Japan business lobby wants weapon export ban eased

TOKYO (Reuters) - Japan's largest business lobby called on Tuesday for restrictions on weapons exports to be eased to allow defence contractors to take part in international research and development projects and stay competitive.

The proposal by Nippon Keidanren comes as the government, facing an unpredictable North Korea and rising China, prepares the latest defence policy outline and mid-term defence equipment procurement plan for issue by the end of the year.

"As defence gear becomes sophisticated and development costs grow, more and more fighter jets and other equipment are being developed by international consortia," Nippon Keidanren said in its proposal released on Tuesday.

"But the three principles are prohibiting Japan from joining international joint development, putting the country in the state of technological isolation."

Japan in 1967 drew up "three principles" on arms exports, banning sales to countries with communist governments or that are involved in international conflicts or subject to United Nations sanctions.

But the rules eventually became almost a blanket ban on arms exports and on the development and production of weapons with countries other than the United States.

That prohibits the nation's defence industry from joining multinational projects such as Lockheed Martin-led(LMT.N) F-35 Joint Strike Fighter, and makes it difficult for Japanese defence contractors such as Mitsubishi Heavy Industries(7011.T) to drive down costs and keep up with cutting-edge arms technologies. (Reporting by Kiyoshi Takenaka, editing by Andrew Marshall)