TENTH U.S.-JAPAN COMMISSION MEETING ON NOVEMBER 8, 2007

C O N F I D E N T I A L SECTION 01 OF 10 TOKYO 005492

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TAGS: ENRG, KNNP, MNUC, PARM, PINS, PTER, TRGY, KGIC, IAEA,
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SUBJECT: TENTH U.S.-JAPAN COMMISSION MEETING ON NOVEMBER 8,
2007

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

1. (C) Summary: Acting Under Secretary of State for Arms
Control and International Security, John C. Rood, led the
U.S. delegation to the tenth U.S.-Japan Commission on Arms
Control, Disarmament, Non-Proliferation and Verification on
November 8 in Tokyo. The Commission meeting made clear that
Japan shares a common view on important areas in
nonproliferation and will continue to be a strong ally. The
meeting covered a wide range of issues, including North Korea
and Iran; the Proliferation Security Initiative (PSI) and
proliferation finance; disarmament and non-proliferation
issues; U.S.-India Civil Nuclear Cooperation; the Global
Initiative to Combat Nuclear Terrorism (GI); and the Global
Nuclear Energy Partnership (GNEP). End Summary.

Opening Remarks
--------------

2. (C) Following brief introductions by Acting U/S Rood and
head of the Japanese delegation MOFA Director-General for
Disarmament, Non-Proliferation and Science Ambassador Takeshi
Nakane, Acting U/S Rood began by highlighting the broad range
of important issues on the Commission's agenda and pointing
out the last scheduled Commission meeting one year ago was
cancelled due to the press of business following the October
North Korean nuclear test. Representing the U.S. at the
Commission meeting for the first time, Acting U/S Rood noted
the close cooperation with Japanese counterparts he had
enjoyed while working missile defense issues in his earlier
work at DOD. Nakane noted Japan,s position on arms control
and non-proliferation often very closely tracked with that of
the U.S., and added while the Japanese people have a strong
aspiration for nuclear disarmament that occasionally leads to
some difference of views, these differences should not
undermine our close bilateral security. Stressing this
latter point, Nakane stated the U.S. and Japan must strive to
contain discussion of such divergent issues at the UN General
Assembly lest they disturb the U.S.-Japan relationship.

North Korea
--------------

3. (C) Nakane stated that the Six-Party process would enter
an important phase toward the end of 2007, with North Korea
implementing its commitment to disable its nuclear facilities
and to make a complete and correct declaration of its nuclear
programs. Noting with approval President Bush's public
references on October 3 and October 17 to the need for North
Korea to dismantle its nuclear programs and declare its
nuclear activities, Nakane pointed out the importance Japan
attaches to ending North Korea's uranium enrichment program.
Although the current focus is on three critical facilities at
Yongbyon, the DPRK must disable all nuclear facilities.
Nakane added the GOJ is working on the schedule for Japanese
nuclear experts to join the U.S. team in Yongbyon toward the
middle of November, and that Japan is coordinating the
details with U.S. counterparts. Nakane hopes disablement
would happen in the context of the Six-Party Talks and ROK,
China, and Russia would also participate in the disablement
process. However, Nakane added the GOJ had learned Russia
and China were not interested in participating in disablement
at this time. Nevertheless, the GOJ intends for Japanese and
ROK experts to join the U.S. team, Nakane stated.

4. (C) Nakane continued conveying Japan's concern about a
possible Syrian-DPRK proliferation link, calling it a very
serious issue for peace and stability, as well as for the
global non-proliferation regime. If reports of DPRK nuclear
proliferation to Syria were true, Nakane asserted, then the
Six-Party framework must deal with the issue. However,

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Nakane added Japan had little information on this topic and
he asked the U.S. to provide information on the Syria
connection in particular and on DPRK proliferation activities
in general.

