VZCZCXYZ0000
RR RUEHWEB

DE RUEHKO #6298/01 3040720
ZNY CCCCC ZZH
R 310720Z OCT 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 7897
INFO RUEHAD/AMEMBASSY ABU DHABI 0174
RUEHGB/AMEMBASSY BAGHDAD 0162
RUEHBJ/AMEMBASSY BEIJING 4710
RUEHDO/AMEMBASSY DOHA 0196
RUEHKU/AMEMBASSY KUWAIT 0289
RUEHLO/AMEMBASSY LONDON 1623
RUEHMK/AMEMBASSY MANAMA 0115
RUEHMO/AMEMBASSY MOSCOW 1319
RUEHFR/AMEMBASSY PARIS 5102
RUEHRH/AMEMBASSY RIYADH 0448
RUEHRO/AMEMBASSY ROME 1987
RHMFISS/COMUSJAPAN YOKOTA AB JA
RUEHBS/USEU BRUSSELS
RHMFISS/USCENTCOM MACDILL AFB FL

C O N F I D E N T I A L TOKYO 006298 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 10/27/2016 
TAGS: ETRD PREL ZP JA
SUBJECT: JAPAN NEGOTIATING FREE TRADE AGREEMENT WITH GULF 
COOPERATION COUNCIL MEMBERS 
 
Classified By: Ambassador J. Thomas Schieffer for reasons 1.4(b), (d) 
 
¶1. (C) SUMMARY:  Japan has entered into Free Trade Agreement 
(FTA) negotiations with the countries of the Gulf Cooperation 
Council (GCC) and is hopeful an agreement can be inked as 
soon as possible, according to MOFA and METI sources.  A 
major motivating factor for the Japanese is the fact that 
China is also in the process of negotiating an FTA with the 
GCC, and the Japanese fear their goods and services will be 
at a competitive disadvantage should the Chinese beat them to 
it.  END SUMMARY. 
 
¶2. (C)  Takashi Kanazawa of MOFA's Second Middle East 
Division recently confirmed to Embassy Tokyo Political 
Officer that a second round of FTA negotiations between Japan 
and the GCC was held in Tokyo in mid-September, following 
initial meetings hosted in Riyadh last May.  Progress is 
being made, albeit slowly, he said.   Kanazawa reported that 
the two sides had exchanged lists of goods and services to be 
included under an agreement and that Japan hopes to be able 
to meet again to continue negotiations in December.  However, 
a planned GCC summit in early December may push back Japan's 
talks to late December or early January.  In the meantime, 
working level intersessional meetings are scheduled to take 
place in Riyadh during November. 
 
¶3. (C)  Kanazawa's remarks were confirmed to Embassy Tokyo 
Economic Officer by Hideyasu Tamura, Deputy Director of the 
Ministry of Economy, Trade and Industry's (METI) Economic 
Partnership Division of the International Trade Policy 
Bureau.  Tamura reported that nearly 90 percent of imports 
from the GCC to Japan consist of oil.  The rest is comprised 
mainly of petro-chemical products, textiles, and shrimp.  A 
five percent common external tariff that is currently levied 
on oil will be subject to the FTA negotiations.  According to 
Tamura, exports from Japan to the GCC consist mainly of motor 
vehicles and electric appliances, as well as other goods and 
services. Japan also desires to see direct investment 
included in the negotiations. 
 
¶4. (SBU) Both Tamura and Kanazawa said that the Japanese 
delegation was comprised of representatives from MOFA (which 
has the lead), METI, the Ministry of Finance, and the 
Ministry of Agriculture, Forestry, and Fisheries.  According 
to Kanazawa, the GCC delegation was led by Dr. Hamad Sulaiman 
¶A. Albazi, Kuwaiti Deputy Minister of Finance for Economic 
Affairs in his capacity as the head of the GCC Executive 
Secretariat. Other leading members of the approximately 40 
 
SIPDIS 
member delegation were: 
 
-- Kuwait: Dr. Saud E. Al-Malq, Ministry of Commerce and 
Industry, Director General for International Organizations; 
 
-- UAE: Juma Mohammed Al-Kait, Ministry of Economy, Director 
of the WTO Department; 
 
-- Qatar: Dr. Khaled Yousef Al-Derbesti, Ministry of Economy 
and Trade, Director of the Trade and Economic Promotion 
Department; 
 
-- Kuwait: Adnan Al-Kandari, Ministry of Finance, Supervisor 
of International Affairs; 
 
-- Oman: H.E. Dr. Abdulmalik Abdullah Al-Hinai, Under 
Secretary of the Ministry of National Economy; and 
 
SIPDIS 
 
-- Bahrain: Mohammed Ali Taleb, Ministry of Finance, Director 
of Economic Relations. 
 
¶5. (C) According to Tamura, the target date for completing 
the FTA is still undefined, but the Japanese are anxious to 
conclude the agreement quickly.  They are aware that the GCC 
has been negotiating an FTA with the European Union for over 
ten years and has recently entered into negotiations with 
China.  Japanese business leaders are urging the government 
to move quickly, concerned that if other countries or trading 
blocs conclude FTAs with the GCC first, Japan's goods and 
 
services will be at a disadvantage in the GCC marketplace. 
SCHIEFFER