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C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 000238 
 
SIPDIS 
 
E.O. 12958: DECL: 01/28/2019 
TAGS: ECON PREL ETRD PGOV EAGR JA
SUBJECT: DEPUTY FM OTABE ON NEW BILATERAL DIALOGUE 
FRAMEWORK, ECONOMIC RELATIONS OUTLOOK 
 
REF: A. TOKYO 157 
     ¶B. TOKYO 187 
     ¶C. TOKYO 189 
 
Classified By: Charge d'Affaires, a.i. James Zumwalt for reasons 1.4 b/ 
d. 
 
Summary 
------- 
¶1. (C) Discussing the experts' report released and briefed to 
FM Nakasone on the future of U.S./Japan economic relations, 
Deputy Foreign Minister Yoichi Otabe called the study "frank 
and forthcoming" and favorably received by the Minister. 
Otabe said the report was able to make a number of 
recommendations on agricultural liberalization and noted GOJ 
agricultural policies have kept Japan from playing the role 
it should in trade matters.  Talking further on future 
bilateral economic relations, Otabe listed climate change and 
energy security, development assistance, and APEC as areas of 
potential cooperation.  Emboffs urged greater bilateral 
discussion of food security and noted the need to move on 
those outstanding issues such as beef, rice, and 
pharmaceuticals/medical appliances approvals.  Discussion of 
the auto sector is reported in ref C.  End summary. 
 
A "Frank and Forthcoming" Report 
-------------------------------- 
¶2. (C) Meeting January 27 with the Charge, EMIN, and 
Econoffs, Deputy Foreign Minister Yoichi Otabe, accompanied 
by other MOFA officials (see para 10) described as "frank and 
forthcoming" a recently released "eminent persons'" report on 
the future of U.S.-Japan economic relations (refs A and B). 
Otabe had organized the study group and report in an effort 
to foster thinking within MOFA and the GOJ on how to engage 
the U.S. on economic issues under the new Administration. 
Otabe said Foreign Minister Nakasone had liked the resulting 
report as well when Otabe and the group briefed him on it 
January 23.  Pleased with what the report said about Japanese 
agricultural interests and policies keeping Japan from 
playing the role it should in international trade policy 
issues and in new regional trade arrangements such as TTP, 
Otabe admitted the report could not have been written if it 
had been an inter-agency project; its agricultural discussion 
was simply too sensitive. 
 
¶3. (C) Regarding complaints from METI that they had not been 
sufficiently included in the panel's work, Otabe noted a 
former METI vice minister as well as a former vice minister 
from the Finance Ministry had been members of the group and 
suggested they had reached back to former colleagues in those 
ministries.  Otabe recalled the Foreign Ministry had done a 
similar study at the start of the first Bush Administration, 
but the Ministry of Economy, Trade, and Industry had done a 
competing report.  Otabe had sought to avoid a recurrence of 
that situation by including the former vice ministers. 
(Note: As reported in ref B, METI officials disagree and feel 
the level of engagement Otabe devised was inadequate. End 
note.) 
 
¶4. (C) At the same time, Otabe was frank in saying MOFA had 
decided not to include a representative with ties to the 
Ministry of Agriculture, Forestry, and Fisheries (MAFF).  Had 
MOFA done so, the report would not have been so critical of 
GOJ agricultural policies.  Nor did the group have 
representation from the Ministry of Health, Labor, and 
Welfare (MHLW), which, Otabe said, is sometimes more 
obstinate on the health-related aspects of agricultural 
policy than MAFF. 
 
¶5. (C) Otabe agreed with the Charge there are areas, such as 
global food safety and cross-border agricultural supply 
chains, where opportunities exist to strengthen our 
cooperation on agricultural issues.  By and large, we have 
moved beyond the frictions that characterized U.S./Japan 
relations 16 years ago, Otabe said.  While generally agreeing 
with that assessment, EMIN noted there continue to be issues 
such as beef that need to be addressed and it might be best 
for Japan to work with us now, in the early days of the new 
Administration, to underline the new tone in our bilateral 
 
TOKYO 00000238  002 OF 002 
 
 
economic relations.  Otabe said when discussions move into 
agricultural trade, it becomes contentious.  Such 
discussions, he continued, would have to wait until after 
Japan's next general election. 
 
Climate Change and Energy Security, Development Assistance 
--------------------------------------------- ------------- 
¶6. (C) Without agricultural representation in the group, the 
most difficult topic had been emissions trading, with 
Takatoshi Ito, Tokyo University Professor and former Council 
on Economic and Fiscal Policy member, facing off against the 
Japan Business Federation's Kazuyuki Kinbara.  Otabe set 
aside the internal discussions, however, and said he believes 
energy security and climate change are an area ripe for 
strategic cooperation between the U.S. and Japan. 
 
¶7. (C) Otabe outlined three elements that would form the 
basis for U.S.-Japan strategic cooperation in the run-up to 
the COP 15 in Copenhagen.  First, he explained, Japan and the 
U.S. are more realistic than the EU and many of its members 
in approaching climate change and energy security issues.  An 
achievable goal has to be articulated if there will be 
success in Copenhagen, and that would most likely come from 
the U.S. or Japan.  Second, only the U.S. and Japan have been 
increasing their research and development budgets in energy 
technologies and climate change-related work, giving the two 
countries a technological leadership edge.  Third, it is the 
U.S. and Japan that are in a position to influence key 
emerging market countries such as China and Brazil. 
 
¶8. (C) Similarly, Otabe characterized U.S. and Japanese 
development assistance philosophy as more similar to each 
other than they are to EU ideas.  He noted Japan and the U.S. 
had agreed during the Bush Administration to give more aid to 
Africa.  Pursuing that work, he continued, is becoming even 
more important, given China's increasing involvement on the 
continent. 
 
APEC 
---- 
¶9. (C) Otabe agreed the back-to-back 2010 and 2011 Japanese 
and U.S. APEC chairmanships present great opportunities for 
progress in the forum and in further integrating the region, 
and he highlighted steps he would like to see.  On security, 
Otabe said the key question is how to use the ASEAN Regional 
Forum better so that it is not seen as merely a talkshop.  On 
economics, he noted the deep involvement President Clinton 
had in the start of the APEC leaders' meeting and thought 
Secretary Clinton also would be keenly interested. 
Revitalizing the institution and fostering regional 
liberalization, however, would depend on both countries' 
efforts.  As he said, "APEC doesn't make much sense without 
an active U.S. presence." 
 
Other Attendees 
--------------- 
¶10. (SBU) MOFA Economic Affairs Deputy Director General 
Masato Takaoka, Economic Partnership Division Director 
Shinichi Hosono, and Second North America Division Director 
Noriyuki Shikata accompanied DFM Otabe. 
ZUMWALT