5. (C) Turning to IAEA involvement in the DPRK disablement,
declaration, and verification process, Nakane stated Japan's
understanding that North Korea has not been negative toward
ongoing IAEA inspection activities, and stated continued IAEA
involvement is very important. According to the Japanese
delegation to the IAEA, the Agency is frustrated because the
role the agency should play in disablement is unclear.
Nakane highlighted the urgent need for the Six-Party Talks to
establish links between the denuclearization process and the
IAEA role, underscoring Japan's position that the IAEA is
indispensable in the process and the six parties should issue
clear guidance on IAEA participation.

6. (C) Concluding his remarks on North Korea, Nakane noted
Japan's contribution of 500,000 USD to support the special
activities of the IAEA in North Korea, and he explained the
GOJ is now examining ways to make further contributions to
the denuclearization process. Nakane noted that the DPRK
missile issue remains a serious matter for the world and it
is imperative to deal with the issue within the Six-Party
process in the future.

7. (C) In response, Acting U/S Rood noted the time would
soon come to test DPRK intentions. Pointing out that the
DPRK had in the past reversed steps to freeze nuclear
facilities, Acting U/S Rood stated in the next phase, North
Korea's willingness and commitment would be put to the test.
The U.S. hopes for the disablement of core facilities at
Yongbyon by the end of 2007, Acting U/S Rood said, and the
U.S. also believes the DPRK declaration should include
uranium enrichment. However, North Korea continues to deny
the existence of a uranium enrichment program.

8. (C) Acting U/S Rood briefly summarized the September
visit of nuclear experts to North Korea, the negotiation of
disablement steps, and the subsequent positive movement, with
the U.S. nuclear team now on the ground in North Korea
reporting good cooperation.

9. (C) Acting U/S Rood pointed out the U.S. had set aside
about USD 20 million from the Non-Proliferation and
Disarmament Fund to finance disablement in North Korea,
adding the U.S. would like to talk to other Six-Party
countries to assist in additional financing. In response to
DG Nakane's comments on IAEA involvement, Acting U/S Rood
stated the U.S. view is similar to the GOJ,s and too regards
the IAEA as indispensable. Acting U/S Rood affirmed that
North Korea has not been as negative toward the Agency, and
that U.S. anticipates it will be the primary mechanism by
which to monitor the shut-down of DPRK nuclear facilities.
Acting U/S Rood called attention to the one caveat that, in
the area of nuclear weapons themselves, there are
restrictions on IAEA access to nuclear-weapons design
information. South Africa, he noted, is a successful
instance of nuclear weapons disposal under IAEA supervision
with involvement from P5 states.

10. (C) Bringing the exchange on North Korea to a close,
Acting U/S Rood said there is no news on the delisting of the
DPRK as a state-sponsor of terrorism. The Acting U/S
clarified the President can begin rescission of a country's
designation by notifying the Congress of his intent to do so.
If within 45 days no action is taken by Congress, the
President has the authority to take such action, though the
country is not automatically removed from the list. A
country is de-listed only when the Secretary of State

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formally executes such action at the President's direction.

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

11. (C) Turning to Iran, Acting U/S Rood stated the U.S. is
increasingly concerned about steps Iran has taken to boost
its nuclear capabilities, stressing profound concern over the
possibility of a nuclear-armed Iran. He noted it is a bad
assumption to think Iran would behave similarly to the other
states that have acquired nuclear weapons thus far. Acting
U/S Rood stressed the magnitude of this security challenge
and explained Iran achieving a capability to produce fissile
material would place it on a glide path to a nuclear weapon.
He stated the U.S. wants to avoid having to choose between
two terrible outcomes, namely Iran with a nuclear weapon or
military options. The U.S. is concerned Iran is using the
IAEA to shield itself from UN action, and that IAEA DG
ElBaradei does not share our apprehensions regarding Iran.
At the same time, Acting U/S Rood pointed out, the U.S. is
open to face-saving measures should Iran undertake a full
suspension of its nuclear activities.

