PM RUDD VISIT: "A NEW PROPOSAL EVERY DAY"

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 001678

NOFORN
SIPDIS

STATE PASS USTR
GENEVA ALSO FOR USTR
COMMERCE FOR 4410/ITA/MAC/OJ
TREASURY FOR IA - DOHNER/WARTHIN/BEASLEY

E.O. 12958: DECL: 06/17/2018
TAGS: PGOV PREL KGHG AS JA
SUBJECT: PM RUDD VISIT: "A NEW PROPOSAL EVERY DAY"

TOKYO 00001678 001.2 OF 002


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

Summary
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1. (C/NF) During their June 12 meeting, Prime Minister Yasuo
Fukuda and Prime Minister Kevin Rudd affirmed the importance
of the Japan-Australia bilateral relationship and their
commitment to expand bilateral security and economic
cooperation, MOFA told Embassy Tokyo. PM Fukuda responded
cautiously to PM Rudd's proposals to set up an international
commission to pursue disarmament and nonproliferation,
formally add a fourth "pillar" to the Japan-Australia trade
relationship and establish a comprehensive Asia-Pacific
community. Our MOFA interlocutor noted that PM Rudd "seemed
to come up with a new proposal every day he was in Japan" and
that "it is a lot for us to digest at this point."
Nevertheless, the Japanese welcomed PM Rudd's efforts to
stress both the importance of Australia's ties with Japan and
the need to ensure that whaling does not overshadow the
bilateral relationship. PM Rudd also "went out of his way"
to emphasize his "neutrality" regarding China, our MOFA
interlocutor said. End Summary.

Nonproliferation and Disarmament
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2. (C/NF) Meeting for nearly two hours June 12, the two Prime
Ministers underlined that Japan and Australia are
comprehensive strategic, security and economic partners and
are committed to further strengthening their cooperation for
the sake of peace and stability in the Asia-Pacific region,
MOFA Oceania Division Principal Deputy Director Masashi
Takahashi told Embassy Tokyo June 17. The two leaders
further confirmed their commitment to hold the
Japan-Australia Joint Foreign and Defense Ministerial
Consultations later this year.


3. (C/NF) Following up his June 9 speech in Kyoto in which he
proposed the establishment of an international disarmament
and nonproliferation commission, PM Rudd suggested to PM
Fukuda that they first establish a Canberra-Tokyo commission
for experts discussions to build the foundation for broader
international participation. PM Fukuda's response was polite
but lukewarm, Takahashi reported, with PM Fukuda noting that
"it's basically a good idea, but there needs to be further
coordination." Japan's view is that there are already
mechanisms in place to discuss disarmament and
nonproliferation, and that PM Rudd's proposal is
"unnecessary," Takahashi said.

Economic Relations
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4. (C/NF) The two Prime Ministers reaffirmed that the
Japan-Australia economic relationship is highly
complementary, including food and energy trade, and expressed
their determination to further strengthen their bilateral
ties, Takahashi continued. PM Rudd proposed enhanced
cooperation in the service sector, especially in financial
services, and proposed formally making services the fourth
pillar of the Japan-Australia trade relationship (the three
other pillars are mineral resources, manufactured products
and agricultural goods). PM Fukuda's response was cautious,
Takahashi reported; he told PM Rudd that he would like the
two countries' experts to discuss this issue further on a
sector-by-sector basis.


5. (C/NF) PM Fukuda and Rudd also recommitted themselves to
working towards a mutually beneficial Economic Partnership
Agreement (EPA) / Free Trade Agreement (FTA),"bearing in

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mind the sensitivities in their respective agriculture
sectors," Takahashi said. PM Fukuda told Rudd that he
attached "particular importance" to reference within any
trade agreement to a stable supply of Australian energy and
mineral resources.

Regional Cooperation
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6. (C/NF) On the subject of cooperation with the United
States, Fukuda and Rudd stressed the critical importance of
trilateral cooperation in ensuring peace and stability in the
Asia-Pacific region. They also confirmed that the two
countries would continue to cooperate for a successful
Trilateral Strategic Dialogue (TSD) process, the third
ministerial meeting of which will be in Kyoto later this
month, Takahashi said. PM Rudd further proposed -- following
up his recent Sydney speech -- to commence discussions with
Japan and others on the establishment of a comprehensive
community in the Asia-Pacific region that encompasses
political and security cooperation. PM Fukuda's response was
again noncommittal, noting that he shared an interest in
future cooperation and would like to discuss it with
Australia and other countries concerned. "Japan needs more
details about this proposal, and we recognize that there are
certain sensitivities when it comes to Australia and its
relations with certain countries, particularly Indonesia...we
will have to see how others in Asia react," Takahashi
explained.

Climate Change
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7. (C/NF) PM Fukuda welcomed the ratification of the Kyoto
Protocol by Australia and PM Rudd expressed gratitude to PM
Fukuda for his leadership in this area. The two Prime
Ministers affirmed the necessity of a new framework in which
all economies participate in a responsible manner and
confirmed that they would cooperate for the success of the
upcoming Major Economies Meeting (MEM) in Lake Toya in July.
As PM Fukuda seeks to push his Cool Earth Program, Australia
is a "natural ally," Takahashi explained.

"A New Proposal Every Day"
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8. (C/NF) Rudd's lengthy visit to Japan included a stop in
Hiroshima as well as Tokyo and Kyoto, and it seemed that "he
had a new proposal during every day of his visit," Takahashi
noted. "It is a lot for us to digest," and the Japanese
Government is not yet ready to respond to all of the PM's
ideas. Nevertheless, the Japanese welcomed the PM's obvious
efforts to stress the importance of the Japan-Australia
relationship, in spite of the recent dispute surrounding
whaling. Significantly, PM Rudd underlined the importance of
ensuring that whaling does not overshadow bilateral ties and
said that "perhaps both sides could agree to disagree." The
Japanese also noted that PM Rudd "went out of his way" to
emphasize his "neutrality" regarding China, Takahashi said.
SCHIEFFER