VZCZCXRO5147
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2982/01 3002252
ZNR UUUUU ZZH
P 262252Z OCT 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 8270
INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 6031
RUEHBY/AMEMBASSY CANBERRA PRIORITY 2829
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 8597
RUEHUL/AMEMBASSY SEOUL PRIORITY 2029
RUEHGP/AMEMBASSY SINGAPORE PRIORITY 7241
RUEHML/AMEMBASSY MANILA PRIORITY 1265
RUEHBK/AMEMBASSY BANGKOK PRIORITY 4528
RUEHHI/AMEMBASSY HANOI PRIORITY 1090
RUEHNH/AMCONSUL NAHA PRIORITY 2955
RUEHNAG/AMCONSUL NAGOYA PRIORITY 8666
RUEHOK/AMCONSUL OSAKA KOBE PRIORITY 4379
RUEHKSO/AMCONSUL SAPPORO PRIORITY 1169
RUEHFK/AMCONSUL FUKUOKA PRIORITY 0596
RUEHIN/AIT TAIPEI PRIORITY 7173
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 03 TOKYO 002982 
 
SENSITIVE 
SIPDIS 
 
STATE EEB/TRA FOR DAS JOHN BYERLY 
STATE FOR EAP/J 
DOT FOR KEITH GLATZ AND JENNIFER THIBODEAU 
USTR FOR MICHAEL BEEMAN 
DOC FOR EUGENE ALFORD AND DANIEL LEE 
 
E.O. 12958: N/A 
TAGS: EAIR ELTN PGOV ETRD JA
SUBJECT: UPCOMING CIV AIR TALKS: MORE OF THE SAME? 
 
REF: A. TOKYO 2272 
     ¶B. TOKYO 2108 
 
Sensitive But Unclassified.  Contains Proprietary Information. 
 
¶1. (SBU) Summary:  The upcoming bilateral civil aviation 
talks in Tokyo October 29-30 offer an excellent opportunity 
to urge the GOJ to undertake needed meaningful liberalization 
of Japan's aviation sector.  However, recent discussions with 
the Japan Civil Aviation Bureau (JCAB), Japanese airline 
officials (from ANA and JAL), and other aviation-related 
interlocutors suggest the GOJ will continue to hold to its 
long-standing "go slow" line on sectoral reform.  The GOJ 
hopes the talks will focus on the "overall framework" for 
2010, including expansion of operations at both Narita and 
Haneda airports. 
 
¶2. (SBU) During your meetings with GOJ and Japanese airline 
counterparts, we suggest making the following points: 
 
-- Express appreciation for the efforts Japan has made to 
liberalize its aviation sector. 
 
-- Underscore the benefits of the U.S. Open Skies model and 
of anti-trust immunity, especially potential benefits to 
continued skeptic, JAL. 
 
End Summary. 
 
What the GOJ Wants 
------------------- 
 
¶3. (SBU) A JCAB official told us the GOJ is making progress 
on aviation liberalization, and expansion of third and fourth 
freedoms -- the right for an airline to deliver passengers 
from the home country to another country and the right for an 
airline to transport passengers from a foreign country to the 
home country -- are the basis for Japan's aviation 
liberalization policies.  They argue this approach conforms 
to the 1998 bilateral aviation Memorandum of Understanding 
(MOU), which states the GOJ will pursue full liberalization. 
(Note:  The official claimed that in the June 2008 informal 
talks, the GOJ provided a road map for expanding third and 
fourth freedoms that exclude Haneda and Narita airports, 
arguing that they already operate at full capacity.  End 
Note.)  The Asian Gateway Initiative, which was announced in 
May 2007 and encourages liberalization of air services 
between Japan and other Asian countries, comprises a key 
component of the GOJ approach.  The GOJ has so far signed 
agreements with Korea, Hong Kong, Thailand, Vietnam, 
Singapore, and Macao.  Negotiations with the Philippines are 
scheduled for November, while discussions about a possible 
agreement continue with China.  The JCAB indicates it would 
be satisfied with a liberalized agreement with the U.S. 
including third and fourth freedoms.  When asked about the 
2010 APEC Bogor goals for aviation liberalization, JCAB noted 
these goals are only voluntary, and that many APEC economies 
remain unenthusiastic about achieving this objective. 
 
