CORRECTED COPY: JAPAN-KOREA-CHINA TALKS ON LATIN

C O N F I D E N T I A L TOKYO 002440 SIPDIS SIPDIS E.O. 12958: DECL: 05/01/2011 TAGS: PREL EIND ETRD XR XK LA KS CH JA SUBJECT: CORRECTED COPY: JAPAN-KOREA-CHINA TALKS ON LATIN AMERICA: JAPANESE READOUT Classified By: Pol MinCouns Mike Meserve for Reasons 1.4 b/d ¶1. (C) Summary. In strategic bilateral talks on April 26 with China on Latin American and Caribbean Affairs, followed by China-Japan-Korea Consultations on the same subject: -- China stated its desire to double trade with the region by 2010; -- China described its policy as based on three pillars: 1) advancing mutual political understanding; 2) seeking win-win commercial relationships; and 3) promoting cultural/educational exchanges; -- Japan, China and South Korea explored ways to collaborate on spreading East Asian influence and enhancing business opportunities for East Asian companies in Latin America; and -- Japan, China and South Korea agreed to hold similar consultations in 2007. End summary. ¶2. (C) Japanese Director General for Latin America and Caribbean Affairs Mitsuo Sakaba met with his Chinese counterpart, Director General for Latin American and Caribbean Affairs Gang Zeng, on April 26 to discuss topics of strategic common interest for the two countries in Latin America. It was the second such bilateral on Latin America. Later the same day the two were joined by their South Korean counterpart Han Byung-ki for the first-ever China-Japan-Korea Consultations on Latin American and Caribbean Affairs. On April 28, the bureau's Tasushi Ryosenan provided a readout of the meetings, prefacing his remarks with the comment "There was not so much new, but the talks were interesting." China began the bilateral talks by noting that commercial exchanges have been growing by 40-50 percent annually for the past four years, and said China hopes to double trade with Latin America by 2010 from the current $50 billion per year, or currently 4.2 percent of China's overall foreign trade, according to Zeng. ¶3. (C) DG Zeng described China's three pillars in Latin America policy as: 1) advancing mutual political understanding; 2) seeking win-win commercial relationships; and 3) promoting cultural/educational exchanges according to Sakaba. Zeng told Sakaba that China has signed nine investment agreements in the region, six bilateral commercial agreements, and been designated a market economy country by 15 countries. Despite recent growth, China still faces problems of distance, language, labor issues, and a trade cycle it deems as too long, according to Zeng. Additionally, since China's emerging economy often produces products that compete with exports from Latin America, trade friction in some sectors remains, and some countries have created anti-dumping laws aimed at China. Acknowledging Japan's deeper historical ties with the region, Zeng asked for Japanese collaboration on opening Latin American markets to East Asia. ¶4. (C) China is sending 125 peacekeepers to Haiti -- a first for China in Latin America -- despite Haiti's recognition of Taiwan, Zeng told Sakaba. China is doing so out of a feeling of responsibility as a permanent member of the UN Security Council. (Zeng also commented briefly on China's PKO involvement in Sudan, Iraq and East Timor.) ¶5. (C) China's relationship with Venezuela has been upgraded to a strategic partnership following the May 2001 visit of President Chavez to Beijing, Zeng noted. Since that time there have been many high-level exchanges. While China buys Venezuelan oil, it is a very heavy oil that requires high-tech refining in China to be marketable. Zeng explained that China takes U.S.-Venezuela frictions into consideration, but the U.S. relationship with Venezuela is not a decisive factor in policy making. ¶6. (C) During the trilateral talks, Sakaba, Zeng and Han discussed possible areas of trilateral cooperation to spread East Asian influence in Latin America and to improve business conditions there. Possible avenues of greater collaboration discussed included Asian cultural events, trade fairs, symposiums and the Forum for East Asia Latin America Cooperation (FEALAC). Zeng asked for Japan's support in obtaining membership in the Inter- American Development Bank, which Sakaba promised. Zeng also explained that China's policy on military cooperation in the region was based on non-intervention, i.e., China does not export offensive weapons, only medical equipment or materiel. ¶7. (C) Ryosenan reported the three countries agreed the talks were beneficial, and agreed to hold another round in 2007, most likely in South Korea. DONOVAN