GOJ PROPOSAL FOR TRILATERAL COOPERATION IN

C O N F I D E N T I A L TOKYO 001723

SIPDIS

DEPARTMENT FOR PM/DTC AND EAP/J

E.O. 12958: DECL: 06/20/2018
TAGS: KOMC ETTC JA
SUBJECT: GOJ PROPOSAL FOR TRILATERAL COOPERATION IN
OUTREACH ACTIVITIES

REF: 07 TOKYO 04930

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


1. (C) METI Export Controls Deputy Director Takao Shishikura
gave EconOff the following nonpaper in English June 20 and
requested the Embassy transmit it to Washington and also
respond with any USG reaction.

Begin Text:

Proposal for Trilateral Cooperation in Outreach Activities

Background
--------------

Outreach activities of Japanese government in Asian region
have begun in late 1980s and many countries including, the
U.S. and Australia have put a lot of efforts and resources
into the region. As such, Japan has almost 20 years of
experience in multi-national outreach seminars and five years
in bilateral ones in this region. We have learned some
lessons through our experiences, which lead to this proposal
to the U.S. and Australian governments. The lessons are as
follow.

First, we should have made more efforts to take the situation
in each recipient country into consideration in our outreach
activities, considering the fact that each recipient
country's stage of development in the area of export controls
has become more varied in these last 20 years. Disparities
can be observed with regard to such elements as governments'
intentions, export control laws/regulations, industrial
structure, technology level and trade structure. Therefore,
it is essential that we evaluate the situation of each
recipient country and take a more "custom made approach"
based on the evaluation so that we can help each country in
the most effective manner.

Second, we keenly realized the importance of more
coordination and cooperation among other partners such as the
United States and Australia. We have heard recipient
countries' requests for more coordination among countries
providing outreach activities. We believe that coordination
among related countries should be made in terms of timing,
agendas, countries targeted for outreach and determining
other priorities.

Third, we think it would be better if we would divide our
responsibilities based on our strong points. It is our
impression that the U.S. EXBS program has had a strong and
positive impact on many recipient countries especially in
installation of laws/regulations and training of customs
officers. Australia also has had great impact on training
customs officers. While we have limited knowledge and
experience in those aspects, we are confident that we can
help recipient countries establish cooperative relations with
their industries.

Based on those recognitions, we would like to propose closer
trilateral cooperation among Japan, the U.S. and Australia as
described in paragraph 3. It would be truly appreciated if
you could deliver your opinion to us, although this proposal
is still tentative.

Basic Idea of Cooperation
--------------

--------------
Categorizing Asian Countries
--------------
In our view, in order to achieve effective export controls,
the following four elements are necessary: "intention of
controlling exports," "sufficient laws/regulations,"
"sufficient enforcement," and "cooperation with industries."
It is our understanding that the general idea of outreach is
to help the recipient country develop its export controls by
addressing those elements.

Based on this recognition, we divided Asian countries into
following four categories. Though it is almost impossible to
simply categorize Asian countries into only four groups, we
think it is better to have as few categories as possible to
avoid complicating the basis of our discussion and
cooperation.

Category 1: countries with no or low intension of controlling
exports,
Category 2: countries with intention of controlling exports,
but which have yet to establish sufficient export controls

laws/regulations,
Category 3: countries with export controls laws/regulations
but insufficient enforcement, and
Category 4: countries with export controls laws/regulations
and sufficient enforcement, but without sufficient
cooperation with industries.

Since countries in different categories are in different
stages of maturation in export controls, different measures
should be taken and varied objectives be sought for outreach
activities. The following are our tentative ideas of what
should be done in each category.

Category 1
The biggest purpose of outreach to this category is to
increase awareness of the importance and necessity of export
controls. Government to government discussion, especially at
higher levels, is the most effective venue to achieve the
objective. It is important that we get rid of the doubt or
fear among officials in those countries in category 1 that
strict export controls impedes trade and economic
development. Otherwise, it is highly unlikely any country in
category 1 would consider establishing export controls at
all. An export control seminar for industries is also
effective to get rid of the doubt or fear of industries, if
necessary.

Category 2
The main purpose of outreach activities to the countries in
this stage is to make sure that those countries establish
export controls laws/regulations which are harmonized with
international export control regimes. It is also important
to avoid making those laws/regulations too complicated to
understand and implement. It is beneficial to provide
practical assistance, including technical and legal aspects,
through working level discussions and a variety of seminars.
At the same time, industry outreach seminars could also be
effective to get rid of the doubt or fear of industries, if
necessary.

Countries in Category 3

Inter-governmental dialogue should take place to reiterate
the importance of export controls in order to sustain their
awareness. Also a variety of practical seminars, such as
those which target customs officers, should be held to
improve the abilities of their enforcement. At the same
time, measures such as industry outreach seminars and
introduction of ICPs should be taken in order to promote the
cooperation with industries.

Countries in Category 4

Measures such as industry outreach seminars and the
introduction of ICPs should be taken in order to promote the
cooperation with industries.

At the same time, a variety of practical seminars should be
held to strengthen enforcement, if necessary. Bilateral
cooperation in the field of export controls, such as
exchanging information on exports of concern, should be
promoted as appropriate. Furthermore, these countries could
be invited to the outreach seminars for the countries in
category 1 to 3 if possible.

It should be noted that objectives to be sought for and
measures to be taken in each category are neither definitive
nor exclusive of each other. For instance, it is important
to encourage not only governments in category 1, but also
those in all categories to increase or keep high awareness
and motivation to maintain export controls. Gaining
cooperation of industry is not only necessary in category 4
but also in other categories. For example, decision making
by governments in category 1 will be facilitated by the
better understanding in the industry on the importance and
benefit of export controls. Taking this into consideration,
we could summarize what should be done primarily to each
category as below.

