VZCZCXRO1231
RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHPB
DE RUEHKO #1634/01 0880645
ZNY CCCCC ZZH
R 290645Z MAR 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 0251
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHNE/AMEMBASSY NEW DELHI 7921
RUEHPF/AMEMBASSY PHNOM PENH 0561
RUEHGO/AMEMBASSY RANGOON 2070
RUEHVN/AMEMBASSY VIENTIANE 1471

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 001634 
 
SIPDIS 
 
SIPDIS 
 
DEPT PASS USTR FOR CUTLER, NEUFFER, BEEMAN 
 
C O R R E C T E D  C O P Y////ADDED SIPDIS AS CAPTION////// 
 
E.O. 12958: DECL: 03/28/2016 
TAGS: ECON ETRD PREL PGOV APECO ASEAN JA
SUBJECT: MOFA ECONOMIC CHIEF ON EAS-APEC DIFFERENCES, FTA 
STRATEGY, AND ECONOMIC PARTNERSHIP WITH U.S. 
 
REF: TOKYO 1483 
 
TOKYO 00001634  001.2 OF 002 
 
 
Classified By: Ambassador J. Thomas Schieffer.  Reason: 1.4 (b,d) 
 
¶1.  (C)  Summary:  The Foreign Ministry's (MOFA) obsession 
with China is driving Japan's interest in the East Asian 
Summit (EAS), the Director General of MOFA's Economic 
Affairs Bureau told the U.S Senior Official for APEC on 
March 23.  The MOFA official has endeavored to brief the 
Foreign Minister on the continued importance of APEC in 
order to keep the EAS from dominating Japan's thinking on 
regional integration.  He also outlined Japan's new 
strategy on free trade agreement (FTA) negotiations and how 
he had helped to promote the Foreign Ministry as the lead 
agency for Japan's economic diplomacy.  He indicated Japan 
would look into providing some funding to support a U.S.- 
proposed project designed at enhancing APEC-ASEAN 
cooperation and discussed ideas for a new economic 
partnership arrangement with the United States.  End 
summary. 
 
------------ 
APEC and EAS 
------------ 
 
¶2.  (C)  In a March 23 meeting with MOFA Economic Affairs 
Bureau Director General Kaoru Ishikawa, U.S. Senior 
Official for APEC Ambassador Michael Michalak noted that, 
during a recent trip to Washington, MOFA Vice Minister 
Shiozaki had urged the United States to participate in the 
East Asian Summit and had ignored APEC in his remarks.  The 
MOFA Asia Bureau is the main supporter of the EAS, Ishikawa 
replied.  He linked this position with the Asia Bureau's 
obsession with China.  Ishikawa said that he had been 
briefing FM Aso on the importance of APEC, stressing both 
that it is a rules-making international organization at 
time when those types of bodies are in the ascendancy and 
that it includes Taiwan.  (Minami passed Amb. Michalak a 
series of charts on the economic importance of the various 
Asian organizations including ASEAN plus 3, the EAS, and 
APEC, with APEC obviously by far the most important body.) 
Ishikawa added that while it was hard to pressure China 
bilaterally on issues without inciting strong resistance 
from the Chinese, multilateral fora could be used 
effectively to urge China's compliance with international 
rules and norms. 
 
--------- 
EPAs/FTAs 
--------- 
 
¶3.  (C)  Ishikawa acknowledged that he had been called in 
by LDP Policy Research Committee Chairman Hidenao Nakagawa 
to explain why Japan's free trade agreements and economic 
partnership agreements were proceeding so slowly.  In 
response, Ishikawa had devised the new streamlined strategy 
for FTA negotiations that FM Aso outlined in his March 8 
speech.  (See reftel.)  He also indicated that the language 
Aso had used highlighting the leading role of the Foreign 
Ministry in economic diplomacy had been something of a 
coup.  "Don't say that around METI officials!" Ishikawa 
cautioned about the coup remark.  He traced this position 
to his successful addition of a strong defense of the 
Foreign Ministry's role in economic diplomacy into the 
Prime Minister's response to a question posed in a Diet 
Budget Committee session.  The Prime Minister's response 
had been formally cleared interagency, Ishikawa said, but 
stressed nevertheless that he (Ishikawa) was in danger of 
being "attacked" as a result of this "victory."  (Comment: 
We had heard that, unlike the Prime Minister's remark, the 
Foreign Ministry's speech was not cleared interagency.  End 
comment.) 
 
¶4.  (C)  Ishikawa also drew attention to the parts of Aso's 
speech on a possible FTA with the United States.  He 
stressed that the current ambivalent language was a more 
positive to an FTA than the flat "no" that had been Japan's 
position earlier. 
 
¶5.  (C)  Ishikawa also stated that he had met with the 
Australian Ambassador and had suggested the possibility of 
a more limited trade agreement than the full "economic 
partnership agreement" that had been envisioned.  He noted 
that it would not be possible for Japan to negotiate a FTA 
that would meet WTO standards, but that a more limited 
arrangement might be possible.  Once an agreement had been 
struck with Australia, such an model might be used with the 
United States.  He added that he had received some support 
 
TOKYO 00001634  002 OF 002 
 
 
from (unnamed) senior bureaucrats in the Ministry of 
Agriculture, Forestry and Fisheries (MAFF). 
 
---------------------- 
Cooperation with ASEAN 
---------------------- 
 
¶6.  (C)  Amb. Michalak outlined his ideas for greater APEC- 
ASEAN cooperation and described the pilot project on avian 
influenza (AI) that the United States envisioned.  Michalak 
also asked whether Japan could provide funding to assist 
the ASEAN members who could not receive aid from the United 
States:  Cambodia and Burma.  Ishikawa asked APEC Office 
Director Minami to look into whether some of the USD 1.5 
billion that Japan had pledged in development assistance to 
fight AI could be used for that purpose.  Michalak then 
indicated that Japan should consider the possibility of 
including support for ASEAN in the framework of the U.S.- 
Japan Strategic Development Alliance. 
 
----------------------------------- 
New U.S.-Japan Economic Partnership 
----------------------------------- 
 
¶7.  (C)  Ishikawa raised the topic of a new economic 
partnership with the United States and called for an 
approach very close to the U.S. "building block" concept. 
Amb. Michalak suggested to Ishikawa a number of areas that 
might be included in a new U.S.-Japan economic partnership. 
These included IPR protection (particularly regarding 
China), secure trade/supply chain security, and energy 
issues.  Action in these areas would still require some 
sort of regulatory reform dialogue and bilateral investment 
talks, but they would be capped by a new, streamlined sub- 
cabinet meeting, which would focus on more strategic 
questions.  Ishikawa indicated that he agreed with this 
proposed framework.  (Note:  Director General Ishikawa's 
comments on Japan's suspension of U.S. beef imports are 
reported septel.) 
 
¶8. (U)  Ambassador Michalak has cleared this message. 
SCHIEFFER