Japan Plans to Participate in EU’s International Framework for Supporting Defense Industry

The Japanese government and the European Union (EU) will explore joint development of defense products. It is understood that Japan intends to formally participate in the EU’s international framework for supporting its defense industry. Japanese companies could receive EU funding when jointly developing and producing new drones and other products with EU companies. This would help the Japanese defense industry expand into the European market.

The EU advocates for the defense industry to reduce its dependence on the United States and announced in March a plan to secure up to €800 billion in funding to strengthen security.

As part of this, a member state financing scheme, “Security Action Europe (SAFE),” with a maximum scale of €150 billion, has been established to support companies within the region. The funding will be used for the development and procurement of drone and missile defense systems, etc., jointly promoted by member states.

Like-minded countries recognized by the EU can also participate in the SAFE scheme. Japan and the EU established their first security and defense partnership for the Indo-Pacific region in November 2024; therefore, Japan can participate if the proportion of Japanese-made components in jointly developed products does not exceed 35%.

To expand this cooperation, the Japanese government recently expressed its intention to formally participate in the SAFE scheme to the European Union. Formal negotiations are expected to begin once approved by EU member states.

If an agreement is signed, EU member state companies and Japanese companies will be eligible for financing when jointly developing projects, even if they use more than 35% of Japanese-made components.