U.S.-JAPAN-KOREA POLICY PLANNING TALKS - WELCOME

UNCLAS SECTION 01 OF 05 STATE 001514

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ENIV ENRG KGHG PREL JA KS
SUBJECT: U.S.-JAPAN-KOREA POLICY PLANNING TALKS - WELCOME
DINNER AND MORNING SESSION


1. (SBU) Summary: Policy Planning Director David Gordon
opened United States-Japan-Korea Policy Planning Talks by
hosting Japanese Deputy Vice Minister for Foreign Policy
Chikao Kawai, and Korean Deputy Foreign Minister In-kook Park
for a working dinner December 16, during which they exchanged
views on the effects of domestic politics on diplomacy in the
coming year. In the December 17 morning session, Director
Gordon, DVM Kawai, and DFM Park led discussions on climate
change, energy security, Afghanistan, and the emerging
economies of Brazil, Russia, India, and China. The working
lunch and afternoon session are reported septel. End
Summary.

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Effects of Domestic Politics
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2. (SBU) Japanese Deputy Vice Foreign Minister Kawai and
Korean Deputy Foreign Minister Park predicted continuity in
their countries' foreign policies in the coming year despite
new or upcoming executive changes in both Japan and Korea.
The alliance of each country with the U.S. remained central
to foreign policy, but the electorates in both nations would
be concerned largely with domestic issues. Kawai explained
that with the Upper House of the Diet controlled by
opposition Democratic Party of Japan (DPJ),the Liberal
Democratic Party (LDP) would have difficulty passing
legislation, including Indian Ocean refueling operation for
coalition forces engaged in Afghanistan. Speculation remains
rife that Prime Minister Fukuda will call elections some time
in 2008 ) and Kawai noted that the last four times Japan
hosted a G7/G8 meeting, the ruling party has called a general
election. Elections could come in February after a Diet vote
on refueling, in April or May after passing the budget, or in
July after the G8 leaders, meeting. "Instead of policy, we
now have politics," Kawai lamented. Regarding ties to the
U.S. and in the wake of a successful U.S.-Korea Free Trade
Agreement (FTA),Tokyo and Washington should seriously
consider a U.S.-Japan FTA, he concluded.


3. (SBU) Park noted that all the major candidates in the
December 19 presidential election in Korea were well-informed
on foreign policy, but that nongovernmental organizations )-
for example, those dealing with foreign assistance,
peacekeeping, and a host of global issues )- were a new
factor for both the candidates and the government to contend
with. While foreign policy was a second-tier issue in the
campaign, the incoming President will coordinate with the
Blue House on the timing of the submission of the FTA to the
National Assembly. Asking when the U.S. Congress would
consider the agreement, he said the U.S. should view the
U.S.-Korea FTA not only in bilateral terms, but as a
strategic gateway to Northeast Asia.

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Climate Change
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4. (SBU) S/P Member Dean Pittman, in the December 17 morning
session, reported that the UN Climate Change Conference in
Bali, December 3-14, successfully adapted an agreed
framework, thanks to the support of Japan and ROK. The
primary goal was to ratify a framework for negotiations
rather than start negotiating. The framework envisioned
conducting negotiations over the next two years with the
principles of not pre-judging any outcomes, and not excluding
any country. The difficult work ahead, Pittman said, was to
negotiate the details of the process. He noted that the
Major Economies Process (MEM),which will include meetings in
Hawaii January 30-31 and in Paris in February, would
complement and inform the UN process.


5. (SBU) DFM Park said the Kyoto Protocol was a great
achievement but any future framework needed to be more
flexible and inclusive. He called for a framework that
provided balance between preserving the environment and
economic development; respected the unique economic condition
of individual countries; assisted countries in achieving
their environmental goals; and provided for the development
of technologies. Park confirmed that the ROK would support
the MEM process, and expressed appreciation that MEM would
respect the UN process.


6. (SBU) DVM Kawai agreed that the Bali conference was a
good start and that negotiations would be lengthy and
difficult. He echoed the need to continue economic
development while being mindful of climate change and to
improve energy efficiency by developing and diversifying
technologies. He pointed out that while there is a strong
interest in Japan in saving energy and reducing carbon
emissions, given the fact that Japan has already made drastic
cuts in corporate and household energy usage, the Japanese
public wonders what more they can do.


7. (SBU) In summary, Director Gordon said the United States,
Japan, and Korea all agreed that a climate change framework
should be comprehensive and flexible; balance good
environmental stewardship with sustaining high rates of
economic growth; and make use of technology to help us
achieve the balance. He said the United States, Japan,
Korea, along with Canada and Australia, could be an effective
bridge between the European Union, which was calling for more
rigid compliance targets, and the developing world, which was
resisting the imposition of environmental protection
standards.

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Energy Security
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8. (SBU) Turning to energy security, Director Gordon
outlined five goals shared by the United States, Japan, and
Korea: diversifying types of energy and sources of supply;
enhancing efficiency; ensuring the safety of sea lanes and
routes of transport; and maintaining market transparency.

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DFM Park and DVM Kawai agreed that technology would be key to
addressing energy security.


9. (SBU) Kawai added that energy security was important but
market mechanisms were equally important. Japanese companies
were interested in exporting energy-saving expertise but
would require intellectual property rights protection before
they could provide technological expertise in foreign
environments. He noted Chinese companies were interested in
energy saving technologies because they wanted to cut
operating costs and not because they wanted to reverse
climate change. He agreed that diversifying oil resources
was important. In the past, oil shortages were supply-driven
while recent shortages were more gradual and demand-driven.
In response to Kawai's comment that Japan was counting on the
U.S. Navy to provide for the protection of sea lanes, DOD
Deputy Assistant Secretary David Sedney pointed out that the
United States relied on our alliances with Japan and Korea,
as well as cooperation with Malaysia, India, Pakistan, and
Sri Lanka, to protect routes of transport. Sedney
highlighted Japan's Indian Ocean refueling mission in support
of Operation Enduring Freedom as an example of international
cooperation.

