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U.S., Japan Agree on FSX Jet Fighter : Bush Announces Accord on $8-Billion Joint Project; Critics Vow Opposition

April 29, 1989|DAVID LAUTER and ART PINE | Times Staff Writers

WASHINGTON — President Bush on Friday announced final agreement with Japan on an accord for joint production of the advanced FSX jet fighter for Japan's air force, saying the deal "is in the strategic and commercial interests of the United States."

But congressional opponents of the $8-billion project vowed immediately to fight it, although they conceded that they cannot currently claim the votes necessary to override Bush's decision. The lawmakers will have 30 days to block the accord.

"I think it's still a bad deal," despite concessions that the Bush Administration won from Japan in negotiations over the last several months, said Rep. Richard A. Gephardt (D-Mo.), chairman of a House task force formed to monitor the FSX negotiations. Gephardt argued that the United States should have insisted that Japan buy existing F-16 fighters to ease the U.S.-Japanese trade deficit.

Had Wanted Its Own Plane

Administration officials have contended that any such stance would be self-defeating. The Japanese, who initially wanted to build a new fighter without U.S. involvement, would simply return to that plan if the United States pushed too hard, they said.

But California Rep. Mel Levine (D-Santa Monica), another leading opponent of the deal, argued that even so, the United States would be better off without it. Joint production will allow Japan to gain a foothold in one of the few markets--commercial aircraft production--in which the United States still dominates, Levine said. "Even their going their own way would be less harmful," he said.

Both Gephardt and Levine predicted that opponents would be able to muster a majority in the House and might receive a majority in the Senate as well. But both conceded that they lack the two-thirds margin in both houses needed to override an all-but-certain Bush veto of any congressional attempt to kill the FSX plan.

The current agreement is a modification of a deal that was struck last November by the Ronald Reagan Administration. It contains new assurances that American companies will be allocated "about 40%" of the work in producing the aircraft as well as in developing it.

The Reagan-era agreement guaranteed U.S. firms a 40% share only for the development phase.

U.S. Firm Is Subcontractor

Under the agreement, an American company, General Dynamics, will serve as subcontractor for Japan's Mitsubishi Heavy Industries to develop the plane. The American company would receive about $440 million for its development work. The production work on the plane is valued at more than $5 billion. Bush also indicated that U.S. negotiators succeeded in tightening restrictions on Japanese access to sensitive computer software needed to fly the aircraft and fire its weapons.

"Sensitive source codes for the aircraft's computer will be strictly controlled," Bush said. "Access will be granted to only those codes that are essential to complete the project."

U.S. officials said later that the accord calls for the United States to provide Japan with some of the strategically sensitive "source-codes"--a kind of computer blueprint--for firing the aircraft's weapons, but that Tokyo would not have use of the source codes used in the design of the flight-control computer.

It also guarantees that the United States will have access to any new technology that Japan develops under the project.

The new technology will come free of charge in cases where it stems from existing technological information that the United States gives Japan as part of the FSX project. Washington would be able to buy any new technology that Japan develops from scratch.

One element left unresolved in the accord is who will produce the engine for the FSX. U.S. officials said the two sides had "no agreement" on the question, but the accord does cite the possibility of Japanese production under U.S. license as "a viable way."

The deal on the FSX, which is to be patterned after the American F-16 fighter jet, is unusual not only in reflecting traditional concerns about sharing of sensitive military technology, but also in making certain that America has access to any new Japanese technology.

Even though Japan has not developed any major military aircraft on its own since World War II, American officials recognize that Japanese technological capability is so high that Japan could develop breakthroughs.

Friday's announcement of the accord also ends a major battle inside the Administration over giving top economic policy-makers more say in negotiating such deals, which previously had been the sole province of the State and Defense departments.

It was objections by the Commerce Department and the U.S. Trade Representative's Office last January that set off criticism of the agreement in Congress and eventually gave rise to a renegotiation of the Reagan Administration's accord.

The two agencies feared the deal might give Japan the technology it needs to establish its own civilian aircraft industry that eventually could compete with that of the United States. The U.S. aircraft industry has dominated the world market for civilian planes.

U.S. officials said Friday the Administration now has set up internal procedures designed to bring in economic officials at the early stages of negotiation over co-development of major weapons systems.

The major elements of the deal were completed early in April, but final signing of the accord was held up while the two sides wrangled over last-minute changes in language. Japan twice sent special envoys here to work out details in such disputes.

U.S. officials had been anxious to complete the deal before Japanese Prime Minister Noboru Takeshita, a prime mover in negotiating the accord, steps down from office. Takeshita announced Tuesday that he would resign because of a domestic stock scandal.

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