ABSTRACT
Japan's defense expenditures have been low in comparison to other Western industrialised countries and in relation to Japan's economic size. The opportunities of the international market for Japan's civilian products and the country's outstanding performance within it have left many reluctant to expand into the arms export market, which they view politically more sensitive than trade surpluses. The greater involvement of Japanese companies in military-related areas, despite a limited defense budget and a ban on arms exports, is the result of considerable interchange and permeability between civilian and military sectors. The 1983 agreement has considerably weakened the arms export ban, although at the same time it gives the United States a certain control of the spread of Japanese technology and its application to civilian products. The greater loyalty of Japanese employees as well as the high competition between Japanese companies has worked to protect company secrets.