12. (C) Acting U/S Rood stated it is difficult to know the
status of Iran,s centrifuge operation, as the GOI has tried
to create "facts on the ground" for political reasons.
However, while Iran is no doubt exaggerating its progress,
Iran is making progress, which is of concern to the U.S.
Acting U/S Rood outlined the several approaches the U.S. is
pursuing. First, within the Nuclear Suppliers Group, the
U.S. is discouraging other supplier countries from conducting
any nuclear business whatsoever with Iran and a U.S. effort
is underway to sensitize other countries to the dual-use
nature of many petroleum-sector goods. Second, on the
Security Council track, if the next ElBaradei report does not
show clear suspension, then the U.S. will push for a third
UNSC resolution. (Acting U/S Rood noted the Political
Directors meeting the previous week did not go well, as
Russian and Chinese views have hardened and the two countries
are opposing further steps.) Third, the U.S. recently took
further steps on the financial front, designating the IRGC,
the Quds force, three major Iranian banks, and a number of
IRGC-owned companies for involvement in terrorism or
proliferation-related activity. In concluding his remarks on
Iran, Acting U/S Rood stressed the U.S. is encouraging all
countries to reduce export credits to Iran, and he noted
current levels of pressure on Iran are not sufficient to
compel the GOI to come to the negotiating table.

13. (C) Nakane responded Japan is also pessimistic about
Iran and hopes to avoid the two extreme outcomes described by
Acting U/S Rood. Nakane stated Iran's implementation of the
Additional Protocol would be desirable, that it is important
for the international community to be united in increasing
pressure on Iran, the GOJ believes it is important to adopt
another UNSC resolution, and that Japan hopes Iran will
return to the EU 3 3 negotiation. Nakane added Japan
maintains good contacts, even at the ministerial level, with
Tehran and at every opportunity encourages Iran to suspend
its nuclear activities. Iran, however, has not been
receptive.

14. (C) Noting Japan has faithfully and completely
implemented UNSC resolutions 1737 and 1747, Nakane pointed
out China in 2006 overtook Japan and is now Iran,s number
one trading partner. Nakane, adding Japanese banks refrain
from new transactions with Bank Sepah and Bank Saderat,
stated "Japan will not sacrifice its non-proliferation policy
for economic interest." Promising Japan will continue to
exert pressure on Iran to engage in dialogue, Nakane added if
Japan suspends transactions with the Iranian Central Bank, it

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could have a serious effect on imports of crude oil --
serious not only for Japan but also for more vulnerable Asian
countries. Acting U/S Rood clarified that the U.S. is not
encouraging Japan to take action against the CBI. Rather,
the U.S. is cautioning we must protect the international
financial system against Iranian abuses. Acting U/S Rood
stressed while China had been able to replace Japan as Iran's
number one trading partner in trade volume, on the financial
side, Japan is one of very few countries that are major
players. Japan therefore can play an important role in
exerting financial pressure on Iran.

15. (C) Participants briefly discussed proposals for
international enrichment centers. Acting U/S Rood noted the
U.S. saw merit in the proposal for a Russian enrichment
center, with Kazakh participation and an Iranian managerial
and financial stake, but barring Iran access to enrichment
technology. Iran, however, was not interested in the
proposal. In response to a Japanese query, U.S. Senior
Advisor Timbie noted the Saudi enrichment center plan was
troubling, and not supported by, the U.S., as we do not want
to see the spread of this technology to states which do not
currently possess it.

Proliferation Finance
--------------

16. (C) Acting U/S Rood reported the U.S. is pleased with
the work of the Financial Action Task Force. Nakane asserted
Japan will continue to cooperate with the U.S. and other
partners on financial enforcement, both from a
money-laundering and non-proliferation standpoint. Regarding
implementation of FATF recommendations, when queried whether
the GOJ had issued an advisory to banks, MOFA
Non-Proliferation, Science and Nuclear Energy Division
Director Ichikawa replied the relevant authorities were
informing banks of the outcome of discussions. Acting U/S
Rood responded the USG urges Japan to take steps to
financially isolate itself from those entities recently
designated by the U.S.

