PDAS STEPHENS DISCUSSES SECURITY ISSUES WITH DIET

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002975

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/29/2031
TAGS: PREL MOPS MARR JA
SUBJECT: PDAS STEPHENS DISCUSSES SECURITY ISSUES WITH DIET
MEMBER KYUMA

TOKYO 00002975 001.2 OF 002


Classified By: Ambassador J. Thomas Schieffer. Reasons:1.4(b/d).


1. (C) Summary: During EAP PDAS Kathy Stephens' May 30
meeting with Diet member Fumio Kyuma, Kyuma called for
increased defense industrial cooperation and underlined his
support for concluding a bilateral agreement on protecting
classified information. He said that Japan would be able to
implement the recent agreement on Alliance transformation,
while conceding that a difficult budget fight lay ahead.
PDAS Stephens pushed for rapid progress on implementing the
agreement and for a quick resumption of U.S. beef imports.
Kyuma also predicted a lively summer of Japanese politics as
the candidates to succeed Prime Minister Koizumi in September
accelerate their political maneuvering, and criticized Shinzo
Abe's positions toward China and DPRK sanctions. End Summary.

ENHANCING DEFENSE TRADE


2. (SBU) Kyuma, a senior parliamentarian who chairs the
ruling Liberal Democratic Party's General Affair's Council,
asserted to EAP PDAS Kathy Stephens on May 30 that Japan and
the United States need to enhance bilateral defense trade and
cooperation in science and technology. In response to PDAS
Stephens' request for specific ideas, he said that each
country should concentrate its efforts in areas where it
possesses comparative advantage. The U.S. has particular
expertise in software, while Japan is able to add value in
both commercial and military electronic hardware. In
addition to the economic rationale for such cooperation,
continued Kyuma, there are social reasons: Japan's rapidly
declining birthrate limits the number of future engineers.
For closer defense industrial cooperation to occur, Kyuma
recognized, Japan still must alter its export control policy
to allow international sales of defensive weapons systems.
Kyuma also raised the importance of concluding a bilateral
General Security of Military Information Agreement. Japan
must do a better job of protecting classified information, he
acknowledged, while calling for the U.S. to expand
information sharing with Japan.

IMPLEMENTING THE ALLIANCE TRANSFORMATION AGREEMENT


3. (C) Asked for his outlook on implementation of the
agreement of the Security Consultative Committee agreement on
Alliance transformation, Kyuma downplayed the importance of
local political consent, because all planned construction in
Okinawa would take place within the confines of existing
bases. The SACO agreement, made ten years earlier when Kyuma
was Defense Minister, had not been self contained and was
therefore stymied by objections from environmentalist and
anti-base activists. Kyuma took credit for having insisted
to Prime Minister Koizumi that this agreement be structured
in a way that neutralized those factors.


4. (C) The biggest hurdle to implementation was financial,
Kyuma stated. He disclosed that there had been "intense"
discussions between the Cabinet Office, Ministry of Finance
and Japan Defense Agency over whether the costs for
implementing the alliance transformation agreement,
particularly the cost of moving U.S. forces from Okinawa to
Guam, would come from the Japan Defense Agency's budget or a
separate budget line. Both a review of the mid-term defense
plan and consideration of a separate funding framework, as
had been done for SACO, would be necessary. Despite the
funding difficulties, Japan would find a way to fulfill its
commitment, he assured. Stephens expressed understanding for
the difficulties involved in finding an acceptable budgetary
formula while stressing U.S. appreciation for Kyuma's
commitment to rapidly implementing the agreement.

KOIZUMI'S VISIT AND THE LDP LEADERSHIP CONTEST


TOKYO 00002975 002.2 OF 002



5. (C) Stephens pointed to Prime Minister Koizumi's upcoming
visit to the United States as a good opportunity to highlight
bilateral cooperation. Kyuma agreed, saying that the list of
issues to be resolved by the Prime Minister's visit includes
the "beef problem" and finding a new formula for Japan's Self
Defense Forces to play a role in Iraq. The Air Self Defense
Force will increase its tactical transportation role as the
Ground Self Defense Deployment ends, explained Kyuma.
Stephens said that when U.S. beef imports resumed we hoped to
explore new areas for economic cooperation.


6. (C) As the meeting ended, Kyuma predicted that the summer
would see "intense and loud" campaigning to succeed Prime
Minister Koizumi. Kyuma described Chief Cabinet Secretary
Abe as a "powerful candidate," but pointedly added that he
wished Abe would be more flexible towards China and more
realistic in his views on economic sanctions on North Korea,
which Kyuma described as unworkable without broad
international support, including that of China. "I wish he
was a better listener" Kyuma concluded.


7. (U) PDAS Stephens cleared this cable.
SCHIEFFER