VZCZCXYZ0004
PP RUEHWEB

DE RUEHKO #1916/01 1000536
ZNR UUUUU ZZH
P 100536Z APR 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0723
INFO RUEHBJ/AMEMBASSY BEIJING 1613
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RHEFHLC/HOMELAND SECURITY CENTER WASHINGTON DC

UNCLAS TOKYO 001916 
 
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SENSITIVE 
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DEPT PLEASE PASS USTR FOR BEEMAN, CUTLER 
PLEASE PASS TREASURY FOR DOHNER 
PLEASE PASS USDA FOR U/S PENN 
PLEASE PASS FAS FOR TERPSTRA 
PLEASE PAAS DHS FOR A/S ARCOS 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR PREL ECON JA
SUBJECT: TOKYO VISIT BY U.S. SECRETARY OF COMMERCE GUTIERREZ 
 
 
SENSITIVE BUT UNCLASSIFIED -- PLEASE PROTECT ACCORDINGLY. 
 
¶1. (SBU) SUMMARY.  On March 30, 2006, in Tokyo, Secretary of 
Commerce Carlos M. Gutierrez met with Japan's Minister of 
Economy, Trade and Industry; Minister of Health, Labor and 
Welfare; and Minister of Land, Infrastructure and Transport. 
He raised beef, enhanced cooperation on IPR protection and 
enforcement, medical devices and drug pricing and regulatory 
systems, tourism, and public works (design/construction). 
His counterparts raised topics including the Administration's 
Competitiveness Initiative, an issue regarding the WTO 
Government Procurement Agreement and Japan Railways 
companies, and whaling, and briefly mentioned DHS Secretary 
Chertoff's recent Tokyo visit and Transportation Secretary 
Mineta's participation in a recent security conference.  END 
SUMMARY. 
 
¶2. (SBU) Secretary of Commerce Carlos M. Gutierrez met with 
his ministerial counterparts at the Ministry of Economy, 
Trade and Industry (METI), Ministry of Health, Labor and 
Welfare (MHLW), and Ministry of Land, Infrastructure and 
Transport (MLIT) on March 30 in Tokyo, Japan.  While in 
Tokyo, Secretary Gutierrez also gave a speech to the American 
Chamber of Commerce in Japan (ACCJ) on March 31 and 
participated in an event on March 30 with Mr. Ralph Lauren at 
the newly opened Polo Ralph Lauren store. 
 
¶3. (SBU) METI MEETING:  Secretary Gutierrez and Minister of 
Economy, Trade and Industry Toshihiro Nikai addressed several 
issues during their meeting including the Competitiveness 
Initiative and METI's New Economic Growth Strategy, IPR and 
other issues related to China, the new Joint Initiative by 
the Commerce Department and METI for Enhanced Cooperation on 
IPR and Other Issues, tourism, a possible new educational 
exchange program for Japan, beef, and whaling. 
 
¶4. (SBU) After discussing Japan's victory in the World 
Baseball Classic, Minister Nikai said he applauded the State 
of the Union Address and was impressed by the 
Administration's Competitiveness Initiative.  He explained 
that METI recently issued its New Economic Growth Strategy 
and noted that Japan's economy had been in a dark tunnel for 
15 years and is now gradually emerging. 
 
¶5. (SBU) When Minister Nikai asked about the Secretary's 
recent China visit, Secretary Gutierrez mentioned the 
following areas with pending issues that need to be resolved: 
 market access, IPR protection and enforcement, and 
transparency.  Minister Nikai said he had urged Chinese 
Commerce Minister Bo Xilai during his February visit to 
Beijing to give further consideration to the importance of 
protecting IPR.  Secretary Gutierrez encouraged Minister 
Nikai to continue his efforts.  Secretary Gutierrez said the 
joint initiative that he and Minister Nikai would announce 
after their meeting would signal to many countries the 
importance of IPR protection and enforcement.  Minister Nikai 
agreed. 
 
¶6. (SBU) Secretary Gutierrez said he understood that Minister 
Nikai is an expert on tourism and asked for his insights on 
how to attract more Japanese tourists to the United States. 
Minister Nikai encouraged Commerce to continue its current 
activities and described his long involvement in the tourism 
issue, which included his participation in the first meeting 
of bilateral consultations on tourism at the Commerce 
Department about 15 years ago.  He explained that he would 
like to introduce in Japan a scholarship program, modeled on 
the Fulbright Program, for students from Japan and other 
Asian countries and possibly some U.S. students. 
 
