Enabling Forward Sustainment

In a potential conflict in the Indo-Pacific theatre, contested logistics will make sustainment and repair of U.S. Air Force (USAF) aircraft difficult. The USAF should consider collaborating with allies and partners to develop the capability to sustain its aircraft near the conflict zone, reinforcing deterrence and enhancing warfighting ability.

Japan is a key U.S. ally in the region, possessing advanced technical capabilities, a long-standing relationship with the USAF, and an increased strategic focus on its own defense industrial base. Maintenance, repair, and overhaul (MRO) collaboration could be mutually beneficial for Japan and the United States, providing cost savings, predictable demand, and integration that could strengthen credible deterrence against a common adversary. By leveraging each nation’s strengths, Japan and the United States could bolster their defense capabilities, increase resilience, and better prepare for a potential conflict for a potential conflict in the Inso-Pacific.

Japan is well positioned to be a capable MRO partner for the USAF. The nation has a strong commercial aviation industry that has existing relationships with U.S. companies. Some of these relationships extend to the military aviation industry, creating opportunities for further integration and expansion of military MRO capabilities, particularly for several military aircraft that are flown by both countries. Japan has recently made investments in its defense industrial base and revised its export regulations, enabling closer defense cooperation.

USAF MRO in Japan would build upon a robust set of existing frameworks and strategies focused on addressing sustainment challenges in the Indo-Pacific. The Defense Industrial Cooperation, Acquisition, and Sustainment (DICAS) Forum established an open dialogue on MRO with Japan in 2024. The Partnership for Indo-Pacific Industrial Resilience (PIPIR), also launched in 2024, brings together industrial and international partners to integrate MRO strategies. The Global Enterprise Network for Universal Sustainment (GENUS), a USAF program, expands depot maintenance capabilities to ally and partner countries.

However, there are challenges to U.S.-Japan MRO cooperation, including export controls that delay the exchange of knowledge, labor, and capital; technical challenges like differing manufacturing standards and quality controls; and a lack of consensus about who will bear the financial burden of investment in expanding capability.

This report identifies recommendations on how to accelerate cooperation to meet the urgent strategic imperative of enhanced MRO capabilities in the Indo-Pacific. The United States could expand on physical and diplomatic infrastructure, send clear demand signals to industry, and use Other Transaction Authority (OTA) to allow U.S. companies to explore collaborative opportunities. Both the United States and Japan could identify common systems for MRO cooperation, increase the alignment of their manufacturing standards, embrace modular designs for future acquisition programs, and conduct an exercise to evaluate current joint sustainment capabilities and gaps. Japanese industry could leverage its strong commercial aerospace assets by adapting knowledge, labor, and facilities to support military MRO.

Introduction

The USAF is globally postured, with bases, airmen, and aircraft forward positioned across the world to protect and advance the United States’ geostrategic interests. Such a far-flung footprint, while strategically advantageous, creates its own challenges, especially in maintaining USAF aircraft in theater when potential conflicts are likely to involve contested logistics.

The challenges associated with forward presence are particularly evident in the United States Indo-Pacific Command Area of Responsibility. The Indo-Pacific region fuels much of the world’s economic growth and, through trade, supports more than 3 million American jobs. As the source of nearly $900 billion in foreign direct investment into the United States, the region has great importance for U.S. national and economic security. Japan is a key U.S. ally in the Indo-Pacific that is investing in advanced defense capabilities and promoting defense industrial cooperation with the United States to enhance jointness and interoperability. Japan’s highly capable industry has the potential to help alleviate the USAF’s maintenance and contested logistics challenges in the region.

Both the United States and Japan have already taken steps to advance cooperation in aircraft maintenance and repair. The United States has established multiple dialogues and frameworks, such as the DICAS Forum, dedicated to partnering with Japan and exploring sustainment solutions in the Indo-Pacific. Japan has made investments in its defense industrial base and aligned its export laws to enhance defense collaboration, demonstrating its commitment to expanding its defense posture and industry. The United States and Japan should consider building upon and accelerating these efforts as a way to overcome the challenges of maintenance cooperation and meet the urgent strategic need for enhanced sustainment capabilities in the Indo-Pacific.

Strategic and Operational Challenges

Japan faces a rapidly deteriorating regional security environment. China’s coercive tactics in the East China Sea, including continued deployments of government vessels into the Senkaku Islands’ territorial waters, are having a corrosive effect on regional security. China is consistently and clearly demonstrating a desire to reshape the balance of power in the Indo-Pacific region. China and Russia have increased their joint bomber exercises in the North Pacific and their flying of uncrewed aerial systems (UASs) near Japan’s southwest islands, leading the Japan Air Self-Defense Force (JASDF) to scramble fighter jets.

An emboldened North Korea, armed with advanced Russian military technology, has also increased the importance of Japanese deterrence and defense capabilities. China has not actively sought a trilateral partnership with North Korea and Russia, but both China and North Korea have supported Russia’s weapons manufacturing since its invasion of Ukraine in 2022. North Korea has long posed a threat to regional security, and deterrence strategies must now account for a North Korea that is armed with both nuclear weapons and ballistic missiles and is capable of delivering them to Japan and even to the West Coast of the United States.

The distance between the United States and the Indo-Pacific presents operational challenges for the U.S. military, particularly in the maintenance of USAF aircraft. Located thousands of miles away from China—its “pacing threat”—the United States faces significant challenges due to its geographic separation from its allies in the Indo-Pacific region. The tyranny of distance complicates U.S. efforts to bolster deterrence. In addition to these challenges, the Department of Defense (DOD) faces slower response times and repair delays due to export controls and other bureaucratic hurdles that complicate the performance of repairs outside of the United States.

In North America, the United States is also confronting difficult conditions that exacerbate these challenges. Operating on peacetime footing, “the U.S. defense industrial ecosystem lacks the capacity, responsiveness, flexibility, and surge capability to meet the U.S. military’s production and warfighting needs.” Beyond these production shortcomings, the United States also faces hurdles and inefficiencies from overly restrictive or outdated arms transfer policies and institutions such as the International Traffic in Arms Regulations (ITAR) and Foreign Military Sales (FMS) program, as well serious workforce inadequacies and shortages. Collectively, these constraints have a negative impact on supply chain resilience, military readiness, and sustainment efforts.

Beyond military security difficulties, Japan has also been forced to reckon with challenges in its defense industrial base, where capacity has suffered due to falling profits, higher costs of technology development, and increased government acquisition spending on foreign technologies over the past decade. This is particularly of note because defense contracts make up only a small fraction of overall revenue for large Japanese companies doing work for Japan’s Ministry of Defense (MOD). While this means that Japanese companies are more diversified and better equipped to manage financial instability and fluctuations in defense sales, it also means that top management is not singularly focused on managing and growing their defense sectors.

As one of the United States’ most important allies in the Indo-Pacific, Japan could play a key role in ensuring deterrence in the region by helping to overcome the difficulties of contested logistics via cooperation on aircraft maintenance. As discussed below, Japanese companies have strong capabilities in aircraft MRO but currently face challenges in meeting the USAF’s MRO needs in the region.

Deterrence Strategy in the Indo-Pacific

As the United States and Japan grapple with growing threats in the Indo-Pacific region, both countries have placed greater emphasis on deterring aggression from potential adversaries. China continues to be an overriding strategic concern, as highlighted in Secretary of Defense Pete Hegseth’s initial message to the force on January 25, 2025, where he stressed the importance of working with allies and partners to “deter aggression in the Indo-Pacific by Communist China.” In March 2025, Hegseth called Japan an “indispensable partner” in deterring China and confirmed plans to upgrade of the U.S. military command in Japan to a Joint Force Headquarters. This upgrade allows for improved coordination of bilateral operations between the United States and Japan and is aimed at reestablishing deterrence in the Indo-Pacific. These remarks came during Hegseth’s meeting with Japanese Defense Minister Nakatani Gen, in which the two officials agreed to accelerate the process of maintaining U.S. aircraft and ships in Japan, as well as to move forward with plans to jointly produce certain missiles, such as Advanced Medium-Range Air-to-Air Missiles (AMRAAMs).

The USAF contributes to the deterrence mission and has operated in Japan for decades, with aircraft stationed at Kadena Air Base, Misawa Air Base, and Yokota Air Base. Dr. Troy Meink, during his nomination hearing for secretary of the Air Force in March 2025, stated that “China poses the largest plausible military threat to the United States of America, as well as our allies and partners in the Indo-Pacific region.” China has the largest air force in the Indo-Pacific and is rapidly modernizing and advancing its power-projection capabilities with high levels of military spending.

Part of USAF deterrence strategy is building credibility through the establishment of effective military infrastructure. One component of that strategy is the Pacific Deterrence Initiative (PDI), a set of targeted investments that “enhance U.S. force posture, infrastructure, presence, and readiness as well as the capacity and capabilities of U.S. Allies and partners, specifically in the Indo-Pacific region.” In FY 2025, the PDI requested $9.9 billion across six investment categories, including logistics and maintenance capabilities, prepositioning of equipment, and ally and partner capabilities. Investments in the region, from building new facilities to strengthening the capability of allies and partners, are credible commitments to the region’s defense. The PDI is a signal to adversaries that the United States is dedicated to spending time and money building up its force posture and readiness in the Pacific, translating directly to a willingness to fight and win a conflict.