PSI and Outreach Activities
--------------

17. (C) Nakane thanked the U.S. for sending assets and
personnel to the recent PSI exercise hosted by Japan. He
said the exercise was a success, having drawn the
participation of 40 countries, up from 21 in Japan's previous
2004 exercise. Japan was pleased India, Pakistan, Vietnam,
Malaysia, and many Middle Eastern countries sent observers to
the exercise. Although Japan repeatedly invited China and
South Korea, neither country sent observers. After the
exercise, Japan gave a detailed briefing to both, to
emphasize that the exercise did not target any particular
country. China appreciated these briefings, Nakane said, and
he stressed the importance of continuing to reassure China.
(Note: During the coffee break of the Commission meeting,
MOFA showed a brief video, still in production, on the
mid-October PSI exercise. End note.)

18. (C) In response, Acting U/S Rood commended Japan for
hosting such a large and successful exercise, noting it was
particularly gratifying to see India participating as an
observer. Acting U/S Rood pointed out 2008 marks the 5th
anniversary of the start of PSI, and the U.S. is planning a
large celebration in Washington, with the aim of taking the
group to a higher level of effectiveness. Nakane, stressing
bi-partisan domestic support in Japan for PSI, stated it was
necessary to show good examples of PSI results and other
success stories beyond the BBC China. Nakane asked the U.S.
to supply one or two additional concrete success stories

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which would contribute to Japanese support; the U.S.
delegation promised to look into the matter and respond.

19. (C) Nakane recapped the 4th Asian Senior Level Talk on
Non-proliferation (ASTOP) meetings held in January 2007,
which included a mock table-top PSI exercise. He stated
Japan's intention to host the next ASTOP meetings in April or
May 2008. Nakane noted Japan's desire to include an element
to deepen Asian countries, understanding of PSI. He said
Russia is interested in being invited to the ASTOP meetings,
but added his personal concern regarding the Russian attitude
toward the export control regime. Pointing to their
disruptive behavior when they first joined PSI, Acting U/S
Rood noted the U.S. shared Japan's concerns about Russian
intentions as well.

Conference on Disarmament
--------------

20. (C) Taking the lead on CD discussions, Acting U/S Rood
stated the last year has been the most active in the past
decade. Acting U/S Rood said the U.S. supports the L-1
proposal, and the highest priority is to break the deadlock.
Pakistan remains a problem, as do China and Iran, Acting U/S
Rood explained. Furthermore, Israel does not support the
FMCT, but will not openly object at the CD at this time.
Acting U/S Rood asserted there needs to be a two pronged
approach: 1) a greater focus on China to drop their
opposition, by increasing their discomfort especially in the
run up to the Olympics; and 2) an attempt to not create
further linkages. Acting U/S Rood stressed the U.S. had made
compromises, to set the FMCT negotiations in motion. Adding
France, UK, and Germany are of like minds, the Acting U/S
exhorted coordinated action to highlight Chinese opposition.

21. (C) In response, Nakane pointed to Diet references to
former Secretary of State Kissinger's WSJ op-ed on
disarmament and to the Japanese public,s enthusiasm for
eliminating nuclear weapons. While Japan is encouraged by
recent signs, Nakane added, the country remains realistic
about the security situation. Nakane conveyed Japanese
appreciation for U.S. efforts to be forthcoming in the CD and
for progress on FMCT discussions. Stressing the FMCT is a
top priority of Japan in the CD, Nakane stated the GOJ will
continue to push Pakistan, although little change can be
expected prior to the election there. Regarding PAROS,
Nakane relayed Japanese concern with China's ASAT test and
stated Japan believed Russia was not eager to start
negotiations on prohibition of space weapons.