¶7. (SBU) Secretary Gutierrez raised the beef issue, assuring 
Minister Nikai that U.S. beef is safe.  Secretary Gutierrez 
said the U.S. Government is committed to ensuring there are 
no future incidents and urged Japan to open its market to 
U.S. beef imports.  Minister Nikai said the beef issue is not 
in his portfolio, but he will give good thought to the 
Secretary's remarks.  He said he has heard much about beef 
 
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from USTR Portman and Agriculture Secretary Johanns when he 
has met them at WTO meetings.  Minister Nikai briefly raised 
the whaling issue, stating his hope that the U.S. and 
Japanese Governments can respect each other's culinary 
cultures and put this issue behind us. 
 
¶8. (SBU) JOINT INITIATIVE FOR ENHANCED COOPERATION ON IPR AND 
OTHER ISSUES:  Immediately after their meeting, Secretary 
Gutierrez and Minister Nikai announced to the press a Joint 
Initiative between the Commerce Department and METI for 
Enhanced Cooperation on IPR and Other Issues.  The Joint 
Initiative involves exchanging information, sharing 
resources, and working together to build stronger 
government-industry relationships to address IPR concerns, 
especially in third countries, by enhancing cooperation on 
IPR protection and enforcement.  The Joint Initiative's 
activities include:  developing best practices for government 
outreach to industry including SMEs, sharing information on 
enforcement activities, working together toward streamlining 
patent procedures and harmonizing patent laws, and 
strengthening technical assistance.  In addition, the 
Commerce Department and METI will enhance cooperation on 
standards and conformity assessment, export controls, clean 
development and climate, and information technology security. 
 
¶9. (SBU) MHLW MEETING:  During his meeting with Minister of 
Health, Labor and Welfare Jiro Kawasaki, Secretary Gutierrez 
raised issues including beef and medical device and drug 
pricing and regulatory systems.  On beef, Secretary Gutierrez 
said U.S. beef is safe.  He explained that the U.S. 
Government is committed to meeting the standards and 
specifications in our agreement with Japan and ensuring there 
are no future incidents.  He urged Minister Kawasaki to give 
full consideration to restoring imports of American beef. 
 
¶10. (SBU) Minister Kawasaki responded that since the January 
incident, he and the MAFF Minister have been like sandbags, 
pummeled by the public with questions about how they could 
have allowed beef imports without having seen the U.S. 
facilities.  They had explained that they based their 
decision on the relationship of trust between the United 
States and Japan.  As a result of the 
government-to-government consultations during the week of 
March 27, Minister Kawasaki said he now understands the 
erroneous acts that resulted in the January incident.  He 
explained that the consultations went one step further to 
address how the U.S. Government can ensure the remaining 38 
establishments will not make a similar mistake.  Because the 
Commerce Secretary came all the way to see him for this 
meeting (held at 7:30 pm), he understands the important 
weight of this issue for the United States. 
 
¶11. (SBU) On medical device and drug pricing, Secretary 
Gutierrez said he is surprised that Japan's pricing system 
does not reward innovation and deprives Japanese patients of 
the world's best devices and drugs.  He said U.S. firms are 
very concerned that MHLW may decide to change prices every 
year instead of the current practice of every two years.  He 
urged MHLW not to move to annual price cuts.  Kawasaki 
responded that MHLW has introduced a pricing system that 
evaluates the innovativeness of a product.  He said he made a 
commitment to Ambassador Schieffer on this issue last year 
and will make further efforts. 
 
¶12. (SBU) Secretary Gutierrez expressed concern that Japan's 
slow regulatory system is preventing Japanese patients from 
having access to the most innovative products, noting that 
devices available in Japan are 3-4 generations behind those 
available in the United States and several new drugs are not 
available in Japan.  He said he is aware of Japan's 
demographic challenges and the importance of innovative 
products.  Secretary Gutierrez encouraged MHLW to speed up 
the regulatory approval process.  On devices, Minister 
Kawasaki responded that as the staffing at the regulatory 
agency increases, he expects the pace of approvals to 
improve.  On drugs, he said the only area where MHLW needs a 
new system is clinical trials and added that MHLW is making 
efforts in this area. 
 