Contested Logistics and the Importance of MRO

Conflict in the Indo-Pacific will be challenging due to the region’s distance from the United States and the growing difficulties of contested logistics, all of which put assets at an increased risk. Contested logistics is defined by the USAF as “an environment in which an adversary presents challenges in all domains and directly targets logistics, operations, facilities, and activities in the United States and abroad, or in transit from one location to another.” To overcome the challenges of contested logistics, the USAF aims to improve forward posture by utilizing information management, enabling agile combat deployment, and fielding improved active and passive defenses.

Any potential conflict will provide China with opportunities to contest and disrupt the United States’ supply chains and logistics. Readily available, pre-staged military assets that would allow U.S. and allied forces to provide protection, intelligence, and sustainment right away in the event of a conflict are crucial. Reducing the time it takes to surge resources from the United States into the Indo-Pacific would help to defeat the tyranny of distance. MRO capabilities in-theater are critical to overcoming these logistics challenges and maintaining deterrence. In-country maintenance capabilities reduce the risk of attack on systems that are being ferried to and from the continental United States for maintenance and makes these systems available more rapidly. It also reduces the demand for additional assets like tankers and ensures that pilots can remain forward.

The Potential of U.S.-Japanese Collaboration

The challenges of maintaining deterrence and overcoming contested logistics in the Indo-Pacific have deepened the importance of joint efforts between the United States and Japan to enhance defense industrial cooperation, strategic integration, and sustainment. Both countries stand to gain from regional integrated deterrence, increases in interoperability, and coordination of strategic goals and efforts. By leveraging their individual strengths, Japan and the United States could collectively build their defense industrial bases and better prepare for a possible conflict with China.

MRO offers a way to deepen cooperation. Considered a crucial component of military readiness and international defense partnerships, MRO is critical for sustainment efforts and a primary enabler of U.S. military operations. By the DOD’s definition, maintenance and repair pertain specifically to “the overhaul, upgrading, or rebuilding of parts, assemblies, or subassemblies, and the testing and reclamation of equipment.” For the USAF, MRO operations mainly revolve around maintaining aircraft and supplying forces with the necessary parts, pieces, and equipment to do so.

The DOD splits maintenance into two categories: field level and depot level. Field-level maintenance refers to organizational maintenance—which can include inspections, servicing, and preventative maintenance—as well as intermediate maintenance, which includes assembly and disassembly. Field-level maintenance includes shop-type work and on-equipment maintenance, both of which are normally performed by an operating unit on a day-to-day basis. Depot-level maintenance is material maintenance or repair that requires overhaul, upgrading, or rebuilding of parts or components. Each military service has its own depot-level maintenance infrastructure, requiring specialized tools, equipment, and uniquely trained personnel. More complicated than maintenance are modifications and overhauls. Modifications involve changing components or software; they often need to be done by the original equipment manufacturer (OEM), either in-country or back in the United States. MRO operations feature differing degrees of specialization, ranging from simple maintenance at more rudimentary levels to specific modifications that require particular facilities.

The Japanese government has advocated for the country’s industry to expand its support for U.S. MRO operations in the Indo-Pacific. As MOD has stated, “In general, conducting maintenance and repairs in Japan on U.S. Navy vessels and U.S. Air Force aircraft deployed in the vicinity of Japan, without them returning to mainland U.S., will contribute to strengthening Japan’s defence production and technological bases.” Such maintenance and repair work will also improve “the readiness of U.S. forces by shortening the repair period and increasing efficiency,” a spokesperson stated in 2022, adding that this would improve the “deterrence and response capabilities of the Japan-U.S. alliance.” This sentiment is in close alignment with Japanese strategic policy as outlined in Japan’s National Defense Strategy and as evidenced by the country’s increasing defense budget.

The United States already addresses some of its maintenance needs in Japan. The U.S. Navy and U.S. Marine Corps contract Japanese companies for maintenance on some aircraft, such as the F/A-18E/F and V-22. Some MRO has also been done on U.S. Navy ships at Japanese shipyards. While the USAF has existing capacities at Kadena, Japanese firms could be called upon to assist the USAF in performing more MRO operations in-theater than is currently possible by contributing extra parts, components, technicians, and capacity.

Recent strategic messaging, investment, and global engagement show encouraging signs of progress for MRO cooperation between the United States and Japan. A key path to overcoming the challenges of cooperation will be to build upon the existing foundation of MRO collaboration, including physical and diplomatic infrastructure. The remainder of this report will examine what the United States and Japan can do to build on existing efforts and further catalyze MRO cooperation.

Methodology and Report Overview

This report draws on interviews, private roundtables, a public event, and independent research to provide an overview of the possibilities for greater cooperation between the United States and Japan on MRO of USAF airplanes.

CSIS held two private roundtables that brought together key stakeholders from both countries and other subject matter experts. The first roundtable occurred in October 2024 and focused on Japanese industry. The second roundtable took place in January 2025 and featured greater representation from U.S. industry. A public event held at CSIS in March offered the opportunity for government and industry figures to voice their perspectives to the policy community.

Industry research was compiled from interviews and written surveys as well as from the roundtables. Virtual interviews were conducted with five U.S. companies, and survey answers were collected from six Japanese companies. U.S. and Japanese companies were asked about their current MRO activities, the challenges and opportunities for MRO work with the partner nation, and other topics such as investments and production dynamics.

Chapter 2 of this report describes the current state of USAF MRO efforts in Japan and offers data-driven insights into current MRO cooperation. Chapters 3 and 4 sort MRO cooperation challenges in Japan and the United States, respectively, into a typology of barriers. Chapter 5 discusses enablers of greater cooperation. Finally, Chapter 6 provides recommendations to industry and policymakers in the United States and Japan.

Current State of USAF MRO in Japan

The USAF has long maintained a dedicated MRO hub in Japan. The Support Center Pacific (SCP), located at Kadena Air Base, has been providing parts and repair services for USAF assets in the region for over 40 years. The SCP primarily produces depot-level repair parts; in 2013, for instance, it provided over 3,000 assets to the theater. With over 90 employees, the SCP has the capability to maintain a wide range of aircraft and service more than 125 different aircraft components from both the USAF and foreign militaries, including Taiwanese F-16s. The center provides in-theater services for the A-10, C-5, C-130, F-16, F-15C/D, F-15E, KC-135, HH-60, E-3, and MQ-9 aircraft, and works with allied forces within the supply chain to ensure swift support of air assets. The center’s skilled workforce has an average of 20 years of experience and is cross-trained to handle multiple functions, giving the SCP flexibility to meet the changing needs of the USAF and allies.

Though the SCP provides the USAF with a significant independent capability in Japan, the United States continues to seek out joint solutions to sustainment in contested logistics environments. In 2024, the DOD rolled out a new plan to launch military repair hubs across the Indo-Pacific. Japan, South Korea, Australia, Singapore, and the Philippines were named as partners in this expansion of the DOD’s network of repair hubs across the world. The announcement aligns with the Regional Sustainment Framework (RSF), which advances collaboration with allies and partners as a solution to conducting MRO closer to the point of need, avoiding the costly and time-consuming process of sending military equipment back to the United States for repairs. While the DOD’s network of MRO hubs contributes to integrated deterrence, these hubs are also prepared to handle “battle-damaged equipment” in the event of a conflict.

Expanded MRO cooperation with Japan would also build on existing relationships between the U.S. government and Japanese industry. The Komaki South Plant, operated by Mitsubishi Heavy Industries (MHI), functions as a regional depot for the F-35 airframe. The Mizuho Plant, operated by IHI Corporation, also functions as a regional depot for the F-35, specifically its F135 engine. The potential expansion of Japan’s aircraft servicing capacity would match the country’s strategic shift toward increasing its domestic defense capacity, defense spending, and focus on national security. Servicing and maintaining USAF aircraft in Japan will significantly reduce the turnaround time of returning aircraft to service, bolstering regional security and partially solving the pressing issue of MRO logistics in potentially contested environments.

Institutional Frameworks and Strategies for Cooperation

The DOD has a robust set of institutional frameworks and strategies focused on addressing sustainment challenges and deterrence obstacles faced by the Air Force in the Indo-Pacific region. These emphasize the importance of MRO operations and the critical leveraging of relationships with allies and partners. For example, the RSF seeks to bring together industrial and international partners to strengthen MRO capabilities overseas. By prioritizing engagement with allies and partners, the RSF strives to “build a collective and resilient co-sustainment ecosystem” that can enhance military readiness, quickly respond to persistent threats, and deter regional aggression.

The RSF builds on the strategic and operational priorities outlined in the Pacific Air Force (PACAF) Strategy 2030, which provides direction to the command’s 46,000 Airmen and civilians across strategic areas, including resilient basing, contested logistics, and the training of multi-capable Airmen. As reflected in this and other foundational USAF policies, collaborative MRO efforts like reciprocal aerial refueling and maintenance integration are critical to enhancing the USAF’s adaptability and ensuring aircraft are airworthy and ready to fly, enabling Airmen to leverage their skills and experience in contested environments.

The Defense Industrial Cooperation, Acquisition, and Sustainment (DICAS) Forum is another key enabler in the U.S. defense industrial toolkit that makes joint projects mutually beneficial to Japan and the United States. Similarly to the RSF, DICAS seeks to “accelerate coordination toward co-development, co-production, and co-sustainment” by pursuing mutually beneficial objectives, tackling obstacles jointly, and expanding defense industrial base opportunities for both countries.