22. (C) Acting U/S Rood replied the U.S. agreed that the
FMCT should be the CD's priority. Regarding Russia's stance
on space arms control, Acting U/S Rood suggested the U.S. had
a slightly different perspective on Russian interest in this
area, as Chinese or Russian interest in such arms control
seemed a likely "back-door" approach to limiting U.S.
capabilities. Finally, Acting U/S Rood expressed the U.S.
concern with the extensive and long-lasting debris cloud
caused by the Chinese ASAT test.

2010 NPT Review Process
--------------

23. (C) Touching only briefly on the ongoing preparations
for the 2010 Review Conference, Nakane conveyed Japan's
appreciation for U.S. cooperation to bring about a successful
Revcon. He noted U.S. efforts to explore disarmament
measures contributed to a positive outcome to the recent
first session of the PrepCom, and noted a time and venue for
the 3rd session of the PrepCom must still be decided. On the
latter point, Acting U/S Rood replied the U.S. has little

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interest in finding a new and more costly venue away from New
York, and he dismissed Iranian complaints that restrictions
placed on them in New York hampered the discharge of their
duties.


NPT Article VI Issues
--------------

24. (C) Turning to NPT Article VI, Nakane opened by
expressing Japan's interest in the current state of
U.S.-Russian negotiations on strategic-force reduction and by
saying Japan had received a demarche from Russia to support
INF treaty negotiations. Nakane also conveyed Japanese
appreciation of U.S. support in developing the international
monitoring system for the CTBT. He added, however, Japan
remains concerned that the U.S. contribution be spent in the
same areas as in the past. On the UNGA de-alerting
resolution sponsored by New Zealand and others, Nakane
emphasized Japan continues to rely on U.S. nuclear
deterrence, especially given the current unsettled security
situation, and noted the U.S. deterrent plays an important
role in maintaining peace and stability. He explained
Japan,s press closely watches GOJ actions on disarmament and
asked for U.S. understanding that Japan's intention is not to
undermine the U.S.-Japan security arrangement. Acting U/S
Rood subsequently responded while the U.S. understands
Japan's position, we would have preferred a GOJ abstention or
rejection of the de-alerting resolution. Acting U/S Rood
also stressed the U.S. posture has been markedly reduced in
recent years.

25. (C) On Nakane's queries, Acting U/S Rood reported the
U.S. and GOR agreed at the 2 2 in Moscow to support a legally
binding START follow-up. While neither party wished to
continue with START, the objective is to take the best
elements of START, with the goals of stability, confidence,
and transparency. Acting U/S Rood cautioned that although
the U.S. believes the INF Treaty has been a success, the USG
will not launch a global campaign for a global treaty. In
conclusion, he thanked Japan for feedback on the U.S.
disarmament record, and added a personal comment from his
direct experience at the Department of Defense to underscore
the deep but often-overlooked cuts in the U.S. strategic
arsenal. The United States has not made fissile materials
for weapons for decades, and has reduced its nuclear forces
to levels not seen since the Eisenhower administration.

Nuclear Suppliers Group (NSG)
--------------

26. (C) Touching on NSG-related topics, the U.S. delegation
argued a ban on the spread of enrichment technologies would
make the most sense, even if it would be difficult to
persuade all NSG members to join in to such an approach.
Timbie underscored the U.S. is not just interested in
blocking Iran and North Korea, but in preventing any spread
of enrichment and reprocessing technologies to states that do
not already possess such facilities. In response, Nakane
stated there was no chance to achieve a total ban on transfer
of these technologies to other states. Nakane indicated the
GOJ had heard of a recent high-level communication from the
Canadian government expressing displeasure with this U.S.
stance. Nakane added it would be difficult for Japan to
continue this approach, and he urged the consideration of
alternate strategies. Acting U/S Rood countered that
settling for weak criteria would in fact set our efforts
back. Ichikawa chimed in that a source of Japanese concern
is the current moratorium is non-binding beyond the G-8.

