VZCZCXYZ0001
PP RUEHWEB

DE RUEHKO #1205/01 1480930
ZNR UUUUU ZZH
P 280930Z MAY 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3297
INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 9516
RUEHBY/AMEMBASSY CANBERRA PRIORITY 3192
RUEHOT/AMEMBASSY OTTAWA PRIORITY 9820
RUEHUL/AMEMBASSY SEOUL PRIORITY 5537
RUEHGP/AMEMBASSY SINGAPORE PRIORITY 7399
RUEHHK/AMCONSUL HONG KONG PRIORITY 6781
RUEHIN/AIT TAIPEI PRIORITY 7350
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS TOKYO 001205 
 
SENSITIVE 
SIPDIS 
 
USDA/FAS PASS MITCHNER, BERMAN, HALE, WETZEL 
STATE PASS USTR FOR MURPHY, OCONNOR, DOHERTY, CUTLER, AND 
BEEMAN 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD PREL JA
SUBJECT: IS JAPAN READY TO DISCUSS RESTRICTIONS ON U.S. 
BEEF? 
 
REF: 08 STATE 689912 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET DISTRIBUTION. 
 
¶1.  (SBU) Summary:  Recent media reports suggesting Japan is 
willing to consider easing its requirements on testing of 
cattle for Bovine Spongiform Encephalopathy (BSE) have raised 
speculation the GOJ might be prepared to engage the USG to 
lift remaining barriers to U.S. beef.  Current BSE-related 
restrictions severely limit the quantity of U.S. beef 
eligible for export to Japan, which until 2004, reached as 
much as $1.4 billion annually; U.S. industry estimates it now 
loses two to three million dollars a day in foregone sales. 
Key Japanese regulators have suggested willingness to raise 
the age restrictions imposed on U.S. beef and to scale back 
burdensome enforcement measures and documentation 
requirements.  A recent decision by the World Animal Health 
Organization (OIE) to reclassify Japan as "controlled risk" 
country for BSE potentially provides useful cover for Japan 
to enter into new negotiations with the U.S.  Persistent 
political concerns within the GOJ, consumers' food safety 
worries, and a problematic Japanese bureaucratic, procedural, 
and legal landscape will complicate any progress.  End 
Summary. 
 
Japan Ready to Engage? 
---------------------- 
 
¶2.  (SBU) Japan agreed in 2007 to permit imports of U.S. beef 
from cattle up to 20 months of age, but under strict 
conditions that severely curtail what U.S. beef qualifies for 
export to Japan.  Having put the overly stringent 
restrictions in place, Japanese bureaucrats and their 
political masters have been loath to remove them for fear of 
possible recriminations if beef from a BSE-infected cow was 
later found to have been imported.  The concern in the 
Ministry of Agriculture, Forestry, and Fisheries (MAFF), and 
reportedly in the Ministry of Health, Labor, and Welfare 
(MHLW) -- a ministry burned by other food scandals on top of 
its disastrous loss of 30 million pension records -- is risk 
avoidance rather than risk management.  Since 2007, Japan has 
offered repeatedly to raise its restrictions to permit U.S. 
beef from cattle up to 30 months of age, but at the same time 
has insisted a separate negotiation, starting at some future 
point, would be required to move Japan to full compliance 
with OIE guidelines.  Key Agriculture and Health Ministry 
officials reiterated recently that Japan's offer of trade 
based on beef from animals aged 30 months or under is still 
on the table. 
 
¶3.  (SBU) Following the OIE's decision this month to 
reclassify Japan as a "controlled risk" country for BSE -- 
which the GOJ hopes will improve opportunities for Japanese 
beef exports -- press reports indicated MHLW is prepared to 
ease restrictions on testing of Japanese cattle for BSE. 
Indeed, the OIE decision likely gives MHLW adequate cover to 
review domestic screening rules.  There is also growing 
support among Japan's beef industry and some regulators to 
loosen excessive national and local requirements that 
currently call for 100-percent testing of all slaughtered 
domestic cattle.  One leading newspaper speculates a revision 
of Japan's BSE testing procedures could encourage the U.S. to 
push Japan to ease further these requirements, raising the 
possibility that the GOJ might even lift import restrictions 
altogether to comply fully with OIE guidelines.  Citing 
"deep-rooted" public concerns about food safety, the article 
goes on to suggest the GOJ will likely ease restrictions in a 
"cautious manner." 
 
Food Safety Commission Must Weigh In 
------------------------------------ 
 
¶4.  (SBU) Japanese officials are familiar with the 
longstanding USG position that Japan should re-open its 
market to U.S. beef and beef products without any 
restrictions on age or type, i.e., "all ages, all cuts by a 
date certain" (ref).  Although MHLW officials concede 
privately that OIE guidelines may provide appropriate risk 
 
management tools, they insist it is "impossible" to commit to 
a firm time line for Japan to achieve full OIE consistency 
until the Food Safety Commission has completed its scientific 
review.  They contend that doing otherwise would appear as 
pre-judging the Commission's conclusions.  MAFF officials, by 
comparison, seem more open to eventually applying OIE 
guidelines, although they have indicated implementation would 
have to proceed carefully. 
 