Similarly, the Partnership for Indo-Pacific Industrial Resilience (PIPIR) directly supports the RSF and the DOD’s implementation of the National Defense Industrial Strategy (NDIS). PIPIR is focused on enhancing defense industrial collaboration between the United States and its allies in the region. Centered around a core vision statement that defines strategic principles to guide collaboration, PIPIR has brought partners together around four workstreams: sustainment, production, supply chain resilience, and policy and optimization. Having agreed that the delivery of material solutions is integral to defense industrial resilience, the 13 countries that comprise PIPIR have appointed leadership for each workstream and committed to the creation of an advisory board to complement and inform joint efforts.

The USAF’s Global Enterprise Network for Universal Sustainment (GENUS) compliments RSF, PIPIR and DICAS by focusing on the expansion of depot maintenance capabilities beyond the shores of the United States, including in the Indo-Pacific. The USAF will operationalize RSF using the GENUS framework. By leveraging relationships with allies and partners around the world, GENUS aims to strengthen alliances, processes, and capabilities to increase depot-level max capacity, embed personnel, and improve regional supply chains. The framework aims to bring aircraft component repair capabilities to regional repair facilities in places such as Japan. The USAF is investing in Forward Air Logistics Complex Operational Nodes (FALCON) to embed depot-level maintenance within operational units, offering a further opportunity for aircraft repair to take place in Japan. In remarks at an event hosted by CSIS in March 2025, Lt. Gen. Stacey T. Hawkins described Japan as a prime candidate for FALCON expansion due to its strong existing military partnership with the United States and discussed the potential for partnership with Japanese industry.

Aircraft MRO in the Data

Alongside the growing strength of institutions designed to enable defense industrial cooperation, U.S.-Japanese cooperation on the MRO of USAF aircraft in Japan would build upon a strong foundation of existing contracts and relationships between the U.S. military and Japanese companies, many of which have worked on contracts for the U.S. military for decades. Japanese firms have cooperated with U.S. firms to produce aircraft parts like Stage 1 Integrally Bladed Rotors for the F135, for example, the manufacture of which began in 2024. Local firms have already provided MRO services for U.S. Navy aircraft, such as the F/A-18, in Japan.

The majority of the DOD’s Japan-related MRO contracts are already with Japanese vendors, except in a few specialized categories. Figure 1 depicts DOD MRO product and service contracts for aircraft from 2012–23 that are either conducted in Japan, held by a Japanese company or linked to a Japanese parent company, or that use materials that are majority Japanese in origin. U.S.-owned vendors hold all contracts in quality control, testing, and inspections due to the highly technical nature of this category; the same is true for technical representatives, as U.S. OEMs send their own engineers to Japan to work on their aircraft when there are restrictions on intellectual property (IP) or other constraints. In a conversation with CSIS, a U.S. industry representative explained that in some cases, engineers from the OEMs are the only ones who that can perform repairs because the OEMs own the IP. Outside these specialized categories, the data suggests that Japanese industry is capable of performing a majority of the MRO work being done in that country—especially in maintenance and repairs, the largest and most labor-intensive category of MRO activities.

▲ Figure 1: DOD Prime Product of Service Contracts for Aircraft MRO with a Japanese Aspect. Source: Federal Procurement Data System (FPDS) and CSIS analysis.

A 2014 DOD initiative that named Australia and Japan as F-35 heavy maintenance hubs for the Asia-Pacific region corresponds with the upticks in maintenance and repair contracts in 2014, 2018, and 2020. The F-35 maintenance facilities were expected to be operational by 2018, with Australia initially chosen to provide heavy maintenance to the F135 engine and Japan providing additional capability three to five years later. In Japan, MHI’s Final Assembly and Check Out facility in Nagoya was selected as the regional MRO provider; the facility unveiled the first Japanese-assembled F-35A in 2017. As part of the 2014 initiative, MHI began conducting inspections and repairs of F-35 airframes at its Aichi facility in 2020, after which there was an uptick in contract awards in maintenance and repair.

▲ Figure 2: DOD Prime Contracts for Aircraft MRO with a Japanese Aspect by Contracting Agency. Source: FPDS and CSIS analysis.

The USAF is not the main spender of DOD MRO funds related to Japan. Figure 2 shows all DOD prime contracts on aircraft MRO performed in Japan, divided by service. The majority of DOD funds spent on MRO with a Japanese aspect are paid by the Defense Contract Management Agency (DCMA), an agency that administers contracts, provides oversight, and ensures effective contract management. The DCMA typically focuses on high-value and high-risk contracts that directly support increased warfighter readiness, avoiding any contract below $300,000 and non-mission service work. In Figure 2, the “Air Force” and “Navy” sections represent the actual value of MRO contracts being performed in Japan, while DCMA contracts can concern products or services that are destined for the USAF, Navy, or any other military service.

The data in Figure 2 illustrates that U.S-Japan defense industrial cooperation on MRO is not only relevant for the USAF but also for the U.S. Navy, whose partnership with Japanese industry dates in 1953, when NIPPI, a Japanese corporation, began servicing Navy assets. NIPPI currently provides maintenance support for the Marine Corps’ V-22 Osprey helicopters. Japanese companies also service U.S. Navy ships, with MHI conducting maintenance on the USS Millus in 2019 and recently signaling its openness to additional contracts with the U.S. Navy. Expanded MRO cooperation could benefit the U.S. military broadly, not just the USAF, and has already begun to accelerate in some other services.

▲ Figure 3: DOD Prime Contracts for Aircraft MRO with a Japanese Aspect by Type of MRO Activity Across Aircraft Product Categories. Source: FPDS and CSIS analysis.

Figure 3 shows all DOD prime contracts with a Japanese aspect, segmented by the activities being performed on different aircraft parts and the type of MRO activity involved. The data shows that technical representatives are mostly performing work on components and accessories and that aircraft/airframes are receiving only general maintenance work. The topline of $30 million also shows a very limited amount of MRO with a Japanese aspect, meaning there is significant room for growth. The trend points upward on maintenance of aircraft and airframes, as more USAF aircraft are deployed to Japan and as the USAF seeks in-country sustainment solutions.

Engines and sub-suppliers are not included in this data, which means that Figure 3 does not capture some of the important MRO work being performed by Japanese companies, such as IHI’s supply of parts for and repairs of the F135 engine in Japan. As mentioned above, in 2023, IHI opened the first regional depot outside of those run directly by F-35 partner nations to provide services for the F135 engine for both the USAF and JASDF; in 2024, the company began shipping F135 Stage 1 Integrally Bladed Rotors to Pratt & Whitney in the United States, becoming the only external vendor with this capability. This activity is likely not represented in the data because IHI is not the prime contractor for the engine, but rather a subcontractor to Pratt & Whitney. Significantly more Japanese industry participation in MRO is likely happening at the sub-supplier level and therefore will not be included in DOD prime contract data. Pratt & Whitney have expanded their MRO presence in Japan through partnerships with MHI and IHI, with two facilities operational as of 2023. This expansion demonstrates an expectation of a continued uptick in MRO contracts with a Japanese aspect, mirroring the increases seen in aircraft and airframe MRO from 2018 through 2023.

Japanese Industry and Government Challenges

Japanese industry and government face a variety of barriers in facilitating MRO support for USAF aircraft. To categorize barriers to cooperation, this section draws on insights from project team research, roundtables, and interviews with key stakeholders. The chapter focuses on barriers that directly impact Japan’s government and industry.

To categorize these barriers, this report draws on a 2023 RAND report that offers a typology of barriers to U.S. security cooperation with highly capable allies in a variety of domains. CSIS previously modified this typology in a March 2025 report on U.S.-Australia defense industrial integration to include a new classification of the economic barriers experienced by industry.

▲ Table 1: Barriers to Security Cooperation. Source: Jennifer D. P. Moroney et al., Overcoming Barriers to Working with Highly Capable Allies and Partners in the Air, Space, and Cyber Domains: An Exploratory Analysis (Santa Monica, CA: RAND Corporation, July 2023).

Budgetary and Strategic Barriers

While Japan has highly advanced technological expertise and a robust manufacturing base, the domestic demand for defense industrial capacity is limited due to the size of the Japan Self-Defense Force (JSDF) and its aviation arm, the JASDF. The JASDF operates approximately 700 aircraft, while the USAF operates over 5,100. The USAF has over 350 planes stationed in Japan, with dozens of new fighter jets scheduled to deploy to Japan as a part of a $10 billion investment aimed at bolstering fighter jet operations across multiple military bases in the country. Adding aircraft MRO demand from USAF to that of JASDF would encourage Japanese industry to expand its capacity to meet this new market opportunity in the long run. In the short term, however, Japanese industry may struggle to “right-size” or scale up its MRO operations to match demand, especially if USAF demand is not seen as guaranteed (discussed below). Additionally, the number of airframes per system that would undergo MRO in Japan matters. Building Japanese MRO capacity for a U.S. system with only two aircraft in Japan, for example, would incur a high per-unit cost, which could be unjustifiable if there is existing MRO capacity for these aircraft in the United States.

