VZCZCXRO4410
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2548/01 2610550
ZNR UUUUU ZZH
R 170550Z SEP 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 7271
INFO RUCPDOC/USDOC WASHDC
RUEHFK/AMCONSUL FUKUOKA 9881
RUEHNAG/AMCONSUL NAGOYA 7993
RUEHNH/AMCONSUL NAHA 2241
RUEHOK/AMCONSUL OSAKA KOBE 3622
RUEHKSO/AMCONSUL SAPPORO 0457

UNCLAS SECTION 01 OF 02 TOKYO 002548 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN EAGR PREL SENV JA
SUBJECT: Japan Economic Scope for September 16, 2008 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY 
 
¶1. (U) This cable contains the Japan Economic Scope from 
September 9, 2008 
 
Business 
---------- 
 
¶2. (U) JFTC Requests Merger Plan From BHP Billiton, Establishes 
Exclusive Review Team 
 
The Japan Fair Trade Commission (JFTC) has ordered mining giant BHP 
Billiton to submit its plans for a $147 billion takeover of rival 
Rio Tinto.  JFTC's request is the first time the agency has proposed 
to review a prospective merger between two foreign entities.  JFTC 
Secretary General Matsuyama confirmed that the JFTC established an 
exclusive team of eight members in July to review the market 
situation.  The JFTC established such an exclusive team only once 
before in 1970.  The JFTC is unlikely to complete its review of the 
planned merger until December. 
 
¶3. (U) Japan Association of Corporate Execs to Visit United States. 
 
Senior researchers from the Association of Corporate Executives 
(Keizai Doyukai) met with the Economic section September 2 to 
discuss their September 23-28 visit to New York and Washington. 
EMIN noted U.S. concern that the bilateral economic relationship was 
not living up to its potential.  Both governments need to show more 
creativity in working together on regional and global economic 
issues.  Staffers agreed the GOJ has failed to articulate to the 
Japanese public a dynamic vision for the bilateral relationship. 
While in the United States, Doyukai members plan to meet a cross 
section of USG officials and private sector policy experts to obtain 
insight into current U.S. business conditions and learn more about 
likely policy proposals of the next U.S. administration.  The 
results of the trip will feed into a report on the future of the 
U.S.-Japan economic relationship the Association will issue later 
this year. 
 
¶4. (SBU) Japan-U.S. Business Council Worries About Stagnant Economic 
Reform 
 
Japan-U.S. Business Council (JUSBC) Executive Director told EMIN 
Sept 2 that Council members worry Japan's political drift -- 
underlined by the PM's recent resignation -- is delaying needed 
economic reform.  In the past, large Japanese corporations could 
ignore most political discord, but now Japan's economic recovery 
depends on firm government leadership. Continued political 
uncertainty is damaging Japan's reputation abroad and discouraging 
needed inward investment, he said.  JUSBC will host the 45th 
U.S.-Japan Business Conference in Tokyo October 6-7 with the 
Minister of Health, Labor and Welfare Yoichi Masuzoe as the headline 
speaker.  The draft conference agenda includes discussion of IPR, 
Healthcare Reform, prospects for a U.S.-Japan FTA, and Energy, 
Environment, and the post-Kyoto Framework. 
 
 
Environment and Energy 
---------------------- 
¶5. (U) Japan Takes Next Step in R&D of Coal Gasification and CCS 
Technology 
 
The Japan Electric Power Development Company (J-Power) and the New 
Energy Development Organization (NEDO), the GOJ's public R&D 
management organization, are engaged in a joint project to develop 
multi-purpose coal gasification technology with the potential to 
reduce CO2 emissions by as much as 30 percent above the level of 
existing thermal power generation systems. 
 
The co-development of highly efficient thermal electric power 
generation and CCS technology figures prominently in the GOJ's "Cool 
Earth-Energy Innovative Technology Program". 
 
