TOKYO SCENESETTER FOR UNDER SECRETARY JOSEPH'S

C O N F I D E N T I A L TOKYO 005753

SIPDIS

SIPDIS

FM CDA JOE DONOVAN FOR UNDER SECRETARY JOSEPH

E.O. 12958: DECL: 10/01/2016
TAGS: EFIN JA PARM PREL PTER
SUBJECT: TOKYO SCENESETTER FOR UNDER SECRETARY JOSEPH'S
VISIT

Classified By: CDA JOE DONOVAN FOR REASONS: 1.4 b,
d


1. (C) SUMMARY: When you arrive in Tokyo on October 16,
Japan's new government will have been in office less than one
month. The new PM, Shinzo Abe, held the powerful Chief
Cabinet Secretary position in former PM Koizumi's government.
Both Koizumi and Abe are LDP members with a conservative
bent, but there are already some differences betweem the two
in nuance. On financial sanctions, Japan will continue to be
a cooperative partner. On North Korea, the GOJ will ask
about U.S. plans to impose sanctions on 3 GOJ identified
entities. On Iran, the GOJ will continue to press for a
place at the table on Iran policy, arguing that if they are
not part of the core group that develops sanctions, it will
be more difficult to obtain political support at home to
impose them. In all cases, GOJ officials will ask for more
information on identified proliferators to increase public
support for the imposition of sanctions. Finally, you have
agreed to MOFA DG Nakane's invitation to hold the 10th U.S.
Japan Disarmament Nonproliferation Meeting during this visit
to Tokyo providing a good opportunity to revisit our request
for Japan to support our civil nuclear agreement with India.
END SUMMARY.

THE NEW GOVERNMENT
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2. (SBU) Shinzo Abe is Japan's new prime minister, succeeding
Junichiro Koizumi. At 53 years of age, he is Japan's
youngest prime minister and the first born after the end of
the Second World War. Abe's lopsided election in the Diet on
September 26 was assured after his runaway victory in the
ruling Liberal Democratic Party (LDP) presidential campaign
two days earlier, due to the LDP's overwhelming majority in
both houses. Within hours of his election as prime minister,
Abe appointed a cabinet drawn largely from close associates
in the LDP factions that had been most supportive of him
during the party presidential race. Some criticism of those
cabinet choices has begun to emerge in the press. Abe,
meanwhile, has drawn criticism in some quarters for his youth
and relative inexperience, despite his high-profile role as
Chief Cabinet Secretary to Koizumi. He has never served in a
cabinet post. That said, public opinion polls register
strong support for Abe.


3. (SBU) The transition from Koizumi to Abe has been marked
thus far by a strong measure of continuity in foreign and
domestic policy. Koizumi, a hugely popular political figure
in Japan, made his reputation by centralizing power within
the Office of the Prime Minister (the "Kantei"),and focusing
on a few key issues, such as postal privatization, structural
reform, and the North Korean abduction issue. He was seen as
less successful at maintaining good relations with China and
Korea. Abe, too, enjoys a reputation as a reformer, although
he is considered to be more conservative than his
predecessor. His first week on the job has been marked by
the introduction of proposals aimed at increasing government
efficiency and improving decision-making. Some, including
the creation of a U.S.-style National Security Council and
the creation of new senior level political appointments, are
a continuation of Koizumi's efforts to shift power from the
ministries to the Kantei. Whether these new political
structures will achieve their goal, without alienating
Japan's traditional political elite and the general public,
remains to be seen.


4. (U) In his first policy speech to the Diet on September
29, Abe proposed an ambitious agenda that included: more
assertive diplomacy; a renewed bid for a UNSC seat; improved
ties with China and Korea; resolution of the DPRK abduction
issue; constitutional revision; centralized decision-making
within the Prime Minister's Office; fiscal belt-tightening;
education reform; and a return to traditional Japanese
values. He has already scheduled summits with the leaders of
China and Korea for October 8 and 9, just before your
arrival. Abe also emphasized the importance of advancing the
U.S.-Japan alliance and implementing base realignment. Major
Japanese news media focused on his promise to study the
possibility of easing restrictions on exercising the right of
collective self-defense in specific cases, a first for a
Japanese prime minister in a policy speech. Most Japanese
media described the speech as conservative and nationalistic.


