The deal, which Reuters reported in July, aims to put an advanced front-line fighter into operation by 2035 by combining the British-led Future Combat Air System project, also known as Tempest, with Japan’s F-X programme in a venture called the Global Combat Air Programme (GCAP), the three countries said in a statement on Friday.

Against the backdrop of Russia’s invasion of Ukraine and intensifying Chinese military activity around Japan and Taiwan, the agreement may help Japan counter the growing military might of its bigger neighbour and give Britain a bigger security role in a region that is a key driver of global economic growth.

“We are committed to upholding the rules-based, free and open international order, which is more important than ever at a time when these principles are contested, and threats and aggression are increasing,” the three countries said in a joint leaders’ statement.

Amid what it sees as deteriorating regional security, Japan this month will announce a military build up plan that is expected to double defence spending to about 2% of gross domestic product over five years.

British Prime Minister Rishi Sunak separately said his country needed to stay at the cutting edge of defence technology.

“It means we can keep the country safe from the new threats that we face, it also adds billions to our economy and supports tens of thousands of jobs across the country,” Sunak, visiting an air force base in eastern England, said of the deal. “It’s also good for our international reputation”

Britain’s BAE Systems PLC BAES.L, Japan’s Mitsubishi Heavy Industries 7011.T and Italy’s Leonardo LDOF.MI will lead design of the aircraft, which will have advanced digital capabilities in artificial intelligence and cyber warfare, according to Japan’s Ministry of Defence.

NATO COMPATIBLE

European missile maker MBDA will also join the project, along with avionics manufacturer Mitsubishi Electric Corp 6503.T. Rolls-Royce PLC RROYC.UL, IHI Corp 7013.T and Avio Aero will work on the engine, the ministry added.

The three countries, however, have yet to work out some details of how the project will proceed, including work shares and where the development will take place.

Britain also wants Japan to improve how it provides security clearances to contractors who will work on the aircraft, sources with knowledge of the discussions told Reuters.

Other countries could join the project, Britain said, adding the fighter, which will replace its Typhoon warplanes and complement its F-35 Lightning fleet, will be compatible with fighters flown by other North Atlantic Treaty Organization (NATO) partners.

BAE Chief Executive Charles Woodburn told reporters that no other partners were needed.

“The three nations is everything that we need to take this programme forward very successfully,” he said, adding he was confident the partners would work out further details of the collaboration in the coming months.

Confirmation of the plan comes days after companies in France, Germany and Spain secured the next phase of a rival initiative to build a next-generation fighter that could be in operation from 2040.

Asked about the potential for the British, Japanese and Italian project to join forces with the rival European project in future, Woodburn said it was a possibility.

“I wouldn’t rule out one thing or another. At the end of the day, these are political decisions,” he said.

The United States, which has pledged to defend all three countries through its membership of NATO and a separate security pact with Japan, also welcomed the joint Europe-Japan agreement.

“The United States supports Japan’s security and defence cooperation with likeminded allies and partners, including with the United Kingdom and Italy,” the U.S. Department of Defense said in a joint statement with Japan’s Ministry of Defense.

Japan had initially considered building its next fighter with help from U.S. defence contractor Lockheed Martin Corp LMT.N, which had proposed an aircraft that combined the F-22 airframe with the flight systems from the F-35 fighter.

By Tim Kelly, Paul Sandle and Nobuhiro Kubo

(Reporting by Tim Kelly, Nobuhiro Kubo in TOKYO and Paul Sandle in LONDON, additional reporting by Sarah Young and William James; Editing by Robert Birsel and Mark Potter)