Primary objectives in each category
--------------

Category 1
Primary Objectives: Increase awareness of government
Tools: Bilateral discussion, Seminars for Industries (if
necessary)

Category 2
Primary Objectives: Establish strict legal system
Tools: Legal assistances, Training for officers, Seminars

for industries (if necessary)

Category 3
Primary Objectives: Strengthen enforcement
Tools: Training for officers, Seminars for industries, Legal
assistances (if necessary)

Category 4
Primary Objectives: Gain Cooperation of industries
Tools: Seminars for industries, Training for officers (if
necessary)

--------------
Priority
--------------
Since we don't have infinite resources to put into outreach
activities, we have to prioritize Asian countries to maximize
the effectiveness of our activities. Though there are many
ways to make prioritization, we would propose to do it in
accordance with potential risk of diversions to nations of
concern since the fundamental purpose of outreach activities
is to prevent Asian countries from contributing to the
development of WMD, missile or conventional military weapons
in countries such as PRC, DPRK and Iran. It is obvious that
the higher potential risk a country has, the sooner we have
to take care of the country though we have no intention of
ignoring low risk countries.

There are many elements with which to evaluate potential
risks: technology level of industries, volume of trade,
geographical location, and historical, racial, cultural and
economic ties to countries such as PRC, DPRK and Iran. We
have made a preliminary survey of the situation of each Asian
country and prioritized them in accordance with potential
risks (see Annex I). Though our evaluation is still
tentative in both criteria for the result to be recognized as
a solid proposal, we are sure that it can serve as a basis of
our discussion. We would like to listen to your opinion on
our criteria to evaluate risks and our results.

Trilateral Cooperation
--------------

We would like to propose possible trilateral cooperation
between Japan, the U.S., and Australia in the following
aspects:

1. Sharing evaluation of the status of Asian countries;

2. Dividing responsibilities in the field of outreach
activities; and

3. Exchanging information on such things as schedules,
agendas, objectives and results of each outreach activity.

First, we would like to have a shared evaluation of Asian
countries as a basis for our cooperation. It is necessary to
review the evaluation regularly, since the export controls
situation in Asian countries is very likely to change in the
short term.

Second, and most importantly, we think it essential that we
share our roles to maximize the effectiveness of our
cooperation. We would like to propose to share our roles
based on the specialty and advantage that each country has.
As mentioned above, it is our impression that the U.S. has
huge advantages in installation of export controls systems
and training for officers, while Australia has advantages in
training for customs officers. The Japanese government has
both experience and knowledge in establishing relations with
industries. Based on this recognition, we would like to
propose following role-sharing:

Technical assistances are provided by mainly U.S. and
Australia
Training for officers are conducted by mainly U.S. and
Australia
Industry outreach is conducted mainly by Japan.

Sharing among Japan, U.S. and Australia

Category 1
Objectives: Increase awareness of government
U.S.: Bilateral discussion
Australia: Bilateral discussion
Japan: Bilateral discussion, Multilateral seminar, Seminars
for industries (if necessary)

Category 2
Objectives: Establish strict legal system
U.S.: Legal assistance, Training for officers
Australia: Legal assistance, Training for officers
Japan: Multilateral seminar, Seminars for industries (if

necessary)

Category 3
Objectives: Strengthen enforcement
U.S.: Training for officials, Legal assistance (if necessary)
Australia: Training for officials, Legal assistance (if
necessary)
Japan: Multilateral seminar, Seminars for industries

Category 4
Objectives: Gain Cooperation of industries
U.S.: Training for officials (if necessary)
Australia: Training for officials (if necessary)
Japan: Multilateral seminar, Seminars for industries

Finally, it is essential to exchange, in advance, information
on such thing as schedule, agenda and objective each outreach
activity and confirm that those of U.S. are looking at the
same direction. It is also essential that the result of each
activity be shared and used for annual review of criteria and
evaluation. As the first step, we would like to provide our
plan of outreach in this year (see Annex II).

Annex I
Current Status of Export Control in Asia (tentative)
Category 1
High (risk of diversion to nations of concerns)
Thailand, Philippines, Indonesia, Vietnam

Low (risk of diversion to nations of concerns)
Mongolia, Cambodia, Laos, Myanmar, Brunei Darussalam,
Bangladesh, Sri Lanka

Category 2
Low Risk
Malaysia

Category 3
Low Risk
China, India Pakistan, UAE

Category 4
Low Risk
Republic of Korea, Chinese Taipei, Singapore, Hong Kong

Annex II
Japan's Outreach Program in 2008

Industrial Outreach Seminar
--------------
Chinese Tapei--January
India--February
Malaysia--March
Viet Nam--September
Republic of Korea--October
Indonesia--October
UAE--November

We organized industrial outreach seminars in Thailand and
Philippines in 2007. We are currently proposing to China to
have a seminar.

The Asia Export Control Seminar
--------------
The next seminar will be held in February 2008.

Bilateral Consultation
--------------
Chinese Taipei--January
Israel--January
Malaysia--March
Singapore--March
Republic of Korea--March/June
Hong Kong--May
India--June
Viet Nam--September
Indonesia--October

End Text.


2. (U) This is the second time METI export controls division
has reached out to the Embassy to express an interest in
solidifying a trilateral relationship on export controls
outreach programs. The previous discussion from October 2007
is documented in the ref.

SCHIEFFER