5. (C) Abe's greatest challenge in the short term is to gain
passage of several important pieces of legislation held over
from the last regular Diet session before the extraordinary
Diet session ends in mid-December. These include bills aimed
at revising the Basic Education Law, recognizing the crime of
conspiracy, and extending the operations of Japan Maritime
Self-Defense Force tankers in the Indian Ocean. He will also
be measured by his ability to manage the ruling coalition

with junior partner Komeito and fight off challenges from the
largest opposition party, the Democratic Party of Japan
(DPJ). The LDP is expecting a series of grueling battles
with the DPJ in unified local elections and Upper House Diet
elections in April and July of 2007. Even the rosiest
projections point to the ruling coalition losing seats in the
Upper House. If Abe is seen as a strong leader through the
elections, his future prospects are good. If the ruling
coalition is broken or loses their majority, he is much more
likely to be replaced.

FINANCIAL SANCTIONS
--------------

6. (SBU) Since Treasury Under Secretary (Terrorism and
Financial Intelligence) Stuart Levey,s visit to Japan on
July 20th, when he engaged GOJ officials on joint financial
countermeasures against the DPRK under UNSCR 1695, as well as
in response to Iran,s proliferation activities, bilateral
cooperation on both issues has continued.


7. (C) On September 19, following consultations with the
United States, the GOJ imposed financial sanctions on the
DPRK 12 1, as well as on three additional entities identified
by GOJ authorities as having imported WMD-related materials
from Japan. (The Japanese exporters of the WMD-related
materials are currently under investigation.) The GOJ is
likely to ask about U.S. plans to impose sanctions on these
three additional entities, as well as on strategies for
future DPRK sanctions. They may specifically ask about U.S.
plans to re-impose some of the previous trade and financial
sanctions on the DPRK that the U.S. lifted in 2000, as well
as further plans for engaging other members of the Six-Party
talks on sanction issues.


8. (C) Japan is concerned about the possible effects of any
sanctions levied against Iran, particularly those that would
impact energy supplies, as approximately 15 percent of
Japan,s petroleum supplies are imported from Iran. In
addition, Japan is also in the final stages of negotiations
with Tehran about developing Iran,s Azadegan oil fields.
Although there are questions about this deal,s economic
viability, Japan is sensitive for political reasons to
threats made by Iran to hand it to either Russia or China.
Nevertheless, Japan has firmly stated at the highest levels
that international solidarity on Iranian nonproliferation is
more important than economic interests. Over the past
months, Japanese authorities have told a number of Iranian
visitors to Tokyo (Vice President Mashay, Deputy Foreign
Minister Araghashi, former President Khatami) that Iran must
respect the will of the international community, deal in good
faith with the IAEA, and comply with the terms of UNSCR 1696,
which Japan, a current member of the Security Council,
supported. As Deputy Foreign Minister Nishida recently did
with U/S Burns in New York, your Japanese interlocutors are
likely to question you regarding the intentions of the United
States on sanctions, tell you that Japan shares in both the
political and economic high stakes involved in this issue,
and ask that we consult with them closely as deliberations on
sanctions move forward. It is their strongly held view that
any UN resolution or other multilateral action on Iran
stemming from preparations that did not include Japan would
be politically difficult for Japan to implement. MOF likely
will ask for further explanation of the new countermeasures
against Bank Saderat, specifically how they may impact the
operations of Japanese banks that do business with Iran and
also have offices in the United States.


9. (SBU) For both North Korea and Iran, the GOJ has regularly
asked for additional, more detailed information from the USG
on identified proliferators that can be made public to
support a possible asset freeze. GOJ officials may again
stress that expanded information sharing would make it easier
for them to impose sanctions on specific proliferators.


10. (SBU) During your visit, you will meet separately with
senior officials from MOF and MOFA on both North Korea and
Iran, as well as with a larger interagency group including
METI officials responsible for Japan,s energy policy, and
bank regulators from the Financial Services Agency. In July,
U/S Levey followed a similar schedule, including an
interagency meeting chaired by MOFA Deputy Minister Nishida.
In addition, you will also meet with senior officials from
Japanese banks engaged in business with Iran, who also may
ask for clarification on the Saderat measures.

U.S./ JAPAN DISARMAMENT NONPROLIFERATION COMMITTEE
-------------- --------------

11. (SBU) You have accepted MOFA DG Nakane's invitation to
hold the 10th U.S. Japan Disarmament Nonproliferation
Committee meeting while in Japan. We expect Japan will want
to discuss regional issues (DPRK, Iran and India). This will

be an excellent opportunity to revisit our request for Japan
to support our civil nuclear agreement with India, generally
and in the NSG. Japan will also want to review progress on
PSI, proposals related to the nuclear energy cycle including
the Standby Arrangements System for Nuclear Fuel Supply and
GNEP. Japan also proposes discussion of the NPT process and
Arms Control and Disarmament issues.
DONOVAN