Weapons and ammunition depots store military equipment and parts and maintain their readiness, making in-theater storage depots essential for deterrence and the conduct of military operations. A central question regarding Japan’s defense capacity is the availability of storage depots that can ensure Japanese manufacturers have access to critical parts for MRO and other necessary materiel if a conflict breaks out. There are approximately 1,400 active weapons depots in Japan, but many are located in the north of the country, and larger depots are needed to house the long-range missiles that Japan moved to acquire in 2023. These depots are both a strategic necessity and expensive to build.

Bureaucratic Barriers

Former Prime Minister Kishida Fumio eased the Three Principles on Transfer of Defense Equipment and Technology, or Japanese arms export regulations, in 2023. The revision has opened the door to the export of lethal weapons to the United States and other partner countries by allowing the transfer of finished products and components to the licensing country. The stated purpose of these revisions is to strengthen regional deterrence, reinforcing the impression that Japan is committed to mobilizing defense transfers for national security. In interviews and surveys conducted by CSIS in January and February 2025, U.S. and Japanese industry representatives acknowledged the benefit of revised Japanese export control laws but have also noted that process change takes time. The Japanese Ministry of Economy, Trade, and Industry (METI) is working to comply with updated export regulations, which will take training and cultural change. Both Japanese and U.S. industry are hoping for METI to become more efficient, as delays in the export process are reported to be hampering work and increasing costs.

Cultural and Political Barriers

Historically limited in scope, JSDF operations have evolved over time in response to changes in the security environment around Japan. Japan issued its first national security strategy in 2013, reflecting the security challenges posed by China and North Korea. The defense policy reforms of 2015 marked a substantial turning point in Japan’s defense policy, reflecting the country’s willingness to participate in collective security efforts with allies and partners in specific circumstances. In 2022, Japan released its second national security strategy, identifying China as its greatest strategic challenge, and issued a new defense strategy and procurement plan in tandem, outlining plans to increase military expenditures from 1 percent to 2 percent of GDP by 2027.

However, the legacy of World War II and the pacifism enshrined in Japan’s postwar constitution still impact Japanese defense industrial capacity and regulations, as well as the workforce that Japanese defense industry attracts. For example, in recruiting ads, the JSDF depicts its activities as providing medical assistance and engaging in rescue missions, both at home and overseas—unlike U.S. military recruiting, which highlights warfighting. Although the Japanese government has reinterpreted Article 9 of its constitution, which renounces war and the threat or use of force to resolve international disputes, a culture of pacifism still prevails, complicating efforts to strengthen Japan’s defense industrial base.

Negative public opinion of the defense industry makes it difficult for defense companies to hire skilled talent, especially as Japan contends with a demographic challenge (research projects a 12 percent reduction in the working population from 2022 to 2040). Japan’s worker shortage comes at a time when defense companies need more skilled labor than ever to expand capacity, and are competing for talent with other high-growth and specialized industries such as automotive engineering, manufacturing, sustainability, and other innovative technology areas.

The U.S. military’s forward presence in Japan—per Article 6 of the U.S.-Japan Security Treaty—may be excellent for strategic positioning, but it also proves politically sensitive in some local communities. Okinawa is a hub for the U.S. military, hosting 70 percent of all U.S. bases in Japan, including Kadena Air Base, and housing 80,000 Americans. The large U.S. military presence has strained relations with Okinawans since the 1970s, and there have been periodic incidents of violence. Though this is not a challenge unique to Japan, it poses a barrier to the expansion of MRO facilities for U.S. military aircraft, as local populations could protest new facilities.

Regulatory Barriers

The United States uses export controls like the International Traffic in Arms Regulations to ensure advanced U.S. technology is not transferred to unfriendly actors. Although limiting access to critical technologies and military capabilities is essential to maintaining a technological advantage, ITAR delays and in some cases obstructs the United States’ ability to export critical parts to foreign allied partners, like those needed by Japanese industry to perform MRO services on U.S. aircraft.

Another challenge mentioned in CSIS’s conversations with Japanese industry stakeholders is obtaining certifications from OEMs and securing the technical disclosures that they provide to MRO partners. Each U.S. company that originally manufactures an aircraft has its own quality and process standards that Japanese industry must follow to perform MRO on its planes. Overclassification of information can greatly complicate the sharing of critical enabling details like these.

Technical Barriers

After World War II, Japan adopted proprietary standards for its self-defense forces, creating a barrier to cooperation on MRO and FMS with foreign militaries. As the United States’ alliance structure in Asia revolves around bilateral relationships, the Indo-Pacific lacks a multilateral security organization like NATO in Europe to set standards for interoperability. Japan’s ban—due to cultural challenges mentioned above—on the export of lethal weapons also resulted in a lack of emphasis on aligning standards, as common standards are often profitable only if tied to enhancing success in foreign military sales (or alliance interoperability). Without the benefits of foreign sales, adopting foreign standards would have been costly for the small Japanese aircraft fleet. These strategic and cultural dynamics have created a legacy that is complicating modern MRO cooperation with the United States and other partners, as many of the parts used in Japan are not compatible with U.S. systems and standards.

A lack of shared standards between the United States and Japan not only means that parts may not fit together, but also that the technology within subsystems may not interface easily. Standards apply beyond just physical characteristics: Test and Evaluation requirements, for instance, can apply to parts in Japan that may be functionally identical to U.S. parts but that can still be manufactured or evaluated using processes that the USAF or U.S. primes do not view as aligning with their standards, and thus cannot be incorporated into MRO practices currently.

While aligning Japan’s military standards with those of its allies would help lower MRO costs in the long run, the process of alignment will require the investment of time, money, and effort to see these long-term rewards come to fruition. Achieving more aligned process standards for cross-national certification will require investment and close collaboration with the OEMs for all aircraft on which MRO is needed. These costs require careful navigation, as Japan has been successfully manufacturing for its domestic needs for decades. Scaling up to become a global service provider will necessitate collaboration and communication from all involved, which can be complicated by the necessity of navigating the differing interests of many stakeholders.

Another technical barrier is the misalignment of industrial practices between firms in Japan and the United States. In conversations held by CSIS in February 2025, U.S. industry representatives noted the occasional mismatch in manufacturing and quality control processes between their companies and their Japanese partners. They explained that although many Japanese facilities were highly advanced, other facilities used significant amounts of manual labor and craftsmanship when finishing products, in contrast to the machinery and automation used in the United States to ensure quality standards. One U.S. industry partner recognized the legacy of the Japanese industrial base as a potential cause of this lack of automation, noting that the Japanese defense aviation industry has less incentive to invest in machinery because it has historically serviced a limited fleet and solely focused on meeting the needs of the JASDF, its only customer. U.S. industry representatives said investments in machinery and automation are needed for Japanese facilities to receive quality certifications from them, as well as to increase efficiency and lower costs as Japanese industry looks to scale production to meet external demand. Many U.S. and Japanese industry representatives stressed that the overall level of performance and automation of Japanese industry is high.

Economic Barriers

The DOD’s investment of $10 billion toward bolstering fighter jet operations in Japan, as outlined in the strategic barriers section above, has led to increased demand for Japanese MRO capabilities. However, in surveys conducted by CSIS, Japanese manufacturing industry leaders highlighted capacity constraints as a principal challenge to scaling MRO operations to meet demand surrounding foreign military aircraft, citing the presence of shortages in both facility space and human capital. In addition to the lack of hangar space in which MRO could be performed, limited defense industrial capacity also means that Japan has fewer weapons and parts depots, shallower existing pools of spare parts, reduced ability to quickly manufacture parts, and fewer additional skilled workers who could be mobilized to work on aircraft MRO should demand surge in the event of a contingency.

The history of the Japanese defense industry also means that Japan does not have a government-owned and operated defense industrial base; and private capacity can only expand through MOD contracts. Japanese companies will remain stagnant without demand signals or contract guarantees to invest in the expansion of their industry.

The contraction of Japan’s domestic defense industry has contributed to strains on capacity. The fact that the JSDF has historically been the only customer for the defense industry has created low profit margins compared to those of U.S. and EU defense companies and has led to hesitancy to invest in new equipment and facilities. More than 100 companies have exited the defense market in the last 20 years due to this challenging landscape.

▲ Figure 4: U.S. and Japanese Defense-Involved Firms by Arms Revenue as Percent of Total Revenue. Source: Stockholm International Peace Research Institute (SIPRI) data and CSIS analysis.

Figure 4, generated from Stockholm International Peace Research Institute (SIPRI) data, shows that Japanese companies that participate in the defense industry received a smaller share of their overall revenue from their defense units than most defense-involved firms in the United States. This diversifies their revenue streams but also means that some economies of scale and specialization returns are missed by Japanese conglomerates, which may make it hard for these firms to compete as they enter the global marketplace. However, as elaborated upon later in the section on enablers, these companies’ commercial divisions offer opportunities to expand their capacity to meet military needs by leveraging nonmilitary practices and capabilities.

U.S. Industry and Government Challenges

The U.S. government faces a range of challenges in conducting MRO in the Indo-Pacific, including regulatory discrepancies and insufficient demand signals to industry partners. Many of these challenges stem from inefficient bureaucratic processes that were established under a different threat landscape and do not match today’s geopolitical environment. U.S. government and industry challenges can be sorted according to the Moroney Framework OF barriers to cooperation, outlined in Table 1 in the previous section, with slight variations to reflect the different challenges on the U.S. side.

