U.S.-JAPAN INFORMAL POLICY PLANNING BILATERAL:

S E C R E T SECTION 01 OF 07 TOKYO 001349

SIPDIS

STATE ALSO FOR INR

E.O. 12958: DECL: END OF U.S.-JAPAN ALLIANCE
TAGS: ECIN PREL PARM PINR KDEM CH TW KN JA ASEAN
SUBJECT: U.S.-JAPAN INFORMAL POLICY PLANNING BILATERAL:
PART I PM SESSION, MARCH 2, 2005


Classified By: Political Section Deputy Carol Reynolds. Reasons:1.4(b/
d).


1. (C) Summary: During informal policy planning talks with
Ministry of Foreign Affairs Deputy Vice Minister Tsuneo
Nishida on March 2, Director of Policy Planning Stephen D.
Krasner discussed East Asian architecture, China, North Korea
and the President's democratization agenda. Nishida said
Japan was closely focused on the Asia-Pacific theater, but
shared the fundamental recognition that in today's world, it
was impossible to separate the region from the challenges of
the global community. He outlined the various challenges
facing the U.S.-Japan alliance, including the Korean
Peninsula, expanding weapons stockpiles in the region, and
the Taiwan Strait. Nishida viewed ARF as an important
regional institution, and the East Asian community as a
natural, legitimate trend among Asian countries to create a
regional institution. China is a rising power, he said, and
the GOJ is still evaluating the orientation of the Hu-Wen
regime. Despite rapidly growing bilateral economic ties,
Japan is experiencing daily problems with China and
uncertainty over its military buildup.


2. (S) Summary, cont. Turning to North Korea, Krasner noted
that China's role appeared central to the problem. Nishida
agreed and said the USG and GOJ must think carefully about
what real leverage China had to help resolve the nuclear
issue effectively. Domestic political pressure on Japan from
the abductions issue was significant, and Nishida was unsure
how long the GOJ could resist such pressure before having to
apply unilateral measures such as legal sanctions. Nishida
said Japan is hoping for successful resolution in the context
of the Six-Party Talks, but might be forced to go to the UNSC
with or without the United States if the Six-Party Talks
remain a "hollow circus." Many label the UNSC route a
"non-starter" because China would oppose it, but if China
cannot deliver on the talks, the UNSC might become a viable
option, Tsuruoka argued. For this reason, things needed to
start moving in the context of the talks. Nishida suggested
that Secretary Rice's upcoming trip to Asia might be an
opportune time to discuss the issue. Krasner briefed his
counterparts on the general goals of the U.S. democratization
initiative and on the challenges of implementation, and
invited Nishida to discuss ways to coordinate bilaterally.
Nishida offered Indonesia and India as two possible targets
for joint democratization efforts because Indonesia is a big,
complex, strategically important country and, he argued,
India's role in Asia will likely grow as China rises. End
Summary.


3. (C) Deputy Vice Minister Nishida kicked off the informal
policy planning talks with S/P Director Stephen D. Krasner on
March 2 by praising the value of such meetings in promoting a
concrete political agenda and in creating new frontiers for
expanded U.S. and Japanese cooperation to achieve common
objectives. He highlighted the challenge of not only setting
policies that respond quickly and effectively to immediate
developments, but that meet a long-term, broader objective as
well. S/P Krasner agreed, stating that he was committed to
continuing the close relationship and appreciated the chance
to speak candidly on a broad range of issues. Nishida
observed that this was the first session of bilateral policy
planning talks held since S/P Director Krasner was appointed,
the first since President Bush was re-elected, and the first
since the Two-Plus-Two talks in Washington on February 19.
The GOJ considered the Two-Plus-Two meeting to have been a
great success, and Foreign Minister Machimura was personally
very happy with the outcome. Nishida said it was important
for the U.S. and Japan to work together to maintain this
momentum.

East Asian Architecture
--------------


4. (C) Outlining Tokyo's view of the international strategic
environment, Nishida said Japan was closely focused on the
Asia-Pacific theater, but shared the fundamental recognition
that in today's world, it was impossible to separate the
region from the rest of the global community. The USG and
GOJ share common strategic objectives, as clearly
demonstrated by the four Ministers' recent meeting in
Washington. Speaking frankly, he shared the view that future
uncertainties demanded increased diplomatic efforts by Tokyo
and Washington to ensure that the region and the world
developed in a way that was in our best interests.