¶5.  (SBU) Ongoing exchanges with MAFF, including members of 
the GOJ's OIE delegation who drafted Japan's "controlled 
risk" application, reflect a potential change in position 
similar to MHLW's that could facilitate re-engagement on U.S. 
beef.  They have expressed appreciation for further 
implementation of BSE-related cattle feed rules in the U.S., 
as confirmed in a recent exchange of letters between 
Secretary Vilsack and MAFF Minister Ishiba.  MAFF officials 
have told us they view the OIE decision as a needed 
third-party validation of its BSE-control measures and as an 
essential initial step toward increasing market access for 
exports of Japanese specialty Wagyu beef. 
 
Korea Deal Not a Way Forward 
---------------------------- 
 
¶6.  (SBU) Agriculture and Health Ministry officials have 
stated the two agreements to re-open Korea's market to U.S. 
beef are neither "useful" nor "relevant" to Japan's 
situation.  One MAFF official asserted the commercial 
agreement under which U.S. beef is traded with Korea is not 
OIE-consistent and lacks a date certain by which Korea would 
achieve full OIE compliance. 
 
Obstacles Remain 
---------------- 
 
¶7.  (SBU) Beyond the age-related restrictions Japan imposes 
on U.S. beef, MHLW may find it difficult to revise its 
OIE-inconsistent list of "specified risk materials" (SRMs) 
that must be removed from slaughtered animals since this list 
is based in law rather than regulation.  Changing MHLW's 
heavy-handed procedures for managing import violations could 
prove more straightforward since these require only 
administrative adjustments.  (Note:  Currently, MHLW responds 
to SRM violations either by suspending the meat processing 
plant in question or by stopping all U.S. beef trade, as 
happened in 2006.  End note.)  Other issues that need to be 
addressed include Japan's disproportionate enforcement of 
violations of minor import rules for beef such as improper 
labeling, as well as BSE-based prohibitions on imports of 
beef offal (a popular dish in beef bowl restaurants), U.S. 
lamb, bison, veal, and medical-use gelatin. 
 
Background 
---------- 
 
¶8.  (SBU) BSE Testing:  At the root of the problems with beef 
in Japan is a fundamental policy difference on the 
appropriate use of BSE diagnostic tests and public health, 
risk communication, and marketing.  The problem is connected 
with the move by the bureaucrats and politicians to prevent 
all risk of BSE rather than to manage risk.  After the 2003 
discovery of BSE in the U.S., Japan insisted the U.S. test 
all cattle whose beef was destined for Japan.  Currently, all 
cattle slaughtered in Japan are tested for BSE, although 
national guidelines only call for 100-percent testing of 
animals over 20 months.  Japan's extensive use of diagnostic 
testing is done primarily to address consumer concerns.  For 
U.S. beef, Japan considers 100-percent testing to be a 
question of equivalency with the domestic system.  The 
current Beef Export Verification (BEV) agreement was 
negotiated primarily to bridge differences between the 
appropriate role of BSE testing.  The GOJ's focus on ending 
domestic testing of its own young cattle should be viewed as 
a positive and realistic sign that it is willing to change 
its approach. 
 
¶9.  (SBU) Current Japan Beef Agreement:  The U.S. currently 
 
exports beef to Japan under the BEV program, which is 
administered by USDA's Agricultural Marketing Service.  The 
program certifies all beef shipments are from cattle under 21 
months old and that shipments are only comprised of closely 
monitored lists of eligible products.  Under the BEV program, 
the U.S. agreed to further expand its definition of SRMs to 
include for cattle of all ages the entire head except tongues 
and cheek meat, tonsils, spinal cords, distal ileum, and part 
of the vertebral column.  This approach is broader than the 
current OIE or domestic U.S. SRM definitions, both of which 
apply mainly to cattle over 30 months of age.  The BEV 
program was intended to be an interim agreement and its 
implementation was initially plagued by burdensome custom 
clearance procedures and, later, with frequent "delisting" of 
U.S. beef plants for technical violations of the BEV.  Even 
minor packaging and labeling-related violations result in 
delisting of a slaughter plant under the current terms of 
trade.  Currently, two U.S. plants are under suspension. 
 
¶10.  (SBU) Demand for U.S. Beef Outstrips Supply:  Japanese 
consumers' acceptance of U.S. beef has rebounded since 2004, 
due in part to a multi-million dollar investment in marketing 
programs run by the U.S. Meat Export Federation funded by 
USDA's MAP program and check-off funds from the U.S. cattle 
industry.  U.S. beef is now available in over 11,000 
locations in Japan and in 2008 U.S. beef sales to Japan 
increased 57 percent to $382 million.  This figure is roughly 
11 percent of the total value of U.S. beef exported to the 
world, but an amount that still falls far short of historic 
trade levels with Japan.  U.S. beef exports for the first 
quarter of 2009 are up 26 percent and it is clear that 
Japanese demand for U.S. beef, even in time of recession, 
significantly outstrips the available supply of animals under 
21 months of age. 
ZUMWALT