DIRECTOR GENERAL FOR NORTH AMERICAN AFFAIRS

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 006740

SIPDIS

DEPARTMENT PLEASE PASS TO DEPARMTENT OF AGRICULTURE WASHINGTON DC

SIPDIS

E.O. 12958: DECL: 11/26/2016
TAGS: PREL MARR ABLD ETRD EAGR EFIS JA
SUBJECT: DIRECTOR GENERAL FOR NORTH AMERICAN AFFAIRS
DISCUSSES BILATERAL ISSUES

Classified By: Ambassador J. Thomas Schieffer for reasons 1.4(b),(d)


1. (C) SUMMARY: MOFA Director General for North American
Affairs Chikao Kawai met with DCM November 27 to discuss a
range of bilateral issues:

-- Kawai reported that Prime Minister Abe had been very
pleased by his meeting with President Bush at the APEC summit
in Hanoi and is hoping to travel to the United States in
early May, following a trip to Europe in January.

-- With regard to force realignment, Kawai stressed the need
to have at least a notional plan for what will be constructed
at Guam in order for the Diet to begin debating the budget
and said that Japan also plans to set aside approximately 10
billion yen a year to fund projects in communities affected
by or helping with the base realignment process. He was
noncommittal to a suggestion by the Embassy to host a
bipartisan Diet visit to Guam in January, but agreed that
such a visit would probably be useful.

-- Kawai stated that Japanese expectation for next weeks
sub-cabinet meeting will be to focus on how to strengthen our
bilateral economic relations as well as discussing a possible
regional approach. He indicated serious discussions
regarding a possible Free Trade Agreement would be premature,
but ventured that this possibility should be at least
studied.

-- On U.S. beef imports to Japan, Kawai urged patience,
saying that it is too early to commence discussion as to
whether international standards should be applied to this
trade.

-- He predicted the Japanese Defense Agency will be elevated
to a full ministry on January 9, 2007 and expressed yet again
Tokyo's eagerness to hold Two plus Two meetings as soon as
possible.

-- Speaking of negotiations between the U.S. and Japan set to
take place this week concerning the status of the land
occupied by the Chancery, Kawai indicated the Japanese side
is not yet ready to discuss the valuation of the land.
According to him, before the land can be valued the exact
nature of the relationship (landlord-tenant) must be
established, and the U.S. must express a willingness to pay
some back rent and also a desire to purchase the land. It is
the Japanese intention to cover these two steps at the
upcoming meeting. Only when this has been done can an
independent expert be brought in to appraise the value of the
land. END SUMMARY.


2. (SBU) Director General Kawai met with DCM November 27 at
the DCM's residence to discuss bilateral issues. He was
joined by Deputy Director General Kazuyoshi Umemoto, Director
of Japan-U.S. Security Treaty Division Junji Shimada, and
First North American Principal Deputy Director Yusuke Arai.
DCM was joined by Political Minister Counselor and notetaker.

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PRIME MINISTER'S VISITS
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3. (C) Kawai reported that Prime Minister Abe was very
pleased by his 90 minute visit with President Bush during the
APEC summit in Hanoi, and that the Japanese side appreciated
very much the arrangements made by the U.S. side. He said
that Abe is still in the process of making his first round of
visits with important world leaders. Now that he has met
with the leaders of the U.S., Russia, China, and Korea, he
will receive in Tokyo this month the leaders of Indonesia,
India, and Australia. Although it has yet to be officially
announced, in January Abe plans to visit Europe to call on
his British, French, German, and Belgian counterparts, as
well as to meet with high-level EU and NATO officials. This
will conclude what Kawai calls Abe's "first round" of visits.
The "second round" will commence with a trip to the United
States hopefully in early May. The Prime Minister has
expressed an interest in visiting several other regions in

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the United States besides Washington, although Kawai was
unable to say which ones at this early stage.

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DPRI
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4. (C) Now that the election for governor of Okinawa is over,
it is important to move forward with the base realignment
plan, Kawai said. He believed there is value to having
Embassy representatives meet directly with governors and
mayors of areas affected by the realignment plan, but urged
that such contacts be kept to a low level and that
negotiations concerning the details of any plans be handled
between Tokyo and the local governments. The government is
in the midst of the budgetary drafting process and wants to
set aside approximately 10 billion yen to spend on public
works and community service projects in communities most
affected by the realignment process, although none of the
money will actually be expended until the realignment process
is underway. In order to budget for these projects, and for
the funds needed to begin construction for new bases on Guam,
it is critical that Diet members be given some idea of what
the plans for Guam are.


