Identifier
Created
Classification
Origin
06TOKYO3104
2006-06-06 08:17:00
CONFIDENTIAL
Embassy Tokyo
Cable title:  

METI VALUES RELATIONS WITH THE UNITED STATES AND

Tags:  ECON ETRD PREL JA APECO 
pdf how-to read a cable
VZCZCXRO8913
RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHPB
DE RUEHKO #3104/01 1570817
ZNY CCCCC ZZH
R 060817Z JUN 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 2901
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHNE/AMEMBASSY NEW DELHI 8037
RUEHFR/AMEMBASSY PARIS 4942
RUEHPF/AMEMBASSY PHNOM PENH 0583
RUEHGO/AMEMBASSY RANGOON 2104
RUEHVN/AMEMBASSY VIENTIANE 1501
RHMFISS/COMUSJAPAN YOKOTA AB JA
RUEHBS/USEU BRUSSELS
RHHMUNA/HQ USPACOM HONOLULU HI
C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 003104 

SIPDIS

SIPDIS

DEPARTMENT PASS USTR FOR AUSTR CUTLER
USTR ALSO FOR JNEUFFER, MBEEMAN
PARIS FOR USOECD

E.O. 12958: DECL: 06/06/2016
TAGS: ECON ETRD PREL JA APECO
SUBJECT: METI VALUES RELATIONS WITH THE UNITED STATES AND
APEC

REF: A. TOKYO 3045

B. TOKYO 2991

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

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 003104

SIPDIS

SIPDIS

DEPARTMENT PASS USTR FOR AUSTR CUTLER
USTR ALSO FOR JNEUFFER, MBEEMAN
PARIS FOR USOECD

E.O. 12958: DECL: 06/06/2016
TAGS: ECON ETRD PREL JA APECO
SUBJECT: METI VALUES RELATIONS WITH THE UNITED STATES AND
APEC

REF: A. TOKYO 3045

B. TOKYO 2991

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


1. (C) Summary. Japanese Trade Minister Nikai's
proposal for an East Asian Free Trade Area was meant
to preempt Chinese proposals for a low-standards
Asian FTA, not to exclude the United States from the
region, according to Vice Trade Minister Kazumasa
Kusaka. Kusaka claimed that METI still valued APEC
but seemed unenthusiastic about strengthening its
role. He said his Minister had no intention to
"tilt" towards China. End Summary.

Explaining Minister Nikai's Asian FTA Proposal
-------------- -


2. (C) Ministry of Economy, Trade and Industry
(METI) Vice Minister for International Affairs
Kusaka told U.S. Ambassador to APEC Mike Michalak
over dinner on June 2 that METI Minister Toshihiro
Nikai's proposal for an East Asian free trade area
was meant to preempt Chinese proposals for a low-
standards Asian FTA. Kusaka claimed that METI had
become quite concerned last year when Japan was
unable to do more than delay a Chinese proposal for
a low standards FTA among the 13 "ASEAN plus Three"
members. Japan opposed this proposal, but with no
support from Korea or any of the ASEAN countries, it
was only able to delay a decision for a year by
calling for a "track two" study. Unfortunately this
study would conclude that such an agreement would
boost regional economic integration. Therefore,
METI decided that it should attempt to broaden (by
including Australia, New Zealand, and India) and
deepen (by seeking to include more than just trade
in goods) this proposal and focus it on the post
2010 period by which time the "plus Three" were
scheduled to conclude their separate FTA talks with
ASEAN. Kusaka claimed that Japan's intention in
including Australia and India was to slow down this
process immensely. Australia, he noted, would
demand a high standards FTA that would be difficult

for the ASEANs to accept. India's presence would
extend the debate and delay any concrete outcome.


3. (C) Kusaka claimed that METI had some
bureaucratic support for its push for an Asian FTA.
He claimed that the Foreign Ministry's "Asian
School" was supportive, even as he acknowledged that
MOFA's America hands were opposed. (Note: We have
heard a different story from MOFA's Economic Bureau.
According to MOFA Economic Affairs Bureau Director
General Kaoru Ishikawa, he had been "yelling at"
METI at interagency meetings but that the
Agriculture Ministry had been even more critical of
METI's proposal. Ishikawa claimed that the Ministry
of Health, Labor, and Welfare -- because of movement
of persons issues -- was also opposed and that the
Ministry of Finance was "also leaning against"
METI's proposal. One of METI's problems, Ishikawa
pointed out, was its failure to consult with other
ministries before announcing this idea. End note.)