¶6. (U) Japan to Step Up Methane Hydrate Research 
 
Japan has stepped-up its focus on extracting methane hydrate, an 
alternative gas energy source, with a target date of 2012 for trial 
methane production, according to Ministry of Economy, Trade and 
Industry (METI) officials and media reports.  Reserves of deep-sea 
methane hydrate (a sherbet-like compound of methane and frozen water 
molecules that becomes methane gas when heated) near Japan are 
relatively abundant, elevating the resource's potential as an 
alternative to imported fuel stocks in Japan's energy mix.  However, 
the economics of extracting methane from methane hydrate remain 
 
TOKYO 00002548  002 OF 002 
 
 
unknown and researchers must overcome several technical and 
environmental obstacles before the resource can become commercially 
viable. 
 
¶7. (U) Japan Seeks Stable Coal Supply Against Fierce Competition 
 
Securing stable, diversified sources of coal, research and 
investment in zero-emission coal-fired power generation and Carbon 
Capture and Sequestration (CCS) technology and continued emphasis on 
resource diplomacy are the pillars of Japan's coal policy, according 
to Ministry of Economy, Trade and Industry (METI) Agency for Natural 
Resources and Energy (ANRE) Coal Division Director Hirotoshi 
Kunitomo.  Speaking at the Japan Coal Energy Center's Clean Coal Day 
2008, Kunitomo said Japan, which is almost completely reliant on 
imported coal and is traditionally the largest importer, faces 
increasing competition from China, which is predicted to become a 
net importer this year.  Accordingly, Japan is moving to diversify 
its source of supply beyond such traditional suppliers as Australia 
and to secure more varied types of coal, which accounts for 23 
percent of Japan's electricity generation.  To this end, the GOJ is 
supporting private companies in overseas mining ventures by 
providing credit guarantees and trade insurance.  To increase global 
coal mining output, the GOJ is also providing producing countries 
such as China, Vietnam, Indonesia, and India with assistance to 
upgrade their coal industries with more efficient mining technology. 
 
 
Japan's Foreign Relations 
------------------------- 
 
¶8.  (U) Official Development Assistant Loan to Bulgaria To Develop 
Two International Ports 
 
The Japan Bank for International Cooperation (JBIC) signed on August 
29 an official development assistance (ODA) loan totaling 36,932 
million yen ($348 million) with Bulgaria.  The loan will finance the 
"New Container Terminals Development Project at the Ports of Varna 
and Bourgas".  The project consists of building container terminals 
and their ancillary facilities such as port security, and installing 
necessary equipment at the two ports.  The loan will be used for 
construction of the terminals, access roads to the ports and 
consulting services.  The container terminals will be operated by 
private firms to be selected in a concession contract.  JBIC will 
also provide technical assistance in selection of the operators 
 
¶9. (U) Japan-India Economic Partnership Agreement Negotiations - 9th 
Round 
 
Japan and India held the ninth round of Economic Partnership 
Agreement (EPA) negotiations September 8-12 in New Delhi at the 
Ministry of Commerce and Industry.  In this round, both sides 
discussed market access of trade in goods and such issues as rules 
of origin, general rules, customs procedures, trade in services, 
investment, intellectual property, and official development 
assistance cooperation. 
 
Technology, Telecom, and IPR 
---------------------------- 
 
¶10. (U) Japan Patent Office to Launch Patent Strategic Portal 
 
The Japan Patent Office (JPO) recently announced plans to launch a 
new pilot program, the "Patent Strategic Portal."  This website will 
pool patent application data, and make it available to users for 
analysis and more strategic thinking about patents.  The site will 
host information in six general categories, including:  basic patent 
information (for 10 years); examination status list (since Jan. 
2001); first examination list (2006-07); projected timing for 
examination of un-examined applications; list of appeals 
(applications requesting appeal against rejections); and simple 
analytical reporting.  Eligible applicants who have filed more than 
20 applications in the past 10 years can access the first five 
categories, while applicants filing more than 400 applications in 10 
years can access the analytical reports.  Roughly 10,000 Japanese 
firms have filed more than 20 applications in 10 years and would be 
eligible to apply for access to the portal. 
 
SCHIEFFER