Budgetary and Economic Barriers

Without a clear demand signal, neither U.S. nor Japanese industry will have a strong business case to allocate resources to the expansion of MRO capacity and capability on U.S. platforms in Japan, and much-needed capital improvements will not occur. William A. LaPlante, former U.S. undersecretary of defense for acquisition and sustainment, stated in 2023 that steady demand signals from government to industry is a requirement for ensuring resiliency. In an interview with CSIS in February 2025, U.S. industry representatives called for more funded demand in the form of requests for information (RFIs) and other contracts with dollar amounts attached. One representative said that although real demand in the region is growing due to increasing challenges, business plans are only based on funded demand.

The primary cost challenge is the allocation of responsibility for the investment needed to build up Japanese defense industrial capabilities, with clarity needed on whether industry or government will take the lead—and shoulder the financial burden. If the United States wants to use Japan for engine parts, for example, thousands of parts will need to be certified, requiring time and money. Both U.S. and Japanese industry have expressed concern over who is to bear the responsibility of investment and whether the U.S. government would help; both have also raised questions about what guarantees of future demand and contracts the U.S. government would be able to give Japanese industry if the private sector assumes responsibility for making investments in capability. Without assurances of future returns, it is difficult for industry to justify taking on the risk of expensive capacity improvements.

Workforce issues are also a challenge for the United States. In 2023, the USAF was short 1,800 maintainers, though the shortage had shrunk to 500 by May 2024. Despite this improvement, the shortage has already begun taking a toll on the workforce and was possibly a contributing factor to the number of maintenance mishaps hitting a peak of 21 in FY 2023, almost double the amount in FY 2022. Among the most consequential of these was an incorrect installation of pins that had the potential to cause vertical stabilizers to fall off of aircraft; this mistake resulted in hundreds of air refueling and recon jets being grounded in early 2023. According to Senior Master Sergeant Joshua Morales, a USAF crew chief with over 15 years of aircraft maintenance experience, “The implications [of such mishaps] extend beyond flight delays to the possibility of compromised missions and military defeat—especially in a prolonged conflict where keeping aircraft flying will be a constant challenge.” While an overstretched workforce is not necessarily the root cause of the FY 2023 maintenance issues (which remains debated), providing a new pool of labor to supplement maintenance efforts could reduce the burden on the existing workforce. Although incorporating new workflows takes time and investment in the short term, supplementing the U.S. MRO workforce with Japanese personnel could alleviate some of these challenges.

Strategic Barriers

Unique environmental challenges in the Indo-Pacific region make in-theater maintenance of military equipment critical to effective deterrence and readiness. Humidity and exposure to salt water from the Pacific Ocean increases the rate of corrosion on aircraft and ground equipment, which could compromise flight safety if left undetected. Over time, these factors can have a compounding effect on DOD operations in the region and will require an approach that leverages multiple agencies to remedy challenges to U.S. basing initiatives and security efforts. In an interview conducted by CSIS on March 18, 2025, a U.S. industry representative said that material corrosion is a key problem faced during modifications. In many cases, customers who perform MRO on their own planes are unable to address severe corrosion, causing them to stop work until OEM engineers are deployed to work on the aircraft. In-theater corrosion maintenance capabilities are an essential part of deterrence in the Indo-Pacific that can be best achieved through partnerships with allies. A step in the right direction is the Pacific Deterrence Initiative, which includes a $132 million request for a Kadena Air Base Theater Aircraft Corrosion Control Center, which would enable critical corrosion control maintenance of large-body aircraft in an environmentally challenging theater.

The United States may benefit from assessing how to modify existing sustainment training and equipment for the Indo-Pacific environment. Training exercises in the Indo-Pacific have revealed that personnel challenges are a particularly difficult aspect of sustainment operations in the region. Exercises in the Philippines have identified that coordinating and integrating sustainment assets, assessing how environmental factors affect the resupply of resources, and determining how weather impacts water consumption are important considerations. Additionally, exercises in the region conducted alongside U.S. allies have revealed shortcomings in communication and coordination between forces and commanders, movement and tracking of equipment, and the availability of vehicle mechanics in the field. These challenges often occur simultaneously, triggering a chain reaction of disharmony in sustainment operations as, for example, a broken vehicle leads to delays that affect coordination and communication. Conducting similar exercises in Japan may provide further insights into sustainment challenges on the island and in the conduct of joint operations with Japan.

Bureaucratic Barriers

A lack of sustainment analysis by the USAF has made it more challenging to assess the health and readiness of aircraft fleets. Sustainment reviews help military departments estimate the cost of platform life cycles, identify budget shortfalls, and analyze the most cost-effective sources of repairs and maintenance. Despite the U.S. government’s description of sustainment as “a critical tool to assess performance and help increase readiness throughout an aircraft’s lifecycle,” neither the USAF nor Navy have yet completed their required reviews. Similar to the F-35, the F-22 program has high sustainment costs—around $13.6 billion a year. For this reason, the services’ lack of sustainment analyses hinders the DOD’s ability to clearly identify its sustainment needs, which in turn hampers efforts to predict and communicate future demand for MRO operations in the Indo-Pacific. The lack of reviews also limits the degree to which the USAF can assess how to conduct sustainment practices effectively, which impacts conversations on how to leverage Japanese capability and capacity for U.S. sustainment efforts.

Cultural and Political Barriers

Cultural and political challenges were not reported by interviewees as major barriers to cooperation between U.S. and Japanese industry on joint MRO work. One cultural challenge that affects U.S. security cooperation with many allies and partners is U.S. contracting officers’ preference for U.S.-owned firms. This bias is reinforced by the additional bureaucratic difficulties of signing a contract with a foreign firm. These effects combine to discourage the security cooperation workforce from engaging with allied industry, even when superior officers and policy directives favor cooperation.

Cultural and political problems can also reduce the efficacy of potential enablers like Reciprocal Defense Procurement Memorandums of Understanding (RDP MOUs). These are agreements between the United States and foreign countries to waive “Buy American” requirements and facilitate defense trade. In a survey conducted by CSIS in 2024, allies and partners who have RDP MOUs (a group that includes Japan) noted that the existence of this exemption is not well recognized in some U.S. program offices. Additionally, respondents generally agreed that Congress and the executive branch seemed to oppose the exemptions, focusing on protecting domestic industry and making RDP MOUs less effective than originally perceived. These factors complicate the use of RDP MOUs and generate frustration among allies and partners, demonstrating that just because there are certain exemptions in place, these are not necessarily effective in bypassing bureaucratic or regulatory hurdles.

Regulatory and Technical Barriers

U.S. regulations that restrict the export and sharing of technical information and advanced technology hinder the competitiveness of U.S. industry while simultaneously placing a significant burden on allies who try to cooperate with the United States.

Many of these costs have been attributed particularly to ITAR and the Foreign Military Sales (FMS) program. As highlighted in multiple surveys and events, Japanese industry has noted that reliance on imports of ITAR-restricted parts is time sensitive and costly. The United States uses ITAR to ensure that U.S. military technology is not transferred to unfriendly actors; although limiting access to critical technologies and military capabilities is essential to maintaining a technological advantage, ITAR delays and sometimes obstructs the sharing of technical data with allies and partners. Participants in U.S. and foreign industry often point to ITAR as a barrier to cooperation, and one Japanese firm noted that relying on imports of ITAR-restricted components for MRO activities sometimes hinders their operations. However, during a roundtable discussion hosted by CSIS in January 2025, a State Department official claimed that ITAR works quickly in processing licenses and is not a barrier to exports.

Another obstacle that the United States will have to overcome is information disclosure. One form is overclassification, which presents a barrier for integration with U.S. allies. As stated by the DOD’s Defense Innovation Board, the department “continue[s] to overclassify information, defaulting to ‘no foreign dissemination (NOFORN)’ protocols, and even fail[s] to develop suitable processes for communicating ‘controlled unclassified information (CUI)’ in today’s shared threat environment.” Consequently, U.S. government agencies are hindered in their ability to communicate with partner organizations in Japan to better collaborate on efforts like MRO cooperation.

Information disclosure not only presents a challenge for intergovernmental sharing efforts but also harms industry capability. Japanese industry representatives communicated to CSIS that a firm’s ability to perform heavy or depot-level MRO on U.S. aircraft is contingent on information disclosure from the U.S. government and its industry. The Japanese firms particularly emphasized the need to ease or simplify procedures for the provision of technical information (including manuals and drawings) on defense equipment from OEMs. In a CSIS survey conducted in January 2025, Japanese companies noted barriers to receiving technical information from U.S. industry, pointing to hindrances associated with security clearances, visas (for work outside of Japan), and cybersecurity.

These challenges often arise from differences in how the United States and Japan set requirements, as even minor variances can cause issues. For example, license agreements for the use of U.S. components can require extensive levels of certification, which can be a challenge for Japanese industry actors, who have expressed interest in receiving waivers to streamline MRO cooperation. Required certifications for the repair or fabrication of specific parts and for the use of Japanese maintenance facilities can also be barriers, as U.S. standards for these certifications are not always in alignment with Japanese requirements. Complying with a new set of requirements imposes costs on Japanese firms and leads to delays. These challenges can hinder the United States’ ability to conduct MRO operations in Japan and restricts both nations’ use of otherwise compatible parts and processes. In addition to licensing issues, a U.S. prime contractor told CSIS that navigating IP protections is also a difficulty that can be overcome with enough time, highlighting the importance of preparing IP export pathways prior to a conflict.

