ABE-PUTIN G-8 SUMMIT: RUSSIA AGREES TO

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 002690 SIPDIS SIPDIS E.O. 12958: DECL: 06/14/2016 TAGS: PREL PGOV ENRG EPET JA RU SUBJECT: ABE-PUTIN G-8 SUMMIT: RUSSIA AGREES TO ""ACCELERATE"" TALKS ON NORTHERN TERRITORIES REF: TOKYO 01267 Classified By: Ambassador J. Thomas Schieffer. Reasons 1.4 (B) (D) ¶1. (C) Summary. During their June 7 summit, PM ABE and President Putin agreed not to shelve the Northern Territories issue, and Putin promised to instruct his deputies to ""accelerate"" the negotiations, according to MOFA Russian Division Director Muto. On North Korea, Putin expressed frustration at what he claimed was a lack of transparency by the U.S. in the Six-Party process, but showed greater understanding of Kim Jong-il's complex nature and the abduction issue. Russia has begun to express more interest in the Asia-Pacific region, Muto noted, a move stoked by new-found Kremlin concerns about the rise of China. Japan is prepared to assist Russian integration into the region, but only if Moscow acts in a ""transparent"" and ""helpful"" manner that includes both public and private entities. Muto specifically asked Embassy Tokyo to convey the message that the U.S. ""can play a role"" in furthering this process. End Summary. -------------- Abe-Putin Summit -------------- ¶2. (C) European Affairs Bureau Russian Division Director Akira Muto briefed Embassy Tokyo Deputy Political Chief June 12 on recent developments in Japan-Russia relations, including PM SHINZO Abe's June 7 meeting with Russian President Putin on the margins of the G-8 Summit. Muto offered that Japan used the summit opportunity to re-vitalize an exchange in Russia-Japan dialogue. Tokyo officials were pleasantly surprised that Putin failed to say anything negative about bilateral relations with Japan. Putin, referring to the 2003 Japan-Russia six-part action plan, said that relations were progressing well in five of the six fields - the sixth being conclusion of a peace treaty. ¶3. (C) The two leaders agreed that they would not shelve the Northern Territories issue, Muto related. Putin, according to Muto, said he was ready to talk, wanted to remove any obstacles to settlement, and hoped to avoid stagnation in the discussions. Muto asserted that Putin promised to instruct his deputies to ""accelerate"" the negotiations. ABE asked for a clarification of Russia's plans to ""introduce the reciprocity principle"" in restricting foreign vessels from fishing in Russian territorial waters; Putin indicated that it would be forthcoming. Muto surmised this might mean that Moscow would begin to charge fishing vessels to fish in domestic waters - a practice similar to that done for aircraft crossing Russian Siberian/Arctic air space. ¶4. (C) Japan offered a new proposal to the Russians entitled ""Initiative for the Strengthening Japan-Russia Cooperation in the Russian Far East and Eastern Siberia"" (e-mailed to EAP/J) which highlights 8 areas for potential cooperation: energy, transportation, information/communication, environment, security, health/medicine, promotion of trade and investment, and Japan-Russian exchanges. -------------- North Korea -------------- ¶5. (C) According to Muto, who attended the G-8 and the Russian summit meeting, Putin attempted to discuss the Banco Delta Asia (BDA) issue at the G-8 plenary session, but was quickly asked by President Bush not to raise the topic in a public fashion before other G-8 members. Putin, Muto surmised, raised the issue as a way of highlighting Russian frustration at what it claimed is a lack of transparency by TOKYO 00002690 002 OF 003 the U.S. in the Six-Party negotiations. Putin reportedly asked the President to provide more information, particularly about intentions to use a Russian bank to transfer BDA funds. ¶6. (C) Putin appeared to hold a ""different attitude"" toward the DPRK during the G-8 session, Muto observed. Putin reportedly said that he now understood how complex Kim Jong-il was, and expressed a fuller understanding of the abduction issue. Japanese officials assessed that Putin's ""threat recognition"" concerning North Korea had not changed substantially, but that his understanding of the DPRK's impact on the region had shifted. Muto stated that Russia's original goal of obtaining as much benefit from the Six-Party process as possible appeared to have changed as well in favor of a more