Japanese Views on APEC
--------------


4. (C) When asked how the Minister's proposal fit
into Japan's vision for APEC, Kusaka said that Japan
valued APEC, because of the presence of Taiwan and
Hong Kong and because of its role in bridging the
economies across the Pacific Ocean. However, APEC
had turned into a "talk shop" because its membership
was "too broad." Moreover, China clearly preferred
the ASEAN Plus Three and East Asian Summit (EAS) --
where Taiwan was not a member -- and therefore
resisted progress in APEC particularly on the

TOKYO 00003104 002 OF 003


security agenda. Kusaka said, however, that Japan
valued APEC's role in bridging the east and west
sides of the Pacific Ocean and wanted to see APEC
succeed. Moreover, he noted, that Japan would host
APEC in 2010. Amb. Michalak pointed out numerous
areas on APEC's economic and security agendas where
we had advanced U.S. and Japanese interests.


5. (C) When asked how Japan sought to
differentiate APEC and the EAS, Kusaka said that
Japan thought the EAS should evolve into a
"functional" organization for a pursuing topics that
were not exclusionary in nature. Therefore, its
natural role would be to address issues such as the
environment, avian influenza, and maritime piracy.
Progress in these areas in the EAS, he claimed,
would not damage U.S. interests since all could
enjoy the benefits of EAS cooperation. He also said
that Japan strongly supported U.S. membership in the
EAS.

Aren't You More concerned about ASEAN Plus Three?
-------------- --------------


6. (C) Kusaka asked why the United States was so
concerned about the East Asian Summit and not the
ASEAN Plus Three. In his view, U.S. interests were
more threatened by the ASEAN Plus Three process,
which clearly excluded the United States and where
Japan was the sole champion of the advanced
industrial democracies. (Comment: He implied that
Korea was reluctant to oppose China in the forum
thereby increasing the "burden" on Japan. End
comment.) In contrast, Japan had succeeded in
maneuvering three other democracies into the EAS
structure and had also succeeded in leaving the door
open to U.S. membership. He encouraged the United
States to consider joining the EAS process. For
these reasons, Kusaka said, the United States should
welcome Japanese attempts to steer action away from
the ASEAN Plus Three towards the EAS process.

Thou Dost Protest Too Much?: No China "Tilt" METI
Claims
-------------- --------------


7. (C) Kusaka emphasized that Minister Nikai had
not focused on Japan's interests in China at the
expense of Japan-U.S. relations in formulating his
Asia trade strategy. He noted that Nikai had been
instrumental in providing PM Koizumi "political
cover" for his decision to deploy troops to Iraq.
In addition, he had led a delegation of Japanese
tourists to New York soon after 9/11. This
demonstrated Nikai's support for U.S.-Japan
relations, Kusaka claimed.


8. (C) After repeating several times that Nikai
was not "pro-China," Kusaka admitted that his
Minister felt the USG did not fully appreciate his
strong support of U.S.-Japan relations. Kusaka said
that Nikai was essentially a "local politician" who
was accustomed to people coming to him with
requests. China had taken advantage of this trait
skillfully by inviting Nikai to China where Nikai
was impressed by the quality of his reception. METI
staff, Kusaka said, were now arranging for Nikai to
visit the United States in July in an attempt to
remind their minister of the importance of the U.S.-
Japan relationship. Kusaka also said Nikai would
visit Oregon and New Mexico in addition to
Washington DC. Kusaka said that even after Nikai
left the Ministry in September he would continue to
influence Japan's trade policy.

METI Recognizes the Importance of US-Japan
Consultations
--------------


TOKYO 00003104 003 OF 003



9. (C) Kusaka said that Trade Policy Director
General Kitamura and he were both eager to continue
close relations with the United States. He had
visited Washington DC in January this year to
propose an intensified bilateral economic dialogue,
and had been disappointed that the United States did
not want to engage on important topics like East
Asian architecture because of the bilateral dispute
over beef imports. After Minister Nikai's Asian FTA
proposal, Kusaka said, METI understood the U.S.
message on the need to consult in advance of taking
major policy decisions on East Asian architecture.
Therefore, he was looking forward to traveling to
the United States for meetings with USG counterparts
on June 14.

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


10. (C) Kusaka is in a difficult bureaucratic
position. As a friend of the United States he
understands our concerns about METI's proposal for
an Asian FTA that does not include the United
States. Nonetheless, he has to defend his
minister's position, but also was sending us clear
signals that the USG should cultivate Minister
Nikai, who will be an important figure in Japanese
trade policy issues for years to come. Kusaka hopes
that the United States will solve Japan's policy
problem by joining the East Asian Summit, thereby
validating Japan's strategy of attempting to move
the locus of effort away from the ASEAN Plus Three.
He was clearly unenthusiastic about the alternative
approach -- working together in APEC. Kusaka's
attitude toward APEC is particularly striking in
that he was one of the METI officials who
participated in its creation.


11. (U) Ambassador Michalak has cleared this
message.
SCHIEFFER