METI VICE MINISTER DISCUSSES APEC, WTO,

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002681

SIPDIS

STATE FOR EAP FOR AMB HASLACH, EAP/J, EAP/EP, AND EEB
STATE PASS USTR FOR AUSTR CUTLER, MBEEMAN, AND EHOLLOWAY
NSC FOR LOI AND SHRIER

E.O. 12958: DECL: 09/25/2018
TAGS: ETRD EAGR SENV EINV JP
SUBJECT: METI VICE MINISTER DISCUSSES APEC, WTO,
AGRICULTURE, AND CLIMATE CHANGE

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


1. (C) Summary: Japan and the U.S. must work together to
develop a strong agenda to support their back-to-back tenures
as APEC Chair in 2010 and 2011, Ministry of Economy, Trade
and Investment (METI) Vice Minister Hiroyuki Ishige told the
DCM September 25. Ishige said he personally is "very
interested" to see Japan join the Trans-Pacific Strategic
Partnership (or P-4) free trade agreement, but did not offer
a timeline for the GOJ to do so. He did not go into the
reasons why Japan's official stance has not been more
forthcoming. Ishige noted the benefits of a successful Doha
Development Agenda, but offered no comments on steps Japan is
taking to help achieve this end. The DCM raised concerns the
food safety debate in Japan is too focused on perceived
problems with imported food and less on deficiencies in
domestic regulation and policies. With respect to
investment, Ishige said Japan will meet its goal to increase
FDI to five percent of GDP by 2010. He underscored Japan's
desire for a successful COP-15 climate change conference in
Copenhagen next year and noted the need for a post-Kyoto
framework that includes all major carbon emitters and ensures
equitable and shared commitments among developed economies.
End summary.


2. (U) DCM and tradeoff called on the new METI Vice Minister
for International Affairs Hiroyuki Ishige on September 25 to
discuss a range of issues.

APEC/Trans-Pacific Strategic Partnership
--------------

3. (C) Japan and the U.S. must, in Ishige's opinion, work
together to develop a strong agenda for their back-to-back
tenures as Chair of the Asia Pacific Economic Cooperation
(APEC) forum in 2010 and 2011. He was surprised at the
timing of the USG's September 22 announcement so close to the
U.S. presidential election that it will join full
negotiations of the Trans-Pacific Strategic Partnership free
trade agreement (or P-4). Ishige confided he is personally
"very interested" to see Japan join in the P-4 talks, but
said it is difficult to say officially when this might be
feasible. He asked that we stay in close contact on the APEC
agenda and P-4 negotiations.

WTO
---

4. (C) Vice Minister Ishige agrees on the benefits of a
successful conclusion of the WTO Doha Development Agenda. He
said he gained greater insight into USG views on Doha during
his September 9-13 visit to the U.S., but noted he found
"slight differences" between USG and U.S. industry positions.
In particular Ishige said the USG seems more focused on
concluding an agreement quickly whereas industry appears to
place more emphasis on the quality of an agreement and the
modalities for doing so. He said Japanese industry support
for Doha is strongest among electronics manufacturers who
face high tariff barriers in the EU.
Food Safety
--------------

5. (C) The DCM raised concerns the food safety debate in
Japan is increasingly focused on perceived problems with
imported food instead of the deficiencies in Japan,s
domestic regulation of agriculture products. He referenced
our separate requests with the Ministry of Agriculture,
Forestry and Fisheries (MAFF) to resume immediately the rice
and other grain tenders that MAFF stopped in response to the
scandal currently capturing headlines around the country
involving Chinese and Vietnamese (but not U.S.) rice
imports. Ishige agreed the U.S. and Japan should engage more
vigorously on food safety and food supply issues. Regarding
GOJ policy to increase Japan's agricultural self-sufficiency,
he said former PM Fukuda had instructed METI to work with
MAFF to make the agriculture sector more competitive globally
and to increase the efficiency of Japan,s food distribution
system.

TOKYO 00002681 002 OF 002


Investment
--------------

6. (C) Ishige said the GOJ looks forward to good discussions
with the U.S. during the upcoming bilateral investment talks
hosted by Japan in October. Encouraging more foreign
investment is an important GOJ policy objective, he noted.
Japan is on target to meet its goal to increase foreign
direct investment to five percent of GDP by 2010. Ishige
also agreed more work needs to be done to dispel the
misperception Japan is ambivalent about foreign investment
and welcomed our suggestions about how to overcome this
problem. For example, during a recent visit to Abu Dhabi, he
was surprised to hear UAE officials say Japan does not
welcome investments by sovereign wealth funds. (Comment:
Given the conversations Embassy and other USG official had
with Ishige during his previous tenure as Director General
for METI's Trade Policy Bureau on investment and the impact
of GOJ decisions, including the Children's Investment Fund
and Steel Partners cases, we find his remarks surprising.
End comment.)
Climate Change
--------------

7. (C) Vice Minister Ishige said the GOJ is committed to a
successful outcome for the 2009 UN Climate Change Conference
(COP-15) in Copenhagen. A post-Kyoto framework must include
all major carbon emitters and ensure CO2 reduction
requirements are set at levels that are equitable and shared
among developed countries. He said the good progress was
made during the Toyako G-8 Summit, in particular the EU,s
greater willingness to participate in development of the new
climate change framework.
Subcabinet Talks
--------------

8. (C) Ishige said he will attend the Subcabinet meetings in
Washington November 12. In addition to stocktaking, he said,
the U.S. and Japan need to discuss how they approach their
relations with third countries, especially China. Having
recently returned from India, he noted New Dehli's concern
about China's "dominance" of Asian markets.
SCHIEFFER