U.S.-India Civilian Nuclear Cooperation

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--------------

27. (C) Acting U/S Rood reviewed the status of the
agreement, citing the two key criteria set by the Congress,
namely a bilateral agreement between the U.S. and India and a
Safeguards Agreement to be concluded between the IAEA and
India. In addition the NSG would need to change its rules.
Acting U/S Rood pointed to the fluid internal political
situation in India, of which the Japanese were well aware,
explaining the BJP opposes the agreement on the basis of pure
political opportunism, while several Communist parties were
against the deal because it would bring India closer to the
West and the U.S.

28. (C) Nakane responded by conceding there was strong
criticism in Japan of nuclear cooperation with India, and
noted Japan will closely watch the talks on the IAEA-India
Safeguards Agreement. Nakane further suggested a reference
to weapons testing might be necessary in the agreement.
Although likely premature, Nakane stated Japan also hopes to
carry out constructive discussions within the NSG as well.

Preventing WMD Terrorism
--------------

29. (C) Leading off on chemical terrorism, Acting U/S Rood
raised U.S. concerns about improvised chlorine gas devices
used for terrorist attacks in Iraq. Turning next to
bioterrorism, he mentioned U.S. monitoring has shown growing
interest in bioterrorism methods among terrorist groups. He
added the growth of the biotech industry in Southeast Asia,
particularly Indonesia, brings many benefits, but it also
makes potential biological weapons more available to Al-Qaida
and other terrorist groups. He mentioned that Al-Qaida
bioterrorism plans found in Afghanistan revealed greater
advances than was previously known. Acting U/S Rood
highlighted U.S. efforts on pathogen security, noting the G8
Bioterrorism Experts Group (BTEX) and APEC are promising fora
for this initiative. He also mentioned DOS participation in
the U.S. Biosecurity Engagement Group, along with HHS, DOA,
EPA, and other agencies. Acting U/S Rood noted Japan,s
considerable expertise and practical history in the area of
chemical and biological terrorism and welcomed Japan,s
advanced capabilities in global efforts to prevent terrorist
attacks.

Nuclear Terrorism
--------------

30. (C) Acting U/S Rood outlined progress expanding the
Global Initiative to Combat Nuclear Terrorism (GI),which
comprises 62 countries, including all G8 members and 24 of
the 27 EU members, as well as the IAEA and EU. He noted Asia
is well represented in GI, notably in Central Asia where both
Afghanistan and Pakistan are participating. Acting U/S Rood
conceded some priority countries, including India, Brazil,
Argentina, and South Africa, have not yet joined, but is
optimistic they will do so. The U.S. is also encouraging
China to contribute more to GI.

31. (C) On the future of GI, Acting U/S Rood mentioned the
need to deepen the substance of the work, build more capacity
among member countries, and expand participation. He noted
ideas to put together an experts group for planning GI
exercises, and to expand the use of the GI Internet portal,
used regularly by around 40 countries, to serve as a platform
for collaborative planning.

32. (C) Nakane thanked Acting U/S Rood for U.S. efforts to
prevent WMD terrorism and highlighted Japanese work with
Asian countries on chemical and biological terrorism

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prevention. He noted Japan,s support for the upcoming Asia
Export Control Seminar that aims to strengthen the capacity
of the region,s law enforcement agencies. Nakane also
stressed the importance of enhancing the BWC and CWC in the
fight against terrorism and voiced support for Iraq joining
the CWC.

33. (C) Regarding G8 initiatives, Nakane said the GOJ was
not in a position to host a BTEX workshop, but will continue
to send high-level experts to U.S.-organized BTEX events.
Nakane stressed the importance the GOJ places on supporting
the GI, noting Japan has hosted seminars on physical
protection of nuclear materials and sent vice minister-level
officials to recent GI meetings. He underscored the role
Japan plays in Asia and the former Soviet Union by providing
bilateral assistance to improve physical protection
capabilities and encouraging countries to join international
conventions. He noted specific GOJ support for IAEA programs
in Belarus and Ukraine to improve systems for accounting for
nuclear material, and added that Russia, with its strong
economy, should step up cooperation with its neighbors.