Compliance with cybersecurity requirements such as the Cybersecurity Maturity Model Certification (CMMC) program and the Technology Security and Foreign Disclosure process are other common challenges for U.S.-Japan industry collaboration. As a U.S. industry official highlighted in an interview with CSIS, “CMMC is an issue across the board. Cyber and security concerns come up every time we talk about Japan, more than in business case issues.” The Defense Security and Cooperation Agency has tried to address these challenges by implementing “changes to improve the DOD’s understanding of international military requirements, provide allies and partners with more relevant priority capabilities, and incorporate these requirements into DOD plans to expand defense industrial base production capacity.” However, interviewees noted that these issues continue to persist.

Additionally, certain U.S. maintenance and sustainment requirements make it difficult for U.S. agencies to embrace defense industrial integration and collaborate on MRO efforts with Japan. One example is U.S. Code 2466, which mandates that not more than 50 percent of the funding for depot maintenance in a fiscal year may be used to contract for performance of depot maintenance and that 50 percent or more of the workload must be performed in a DOD organic depot maintenance facility by U.S. government employees. This rule limits the amount of MRO work the government can allocate to commercial or foreign entities and increases competition for work by those companies. The “50/50” statute also incentivizes the use of internal resources for platforms with higher security and technological sensitivity, posing potential challenges for MRO cooperation with U.S. allies and the expansion of joint MRO efforts overseas.

Enablers of Japanese Industry Participation in MRO

Collaborating on MRO for USAF aircraft is mutually beneficial for Japan, the United States, and their respective defense industries. For the DOD and USAF, an integrated sustainment approach can enhance readiness, resilience, and capability for the U.S. Joint Force and its partners, as well as contribute to other strategic goals. On the economic front, the U.S. government can also leverage this partnership to mitigate workforce shortages, decrease cost of transit for parts and aircraft, and strengthen supply chain resilience. Integrated sustainment presents Japanese industry with the opportunity to enhance its industrial capabilities and capacity. MRO cooperation may also bolster the resiliency of U.S. industry supply chains by certifying and integrating Japanese firms. Beyond providing significant opportunities for economic growth and strengthening Japan’s defense industrial base, collaboration on MRO can also provide the Japanese government with a unique opportunity to strengthen its relationship with the United States.

Economic Enablers: Existing Infrastructure and Relationships

Two main enablers of Japanese industry participation in MRO processes are the current infrastructure present in Japan and the existing relationships between U.S. and Japanese industry.

The USAF and its partners in Japanese industry can build on existing infrastructure, such as Support Center Pacific (SCP), to enable them to leverage MRO capability that is already in place. The SCP has been an “integral support unit for Department of Defense services and allied forces in the Indo-Pacific,” with operations encompassing more than 125 different aircraft components, providing a foundation for expansion of capacity and capability.

Despite the SCP’s high degree of capability, its limited capacity means that 95 percent of systems still require transportation back to the United States for maintenance. By expanding and improving facilities like the SCP and Kadena Air Base, along with their working relationships with the JSDF and Japanese industry, both the U.S. and Japanese governments can capitalize on existing expertise and effective MRO operations without added costs for training and relocation.

Japan’s MOD has recently taken steps to expand existing weapons storage facilities, requesting $148 million in FY 2024 to build 130 new ammunition depots by 2035. Many of these depots will store long-range missiles, which require larger facilities than are currently available in most cases. Building new storage facilities for these weapons aligns with former Prime Minister Kishida Fumio’s pivotal 2022 decision to acquire long-range strike capabilities; the initiative will include the construction of four long-range missile depots at JSDF bases in the Oita and Aomori prefectures. These depots support the storage of conflict-ready equipment and increase Japanese industry access to parts necessary for MRO, especially long lead-time parts—addressing a challenge highlighted by Japanese industry in surveys conducted by CSIS in January 2025.

The U.S. and Japanese governments can make the most of existing relationships with Japanese subcontractors involved in joint projects by encouraging them to play a role in MRO operations. Platforms like the F-2 Fighter, Glide Phase Interceptor, and SM-3 Block IIA Missile Defense System are prime examples of existing defense industrial collaborations where additional energy could be directed toward identifying mutual areas for cooperation and joint sustainment.

Though building these existing relationships into MRO cooperation will require time and effort—as U.S. companies help certify and integrate Japanese companies into their supply chains—the benefits to U.S. industry are clear. Cooperation could lead to new possible areas of business in Japan through new cooperative agreements with Japanese companies, either for commercial MRO or military MRO, covering both USAF planes and, possibly, JSDF aircraft. Furthermore, the USAF is the most important customer for many of the United States’ aviation-focused primes; given the USAF’s emphasis on regional sustainment, many U.S. industry firms may be motivated to join the initiative in the interest of customer relations.

U.S. primes can also benefit from collaborating with Japan if Japanese firms are hired to be the low-cost subcontractors of key components—given Japan’s superior production technology in certain niche areas (especially castings)—or as second sources for stressed supply chains in U.S. primes’ other markets. As one U.S. prime noted to CSIS, “We want more capacity. Raw material and some schedule items are not as quick as we would like now. The real unlock with Japan is their raw material sources and their machining sources.” Another source of advanced capability in Japan exists in Japanese industry expertise. Japan is well known for its technological advances in fields like robotics, automation, precision engineering, aerospace manufacturing, cybersecurity, electronics, and sensor technology.

Japanese commercial infrastructure includes significant production technology in advanced manufacturing and aerospace. In an interview conducted by CSIS on March 18, 2025, a U.S. industry representative noted that Japanese industry, in its commercial business, uses the same standards as the United States—standards that were, in many cases, pioneered by Japanese companies. The spokesperson said that Japanese quality for major commercial components is extremely high and that companies such as MHI and KHI have been ahead of the United States on automation for decades. In another interview conducted by CSIS on February 19, a U.S. industry representative described Japan’s commercial business as a great model for the Japanese defense sector to follow, noting that Japanese companies have been successfully and competitively exporting commercial engine parts for decades.

In addition to the commercial branches of Japanese defense companies, nontraditional companies also present an avenue for Japanese industry participation in MRO processes, as more commercial entities enter the defense market and industrial ecosystem. This grants novel opportunities to develop relationships with new companies and stakeholders. In a public event hosted by CSIS on March 13, 2025, Lt. Gen. Leo Kosinski (who retired in 2024) encouraged the involvement of nondefense companies with advanced manufacturing and innovation advantages, such as Nikon, which recently opened an advanced manufacturing plant in Long Beach, California. Aside from large companies, “startups and VCs interested in the defense sector are steadily increasing” in Japan, according to CSIS research, since the Japanese government has continued to increase its defense spending and agencies like ATLA and METI have established initiatives to connect the JSDF with startups.

Strategic and Political Enablers: Institutions

Bilateral frameworks and institutions are currently the primary enablers of U.S.-Japanese defense industrial cooperation. Initiatives like Defense Industrial Cooperation, Acquisition, and Sustainment and the Partnership for Indo-Pacific Industrial Resilience constitute formal commitments by the United States to invest in activities in Japan and signal a commitment and desire to increase collaboration in both directions.

DICAS seeks to pinpoint avenues for advanced defense industrial cooperation. Although DICAS has a broad scope, a primary focus is the joint maintenance of U.S. ships and aircraft that are forward deployed to the Pacific using Japanese commercial facilities. The four DICAS Working Groups, comprised of representatives from the United States and Japan, will focus on ship repairs, aircraft repairs, supply chain resilience, and missile coproduction. In initial talks, DICAS working groups will identify what types of weapons to focus on and coproduce, while also determining maintenance and production timeline goals. DICAS provides an official forum for defense industrial cooperation that has already enabled effective discussions and alignment of standards between the United States and Japan—serving as a technical enabler and an essential mechanism for collaboration as the two countries seek to further integrate their MRO networks.

In an interview conducted by CSIS in February 2025, a U.S. prime contractor said they might explore working with Japanese industry on future programs, and in some places codevelopment, under DICAS. The company representative said that partnering with Japan is an increasing priority and that there is an effort across the whole company to focus on such opportunities.

The USAF has plans to expand the Global Enterprise Network for Universal Sustainment in the Pacific region, with proposals for further services on the C-130, F-35, and F-15EX and the addition of rapid manufacturing, composite, and mobile support. Japanese industry is well positioned to benefit from this proposed expansion, as the JASDF flies the F-35A and Japanese companies have experience supporting MRO and engine component production for F-35s. During interviews conducted by CSIS in February 2025, U.S. industry representatives emphasized the significance of procuring parts in a timely and cost-effective manner, as depot capacity becomes irrelevant without the parts necessary for MRO. Procuring and storing parts is one of the primary goals of GENUS, and expanding GENUS operations in Japan and other countries will enable MRO to be performed effectively.

