AMBASSADOR'S DECEMBER 14 LUNCH WITH VICE FOREIGN

C O N F I D E N T I A L SECTION 01 OF 06 TOKYO 006994

SIPDIS

SIPDIS

DEPT PASS USTR FOR AUSTR CUTLER
PARIS FOR USOECD
GENEVA ALSO FOR USTR
DOD FOR OSD/ISA - LAWLESS/HILL/BASALLA
COMUSJAPAN FOR J00/J01/J5

E.O. 12958: DECL: 12/15/2026
TAGS: MARR PREL ECON PGOV JA BM IZ KS RS AF IR
UNSC, AMGT
SUBJECT: AMBASSADOR'S DECEMBER 14 LUNCH WITH VICE FOREIGN
MINISTER YACHI

REF: A. STATE 197809

B. STATE 197807

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


1. (C) Summary: During a lunch conversation on
December 14, Japanese Vice Foreign Minister
Shotaro Yachi and the Ambassador covered a wide
range of issues including:

-- the U.S.-Japan security relationship ("2 Plus
2" Talks, DPRI);
-- Iraq;
-- economic issues (sub-Cabinet meetings,
"triangular mergers," beef);
-- the Embassy property issue;
-- issues related to Burma, Iran and Afghanistan;
-- Japan's relations with South Korea and Russia;
-- Foreign Minister Aso's November 30 Policy
Speech;
-- the election of the new head of the
International Energy Agency.

Yachi's comments related to the visit of the
Indian Prime Minister to Japan have been reported
septel. End summary.

U.S.-Japan Relations (General)
--------------


2. (C) Meeting with the Ambassador over lunch
on December 14, Vice Foreign Minister Yachi said
the Japanese were very happy with the results of
the meeting in Hanoi between President Bush and
Prime Minister Abe. In particular, the meeting
had reaffirmed the importance of the U.S.-Japan
security alliance, acceleration of cooperation on
ballistic missile defense, and the common
position on North Korea. The Ambassador noted
that the President had also been very pleased by
his meeting with the Prime Minister and was
looking forward to seeing Abe in Washington in
May.

Security Relationship
--------------


3. (C) The May summit meeting in Washington
should have three main components, Yachi
indicated. These are the security alliance,
intelligence cooperation, and the future of the
economic relationship. With respect to security
issues, Yachi noted that Japan is eager to hold
another "2 Plus 2" meeting with the United States
but that timing was a problem. Although Japan
would like to accommodate the U.S. suggestion to
hold the meeting in the late February-early March
timeframe, the fact that the Diet would be in

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session at that time would complicate arranging
the meeting. The Ambassador noted that
arrangements on the U.S. side were also difficult
because the GOJ-proposed date of January 13 was
problematic for the United States. The
Ambassador indicated that a slightly earlier
date, January 11 or 12, might be a possibility.
According to Yachi, Japan wanted the "2 Plus 2"
meeting, when it took place, to issue strong
messages both on ballistic missile defense
cooperation and on strengthening the U.S.-Japan
alliance.


4. (C) Yachi reconfirmed that the legislation
required as part of the Defense Posture
Realignment Initiative (DPRI) would go to the
Diet in the session opening in January.
According to Yachi, the relevant government
agencies as well as Diet members in the ruling
coalition had discussed the submission of the
bills on December 13. These included the bills
to create a subsidy system for localities
affected by the realignment, as well as
authorization for the Japan Bank for
International Cooperation (JBIC) to finance
projects to support the transfer of U.S. forces
to Guam.

Iraq
--------------


5. (C) Yachi expressed his thanks for U.S.
cooperation in assisting the move of the Japanese
Embassy in Baghdad into the Green Zone. He added
that the Japanese Government had prepared a
complementary (sic) budget request for $100
million in grant assistance to Iraq to cover
areas such as "basic human needs," "DDR" (militia
Demobilization, Disarmament, and Reconciliation),
and border control. This request, Yachi noted,
still required approval by the Diet in the
upcoming regular session. He also said that
Japan hoped for an early convening of a meeting
on the Iraq Compact.


