Australia Wants Japanese Submarine Design Deal

Australia is seeking greater military technology cooperation with Japan that may eventually lead to Japan supplying it with stealth submarine designs, Australian Defense Minister David Johnston said on Wednesday.

The dismantling of an arms export ban by Japan in April has paved the way for Japan to pursue a ground-breaking deal to help Australia build a fleet of stealth submarines that it wants to extend its surveillance reach deep into the Indian Ocean.

"We are taking small and determined steps down that path," Johnston told Reuters in an interview in Tokyo. "We are looking to push the relationship a little further along, carefully and discreetly, as to how we might better inter-operate."

Johnston was meeting his Japanese counterpart, Itsunori Onodera, along with the foreign ministers of Australia and Japan, Julie Bishop and Fumio Kishida, in Tokyo on Wednesday for talks to bolster relations.

Any agreement on closer industrial ties could also see Japan and Australia cooperate in military hardware beyond submarines, he said.

The talks also lead Japan and Australia to "compare notes" on Lockheed Martin's F-35 fighter that both nations plan to deploy, Johnston said, helping them sustain a program that will be at the core of their frontline air defense strategies in the coming decades.

"We are both fundamentally purchasers of U.S. predominantly and some European platforms and we share sustainment issues and technical issues around how we evolve those platforms to our own needs," Johnston added.

Although any deal is far from certain and could hinge on a new security arrangement that could anger China, there is a growing will among officials in Tokyo and Canberra to forge a framework for a submarine deal, sources familiar with the discussion told Reuters last month.

A deal could include hull design, going beyond discussions last year that were limited to engine technology, the sources in Tokyo said.

Australia's proposed fleet of diesel submarines is at the core of the nation's maritime defense strategy.

"We must retain a submarine capability in Australia as one of our most significant strategic deterrents," Johnston told Reuters.

His government, he said, would decide next year in a new defense white paper how many submarines it will build, possibly less than the 12 proposed in 2009.

Johnston described an estimate of A$40 billion dollars for that program as "far too high" for Australian taxpayers to accept, although he declined to predict how much the new fleet of submarines will cost.

By Tim Kelly and Nobuhiro Kubo (C) Reuters 2014.