Japan has an RDP MOU with the United States, a binding agreement that enables Japanese companies to be considered domestic sources, allowing them to pass through some bureaucratic processes that other security partners cannot. From a procurement standpoint, the principal goal of an RDP MOU is to establish a mutual commitment to not discriminate against suppliers from another country, waiving Buy American laws and removing access barriers to defense marketplaces. Historically, RDP MOUs have mostly increased the purchases of component parts from foreign suppliers for larger systems that are built by U.S. companies. This aligns with existing MRO practices on U.S. equipment in Japan, as Japanese companies are focused on supplying parts and performing maintenance on existing U.S. aircraft, not on constructing and selling whole systems to the United States. Japan’s RDP MOU enables easier transfer of components and parts between the United States and Japan that are necessary for MRO. The United States and Japan also entered into a nonbinding Security of Supply Arrangement (SOSA) in 2023—an agreement to exchange reciprocal priority support for goods and services that promote national defense. This creates a mechanism for the DOD and MOD to request expedited handling of industrial resources to resolve unanticipated supply chain disruptions in order to maintain national security.

An additional framework that enables MRO cooperation is the Acquisition and Cross-Servicing Agreement (ACSA), which establishes a framework for settlement procedures for the reciprocal procurement of supplies and services between two countries’ military forces. ACSA transactions are primarily used during wartime, combined exercises, training, deployments, humanitarian or disaster relief operations, or in unforeseen circumstances. Although ACSA can be an effective tool to build capacity, proper use requires strong knowledge of the tool by U.S. forces and partner nations. Additionally, the United States cannot use ACSA transactions when an item can be obtained from U.S. commercial services, and ACSA cannot be used for routine and continual supplies of goods and services. Although these stipulations put limits on the usefulness of ACSA for joint MRO, the agreements can provide valuable logistics resources in a crisis.

Cultural Enablers: Aligning Perceptions of Strategic Landscape

A major enabler of cooperation between the United States and Japan is the two countries’ increasingly aligned threat perception, which is driving mutual interest in national security work and helping to resolve defense industry labor shortages. Escalating tensions between Japan and its neighbors—China, North Korea, and Russia—have generated more public support for strengthening defensive capabilities. A survey conducted in 2023 by the Asahi Shimbun, a Japanese newspaper, noted that 64 percent of Japanese voters believe their country should bolster its defense capabilities, with only 10 percent in opposition. Moreover, Japanese polls indicate that 84 percent of respondents feel that Japan’s national security is under threat and 91 percent consider China a threat.

Younger populations are especially aware of Japan’s geopolitical situation and increasingly alert to the threat posed by China, which may expand their willingness to work on defense products. Greater popular understanding of the strategic landscape may enable both countries to better attract interest by professionals of all ages in working in the defense and national security sectors, which would help to solve current labor challenges and surge capacity labor requirements.

Budgetary and Regulatory Enablers: Cost Savings, Predictable

Demand, and Willingness to Invest in Defense Sending a broken platform back to the United States is expensive, and MRO closer to the point of need is a significant cost-saving opportunity. This has become increasingly important as more advanced platforms incur ever-higher sustainment costs: The F-35 program, for instance, has an estimated life-cycle cost exceeding $1.7 trillion, of which $1.3 trillion is associated with operating and sustaining the aircraft.

For Japan, MRO cooperation represents an opportunity to expand the country’s defense industrial base, which can provide economies of scale beyond what the JASDF could provide. Cooperation could therefore help bring down MRO costs for the JASDF in the long run. Japan’s MRO costs reached $14 billion in FY 2023, accounting for around 30 percent of the nation’s defense spending (compared to 1990, when MRO accounted for only 10 percent of defense spending). This increase in costs is due partly to aging equipment that requires more inspections and parts replacements.

Another budgetary enabler is the ability of cross-national MRO work to increase reliable demand for Japanese industry. Weak demand signals from the country’s own government and limited business opportunities have proven to be a barrier for Japanese investment in the defense market, as discussed in Chapter 4. The fact that there is a larger demand signal from the DOD than from Japan’s MOD may make Japanese industry eager for the chance to work on MRO for the USAF.

As noted in the Regional Sustainment Framework (RSF), industrial base integration with allies and partners contributes to “predictable demand,” which can help defense contractors make decisions about which capabilities to invest in, and at what capacity. A former U.S. official told CSIS in 2024 that Japan’s flying of U.S. aircraft is a “good enough” demand signal to jumpstart co-sustainment efforts. Because of this, a greater degree of industrial integration between the United States and Japan can act as a key enabler for Japanese industry participation in MRO processes. Notably, a U.S. prime representative also emphasized to CSIS that the scale of the conflict that the United States is preparing for in the Indo-Pacific will also fuel the demand signal, as it will inform how much investment industry will be willing to make.

Clear and consistent messaging from the United States is key to turning predictable demand into an enabler. Without contracts, promises of work, or economic guarantees, uncertainty over long-term demand signals from the United States will prevent Japanese industry from feeling confident in investing in capacity upgrades or workforce expansion and development. Dr. Troy Meink stated during his nomination process for secretary of the Air Force that he would request continued support from Congress to provide stable funding for clear and consistent demand signals to incentivize capital investment in the U.S. defense industrial base, which may carry over to any Japanese MRO policy.

A third budgetary enabler is increased Japanese government spending on defense. Japan is trying spur its defense sector to become a high-growth industry through new government assistance to contractors of all sizes and by encouraging exports. Former Prime Minister Kishida Fumio led the passage of the 2023 “Act on Enhancing Defense Production and Technology Bases” to create a pool of funds to bolster defense capabilities. The law was the result of three strategic documents released in December 2022 and is a major part of the Defense Buildup Program, which aims to spend $305 billion through FY 2027 to support Japan’s defense industrial base and ensure the country’s security. The act recognizes the major challenges facing Japan’s defense industry and provides numerous initiatives aimed at ensuring stable manufacturing of defense equipment. To address supply chain resiliency, the law requires Japanese defense manufacturers to shift import sources of raw materials to lower risk countries, maintain stockpiles of raw materials, and increase production of domestic raw materials and substitute products, among other efforts. To improve manufacturing efficiency, the law requires defense manufacturers to introduce advanced technologies in their processes, such as automation, AI, and digital transformation. The law also includes new requirements for cybersecurity enhancement of defense companies, citing the importance of trust in the relationship between ally countries.

Importantly, the law provides for grants to be awarded to defense companies who export or transfer their equipment to foreign governments. These grants are not limited to just prime contractors but also cover suppliers that play partial roles in the finished products. To enable these transfers, the government will award grants to cover the costs of changing designs and modifying specifications required for export. These grants also feature an important safety net: Even if the equipment transfer in an international competitive bid is not realized, the company that receives the grant will not be expected to return any funds they have already spent. The law also aims to promote new entrants into the defense industry, improve predictability for companies in defense, and reduce the risks of investment for defense companies. The Japanese government’s commitment to increasing international defense exports and cooperation through joint public and private efforts has been signaled through diplomacy and legal change, and is now backed up by real investments.

Technical Enablers: Compatibility of Existing Parts & Embrace of Common Standards

A primary enabler of joint MRO in Japan is the compatibility of parts and components between some U.S. and Japanese aircraft, along with the ongoing embrace of shared standards by the Japanese government.

Throughout CSIS’s research, roundtable events, and interviews, government and industry representatives from both the United States and Japan encouraged the idea that collaboration should begin with parts and aircraft that the two countries have in common. Similar systems and components enable joint MRO because the machinery, technology, and expertise needed to perform such maintenance is shared regardless of the ownership of the equipment. During an interview conducted by CSIS on February 28, 2025, a U.S. industry spokesperson stated that the United States and Japan should identify common parts in foreign and domestic versions of the same aircraft and build a capability to repair or fabricate those parts that can be certified to U.S. standards and then applied to both platforms. The spokesperson said that Japan has the capability to service the aircraft in its fleet that have been purchased from U.S. defense contractors, and those capabilities need to be identified and certified for use on USAF planes.

However, differing quality and production standards can inhibit joint maintenance and export efforts. The difficulty of non-common manufacturing processes can be seen by comparing MRO on F100 and F135 engines, as explained by a U.S. prime contractor representative during an interview conducted by CSIS in February 2025. The F100 engine, which powers the F-15 and F-16, is made by Pratt & Whitney (P&W) for the USAF and manufactured by IHI for the JASDF, each following different processes and requirements. Eighty percent of the materials used by IHI to build their engines are sourced from Japan, and the engine is built following IHI quality standards and JASDF requirements, potentially complicating the use of existing Japanese MRO for JASDF planes on USAF aircraft.

On the other hand, the F135 engine production system that powers F-35s around the world has commonality built in from the outset. IHI has built 29 F135 engines to date in a P&W facility that IHI owns and operates, requiring adherence to P&W methods, tooling, and quality standards. This standardized quality and production system allows F135 engines produced by IHI to be interchangeable with other F-35s, regardless of the country of ownership. In CSIS’s interview, the U.S. industry spokesperson mentioned that IHI has now converted its F135 manufacturing facility into a regional depot as part of P&W’s regional network of maintenance facilities. P&W personnel staff the facility, although IHI remains the owner and operator; this could enable the facility to play a key role in sustaining USAF F-35s.

Other aircraft programs such as the F-2 and F-16 offer potential areas of cooperation, despite the many differences between parts and processes used to manufacture the aircraft. The F-2 was a joint project between U.S. manufacturers and Mitsubishi, with around 60 percent of production taken on by Japan and 40 percent by the United States. Japanese companies made parts like the F-2’s radar, heads-up display, and inertial navigation system. The F-2 is used exclusively by the JASDF and was modeled on the General Dynamics F-16, with an engine derived from licensed production of the General Electric F110, also used in the F-16.