helpful posture. ¶7. (C) Japan did not attempt to raise the abduction issue at the bilateral because of time constraints, according to Muto. Describing Japan's prior conversations on the issue, he noted that the Russians have said they want to be helpful on the abduction issue, but ""don't count on us"" to resolve the problem. Moscow did not want the abduction issue to restrict Russia's room for maneuver with the DPRK. -------------- Reassessing Russia,s Role in the Asia-Pacific -------------- ¶8. (C) Russia has begun to express more interest in the Asia-Pacific region, according to Muto. The implications of this new-found interest would not be limited to bilateral affairs but would extend throughout the region. According to Muto, Russia began to re-evaluate Japanese bilateral ties ""early last year"" when a new Moscow assessment raised Kremlin concerns about the growth of China. This re-examination forced Russia, in Muto's view, to view Japan-Russia relations in a security context, rather than as simply an economic one, as Moscow has previously done. Russia's new perspective on the altered security environment in East Asia acted as the primary incentive behind Prime Minister Mikhail Fradkov's February 27-28 Tokyo visit (reftel),FM Aso's May 3 discussion with FM Lavrov, and the DFM Denisov-VFM Yachi strategic dialogue on June 3. Moscow also expressed concern about the PRC's ASAT test, and environmental issues such as the chemical pollution of the Amur River. ¶9. (C) Russia also appeared to be motivated by concerns about oil resources, Muto claimed. Denisov told his Japan interlocutors that Moscow placed a high priority on increasing the percentage of Russia's oil exports to Asia from 3% to 30%, and to shift some production from West to East Siberia by 2020. -------------- Responsible Russia -------------- ¶10. (C) Muto said that Japan wants to see a responsible Russia integrated into the Asia-Pacific region. Tokyo was prepared to assist Russian development in the region, but only if Moscow acted in a ""transparent"" and ""helpful"" manner. Japanese officials would not provide direct investment in Russia, but would target assistance at areas which the private sector had already identified as profitable. Muto noted, by way of example, Japanese plans to take up tenders being offered by firms associated with Sakhalin 1. -------------- Areas of Cooperation -------------- ¶11. (C) Cooperation in the field of high-speed rail transportation, Muto observed, provided another possible TOKYO 00002690 003 OF 003 field of cooperation. The Russians seemed interested in obtaining Japanese technology as Moscow considered establishing rail links between Moscow-St. Petersburg; Moscow-Sochi; Moscow-Nizhniy-Novgorod; and Khabarozsk-Vladivostok. Japanese telecommunications company KDDI hoped to place optical fiber lines between Vladivostok and Naoetsu, Japan, a step that would decrease internet response times for Japanese internet users from the current 0.30 seconds (via trans-Pacific lines to the U.S.),to 0.18 seconds using direct Russia-Japan links. That tiny difference loomed large for industries conducting numerous financial transactions, he said. Muto, employing good-natured needling, warned the KDDI plans would negatively affect its U.S. competitors. -------------- Russia-China Wedge -------------- ¶12. (C) Muto asked the Deputy Political Chief to communicate to Washington that Japan was attempting to involve Russia in a constructive manner in the Asia-Pacific region. Failure to encourage Moscow's integration increased the risk that Moscow and Beijing might forge a closer strategic partnership - one that could provide unconstructive proposals. Japan hoped to ""drive a wedge between Russia and China,"" Muto noted. ¶13. (C) Muto also requested the message be conveyed to Washington that the Japanese government believes the U.S. ""can play a role"" in promoting Moscow's desire to become more involved in the region. Japan's on-going program of financing the dismantlement of retired Russian strategic nuclear submarines, Muto said, offered opportunities on the security and environmental front. The main point was that the U.S. and Japan should avoid the perception that the two countries were ""ganging up"" on Russia, but were instead offering to cooperate. Japan was interested in the environment impact of the dismantlement work and would be glad to ""divide the labor."" SCHIEFFER