May 26, 2009: After over two decades of lobbying, Japan has agreed to allow weapons exports. As part of post World War II reforms (and reaction to the military government that got Japan into World War II, with disastrous results). The post war constitution forbade Japan from possessing offensive military forces. Thus the Japanese armed forces are called the "Self Defense Forces." It was decades before Japan could even bring itself to build major weapons itself. But by the late 1980s, Japanese companies found that they were quite good at it. At that point, an international marketing survey indicated that, if Japan were allowed to export weapons, they would eventually capture up to 45 percent of the world tank and self-propelled artillery market, 40 percent of military electronic sales, and 60 percent of warship construction. That seemed optimistic, but there was no doubt that the Japanese could produce world class weapons. Throughout the 1990s, Japanese manufacturers produced nearly $7 billion worth of weapons a military equipment a year, just for the self-defense force.

But now Japan has noted that even tiny Israel manages to export $4 billion worth of weapons a year. Japan sees itself as well suited to grab a sizable chunk of the world arms market. After the 1990s, the escalating price of oil (driven largely by increased demand from China and India), sent international arms sales from $29 billion in 2003, to over $60 billion now. Oil rich countries, particularly those in the Persian Gulf, as eager to buy more weapons, with which to defend their assets.

The United States and Russia are the largest exporters of weapons, together accounting for over 70 percent of world sales. Traditionally, the U.S. sold nearly three times as much as Russia, but lately that was getting closer to only twice as much. The reason is, more effort by the Russians to not just sell on price, but also on service and warranties. Most of the cost of a new weapon comes during the lifetime (often a decade or more) of use. In the past, Russia had a bad reputation for support, and lost a lot of those "after-market" sales. The U.S. was much better in that respect, but much more expensive. Now the Russians not only have the price advantage (often half, or less, the cost of equivalent American weapons), but an improving reputation for providing good service. The Russians are also selling more high tech, and expensive, warships. For many years, warplanes comprised about two thirds of Russian sales, but now, warship sales are eating into that. But it's still a varied and growing market, and many potential customers feel good when they see "Made In Japan" on any industrial goods.