The U.S. government still must determine the demand rate for these parts before proceeding with a request for work from Japanese industry. U.S. industry is also waiting for resources from the U.S. government to analyze their investments and potential relationships with Japanese industry. The U.S. government has flexible contracting options that could fit this need, delivering funding to industry to accelerate the evaluation of cooperation avenues.

The Japanese government’s commitment to aligning its domestic equipment standards to those of the United States and Europe is one of the strongest enablers of enhanced MRO cooperation. As mentioned earlier, the JSDF has historically adhered to its own unique standards, complicating the exchange of parts and components. In 2023, the Japanese government issued draft guidelines outlining plans to sync its standards for domestically produced defense equipment with those of the United States and Europe to reduce maintenance costs and increase business opportunities for Japanese industry. The new guidelines state that defense supply chains should complement those of allies and partners, encouraging lower prices, increasing domestic production opportunities, and ensuring continuous operability of all equipment. These new requirements also include subsidies for small- and medium-sized manufacturers that supply parts to larger contractors.

In the 2024 Defense of Japan report, the Japanese government outlined a focus on “improvement in mutual interchangeability” of defense equipment to ensure interoperability with the United States. Modular defense equipment can be interfaced across major systems from independent vendors, designed with an architecture in which systems use common standards to ensure interoperability. One strategy for building this adaptable system is called the Modular Open Systems Approach (MOSA), the DOD’s preferred method of implementation for open systems that is required for most major defense acquisition programs. MOSA is particularly useful for integrating technology within systems so that subsystems made by different companies can “talk” to each other. Standardization would allow the United States and Japan, along with other allies and partners, to include subsystems produced by different vendors in standard interfaces that integrate and operate together, enabling joint operations. For Japanese industry, building MOSA-compliant systems or components would increase foreign demand for products and allow companies to take full advantage of Japan’s recently loosened export laws.

Conclusion and Recommendations

The U.S.-Japan alliance stands at a critical turning point amid growing threats in the Indo-Pacific. By focusing on collaborative aircraft MRO, both nations could enhance their credible deterrence capabilities by addressing strategic challenges of distance and signaling a long-term commitment to regional security. This report has underscored the difficulties both countries face in maintaining a defense industrial ecosystem that will be resilient in the face of contested logistics, as well as highlighted the strong foundations for a possible expansion of Japan’s role in the maintenance of USAF assets.

Progress is being made in solving the sustainment challenge faced by the USAF in the Indo-Pacific, but barriers to collaboration still exist. Stringent U.S. export regulations and IP laws prevent the sharing of some technical information essential to MRO, complicating the ability of Japanese industry to perform maintenance on U.S. aircraft. The United States and Japan, along with U.S. and Japanese companies, are unsure of who will bear the cost burden of investing in new capabilities and expanded capacity. Without clarity, further progress is difficult. Though the Japanese government is building a more modern approach to defense production, remaining cultural and bureaucratic challenges continue to slow down the transfer of knowledge, labor, and capital.

In recent years, the United States and Japan have taken steps, both separately and together, to advance defense industrial cooperation and overcome barriers. Japanese companies already perform MRO on numerous U.S. military platforms and have experience partnering with U.S. OEMs on maintenance and joint development. The Japanese government has prioritized investments in its defense industrial base and has arranged its export laws to enhance defense collaboration, demonstrating its commitment to expanding defense posture and industry. The United States, for its part, has established multiple dialogues and frameworks dedicated to partnering with Japan and exploring sustainment solutions in the Indo-Pacific, providing new avenues for official communication and cooperation. Success hinges not only on strategic alignment but also on practical measures to streamline cooperation and overcome hurdles.

The following recommendations identify how the United States and Japan could further accelerate cooperation to meet the urgent strategic imperative of overcoming challenges regarding MRO capacity and contested logistics in the Indo-Pacific.

1. The United States and Japan should consider expanding on, not replacing, the physical and diplomatic infrastructure that is already in place.

   a. Establishments like the SCP, Kadena Air Base, and Japanese facilities in surrounding areas provide significant capability for MRO work, and further investments could be made to grow this capacity. Expanding on existing locations would make it easier to engage with local communities who have adapted to U.S. military presence and have experience working alongside U.S. service members and their families.

   b. If both nations seek continuity and an expansion of current cooperation efforts, dialogue frameworks such as DICAS should be maintained and supported. The DICAS framework has been agreed upon by both the United States and Japan, and officials from both sides have already begun working within the framework. Additionally, U.S. and Japanese industry have begun taking DICAS into account in their business plans and have said that DICAS offers a positive demand signal for future MRO business in Japan. The United States should consider continuing to devote resources to strengthening these facilities and relationships, accelerating progress toward overcoming MRO cooperation challenges.

2. To increase MRO capacity for USAF aircraft in Japan, the two countries will likely need to either pay—fully or in part—for the expansion of facilities, certification, and alignment of standards, or offer contract guarantees to companies who make their own investments. Both nations’ governments and industries will need to determine who will pay for investments in infrastructure. U.S. and Japanese companies have emphasized that they will not invest in expansions of facilities, certifications, or standard alignments without some guarantee of a return on investment.

3. The United States should provide clearer and more consistent demand signals to U.S. and Japanese industry by estimating how much Japan-based MRO support it will need. While estimating future demand is difficult, industry cannot right-size any investment in the capabilities necessary to meet future USAF demand in Japan without knowing roughly what the demand level will be.

4. The United States should consider making use of Other Transaction Authority (OTA) to quickly support U.S. companies, encouraging them to explore areas of collaboration and develop relationships with Japanese companies. The U.S. government could also identify business opportunities for U.S. industry in Japan based on existing domestic capabilities and capacity in MRO—especially opportunities to catalyze partnerships between U.S. and Japanese industry. Timeliness is essential in joint MRO due to the strategic urgency of maintaining and strengthening deterrence in the Indo-Pacific region, and OTA agreements provide a faster method of providing funding to U.S. industry than traditional contracts.

5. The U.S. and Japanese governments should identify common aircraft, components, and parts and build strategies for MRO collaboration. Though U.S. and Japanese models differ at times in specific materials and manufacturing processes, their shared elements can be built upon to create the capability to service both models.

6. Both nations’ governments and industries should consider increasing alignment of manufacturing and quality control standards to enhance the ability of Japanese companies to plug into U.S. supply chains. The Japanese government should continue to fund or increase funding to its Basic Policy on Enhancing Defense Production and Technology Bases, which provides support for defense companies looking to enhance their manufacturing processes and cybersecurity, among other things. U.S. companies should work with Japanese industry toward mutual acceptance of standards and should be flexible in accepting some processes that are common practice in Japan, without sacrificing airworthiness or quality.

7. The United States and Japan could benefit from embracing modular designs and common standards in their future acquisition programs, especially for any joint acquisitions. Coproduction in future programs should ensure that quality standards and processes are aligned from the beginning to enable closer collaboration. MOSA is the gold standard for modularity, and if both the USAF and JASDF make use of modular concepts in procurements, joint MRO of future shared systems would be much easier to realize.

8. Japanese companies could benefit from leveraging their commercial assets and practices for military MRO. U.S. aerospace firms have praised Japan’s commercial aerospace industry, saying the country has pioneered quality standards and is aligned with the United States on advanced production methods and certifications, while still lagging on the military side of the aviation sector. Inter-business managerial transfers or sharing within companies that have successful commercial aviation business units could help transfer knowledge and best practices to defense aerospace business units. Automation and quality standards, as well as commercial best-in-class facilities, should be applied to the defense side of production, potentially including any investment in dedicated defense facilities needed to reach the same level of excellence.

9. The United States and Japan could conduct a wargame, exercise, or other simulation with Japanese forces to evaluate current sustainment capabilities and gaps. Performing a tabletop exercise of a realistic contested logistics scenario would help identify bottlenecks and other factors that could complicate the maintenance of an operable aircraft fleet in the event of a conflict.

Cynthia R. Cook is a senior fellow in the Defense and Security Department at the Center for Strategic and International Studies (CSIS). She is widely published on defense acquisition policy and organization, the defense industrial base, new technology development, and weapon systems production and sustainment. Dr. Cook is a member of the editorial board for the Defense Acquisition Research Journal and is an adjunct professor at the Pardee RAND Graduate School.

Nicholas Szechenyi is vice president of the Geopolitics and Foreign Policy Department and senior fellow with the Japan Chair at CSIS. He also served as deputy director of the Japan Chair from 2005 to 2022. His research interests include Japanese politics and foreign policy, U.S.-Japan relations, and U.S. strategy in the Indo-Pacific region.

Henry H. Carroll is a research associate with the Center for the Industrial Base at CSIS. His analytical focuses include the defense industrial base, naval policy, and assessing foreign military industrial capacity.

Audrey Aldisert is a research associate in the Center for the Industrial Base at CSIS. Her analytical focus includes the defense industrial base, soft power initiatives, and the relationship between security and development.

Sarah Hendrick is a former intern with the Defense-Industrial Initiatives Group at CSIS.

Javier Nater is a former intern with the Defense-Industrial Initiatives Group at CSIS.