¶4. (SBU) The JCAB has said it expects this round of civ air 
talks to address the overall framework for 2010, including 
the Narita and Haneda expansion that will be completed that 
year.  The new lead negotiator, JCAB Deputy Director-General 
Kenji Takiguchi, aims to achieve "mutually beneficial 
results...from a series of negotiations," according to JCAB. 
An ANA representative said he understands Takiguchi already 
plans for another round of talks this spring, thus suggesting 
the GOJ sees it unlikely an agreement will be reached now. 
If the USG proposes increased liberalization, the GOJ will 
 
TOKYO 00002982  002 OF 003 
 
 
demand an equalization of slots, he continued.  It will be 
very difficult for the GOJ to make compromises this year due 
in large part to Japan's political situation. 
 
What the Airlines Want 
---------------------- 
 
¶5.  (SBU) ANA representatives hope the USG will take a 
"constructive and positive" approach to Haneda's expansion. 
Specifically, they advocate that the USG accept restrictions 
on access at Haneda in exchange for a phased in 
liberalization.  ANA also wants further discussion between 
the USG and GOJ on anti-trust immunity, a key component of an 
Open Skies regime.  JAL representatives, in contrast, are 
more interested in progress on other agenda items raised 
during previous talks:  U.S. anti-cabotage rules as they 
relate to JAL/Jalways routes to Hawaii; the Fly America Act; 
and their perception of inequality in slot distribution at 
Narita.  Anti-trust immunity for alliance partners is not on 
JAL's agenda, according to ANA officials.  A JAL 
representative says he does not understand what could be 
possible with anti-trust immunity, while a JCAB official told 
us separately Japanese carriers are uninterested in 
anti-trust immunity. 
 
Different Interpretations of Open Skies 
--------------------------------------- 
 
¶6. (SBU) An ANA representative said the GOJ views Open Skies 
as a regime that favors the country with the most airport 
slots for its carriers.  Should Japan conclude an Open Skies 
agreement with the United States, the GOJ fears being 
inundated by similar requests from neighboring countries, 
particularly China and Korea.  Japanese carriers would be 
unable to compete, he said.  Both ANA and JAL representatives 
queried us about whether an Open Skies agreement between the 
U.S. and Japan that excludes Narita and Haneda airports might 
be possible; ANA contends Narita is "almost liberalized" 
anyway.  A JAL representative claimed the Fly America Act and 
U.S. anti-cabotage rules unfairly discriminate against 
Japanese carriers.  It is not right that the U.S. maintains 
such restrictions while pushing for Open Skies, he said.  He 
also commented that the high proportion of U.S. slots at 
Narita airport relative to other countries "puts the U.S. 
twenty meters ahead in a 100-meter race."  ANA has commented 
separately it will be "impossible" to convince JAL to accept 
Open Skies, an assertion JAL denied in a separate 
conversation. 
 
¶7. (SBU) A Kansai International Airport Corporation (KIAC) 
official suggested Japan has been more receptive to Open 
Skies during previous civil aviation talks than has the U.S. 
KIAC Wants to encourage third-country carriers to fly to the 
U.S. via KIX, something Open Skies would facilitate. 
Previously, Japanese carriers were interested in operating 
Japan-U.S. routes that included onward flights to a third 
country.  However, the current economic downturn has 
diminished interest in such routes, according to a KIAC 
official. 
 
In Search of More Slots 
----------------------- 
 
¶8. (SBU) An ANA representative said his airline was 
frustrated by the limited number of slots for international 
flights at Haneda airport (only 30,000).  Most local 
governments, other than Chiba Prefecture (where Narita is 
located), want more flights.  The Ministry of Land, 
Infrastructure, Transport, and Tourism (MLIT), for example, 
 
TOKYO 00002982  003 OF 003 
 
 
can therefore only increase slots only incrementally, he 
claimed.  ANA does believe MLIT will increase international 
slots over time, but will not say so publicly due to 
political considerations. 
 
¶9. (SBU) A JCAB official noted the GOJ's recent progress in 
increasing slots at Tokyo's airports, e.g., negotiations 
between MLIT and local governments that resulted in 20,000 
new slots at Narita in addition to the airport's current 
200,000 slots.  The same JCAB official asserted the USG 
should understand MLIT can only achieve this expansion at 
politically sensitive airports like Narita and Haneda through 
quiet, behind-the-scenes negotiations with various 
stakeholders.  Western-style transparency is not an option, 
he contended. 
SCHIEFFER