5. (C) The United States and Japan face both new and
traditional challenges in East Asia, according to Nishida.
The first challenge was the existence of a peninsula that
remained divided in two. He noted that it is legitimate for
Korean leaders to expect the present situation to be resolved
peacefully in the long-term with the assistance of good
neighbors. In the medium- to long-term, the future of a
unified Korean Peninsula must be a major agenda item. The
United States and Japan have an interest in ensuring that
reunification occurs in a peaceful, constructive and open way
that, hopefully, results in the establishment of a joint ally.


6. (C) Nishida highlighted his concern about weapons
stockpiles in the region, noting the proliferation of
conventional arms across the region. China is rich enough to
buy a lot of arms. ASEAN also is wealthy and some ASEAN
countries are expanding procurements. The region also
boasted one of the biggest weapons suppliers -- Russia. This
problem had to be addressed in order to improve the level of
security in the region.


7. (C) Asia, Nishida pointed out, is not Europe. European
countries have come a long way since World War II to unite
under one roof. Ukraine was just one fairly recent example
of success in Europe, and some people speculate that Ukraine
may eventually join the EU or even NATO. NATO itself is
moving forward and developing in a positive way to deal with
future challenges. Asia, in contrast, does not have an
equivalent of the EU or NATO. The U.S-Japan security
alliance served a similar purpose, but its structure is
obviously different and it is a bilateral arrangement. The
GOJ has spent significant time and energy on ARF, but has
been disappointed with its progress. Nonetheless, Tokyo
believes that ARF is an important regional institution that
can take steady, albeit small and slow steps toward
establishing a forum to discuss regional security issues.


8. (C) In addition to ARF, there is now the well known, some
may say "notorious," proposal to create an East Asian
community, Nishida continued. The GOJ considers this a
natural and legitimate trend among Asian countries to create
an intra-Asian regional institution to discuss a variety of
issues. Nishida noted that similar intra-regional groups
have already formed in Africa, Latin America and Central
America. He appreciated USG interest in hearing about
developments in this area, adding that he could assure
Washington that this is very much an "Asian" process, i.e.,
there will be steady progress, but it will be slow moving.
We will have time to work out such matters as the nature of
the group, the framework for the summit, and the topics
addressed. Nishida suggested that the GOJ and USG should try
to map out what the best institution might be for both our
interests.

China
--------------


9. (C) The Taiwan Strait was another "challenge" -- although
not a "problem," Nishida stressed. He shared the U.S. view
on the difficulty of the task at hand. The issue was that
the situation requires a peaceful resolution by two parties
(or, Nishida said, "one country, one entity") first. We must
work to ensure that international laws were respected and
observed throughout the process of resolving differences
between the two sides. He noted the emergence of China as a
power in the region and clarified that Japan does not
consider China a threat. As Prime Minister Koizumi has
stated, China presents both opportunities and challenges. On
the positive side, almost 3 million Japanese citizens visited
China in 2002, with half a million Chinese coming to Japan.
This was a huge number, and was increasing every day. The
GOJ welcomed this rising volume of people-to-people contact.
Moreover, Japan's leading trade partner was now China. For
China, its top trade partners were first the EU, then the
United States, and third was Japan. This demonstrated that
China's economy was growing up and a win-win situation was
being created. This growing market presented opportunities,
not just for Chinese citizens, but for Americans, Japanese,
and Russians as well.


10. (C) At the same time, Nishida continued, the GOJ
experiences problems with China almost everyday. First, the
PRC has shown it is not yet prepared to observe laws or
regulations, not only in the trade and economic field, but in
political and military affairs as well. We should take this
very seriously. Second, Chinese society was facing huge
dilemmas. It was still a Communist country, with a virtual
one-party system, and the GOJ sees no sign of a change in the
regime or system itself. So long as the economy continued to
boom, the regime was safe, but once (like any other big
economy) this growth flattened, it was unclear whether the
society or the regime would be prepared to respond to more
fundamental social and political challenges.