6. (C) In response to a question from Yachi
regarding the U.S. administration's response to
the Iraq Study Group report, the Ambassador said
that the President was deeply engaged on this
question and had postponed a major speech on Iraq
from December to January in order to continue his
consultations. Incoming Secretary Gates might
also visit Iraq following his swearing in on
December 18. The Ambassador stressed that even
though the war had become unpopular in the United
States, the President remains more dedicated than
ever to a successful outcome. The Iraq Study
Group report, the Ambassador noted, had brought
home to many Americans the fact that Iraq is part

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of a much larger problem in the Middle East.
More people now realize that there is no easy
solution.


7. (C) Yachi raised the question of the expiry
of the law authorizing the deployment of Air
Self-Defense Force units to Iraq and laid out two
possible choices for the Japanese Government.
One would be to submit a general law that would
authorize all such deployments, while the other
alternative would be simply to extend the current
special legislation. The latter alternative,
Yachi observed, was probably the more realistic
as the special legislation would have a one or
two-year expiry date that would make it less
controversial. Nevertheless, the fact that the
extension of the authorizing legislation would
necessarily come near the time of the summer's
Upper House election will mean that the
opposition parties will focus on it, Yachi said.
Yachi, however, stressed that Japan needed to
continue its operation in Iraq. The Ambassador
indicated that Japan's efforts were greatly
appreciated as it was a tough time for the United
States and expressed the hope that Japan's
operations in Iraq would continue.

U.S.-Japan Economic Relations
--------------


8. (C) Yachi characterized the December 6-7
U.S.-Japan sub-Cabinet economic meetings as a
useful exchange of views and noted that these
exchanges would continue in the lead up to the
visit by Prime Minister Abe to the United States
in May. The Ambassador stressed that the planned
summit in May needed a clear economic component.


9. (C) Confessing that he really did not
understand the topic, Yachi acknowledged U.S.
concerns regarding "triangular mergers". The
Ambassador emphasized that this was an important
issue that went to the heart of increasing
foreign direct investment into Japan. Yachi
asked whether the Ambassador believed that the
concerns underpinning the opposition of the Japan
Business Federation (Keidanren) to the triangular
merger mechanism were justified. The Ambassador
indicated that, in his view, the source of
Keidanren's opposition lay fundamentally in a
desire by corporate management to protect itself.
The United States, he noted, had seen similar
behavior by corporate managers, which had changed
only when shareholders had become more active and
engaged in protecting their investments in the
companies concerned.

Beef
--------------

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10. (C) The Ambassador asked Yachi what the
prospects were for the beef from cattle up to 30
months of age to be allowed into Japan. Yachi
responded that the upcoming decision by the OIE,
the international animal health organization,
which will establish an international standard
with respect to animal age and the possibility of
BSE, should move the issue forward in Japan.
Having an international consensus on the issue
would help significantly in garnering acceptance
in Japan regarding U.S. beef from cattle up to 30
months, Yachi believed.

Embassy Property Issue
--------------


11. (SBU) Yachi expressed appreciation for U.S.
efforts to resolve issues related to the Embassy
Chancery property and reaffirmed MOFA's desire to
cooperate with the Embassy in this regard. The
Ambassador agreed that there had been some good
movement on the issues in the most recent meeting
and added that the U.S. side would endeavor to
respond to the Japanese side's latest proposal by
December 22. The Ambassador noted that, although
the problem was not yet solved, it had moved
closer to a solution.