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Iraq and Afghanistan
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10. (SBU) Director Gordon said that the United States hoped
to build by January 2009 a relatively stable and economically
sustainable Iraq. We were also hoping that the Iraqi
parliament would enact during 2008 a hydrocarbon law to
attract new investment. An improved security situation in
the Sunni regions would encourage Iraq's wealthier neighbors
to play a greater reconstruction role.


11. (SBU) S/P Member Amanda Catanzano stressed that
reconstruction in Iraq and Afghanistan meant more than just
building new schools, hospitals, and other infrastructure,
but building institutions that worked, including a justice
system that can root out corruption. Catanzano noted that
the United States was concerned that international interest
in Afghan reconstruction was dissipating and wanted to
revitalize that interest.


12. (SBU) DVM Kawai said the stability of the Middle East
was vital for Japan. Although Japan was limited by its
constitution in the military forces it could contribute and
had to suspend its refueling operation in support of
Operation Enduring Freedom (OEF) because of domestic
politics, Japan was committed to the civilian donor
coordination program. He expressed confidence that the
Japanese Diet would pass a new law to authorize Japan's
participation in OEF.


13. (SBU) DFM Park said that Middle East stability was
important for the ROK as well. DFM Park said he observed
during his recent visit to Kabul that the Taliban were using
psychological means to give the impression that they were
behind every insurgent action, thus giving rise to the

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possibility that the Taliban would return to power. The
Taliban were also fanning the perception that Pakistan wanted
to divide Afghanistan, all of which were undermining
stability to the country.

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BRICs
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14. (SBU) Deputy Foreign Minister Park summarized a 2003
Goldman Sachs report that argued that by 2050 the rapidly
developing economies of Brazil, Russia, India, and China
(BRICs) would eclipse most of the current richest economies
of the world. The high level of growth in these economies
would translate into increased spending power and rising
consumption of goods, and ultimately serve as a locomotive
for global economic growth. To achieve this goal, however,
China needed to eradicate corruption and undergo a
technological breakthrough, Park said. Russia had to reduce
its energy consumption, and Brazil needed to reduce
bureaucratic red tape.

15. (SBU) Park said the BRIC countries were realizing their
potential more quickly than Goldman Sachs had anticipated.
In 2008 China would overtake Germany as the third largest
economy. India would surpass China as the largest supplier
of labor, because of China,s low birthrate and a growing
aging population. On responding to the rise of the BRICs,
Park proposed increasing our partnership with these countries
to manage both the positive aspects of development and its
adverse impact on the environment.


16. (SBU) Deputy Vice Foreign Minister Kawai said it was
crucial to ensure that the BRIC countries remained stable,
pointing out that macroeconomic management might be difficult
for them. He questioned whether they shared similar values
to each other, and to the United States, Japan, and Korea.
Comparing the Chinese and Indian economies, Kawai said China
was building on 30 years of growth while India had
experienced rapid growth in just the past ten years. He said
that in the course of negotiating a Free Trade Agreement with
India, Japan had discovered that much of the population was
in need of skills training and education.


17. (SBU) Director Gordon, drawing on his work for the
National Intelligence Council 2020 report, noted that
globalization did not necessarily mean Westernization, and as
a result, we were increasingly seeing a decline in the
relevance of many terminologies, including "developing
country" and "North-South." Gordon was struck by the
differences that distinguished the BRIC countries from each
other. India and Brazil were democracies while Russia and
China were not. Russia was energy resource rich while China,
India, and Brazil were high net consumers of energy without
adequate domestic energy resources. He also questioned
whether the four had enough similarities to form a single
political entity or voting block, and recalled former Deputy
Secretary Zoellick's point of engaging them so that they

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would be "responsible stakeholders" in the current status
quo. Gordon said most people were optimistic about the
present and immediate future but less so about the long term.

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18. (SBU) EAP DAS Alex Arvizu said he was inclined to
consider Mexico with the other BRICs (MBRIC). While he was
working in Bangkok during 1994-95, no one had any idea that
China would be what it was today, and India was not even on
the horizon. The focus in the mid-1990s was more on Russia,
but today Russia is seen as an under-performing giant,
particular in the political context of APEC and the Six-Party
Talks. Arvizu suggested that the United States, Japan, and
Korea might consider inviting Australia to the next dialogue.


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Participants
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19. (SBU)
United States
Policy Planning Director David Gordon
S/P Principal Deputy Director Kori Schake
S/P James Green
S/P Amanda Catanzano
EAP DAS Alex Arvizu
OSD DASD David Sedney
EAP/K Jim Heller
Brian McFeeters, U.S. Embassy Seoul
EAP/K Andrew Ou, Notetaker
EAP/J Forest Yang, Notetaker

Japan
Deputy Vice Minister for Foreign Policy Chikao Kawai, MOFA
Policy Planning Deputy Director Daisuke Hoshino, MOFA
First Secretary Taisuke Mibae, Embassy of Japan

Republic of Korea
Deputy Foreign Minister Park In-kook, MOFAT
Development and Cooperation Director Jeong Jin-kyu, MOFAT
North America Division First Secretary Kang Dae-soo, MOFAT
Policy Division First Secretary Jung Young-soo, MOFAT
Policy Division First Secretary Hwang Jun-shik, MOFAT
Staff to Director Jeong Lee Ah-jung, MOFAT
Political Counselor Lee Baek-soon, Embassy of ROK
First Secretary Ryu Chang-soo, Embassy of ROK
RICE