34. (C) Turning to the Radiation Emergency Response
Workshop, Nakane announced Japan will send experts to the
workshop, noting coordination among GOJ ministries had taken
three months. Nakane asked the U.S. to agree not to disclose
the existence of the workshop and welcomed U.S. proposals for
dealing with sensitivities around the issue. Acting U/S Rood
praised Nakane,s announcement of Japanese participation as
&very good news,8 adding coordinating among multiple
agencies is often challenging. He underscored the value of
participation in the workshop and that DOE has particular
equipment and procedures to demonstrate. He added the U.S.
will give proper sensitivity to the workshop, but the
workshop can also send a positive signal to the public that
governments are working actively to deter and prepare for a
radiation emergency.

Nuclear Energy Cooperation
--------------

35. (C) Nakane began the discussion on nuclear energy
cooperation by stressing the importance of a clear G8 message
on nuclear safeguards, safety, and security (the 3Ss) to
countries that aspire to civil nuclear power. He mentioned
Japanese assistance to several countries, including
Kazakhstan, where the GOJ is negotiating an agreement for
civil nuclear cooperation. He recounted the GOJ,s
successful efforts to encourage Kazakhstan to ratify the
Additional Protocol as a condition to concluding a bilateral
agreement, noting that such an incentive could be useful in
dealing with other countries. Nakane also mentioned recent
GOJ civil nuclear efforts with Vietnam, which recently
announced intention to sign the Additional Protocol. As for
civil nuclear cooperation with Indonesia, Nakane said Japan
is proceeding carefully, taking into account the political
situation and risks of terrorism. Responding to the U.S.
position on South Africa,s choice of new reactor design,
Nakane said the GOJ must remain agnostic on the reactor
design type, as Japanese firms other than
Toshiba-Westinghouse are making offers.

36. (C) Acting U/S Rood responded the U.S. has no
proliferation concerns with regard to South Africa and noted
the interest in nuclear cooperation expressed by Indonesia
and Vietnam, as well as Egypt and Jordan. Nakane added
Bangladesh has ratified relevant treaties and has expressed
interest in civil nuclear power, but Japanese companies are
less interested in prospects there. Acting U/S Rood
expressed skepticism Bangladesh possesses the physical
infrastructure and skilled labor necessary to support a

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standard-sized nuclear power plant.

37. (C) Regarding Russia, Nakane mentioned upcoming meetings
with his Russian counterpart, Mr. Kuchinov, on November 9 and
12, to continue the third round of negotiations on a
bilateral civil nuclear agreement. He said Russia is showing
new flexibility on GOJ demands safeguards apply to a broader
range of nuclear activities. Nevertheless, he thinks
concluding a final agreement will be a slow process. MOFA
International Nuclear Cooperation Division Director Yasuyoshi
Komizo added Russia has agreed to apply safeguards to
enriched uranium storage facilities, though not to
centrifuges. Komizo said Russia could provide 120 tons of
nuclear fuel for a reserve at an international fuel center at
Angarsk, but the IAEA will insist Russia apply safeguards.
Nakane added that as nearly all Japanese nuclear fuel has
some U.S. involvement, the GOJ sees a U.S.)Russia agreement
as important. Acting U/S Rood said the U.S. has concerns
that Russia is not being constructive in work on a UNSC
Resolution on Iran and does not plan to move forward to
finalize our bilateral nuclear cooperation agreement at this
time. However, Russian desires to become a mainstream
nuclear supplier, rather than a supplier of &last resort,8
may give the U.S. leverage with Russia on Iran. Komizo
agreed Russia has strong aspirations to be a &major league8
nuclear player and needs both U.S. backing and new technology
in order to get out of the minor leagues. He added Japan has
a unique opportunity to obtain maximum concessions from
Russia at this moment, as they are eager to make progress on
substantive portions of the agreement before Putin leaves
office.