5. (C) DCM raised the possibility of a bipartisan group of
Diet members visiting Guam in late January where they would
be briefed by PACOM on plans for the new facilities there.
Kawai replied that such a trip would have little value unless
the briefing given were to provide some plans for what the
project will ultimately resemble. He cautioned that party
politics are at play in this process and the DPJ is not being
helpful.


6. (C) With regard to the passage of new laws pertaining to
the realignment process, Kawai pointed out that there will
only be five or six weeks from February through mid-March for
the Diet to seriously address this issue. The first few weeks
of the session which begins in early January will be
dominated by budget talks. Once March arrives, attention
will shift to upcoming local elections in April. That will
be followed by the Golden Week break. It is therefore
critical that the realignment agenda be carefully managed.
MOFA wants to signal to the U.S. that Japan is taking serious
action to advance the plans, but Kawai again said this will
be difficult unless concrete information about what is
intended for Guam is provided.


7. (C) Kawai predicted that the Japanese Defense Agency will
be upgraded by the Diet to full ministry status, and that the
new ministry will officially come to life on January 9. He
does not think that this transformation will have any
substantive effect on the bilateral relationship and
reiterated Tokyo's eagerness to hold Two Plus Two talks as
soon as possible.

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SUB-CABINET LEVEL MEETINGS
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8. (C) In response to DCM's question concerning Japan's
expectations for the upcoming Sub-Cabinet Level Meetings,
Kawai replied that the Japanese have two agendas to advance.
The first involves enhancing and strengthening our existing
bilateral economic relationship. He said this does not
necessarily include serious discussions about entering into a
Free Trade Agreement, observing that such an agreement
between the number one and number two economies in the world,
coupled with a continued lack of progress in the Doha
process, would send the wrong signals. Nevertheless, the
possibility of an FTA should at least be studied. Second,
the Japanese hope to explore pursuing regional and global
initiatives, including an approach to China on such issues as
Intellectual Property Rights.

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BEEF IMPORTS, OTHER FOOD ISSUES
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9. (C) Kawai said it is too early to discuss applying
international standards to U.S. beef exports to Japan. He
said time is needed to reintroduce the Japanese consumer to
the notion that U.S. beef is safe, although he recognized
that when the Yoshinoyo fast food chain reintroduces its
popular beef bowl menu item on December 1, it will only have
enough U.S. beef available to offer the dish a few days a
month. Kawai believes it is better to let the whole issue
settle down a bit more before raising what types of U.S. beef
should or should not be allowed into Japan. When asked by
DCM how long this period should last, Kawai said he would
have to consult with colleagues but imagined they would agree
at least until the upper house elections are over in June.


10. (C) DCM reminded Kawai there are several other food
related items on the bilateral agenda that need to be
addressed. These include the importation of rice and rice
flour, as well as the prohibition of irradiated foods,
including spices used in processed foods.

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WHALING
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11. (C) The DCM pointed out that disagreements over whaling
threaten to become an irritant in the relationship unless
they are addressed soon. Kawai agreed that this issue may be
problematic, given the Japanese view that not all species of
whale are endangered. He also said that the U.S. does not
fully understand the Japanese market for whale products and,
on the political side, also pointed out that the whaling
industry has a presence in Prime Minister Abe's home
prefecture.

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CHANCERY LAND ISSUES
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12. (C) Kawai also discussed Japan's expectations for
meetings later this week to address the issue of ownership
over the land currently occupied by the Chancery. Tokyo
hopes that by the end of this round of meetings two issues
will be resolved: (1) the nature of the relationship (i.e.,
landlord-tenant),and (2) whether the U.S. expresses both an
interest in paying arrearages and in making an offer to
purchase. Only when these two steps have been achieved will
it be possible to retain the services of an outside expert to
appraise the value of the land. Kawai explained further that
under Japanese law, if it is determined that a
landlord-tenant relationship does not exist, if the
government were to offer the land for sale it would have to
be open to all bidders. Only if a landlord-tenant
relationship exists can the U.S. have a right of first
refusal. In addition, the Japanese will expect that if such
a relationship is agreed to exist, the U.S. will express at
least a willingness to pay some sum to constitute back rents
that are owed.


13. (C) DCM replied that it is our expectation that the value
of the land can be agreed upon at these meetings. Kawai said
he understood, but highlighted the importance that these
negotiations be conducted transparently. At the end of the
day, the Ministry of Finance will have to go to the public
and the Diet to explain, under great scrutiny, any agreement.
Kawai said he did not expect that the land issue will be
resolved during this round of talks.

SCHIEFFER