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C O N F I D E N T I A L TOKYO 001474 
 
SIPDIS 
 
SIPDIS 
 
FOR U.S. PACOM, ADMIRAL KEATING 
 
E.O. 12958: DECL: 04/05/2022 
TAGS: PGOV PINR JN
SUBJECT: SCENESETTER FOR ADMIRAL KEATING'S VISIT TO JAPAN 
 
Classified By: AMBASSADOR J. THOMAS SCHIEFFER.  REASONS 1.4 (B),(D). 
 
Overview 
--------- 
 
¶1. (C) You take your command as Japan contemplates major changes in 
its approach to our alliance and Japan's role in the region 
and the world.  Prime Minister Shinzo Abe's government is 
focused on expanding Japan's ties, including security 
relations, with new partners like Australia and India.  It is 
taking a more active role, on its own and in partnership with 
us, to expand its role in South, Southeast, and Central Asia. 
 Japan has deployed forces overseas in support of U.S.-led 
coalition efforts in Iraq, the Indian Ocean, and for 
Southeast Asia tsunami relief.  These experiences have not 
only improved the ability of the Self-Defense Forces (SDF) to 
operate with our military abroad, but also deepened their 
experience working with other U.S. partners, including 
Australia and NATO.  Japanese public support for our alliance 
is at an all-time high.  Polling also shows that the 
popularity of the SDF has increased following overseas 
deployments. 
 
¶2. (C) Bilaterally, we are rapidly moving towards a more balanced 
partnership in which Japan plays a more direct role in its 
own defense and in operations with U.S. forces in the region 
and beyond.  Japan's embrace of ballistic missile defense 
(BMD) cooperation is driving policy makers and politicians to 
review post-war restrictions on the exercise of collective 
self-defense.  Enhanced interoperability between U.S. and 
Japanese forces has increased the sharing of intelligence on 
a political as well as operational basis.  China's growing 
economic and military power and North Korea's missile and 
nuclear weapons development have made the need for a close 
alliance with the U.S. very concrete to the Japanese 
man-in-the-street. 
 
¶3. (C) Progress on the policy and operational fronts have 
unfortunately not been matched by an increase in Japan's 
financial outlays for security.  Japan's defense budget has 
stagnated for the past five years, even as the SDF has 
assumed ambitious new roles and missions.  Maintaining 
Japan's Host Nation Support, traditionally a pillar of the 
U.S.-Japan Alliance, will become increasingly difficult over 
the coming years.  The current Special Measures Agreement 
(SMA), covering approximately $1.1 billion of Japan's HNS 
contributions, is set to expire on March 31, 2008.  We need 
to constantly remind Japanese leaders of the growing gap in 
defense spending between the U.S. and Japan and the political 
risk for Japan if it were to reduce its share of alliance 
responsibilities any further. 
 
Domestic Politics 
----------------- 
 
¶4. (C) You will be arriving in Japan just ahead of nation-wide local 
elections and the campaign for the critical July 22 Upper 
House vote.  If the LDP seriously under-performs 
expectations, Abe could face a challenge to his leadership 
from within his party.  Support for Abe's cabinet dropped 
dramatically in the first few months of his administration. 
Abe got off to a strong start with popular fence mending 
visits to Beijing and Seoul.  But his decision to allow the 
return of party rebels kicked out of the LDP under former 
Prime Minister Koizumi has tarnished his credentials as a 
reformer and driven his approval ratings down to the low 
40's.  A series of scandals and gaffes by Cabinet ministers 
has led to a media image of Abe as weak and indecisive.  Abe 
is blessed, however, with a feckless and disunited opposition 
camp.  The Democratic Party of Japan (DPJ) is almost certain 
to pick up seats in the July Upper House election, but small 
gains are not likely to topple Abe from his leadership 
position. 
 
5, (C) The deterioration of Abe's political fortunes has made him 
more cautious.  We assess that it will be more and more 
difficult to get the Japanese to break any new ground with us 
on security policy initiatives until the July elections are 
out of the way.  The same is true on the economic front. 
Japan is back from the economic slump of the 1990's, thanks 
in large measure to the reforms of former Prime Minister 
Koizumi.  Prime Minister Abe pledged to continue a robust 
economic reform agenda, seeking an "open and innovative" 
economy.  Further reform is fundamental to raising Japan's 
economic growth rate and removing obstacles to strengthening 
the bilateral economic relationship.  So far, however, Abe's 
actions indicate a lack of commitment to economic reform, 
partially due to a resurgence of anti-reform elements within 
the LDP and to caution prior to the July 2007 Upper House 
Elections 
 
Foreign Policy 
-------------- 
 
¶6. (C) Six-Party Talks with North Korea have increased Japanese 
anxieties that they will be marginalized as our leading ally 
in Asia.  The Japanese are worried that we could disregard 
their concerns over the abduction issue in an effort to reach 
a deal with the North Koreans.  Their initial reaction to the 
Six-Party Talks Agreement has been generally positive, but 
with an undercurrent of unease that Japan's abduction issue 
was not adequately addressed.  Many of our political 
interlocutors concede that the agreement on the nuclear issue 
is a good thing, but worry that the United States "again 
passed Japan" and cut a deal with the DPRK.  The failure of 
Japan-DPRK Working Group talks in Hanoi on the abduction 
issue earlier this month has increased public unease over 
Japan's possible isolation within the Six-Party framework. 
 