38. (C) Turning to the Global Nuclear Energy Partnership
(GNEP),Nakane congratulated the U.S. on success at the
second GNEP Ministerial. He looks forward to discussions
within GNEP on expanding the partnership and assured fuel
supply. However, he raised concerns about cooperation on
fast breeder reactor (FBR) technology with Russia and China,
adding such cooperation should be limited to the U.S., Japan,
and France. Komizo said FBR cooperation has been omitted
from the scope of civil nuclear agreements with Russia and
China. Timbie noted the GNEP Statement of Principles has
been drafted to address this concern.

39. (C) Acting U/S Rood acknowledged GNEP,s strong momentum
and emphasized the need for further discussion on financing
for nuclear power in developing countries, particularly
through multilateral lending institutions which do not
currently finance nuclear power projects.

40. (C) Ichikawa raised the issue of assured fuel supply,
underscoring both the importance of nonproliferation and the
risk of alienating aspirant countries. She suggested a
Russia-IAEA agreement for use of the Angarsk fuel center
could serve as a model agreement and the U.S. and Japan
should have input. Timbie responded the Angarsk concept is a
good opportunity to make progress on an assured fuel supply
framework and noted the IAEA is unlikely to insist on the
Additional Protocol or safeguards as conditions for access.
However, he noted suppliers could put more stringent
conditions on their contributions, and this could be the
beginning of a fuel supply assurance framework.

G8 Issues
--------------

41. (C) Turning to the G8 agenda under Japan,s presidency
in 2008, Nakane highlighted that G8 political discussions
would likely include nonproliferation items, particularly
relating to DPRK and Iran. He suggested civil nuclear power
cooperation be raised in the discussion on environment and

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climate change. On the G8 Global Partnership (GP),Nakane
said it is premature to try to agree on an extension, but
added a consensus is emerging. Arms Control and Disarmament
Division Director Yasunari Morino, who participated in the
most recent GP working group meeting, added Russia has been
more forthcoming on the expanding the GP, but there remains
disagreement on how to do so. Russia, Morino continued,
prefers a formal procedure, while others prefer a more
flexible approach, and is interested primarily in extending
the GP to Kazakhstan and other CIS states. Morino said, as
G8 Chair, Japan will take a &careful8 approach and will
circulate a questionnaire to G8 members to learn more about
bilateral efforts and reach consensus.

42. (C) Acting U/S Rood voiced support for expanding the GP,
but asserted the need to maintain the present structure as
the best vehicle for expanding the geographic scope. He
encouraged Japan to use its G8 presidency to expand the GP
along these lines. Timbie noted the difficulties involved in
creating a new entity for the GP, adding that without
obtaining additional resources, a new structure would not be
productive. Nakane thanked the U.S side for their comments,
suggesting the ASTOP meeting would be a good forum to explain
the GP and pointing out Japan has several financing schemes
for funding cooperation on prevention of nuclear terrorism.

Conventional Weapons
--------------

43. (C) Turning to conventional weapons, Nakane said CCW
states must come to consensus on the cluster munitions issue.
He said an agreement need not be a complete ban and he
recognized the need for a transition period. Acting U/S Rood
responded the U.S. is willing to work constructively in CCW,
but there needs to be real work done. Responding to
Nakane,s suggestion Russia be persuaded to join the
consensus, Acting U/S Rood said he had sent Moscow,s Defense
Foreign Minister Kislyak a letter urging Russia to be
supportive at the CCW in lieu of a Norwegian forum.

44. (U) This message was delayed in order to obtain Acting
Under Secretary Rood,s clearance.

SCHIEFFER