Identifier
Created
Classification
Origin
06TOKYO2879
2006-05-25 02:14:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tokyo
Cable title:  

JAPANESE BUSINESS WANTS STRONG US TIES; CONCERNED

Tags:  ECON ETRD PREL CH KS JA 
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VZCZCXRO6811
RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHPB
DE RUEHKO #2879/01 1450214
ZNR UUUUU ZZH
R 250214Z MAY 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 2487
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHFK/AMCONSUL FUKUOKA 6390
RUEHNAG/AMCONSUL NAGOYA 6339
RUEHNH/AMCONSUL NAHA 9015
RUEHOK/AMCONSUL OSAKA KOBE 9611
RUEHKSO/AMCONSUL SAPPORO 7550
UNCLAS SECTION 01 OF 02 TOKYO 002879 

SIPDIS

SENSITIVE
SIPDIS

DEPT PLEASE PASS USTR WENDY CUTLER
DEPT PLEASE PASS NSC CHRISTINA COLLINS

E.O. 12958: N/A
TAGS: ECON ETRD PREL CH KS JA
SUBJECT: JAPANESE BUSINESS WANTS STRONG US TIES; CONCERNED
ABOUT CHINA/KOREA


TOKYO 00002879 001.2 OF 002


UNCLAS SECTION 01 OF 02 TOKYO 002879

SIPDIS

SENSITIVE
SIPDIS

DEPT PLEASE PASS USTR WENDY CUTLER
DEPT PLEASE PASS NSC CHRISTINA COLLINS

E.O. 12958: N/A
TAGS: ECON ETRD PREL CH KS JA
SUBJECT: JAPANESE BUSINESS WANTS STRONG US TIES; CONCERNED
ABOUT CHINA/KOREA


TOKYO 00002879 001.2 OF 002



1. (SBU) Summary: Incoming Japan Business Federation
(Keidanren) Chairman Fujio Mitarai told the Ambassador May 23
that Japan's most important foreign relationship was with the
United States. He agreed with Ambassador Schieffer that it
was time to consider further integration of the U.S. and
Japanese economies. Outgoing Keidanren Chair Hiroshi Okuda
told the Ambassador that Japanese business worried over
Japan's deteriorating political relations with Korea and
China. He noted that he and Mitarai, after visiting the US
embassy would visit the Korean and Chinese Ambassadors and
ask them how the business community could improve relations.
Turning to domestic politics, Okuda said that the LDP
Presidential race was down to two candidates -- Abe and
Fukuda. Okuda thought that former Prime Minister Mori and
Prime Minister Koizumi would manage the situation so that
only Abe or Fukuda, would run virtually guaranteeing their
faction's selection in the first round. Okuda implied that
he supported Fukuda when he said that Abe needed to gain
experience by holding a minister portfolio in the next
government. End Summary.


2. (U) Incoming Japan Business Federation (Keidanren)
Chairman (and Canon CEO) Fujio Mitarai and outgoing Keidanren
Chairman (and Toyota CEO) Hiroshi Okuda called on Ambassador
Schieffer on May 23, one day prior to Mitarai's replacing
Okuda as the head of Japan's preeminent business
organization. Okuda noted that he had headed Keidanren for
four years and it was time for a new leader. Okuda also
noted he would step down as CEO of Toyota in June. Okuda
said that Mitarai, who had lived and worked for 23 years in
the United States, was a good friend of the U.S.
relationship. Mitarai noted that he had spent more of his
professional career in the United States than in any country
including Japan. He had learned how to do business in
America and had many American friends. He also looked
forward to developing new American friends in this new role.

Promoting US-Japan Economic Integration

--------------


3. (SBU) Ambassador Schieffer said that the stage was set
for the United States and Japan to further their economic
integration. As Japan's major business organization,
Keidanren could further this goal. Mitarai agreed noting
that relations with the United States were more important to
Japan than any other. He looked forward to participating in
the Business Roundtable and Japan-US Business Council.

Concerns over Japanese relations with China and Korea
-------------- --------------


4. (SBU) Okuda said Japanese companies were concerned over
Japan's deteriorating political relations with China and
Korea. He noted that he and Mitarai, after visiting the U.S.
embassy would call on the Korean and Chinese Ambassadors and
ask them how the business community could improve relations.
He complained that Prime Minister Koizumi "did not listen" to
business views on relations with Asian neighbors. Half
jokingly he said he hoped that President Bush would ask the
Prime Minister to improve Japan's relations with its
neighbors in North East Asia. Okuda said he was also worried
that Chinese President Hu Jintao's visit to the United States
had not gone well. Ambassador Schieffer said that despite a
few glitches, the two President's had engaged in a good
conversation on the issues. Ambassador Schieffer also said
President Bush was eager to welcome Prime Minister Koizumi to
Washington to thank him for his support and friendship over
the past five years.

Selecting a new LDP President
--------------


5. (SBU) Turning to domestic politics, Okuda said that the
LDP Presidential race was down to two candidates -- Chief
Cabinet Secretary Abe and former Chief Cabinet Secretary
Fukuda. Okuda thought that former Prime Minister Mori and
Prime Minister Koizumi would manage their factional politics
so that only one of them would run for LDP President. This
development virtually guaranteed the selection of a Mori
faction member in the first round. Okuda said that other
candidates -- including Foreign Minister Aso and Finance
Minister Tanigaki -- had virtually no chance of election.

TOKYO 00002879 002.2 OF 002


They would both run, but they already knew they would lose.
He discounted the chances of any other dark horse candidates,
saying the selection was down to the two leading candidates.
Okuda said that Fukuda was "gaining strongly" on Abe. Okuda
also said that Defense Agency head Nukaga was the strongest
contender from the Tsushima (former Hashimoto) faction, but
he doubted that Nukaga or anyone else from that faction would
run. He also said that this election represented the last
chance for LDP politicians such as Fukuda, Aso and Nukaga.
In the next election, younger candidates like Abe would be
the main contenders.


6. (SBU) Okuda said that he had told Abe not to run this time
for "health reasons." He said that he sits across from Abe
at Prime Minister Koizumi's Council on Economic and Fiscal
Policy meetings, and expressed concern that Abe's color was
"not good." He had heard rumors that Abe had some sort of
liver problems which were consistent with Abe's "dark"
physical complexion. Okuda then admitted that "health" was
an excuse and he thought that Abe needed to gain experience
by holding a minister portfolio in the next government.

Comment
--------------


7. (SBU) Okuda appeared genuinely anxious to step down and
disappear for a time from Japan's political and business
world. He said that his ambition in the short term was to
travel around the world using sea and road transportation. He
said he wanted to drive across the United States to see
places he had heard about like Route 66. (Indeed after his
visit with the Ambassador he went to the Consular Section to
apply for a visitors visa which is only required for persons
staying for over 90 days.) It was not clear if Okuda's
scenario of only one Mori faction candidate running was a
prediction or more wishful thinking. His decision to back
Fukuda rather than Abe is undoubtedly a reflection of his
concern about Japan-Korea and Japan-China relations. For his
part, Mitarai assumed the back-seat role to Okuda at this
meeting. We expect that after having formally assumed the
reigns of Keidanren on May 24, he will become a much more
active participant in US-Japan economic discussions. Mitarai
appeared anxious to develop close relations with U.S.
counterparts and talked of visiting Washington DC next year.
SCHIEFFER