff, Congressional Research Service, FSX Technology: Its Relative Utility to the United States and Japanese Aerospace Industries, April 1989, in Proposed Joint Development of the FSX Fighter with Japan: Hearings, 229–248.

71. Testimony McEntee, May 5, 1989, in Proposed Joint Development of the FSX Fighter with Japan: Hearings, 33.

72. Written Statement of Frank C. Conahan, Assistant Comptroller General, General Accounting Office, National Security and International Affairs Division, May 11, 1989, in FSX: Hearings, 182.

73. David Silverberg, “U.S., Japan Clash over FSX Computer Codes,” Defense News, April 4, 1989, in Proposed Joint Development of the FSX Fighter with Japan: Hearings, 274.

74. Written Statement Frank Conahan,181.

75. Silverberg, “U.S., Japan Clash over FSX Computer Codes.”

76. Testimony Frank Conahan, FSX: Hearings, 169.

77. GAO, U.S.-Japan Codevelopment: Update of the FSX Program, 26–28, quote at 28.

78. Ibid., 31–32.

79. Ibid., 31.

80. Ibid., 29.

81. Ibid., 30.

82. Ibid.

83. Ibid., 33–34.

84. GAO alludes to this, ibid., 32.