11. (C) The GOJ is still in the process of evaluating the
Hu-Wen regime, Nishida said, and has not yet made a
determination on whether it will be powerful and good, or a
transitional rule marked by compromise. One big uncertainty
was the issue of control over the military. During meetings
with Chinese officials, the GOJ always stresses the
importance of transparency, especially in the area of
military budget. Nishida shared a chart of Japan's and
China's defense budgets and their ratio to GDP, highlighting
the upward trend in Beijing's figures over the last ten
years. He added that the "well-known secret" was that of
course these numbers do not include procurement, so the
official numbers do not capture the full picture. DVM
Nishida proposed some form of U.S.-Japan dialogue on the
Chinese defense budget, i.e., among analysts who could
compare notes on the real status of China's military budget.
It was also important, he argued, for us to strengthen our
efforts to urge the EU not lift its arms embargo on China.
Nishida had seen on the international news that the U.S.
Congress had "raised its powerful voice" on this issue, but
we needed more coordinated action vis-a-vis Europe. The USG
and GOJ have a common interest at stake, and we should not
miss this opportunity to discuss these strategic issues with
Europe. Feigenbaum noted that MOFA's chart on defense
spending appeared to capture the basic trends seen in
Washington.

North Korea
--------------


12. (S) Both Krasner and Nishida agreed on the importance of
looking at the Korean Peninsula from a long-term perspective.
It was clear, Krasner added, that the situation would not
mirror the German experience because of such things as the
large disparities in income between the two Koreas. While it
may be useful to start to think about the long-term future of
the Peninsula, e.g. after reunification, it was a sensitive
topic and would need to be handled delicately, and not in any
open or formal way. He also wondered how receptive either
South Korea or China would be to talking about the very long
term.


13. (S) Nishida responded that in comparison to the U.S.
experience, Japan's engagement on the Korean Peninsula had,
for good or bad, a long history. For Japan, it was unable to
talk about the future of Korea without talking about the
past. As a result, this was a very difficult issue, and a
domestic political issue as well. He urged Krasner to pay
proportionate attention to Japan's point of view when mapping
out U.S. policy. To illustrate, Nishida stated that even
when discussing abduction issues, counterparts in South Korea
say they are fully sympathetic toward Tokyo's position. At
the same time, they add that the ROKG also must think about
what the Japanese did in the past. So even South Korea
raises these "delicate" issues of the past.


14. (S) DDG Tsuruoka noted that the USG and GOJ have not yet
officially discussed long-term reunification, but he argued
that addressing the issue now could be a way of changing
South Korean attitudes toward the United States. He cited a
recent ROK public opinion poll which showed a large
percentage of South Korean citizens now believe that the
United States is to blame for the division of the peninsula.
Twenty years ago, ROK citizens recognized that Communist
aggression was actually to blame. This change was almost
entirely the result of DPRK propaganda. Tsuruoka suggested
that avoiding the issue of reunification had, in effect,
given the North the opportunity to continue to blame
Washington for the division of Korea. While Japan was the
most hated country in Korea, the United States was second.
This was a dangerous trend, and the USG and GOJ should work
to correct this misperception, although, he acknowledged, it
might not be appropriate to raise the topic in the public
domain.


15. (S) Feigenbaum noted that there was a clear distinction
made in the ROK between "reconciliation" and "reunification."
While the latter was a long-term aspiration of all Koreans,
the ROKG is focused on its project of "reconciliation" with
the DPRK. It was important to convey to the ROK public that
the DPRK was, in many ways, the obstacle to reconciliation.


16. (S) Director Mizutori pointed out that the peaceful
reunification of the Korean Peninsula was clearly listed as a
common strategic objective in the most recent Two-Plus-Two
statement. Surprisingly, she said, she had not yet heard
either through private or public channels any complaints or
concerns about this reference. While she agreed with the
basic U.S. analysis of the dangers of discussion, she thought
that in principle it was important to show that we did in
fact support the reconciliation process.


17. (C) Krasner noted that China's role appeared central to
the DPRK problem, and wondered how much pressure Beijing had
been applying on the North. Nishida agreed that China was a
central player, saying the PRC may need something from
Washington or Tokyo -- which could not be viewed as a reward
or a gift -- to gain Pyongyang's cooperation. China does not
want to be seen as taking direction from other countries;
nonetheless, the United States needs to send a stronger
message to China, Tsuruoka insisted. Tsuruoka reminded the
group that North Korea is no longer party to the
Non-Proliferation Treaty and has kicked out IAEA inspectors.
The longer North Korea postpones talks, the more time they
have to do what they want, he warned.


