Mitsubishi Heavy Industries has lost a potential deal to supply tank engines to Turkey because of restrictions that remain in place on Japan’s military exports, officials in Turkey and Japan said.

The development shows the limits of Japan Prime Minister Shinzo Abe’s effort to dismantle a near total ban on Japanese weapons exports that has shut the country’s defense contractors out of overseas markets since World War Two. Abe is pushing to ease the terms of Japan’s self-imposed weapons export restrictions in part to lower Japan’s defense procurement costs as part of a bid to build a more robust military to counter the rising regional power of China. Mitsubishi Heavy had been under consideration to supply engines for the Altay tank being developed by Turkey’s Otokar since last year. But on Thursday Murad Bayar, Turkey’s undersecretary for state-run defense industries, told reporters that the potential deal had been quietly dropped in talks with Tokyo. “We have agreed with Japanese authorities to leave this topic off the agenda and focus on other areas of co-operation,” Bayar said. Turkish Prime Minister Recep Tayyip Erdoğan had raised the issue of Japan’s co-operation in supplying tank engines when Abe visited Ankara in May. The approach by Erdoğan sparked a round of talks between officials from the two countries and a visit to Turkey by Japanese engineers, officials in Japan said. A spokesman for Mitsubishi Heavy said the company had no comment because the discussions were a “government matter.” Yoshihide Suga, Japan’s Chief Cabinet Secretary, said on Friday that he was not aware of the status of the talks with Turkey but said any agreements would be based on the policies that limit Japan’s military. Japan, which renounced the right to wage war in its postwar constitution, effectively banned arms exports in 1967. […]