¶13. (SBU) Minister Kawasaki said MHLW recognizes it may need 
to revamp its healthcare system regarding how best to treat 
cancer and may move to using more innovative drugs and 
devices, in contrast to the past reliance on surgeries. 
Secretary Gutierrez encouraged Minister Kawasaki to let us 
 
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know if we can help and said we also are interested in 
providing input for Japan's healthcare reform process. 
¶14. (SBU) MLIT MEETING:  During his meeting with Minister of 
Land, Infrastructure and Transport Kazuo Kitagawa, Secretary 
Gutierrez raised issues including tourism, public works 
(design/construction), and geostationary satellites. 
Minister Kitagawa raised an issue related to the WTO 
Government Procurement Agreement (GPA) and Japan Railways 
(JR) companies and briefly mentioned DHS Secretary Chertoff's 
recent Tokyo visit and Secretary Mineta's participation in a 
recent security conference. 
 
¶15. (SBU) On tourism, Secretary Gutierrez said the Commerce 
Department plans to launch an advertising campaign this 
summer to encourage Japanese tourists to visit the United 
States and welcomed Minister Kitagawa's support.  Kitagawa 
expressed support and noted the importance of exchanges 
between the citizens of our two countries particularly given 
the strength of our bilateral relationship.  Secretary 
Gutierrez mentioned we are pleased Japan's economy is 
growing.  Minister Kitagawa said Japan's economy has emerged 
from a dark tunnel, and spring is on its way. 
 
¶16. (SBU) On public works, the Secretary explained that U.S. 
design and construction firms are eager to contribute their 
expertise to public works projects in Japan and encouraged 
MLIT to include them in projects covered by the 1988 Major 
Projects Arrangements (MPA) and 1994 Public Works Agreement, 
which includes the Action Plan.  Minister Kitagawa responded 
that Prime Minister Koizumi's basic position is that Japan 
wholeheartedly welcomes FDI, and MLIT agrees with this 
approach.  Secretary Gutierrez encouraged Minister Kitagawa 
to ensure that MPA procedures will be used for all 
procurements for the Central Japan International Airport. 
Minister Kitagawa said MLIT would continue its discussions 
with Commerce on this issue. 
 
¶17. (SBU) On WTO GPA issues, Minister Kitagawa explained that 
Japan requested that three fully privatized JR companies be 
removed from GPA coverage and said MLIT would like the U.S. 
Government to withdraw its objection.  He said he understands 
the U.S. Government has demanded that the operational safety 
of transportation exemption be removed.  Minister Kitagawa 
explained that procurements for the safe operation of 
railways are very important and should continue to be 
exempted from the GPA.  Secretary Gutierrez said he 
understands these issues are being discussed by USTR and the 
Japanese Government. 
 
¶18. (SBU) On geostationary satellites, Secretary Gutierrez 
encouraged MLIT to continue its efforts particularly in the 
Western Pacific where we rely heavily on Japan.  Kitagawa 
said he hopes for even stronger collaboration and noted that 
another satellite recently was launched.  On other topics, 
Minister Kitagawa mentioned DHS Secretary Chertoff's recent 
Tokyo visit and Transportation Secretary Mineta's 
participation in a security conference that included several 
countries. 
 
¶19. (SBU) PRESS COVERAGE:  Secretary Gutierrez also had 
several press interviews on March 30.  During an interview 
with Nihon Keizai Shimbun (Nikkei), he discussed his recent 
visit to China, including preparations for the upcoming Joint 
Committee on Commerce and Trade, the importance of US-Japan 
cooperation on promoting better protection of intellectual 
property around the world, and the safety of US beef.  In 
response to a question on currency reform in China, the 
Secretary noted the concern in Congress on the Chinese 
 
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currency and the yuan's impact on the US trade deficit. 
Nikkei misquoted and mischaracterized portions of the 
Secretary's remarks in a March 31 article.  The article said 
 
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he called for a further appreciation of the yuan and that he 
described the US bilateral trade deficit as the major cause 
of the overall global deficit.  Embassy Press Office staff 
called Nikkei's editor responsible for the final version of 
the article to complain about the misquotes and 
mischaracterizations.  The editor apologized for the sloppy 
reporting and said he would monitor future reporting more 
closely. 
SCHIEFFER