18. (C) Nishida said the USG and GOJ must think carefully
about what real leverage each had to resolve the issue
properly. From Japan's perspective, the domestic political
pressure from the abductions issue was significant, and
Nishida was unsure how long the GOJ could resist such
pressure before having to apply unilateral measures,
particularly in the next year. Tsuruoka sensed growing
Japanese doubt over the efficacy of diplomacy, and worried
that the public would soon begin to question the value of the
U.S.-Japan alliance. He stressed the need to reconvene the
Six-Party Talks in order to prove to the Japanese public that
diplomacy still works. China has a different strategic view.
Instead of pressuring North Korea, China demands that the
United States make concessions. Tsuruoka exhorted the United
States to convince China to move by using a stronger message.
Nishida suggested that Secretary Rice's upcoming trip to
Asia might be an opportune time to discuss the issue and
encouraged the United States and Japan to commit more time
and energy to solving the DPRK problem.


19. (C) Krasner asked whether a failure to resolve the issue
diplomatically would lead the Japanese to pursue an
independent nuclear path. Nishida assured him that the
Japanese government would not go that far. He admitted,
however, that public pressure might force the government to
take unilateral measures, like sanctions. Tsuruoka explained
that the government knows that sanctions applied by one
country would be ineffective but said that at times
governments sometimes have to behave irrationally in order to
pacify their people politically. Nishida said that while PM
Koizumi is trying to downplay the possibility of sanctions,
other politicians are taking a very hard line. The Japanese
government is caught in between the two groups of politicians
and, he predicted, this "delicately constructed package"
would become untenable if progress is not made soon.


20. (C) The North Korea crisis has exposed the Japanese
public for the first time to a real, direct threat, Nishida
said. To that end, Japan has tried to strengthen its ability
to be a global player and a better ally to the United States.
For example, the public accepted the SDF dispatch to Iraq,
in part, because of the threat on the Korean Peninsula.
Yamada agreed that the Japanese government has used the North
Korean situation to facilitate the dispatch of the SDF to
Iraq. In order to maintain the U.S.-Japan alliance in a
global context, we need to solve the North Korea problem,
Yamada concluded. (COMMENT: Asked subsequently by Embassy
Tokyo to comment on these statements by DVM Nishida and his
deputies, Northeast Asia Division Principal Deputy Taisuke
Mibae said he sees no direct linkage between the Six-Party
diplomatic process and regard for the U.S.-Japan Alliance
among officials of the Japanese government, or the
public-at-large, and has not heard anyone else in the
Gaimusho expressing that point of view. As to whether Japan
may impose unilateral economic sanctions on the DPRK, Mibae
pointed out that public pressure for sanctions was firmly
linked to the abduction issue, not lack of progress in the
Six-Party Talks as Nishida and his colleagues agreed. He
said even a total collapse of the talks would not necessarily
increase the public call for sanctions. Furthermore, he
said, his division believes the public call for sanctions
issue is now waning, in large part because the public views
the newly enacted oil pollution law as a de facto sanction,
despite the fact the law was not created for that purpose.
END COMMENT.)


21. (C) DDG Tsuruoka noted that Foreign Minister Machimura
had told Secretary Rice that we should always keep open the
option of bringing the DPRK nuclear issue to the UNSC if the
Six-Party Talks fail. The initial purpose of the Six-Party
process was to secure results on the nuclear issue, but this,
unfortunately, has not been accomplished. The actual result
has been to demonstrate to the world how odd and strange the
DPRK really is. Libya is now behaving well and Syria is on
the verge of improving its behavior, while the DPRK still
tops the IAEA's agenda. Regarding the possibility of taking
the issue to the UNSC, Tsuruoka suggested that Japan would
not necessarily insist on immediate sanctions but might seek
a milder statement. Many label the UNSC route a
"non-starter" because China and Russia would oppose it, but
if China cannot deliver on the Six-Party Talks, the UNSC
might become a viable option, he argued.


22. (C) Nishida agreed that since Japan is now a
non-permanent member of the UNSC, the next step would be to
take the issue there. He said that Japan is a strong
advocate of UNSC reform and is in the midst of Constitutional
revision. For 60 years, both the UNSC and Japan's
Constitution have been left untouched, but times are changing
Nishida said, and Japan should not avoid friction with China.
Japan will be forced to go to the UNSC with or without the
United States if the Six-Party Talks remain a "hollow
circus." Despite China's veto power, Japan can now raise the
issue at anytime and if China repeatedly resists discussing
the issue internationally, China will lose face, which would
have serious consequences in Asia, where "face" is important.
He suggested that a next step might be to go to Beijing
together or individually to deliver a common message: "we
need action, we need results." When asked about the timing
of such a move, Nishida suggested a month from now.


