JAPAN TO JOIN CHINA/IPR WTO CASE AS THIRD PARTY

C O N F I D E N T I A L TOKYO 001771

SIPDIS

SIPDIS

STATE FOR EAP/J RWINSHIP,EAP/CM JYAMAMOTO, EB/IPE-EFELSING
PLEASE PASS TO USTR JAPAN OFFICE-RMEYERS, CHINA
OFFICE-AWINTER, AND OCG SMCCOY
COMMERCE FOR NATIONAL COORDINATOR FOR IPR ENFORCEMENT
CISRAEL, ITA-SSEAMAN, USPTO LBOLAND, EWU

E.O. 12958: DECL: 04/20/2012
TAGS: KIPR ETRD ECON WTRO PGOV CH JP
SUBJECT: JAPAN TO JOIN CHINA/IPR WTO CASE AS THIRD PARTY

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


1. (C) SUMMARY: Trade Minister Amari announced on April
20 that Japan will join the U.S. as a third party in a WTO
complaint against China on IPR prosecutions. The GOJ is
worried about the Chinese reaction and will be monitoring it
closely. Chinese Customs and Copyright agency officials
warned Japanese Trade Ministry officials visiting China the
week of April 9-13 that there might be a severe reaction if
Japan were to join the U.S. complaint. Japanese press
commentary acknowledges that Japan must keep up the pressure
on China to improve IPR protection, but urges the GOJ to be
cautious and not upset the dialogue and cooperation it has
been able to forge with Chinese officials. Japan's decision
to join the WTO complaint as a third party appears to be an
attempt to demonstrate to both China and the U.S. that it is
serious about the IPR problem in China, while hoping not to
damage relations with either government. END SUMMARY.


2. (C) According to GOJ contacts, the timing of the U.S.
complaint at the WTO, coming a day before Chinese Premier Wen
Jiabao arrived in Japan and at the same time that Japan's
fifth annual Joint Mission to China on IPR was in Beijing,
could not have been more sensitive for Japan. The METI
official who led the working level delegation for
consultations with China's IPR officials, IPR Counsellor for
Anti-counterfeiting Hiroki Matsubayashi, told Econoff on
April 16 that many of the Chinese officials they talked to
were "very angry" and "very emotional against the U.S." Some
Chinese officials told them that "the U.S. has closed the
door to dialogue."


3. (C) A METI attorney who was also a member of the
delegation, Yusuke Wakebe told Econoff on April 20 that
reaction had been particularly severe among Chinese officials
dealing directly with copyrights and customs. However, Wakebe
emphasized that other Chinese officials they talked to (the
delegation met with 14 Chinese agencies in four days of
meetings) "accepted" the legal arguments of the WTO case and
reacted calmly. Wakebe said that the GOJ is worried that
joining the WTO complaint will make it more difficult for
Japan to deal with China and that they will be closely
monitoring the Chinese reaction.


4. (C) Ryosuke Kuwana in MOFA's IPR Division noted that MOFA
sent instructions to Japanese embassies in Washington and
Beijing on April 19 to formally inform governments that Japan
would be joining the complaint in Geneva on April 20. Kuwana
explained that was a follow-on to an "informal notification"
by Trade Minster Amari to USTR Schwab earlier in the week.


5. (U) Editorials on the WTO complaint in the Yomiuri and
Asahi acknowledged that the IPR problem in China is severe,
but urged the Japanese government to "tread carefully." Both
emphasized that Japan must press China to improve IPR
protection while continuing dialogue and cooperation with
China on the issues. While both newspapers cited growing
protectionist feeling in the U.S. as a factor in the WTO
complaint, the Yomiuri Shinbun thought that the U.S. was
showing restraint by taking the case to the WTO rather than
"rushing to take a unilateral approach by imposing sanctions
based on domestic law."
SCHIEFFER