7, (C) Relations with both Koreas have been complicated by the 
reaction of Abe's right-wing supporters to Congressman 
Honda's resolution on Japan's treatment of "comfort women," 
girls and women forced to work in military brothels during 
WWII.  Abe has vacillated between reassuring the 
international community that past official apologies still 
stand and appeasing hard-line supporters who are seeking to 
"revise" the official history of the issue.  Abe called 
President Bush to reaffirm that his government would stand by 
the apology made in the 1993 Kono agreement.  Abe hopes this 
will quiet American critics at least long enough for him to 
have a successful summit April 26-27. 
 
¶8. (C) Abe has done a better job about stabilizing Japan's relations 
with China.  Beijing has been careful not to be drawn into 
the public debate on comfort women, which could risk creating 
another chronic irritant like former Prime Minister Koizumi's 
visits to the Yasukuni Shrine.  An upcoming series of 
high-level visits, including Premier Wen Jiabao's visit the 
same week as yours, should keep the bilateral atmospherics 
positive for the immediate future. 
 
¶9. (C) Despite the recent upbeat tone in Japan-China relations, 
China is viewed among policymakers in Tokyo as Japan's most 
significant long-term diplomatic and security challenge. 
Beijing's recent anti-satellite test has exacerbated 
long-standing concerns over China's long-term defense 
build-up.  Japanese military planners are increasingly 
focused on PLA activities in the East China Sea.  Concern 
over the PRC's growing political and military clout is 
driving Japan to diversify its strategic relationships. 
Prime Minister Abe has advocated closer relations with NATO 
and a "Quad" forum that would bring together the United 
States, Japan, India, and Australia.  Foreign Minister Aso 
has also promoted the concept of an "Arc of Freedom and 
Prosperity," which would expand Japan's activities in South 
and Central Asia.  The Japanese government also launched an 
initiative last May at the "Island Summit" in Okinawa to 
enhance Japanese engagement with the Pacific island nations 
with an eye towards limiting PRC influence. 
 
Security Policy 
--------------- 
 
¶10. (C) Abe has set out to accelerate Japan's progress towards 
"normalcy" in its security policy by strengthening the 
bilateral alliance and reaching out to others with new 
proposals.  In a speech before the Atlantic Council in 
January, he declared Japan's ambition to deepen ties with 
NATO, and to not shy away from dispatching forces overseas to 
support international efforts.  Japanese officials have since 
sought to downplay any expectations of "boots on the ground" 
in Afghanistan, however, or of any sudden breakthroughs in 
SDF interaction with NATO.  Abe will be particularly cautious 
on defense policy in the lead-up to the July election. 
Nevertheless, he has secured Diet backing to extend Japan's 
oiler support mission in the Indian Ocean, and requested that 
the Diet extend the ASDF airlift mission Kuwait and Iraq for 
another two years. 
 
¶11. (C) Another initiative immune from Japan's recent pre-election 
go-slow stance is trilateral defense cooperation with the 
U.S. and Australia. The inaugural meeting of the Assistant 
Secretary-level Australia-Japan-U.S. Security and Defense 
 
SIPDIS 
Forum (SDCF) will be held in Tokyo during your visit.  Japan 
and Australia issued a Joint Declaration on Security in early 
March that makes Canberra Japan's closest defense partner 
aside from the U.S.  While not a treaty with security 
obligations, the Joint Declaration calls for deepening 
cooperation across a spectrum of areas - such as disaster 
relief, information sharing, maritime security - and creates 
a regular "2 2" meeting of foreign and defense ministers to 
spur progress forward. 
 
¶12. (C) After the July election, we expect the Prime Minister to 
follow through on his pledge to reassess Japan's self-imposed 
prohibition on collective self-defense, particularly as it 
relates to the use of BMD assets to defend the U.S. against 
incoming missiles.  Abe has not revealed his position on 
draft "blanket overseas dispatch" legislation -- which would 
obviate the need for separate legislation to bless each 
Self-Defense Force deployment abroad.  Defense policy 
realists within the LDP advocate using such legislation as a 
vehicle to break the ban on using force abroad, but other 
elements in the ruling coalition insist that the issue can 
only be resolved through formal revision of the 
constitution's pacifist Article 9. 
 
Alliance Transformation 
----------------------- 
 
¶13. (C) Efforts to implement the landmark "2 2" Security Consultative 
Committee (SCC) May 1, 2006 Alliance Transformation Roadmap 
are progressing well.  The Japanese government took a major 
step forward in fulfilling its side of the agreement in 
February when the Cabinet approved legislation to facilitate 
work on base realignment.  The law, which may pass the Lower 
House as early as this month, includes measures to induce 
cooperation from base hosting communities and to facilitate 
investment in infrastructure and housing on Guam.  The 
Japanese government will also start survey work at Camp 
Schwab for the Futenma Replacement Facility (FRF).  The 
Okinawan government has given tacit approval for this 
activity and appears prepared to assist in accelerating 
realignment activities on the island. 
 
¶14. (C) While we welcome Japan's initiative thus far on realignment, 
we need to remind Tokyo to stay committed on funding.  They 
will cover an estimated $26 billion in costs for realignment 
alone between now and 2014 (although this amount is not 
discussed publicly).  Japan will point to this price tag in 
arguing for sharp cuts in Japan's Host Nation Support 
contributions.  Negotiations on a new 5-year Special Measures 
Agreement (SMA) are expected to begin this summer.  SMA is a 
likely subject for discussion at the May 1 SCC meeting and 
perhaps the April Washington summit. 
SCHIEFFER