23. (C) Mizutori shared that all six members of the process
had attended an ARF meeting a few weeks ago. South Korea,
Japan and the United States demanded that North Korea return
to the table, while China, Russia and North Korea asserted
that all parties should show flexibility. This rhetoric was
surprising, she said, since North Korea had just announced it
had nuclear weapons. Nevertheless, Mizutori thought it
succeeded in proving to other Asian countries that North
Korea was irrational and that China and Russia were
irresponsible.

Democratization
--------------


24. (C) Krasner briefed his counterparts on the general goals
of the President's democratization initiative and on the
challenges of implementation. The President and Secretary
Rice had an ambitious agenda and Krasner would be busy
identifying ways to use existing tools more effectively and
developing new tools. The United States is considering ways
to better deal with nations that are outside the pattern of
globalization and not integrated into the global system.
Much of Africa, for instance, has lower per capita income and
shorter life expectancy than in 1980. He emphasized the
importance of international coordination and invited Nishida
to share his views on the endeavor and ways to coordinate
bilaterally.


25. (C) Democratization has always been an important pillar
of U.S. diplomacy, Nishida said, and Japan, too, believes in
common values and objectives. He thought democratization was
enjoying real success and said there is a shared sentiment in
capitals like Tokyo and Paris that a prudent approach, i.e.,
one that is slow, steady, and takes account of local factors,
is best. In response to a question about what form of
U.S.-Japan coordination would be good for the Asian region,
Nishida said he would support almost any joint initiative as
long as it was feasible and results-oriented. He admitted
that MOFA's resources were constrained and moaned that every
day is a budgetary battle.


26. (C) Krasner asked about specific countries that might
make good targets for joint U.S.-Japan democratization of
good governance promotion in the Pacific region. Nishida
replied that Indonesia and India might be good candidates.
Indonesia is a big, complex, strategically important country
and India's role in Asia will likely grow as China rises.
Although it works well with other Asian countries, India
needs to be more integrated in regional efforts. Nishida was
unsure whether India was ready to work with Japan and United
States and pointed to India's refusal to accept assistance in
the aftermath of the tsunami. He said it showed that India
is a country of proud people which has substantial resources.
He warned that India could become over-confident and refuse
to work with other countries. Indonesia is moving forward,
too, and will host the Bandung Conference in April, which
Japan will enthusiastically attend. Shear noted that the
1955 Bandung conference came to represent the solidarity of
the anti-colonialists, the emergence of China, and the birth
of the non-aligned movement. He wondered why a revised
Bandung was the optimal vehicle for Japan. Nishida agreed
with the analysis of 1955 but said the upcoming conference
will symbolize the emergence of the Least Developed Countries
and of Southeast Asia, a project Japan wanted to be part of.
(COMMENT: At a dinner discussion on UNSC reform, reported
septel, it emerged that Japan's enthusiasm for Bandung is
explicitly part of its effort to lobby for a two-thirds vote
of the General Assembly for its UNSC candidacy. END
COMMENT.)


27. (C) Tsuruoka predicted that the Bandung conference
attendees would use it to mark their shared values and that
successful Asian countries could contribute to African
development. Indonesia was successful because consistent
support for the regime in power gave it enough time to
develop a viable economy. Now Asia is trying to translate
its experience to Africa. Tsuruoka warned that we should not
try to impose our ideas of democracy on Africa because that
would give Africa an excuse not to democratize. He said
there are many things that we can do together and offered
Japan's three principles in building strong democracies:
partnership, ownership and consent by the recipient. Krasner
agreed that the key to democratization is to create a set of
incentives that guides political leaders to make the right
decisions.


28. (SBU) Participants:

U.S.
--------------

Director of Policy Planning Stephen D. Krasner
S/P Member Evan Feigenbaum
POLMIN David Shear
POL Steve Hill
POL Tandy Matsuda (notetaker)
ECON Christina Collins (notetaker)

Japan
--------------
Deputy Vice Minister for Foreign Policy Tsuneo Nishida
Deputy Director General Koji Tsuruoka
Policy Coordination Division Director Kazuhide Ishikawa
Policy Planning Division Director Hiroshi Kawamura
National Security Policy Division Director Mami Mizutori
UN Policy Division Director Kazutoshi Aikawa


29. (U) S/P Krasner has cleared this cable.
MICHALAK