Was Toshiba Flap a U.S. Bid to Horn In on Fighter Deal?

The 47 Masterless Samurai, Japan’s classic tale of retribution, begins with the death of a young country baron, ordered to commit hara-kiri for a minor infraction of protocol against a despotic court official. The story’s perennial popularity is due to its theme of dishonorable suicide, a grievance that arouses the most passionate emotions of sympathy and anger among the Japanese public.

Americans should find it alarming, then, that many of Japan’s business leaders refer to the resignation of Toshiba’s top officials as a tsumebara-kiri --or forced suicide.

In the minds of many Japanese business analysts the Toshiba executives are unlucky pawns in a much larger conflict between the American defense Establishment and Japan’s industrial giants. While Toshiba executives have tried to appease the American outcry with full-page apologies in major newspapers, the larger business community has been less convinced of the American charges.

The view from Tokyo is that the U.S. Defense Department has overinflated the security threat posed by a Toshiba subsidiary’s sale to the Soviets of sophisticated lathes for milling submarine propellers. The Pentagon is suspected of having stirred up congressional ire in order to arm-twist the Japanese government into accepting an American proposal to jointly develop a new line of fighter aircraft.

The disclosure of the equipment sale and the Senate vote to impose sanctions against Toshiba Corp. were timed to coincide with Defense Secretary Casper W. Weinberger’s visit to Tokyo in late June. Weinberger’s stopover was aimed at pressuring Prime Minister Yasuhiro Nakasone to drop the Japanese plan to independently build the new FSX tactical fighter, and to adopt instead a joint design with U.S. defense contractors. The sanctions threat was invoked by Weinberger as he urged Nakasone to resist a concerted lobbying effort by the domestic defense industry.

The development of the FSX is a crucial factor in the effort by Mitsubishi, Kawasaki and other manufacturers to rebuild Japan’s once formidable aircraft industry. As with their more advanced counterparts in the United States and Europe, Japan’s aircraft manufacturers must rely on highly profitable defense contracts to subsidize research and production facilities for developing commercial airliners.

At stake in the FSX deal is not only the survival of Japan’s defense industry but also its ability to become a competitor in the global aerospace market. Arrayed against the planned FSX are two American aerospace contractors, General Dynamics and McDonnell Douglas, with modified versions of the F-16 and F-18.

The resurgence of Japan’s aircraft industry is, ironically, a product of Washington’s effort to pressure the Nakasone government to increase its defense spending beyond the 1% of gross national product imposed after World War II.

The Toshiba affair throws light onto the shadowy world of high-tech sales by Western corporations to the Soviet Union and its allies. Corporations in practically every industrial nation engage in this profitable trade by transferring technology through dummy companies set up in Third World countries. A list of more than 170 contraband items is constantly updated by the Coordinating Committee for Export Control, or COCOM, a Paris-based group of 11 European nations, the United States and Japan. As a watchdog, however, COCOM is essentially toothless, relying on member governments to enforce its provisions.

Except for a handful of violations like Dresser Industry’s sale of oil-drilling equipment to the Soviets, complaints are normally handled discreetly through diplomatic channels. Reported abuses are often disregarded by exporting countries, as in the case of the State Department’s failure to act on a longstanding complaint by Japanese scientists who discovered advanced American electronics gear inside medium-range missiles during a visit to a Chinese defense plant.

By defending the American charges, Nakasone, a political ally of the Reagan Administration, has found himself virtually alone inside his own Cabinet. Representing the views of the business community, Japan’s powerful Ministry of International Trade and Investment has openly collided with Nakasone and Japan’s Foreign Ministry, which accepted the American charges at face value.

International trade ministry head Hajime Tamura has maintained the position that the U.S. Defense Department has produced no persuasive proof that the Toshiba lathes were directly responsible for reducing Soviet submarine noise. Japanese suspicions of being scapegoated were confirmed in early August with the admission by Stephen Bryen, a deputy defense undersecretary, that the Soviets had acquired up to 20 types of equipment to upgrade their vessels from American companies as well as from European and Japanese firms.

Perhaps more than any other incident in recent history, the Toshiba case has added a cloud of distrust to already strained relations between the United States and Japan. For the United States, the loss of Japanese good will over the Toshiba incident may in the long run far outweigh any erosion of military technology.