Burma
--------------


12. (C) The Ambassador raised U.S. concerns
about Burma and the pending UN Security Council
resolution (ref A),noting that the change in the
composition of the Security Council could make
getting a resolution on Burma more difficult.
Yachi replied that Deputy Foreign Minister
Yabunaka had recently traveled to Bangladesh,
where he had met with the Bangladeshi foreign
minister, who, according to Yachi, has close ties
to the Burmese leadership. Yachi said that
Yabunaka had told the Bangladeshi foreign
minister Japan wanted to see power transferred to
civilian leadership in Burma on a definite
timetable. According to Yachi, the Bangladeshi
foreign minister had responded that the timing
was not good for such a request by Japan. (Yachi
did not provide a reason for the Bangladeshi
reaction.) Yachi indicated that the Japanese
message contrasted Burma with Thailand where the
military had promised to return the country to
civilian rule within a year. Foreign Minister
Aso had also called in the Burmese Ambassador to
Japan to convey this view of the Japanese
Government. The Burmese Ambassador had only
responded that he would pass the Japanese message
back to Rangoon.


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Iran
--------------


13. (C) According to Yachi, Japan would like
the draft UN Security Council Resolution proposed
by the UK and France (ref B) to be adopted
unanimously as soon as possible. He noted that
Japan had made a demarche to Russia asking for
support for the resolution.

Afghanistan
--------------


14. (C) Yachi said that the Japanese would like
to conclude a contract for the Kandahar-Herat
Road project within a month and restart
construction as early as possible. He was
uncertain of the length of road to be covered by
the contract.

Russia
--------------


15. (C) Yachi said he planned to travel to
Russia toward the end of January to initiate a
strategic dialogue with that country. The
discussion, he added, would include the status of
the "Northern Territories" (the islands off
Hokkaido occupied by Russia since the end of the
Second World War). According to Yachi, now is a
good time for Japan to begin this dialogue
because President Putin is a strong leader and
will likely remain influential even after he
eventually leaves office. In addition, both
Prime Minister Abe and Foreign Minister Aso have
solid conservative credentials in Japanese
political circles, a fact that might give them
leeway to make progress on the Northern
Territories issue, which is highly sensitive for
Japanese nationalists.

FM Aso's November 30 "Arc of Freedom" Speech
--------------


16. (C) Yachi briefly mentioned Foreign
Minister Aso's recent speech on the "arc of
freedom and prosperity." The Ambassador noted
that the speech had been well received in
Washington and that the Secretary had been
briefed on its contents. Yachi noted that Aso
planned in January to visit Romania, Bulgaria,
and possibly Hungary -- countries to which no
Japanese foreign minister had traveled for a long
time -- in part to substantiate the content of
the November 30 speech.

South Korea
--------------


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17. (C) Yachi expressed frustration that, even
though Japan's relations with China had improved
significantly, ties with South Korea remained
problematic. Although the South Korean
ambassador in Tokyo was relatively easy to work
with, the same could not be said either of the
Blue House or the new South Korean foreign
minister, Yachi lamented. Both the Ambassador
and Yachi praised former Foreign Minister Ban Ki
Moon and welcomed his selection as UN Secretary-
General. Yachi said that Ban had indicated that
he would show consideration to Japanese in the
hiring of senior United Nations officials. The
Ambassador also stressed that Ban, in his new
position, was even better placed to assist Japan
on the issue of Japanese citizens abducted by
North Korea.

Meeting with Families of Abductees
--------------


18. (C) Yachi thanked the Ambassador for
attending a reception the previous evening held
by Chief Cabinet Secretary Shiozaki at which a
number of family members of Japanese abducted by
North Korean agents had attended. Yachi noted
that the people of Niigata Prefecture, the site
of several abductions, were particularly
appreciative of the concern and sympathy the
Ambassador had shown on the abduction issue. The
Ambassador said meeting with the abductee
families had had a profound and moving effect
both on himself and on President Bush.

International Energy Agency Election
--------------


19. (C) Yachi expressed appreciation for the
support of the United States in the election of
Nobuo Tanaka to lead the International Energy
Agency.
SCHIEFFER