JAPAN UNHAPPY WITH DRAFT FUTUREGEN AGREEMENT

C O N F I D E N T I A L TOKYO 002814 SIPDIS SIPDIS DEPT. PLEASE PASS TO OES/SHIRLEY HART. DOE FOR VICTOR DER AND JOSEPH GIOVE. E.O. 12958: DECL: 06/20/2017 TAGS: ENRG TRGY JA SUBJECT: JAPAN UNHAPPY WITH DRAFT FUTUREGEN AGREEMENT Classified By: Charge d'affaires Joseph R. Donovan for reasons 1.4 (b,d ) ¶1. (SBU) Summary. While the GOJ enthusiastically supports the FutureGen project, it has several changes it would like to make to the agreement. Officials from the Ministry of Foreign Affairs and the Agency for Natural Resources and Energy will travel to the US on June 25 and 26 to discuss these concerns in person with appropriate counterparts. This cable outlines in advance their topics of concern. Copies of the non-paper provided by the GOJ have been e-mailed to DOE and State (OES). End summary. ¶2. (C) Ministry of Foreign Affairs Economic Affairs Bureau Economic Security Division Director Manabu Miyagawa and Agency for Natural Resources and Energy Coal Division Director Akito Tani told ESTMin on June 21 that while Japan is an enthusiastic supporter of the FutureGen project, it has several serious concerns that must be addressed before GOJ can sign on. Chief among them is whether the project must be governed by a legal agreement in the first place. Miyagawa explained that getting the Japanese Diet to approve such an agreement would be a long, slow process. He suggested instead that something like a memorandum of understanding be reached first so that the parties can begin work on the project while the lawyers and politicians continue to hammer out the details of an agreement. He stated that he had raised this issue before, and DOE had not been receptive. But, he reiterated, this is a very important and perhaps critical issue for Japan. ¶3. (SBU) As for the proposed agreement itself, Miyagawa and Tani laid out several issues of concern. The first lies in Article II. GOJ would like to understand how and why DOE decided on a 74 percent-26 percent split between Contributing Parties and the "Alliance." Second, in Article IV Miyagawa queried why the Dept. of Energy alone has use of all contributions. ¶4. (SBU) Next Tani and Miyagawa strongly suggested that if DOE functions as both the chair and the secretariat (Article VI ),then opinions of the other Contributing Parties will not be reflected in the decision making. They also stressed that decisions about accession by other countries (Article XIV) should be made by all five countries: the United States, Japan, China, India and Korea, not the United States alone. Miyagawa also queried the appropriateness of terminating the agreement "by withdrawal of the U.S." (Article XVII). ¶5. (SBU) The final note of concern has to do with intellectual property rights. GOJ finds it discriminatory that any intellectual property gained through the FutureGen project should become the sole property of the U.S. ¶6. (SBU) Miyagawa stated that Japanese lawyers might have a few additional points, and that he and his counterpart would raise them in their visit to Washington. Copies of the Japanese non-paper have been e-mailed to Victor Der and Joseph Giove at DOE and Shirley Hart at State/OES. DONOVAN