Identifier
Created
Classification
Origin
06TOKYO1084
2006-03-01 06:02:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tokyo
Cable title:  

Japan Sees U.S.-Korea FTA As Positive

Tags:  ETRD ECON PREL JA KS CH 
pdf how-to read a cable
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FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 9186
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RUEHBK/AMEMBASSY BANGKOK 3459
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RUEHKL/AMEMBASSY KUALA LUMPUR 1627
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RUEHJA/AMEMBASSY JAKARTA 4059
RUCPDOC/USDOC WASHDC
UNCLAS TOKYO 001084 

SIPDIS

SENSITIVE
SIPDIS

DEPT PASS USTR FOR AUSTRS CUTLER AND STRATFORD

USDOC FOR ITA-DAS LEVINE AND OFFICE OF JAPAN/NMELCHER

E.O. 12958: N/A
TAGS: ETRD ECON PREL JA KS CH
SUBJECT: Japan Sees U.S.-Korea FTA As Positive
Influence on Regional Trade Talks

REF: Tokyo 1010

UNCLAS TOKYO 001084

SIPDIS

SENSITIVE
SIPDIS

DEPT PASS USTR FOR AUSTRS CUTLER AND STRATFORD

USDOC FOR ITA-DAS LEVINE AND OFFICE OF JAPAN/NMELCHER

E.O. 12958: N/A
TAGS: ETRD ECON PREL JA KS CH
SUBJECT: Japan Sees U.S.-Korea FTA As Positive
Influence on Regional Trade Talks

REF: Tokyo 1010


1. (SBU) Summary: Although Japanese business circles
believe a U.S.-Korea free trade agreement (FTA) is
unlikely to produce much liberalization in sectors of
greatest interest to Japan, the Japanese government
sees the negotiations between Korea and the United
States as a possible catalyst for restarting Japan's
own moribund discussions with Seoul. According to a
senior official of Japan's Ministry of Economy, Trade,
and Industry (METI),a successful U.S.-Korea FTA could
serve as an alternate model to the less substantive
agreements China has promoted in the region. The
official suggested that an update on efforts by both
the United States and Japan to pursue FTAs be an agenda
item for the next U.S.-Japan sub-cabinet dialogue. End
summary.


2. (SBU) The Japanese Government has a strong
interest in the progress of U.S.-Korea FTA negotiations
(i.e. timeline, substance, etc.),METI Trade Policy
Bureau Director-General Toshiaki Kitamura told EMIN in
a meeting February 24. (Reftel reports Kitamura's read-
out of the visit to China by METI Minister Nikai.) In
contrast, however, the Japanese business sector has
shown little interest in the proposed U.S.-Korea FTA.
The main reason, Kitamura thought, was that Japan's
business leaders assume that even the US will not be
able to conclude the agreement easily because the
Koreans are very tough negotiators. The business
community doubts that the two sides will reach a
comprehensive free trade agreement that liberalizes
trade in key sectors of interest to Japanese companies
and underestimates the potential impact on key Japanese
industries like automobiles and machinery as well as on
investment. Kitamura himself, however, believed the
U.S.-Korea FTA would be comprehensive and have a strong
impact on Japanese industries.


3. (SBU) Kitamura said that an ambitious U.S.-Korea
FTA could stimulate Japan's own "economic partnership
agreement" (EPA) negotiations with Korea because both
sets of negotiations would be conducted along similar
timelines -- provided that Japan and Korea could resume
EPA negotiations shortly. Kitamura even suggested
that, if both the United States and Japan conclude FTAs
with Korea, the three nations ought to subsequently
consider a "triangular" FTA. According to Kitamura,
this arrangement could serve as a counterweight to
Chinese efforts to serve as the "hub" for a system of
bilateral FTAs in East Asia.


4. (SBU) Kitamura explained that FTA/EPA negotiations
between ASEAN-China, ASEAN-Korea and ASEAN-Japan should
be completed in 2007 if all goes smoothly. (In
particular, he said the ASEAN-Japan EPA negotiation
should be finalized by March 2007.) Kitamura expected
that China would endeavor to take the initiative to
promote its own standards for FTAs as a model for other
agreements in the region. In considering how Japan and
the United States could react to such a situation,
Kitamura indicated that the U.S.-Korea FTA could be a
foundation for the strategic counterbalance to China's
efforts.


5. (SBU) Kitamura stressed the importance of
strengthening bilateral transparency measures to share
information regarding FTA/EPA negotiations each side
has been conducting. He thought this would make an
excellent topic to discuss at the next U.S.-Japan sub-
cabinet meeting.

Schieffer