Ultimately, Japan demonstrated a distinct lack of business savvy in pursuing a deal whose core was a personal political friendship between two embattled leaders. Abe apparently even considered making a last-minute personal phone call to sway the decision. The whole endeavor smacked of political cronyism.

Fallout:

Tokyo is left with a failed Soryu bid that could have given Japan its first foot in the door for major military platform exports. Now it has to pick it apart and learn from its competitors.

The immediate response seemed grim, perhaps even outraged. Defense Minister Gen Nakatani called the decision “deeply regrettable” and stated that Tokyo would ask Australia for an explanation of where Japan went wrong.

The media fears of a thaw in relations, but Australia’s recent defense white paper and Japan’s ongoing joint military engagements with the Australian military confirm that this is a defeat that the relationship will weather.

What might change, however, is the expected pace of Japan’s export business. Japan is still in talks with India about the sale of its ShinMaywa US-2 search-and-rescue aircraft, but progress has been slow. Tokyo and New Delhi have been in discussion for five years now.

The issues are familiar — domestic build, technology transfers, limited build capacity in Japan — and progress seems scant.

But aside from these major platform sales, Japan is also signing more and more joint defense research agreements that could produce viable export products for platforms such as the F-35. Tokyo should focus on these smaller products, technologies and systems in order to build up its institutional know-how before attempting another major platform sale.

The government should also consider taking a back seat to its contractors. Although Japanese law requires government involvement in arms sales, the government led both the Soryu bid and the US-2 talks — and didn’t do a very good job.

The contractors that will ultimately build the products that the government is selling are lukewarm to the export mission. Unless the government can draw them into the process and harness their corporate advantages, Tokyo will likely remain out of its depth.

This piece first appeared in WarIsBoring here.