Identifier
Created
Classification
Origin
08TOKYO2951
2008-10-22 08:12:00
CONFIDENTIAL
Embassy Tokyo
Cable title:  

AUSTR CUTLER DISCUSSES BILATERAL TRADE AND

Tags:  ETRD EAGR ECON APEC JP 
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C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 002951 

SIPDIS

STATE FOR EAP/J AND EAP/EP AND AMBASSADOR HASLACH
STATE PASS USTR FOR AUSTR CUTLER AND AUSTR WEISEL

E.O. 12958: DECL: 10/17/2018
TAGS: ETRD EAGR ECON APEC JP
SUBJECT: AUSTR CUTLER DISCUSSES BILATERAL TRADE AND
REGIONAL ARCHITECTURE WITH JAPANESE COUNTERPARTS

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

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 002951

SIPDIS

STATE FOR EAP/J AND EAP/EP AND AMBASSADOR HASLACH
STATE PASS USTR FOR AUSTR CUTLER AND AUSTR WEISEL

E.O. 12958: DECL: 10/17/2018
TAGS: ETRD EAGR ECON APEC JP
SUBJECT: AUSTR CUTLER DISCUSSES BILATERAL TRADE AND
REGIONAL ARCHITECTURE WITH JAPANESE COUNTERPARTS

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


1. (C) Summary: While agreeing on the importance of APEC
and on the Free Trade Area of the Asia-Pacific approach as a
long-term vision for achieving trade and investment
liberalization through the Asia-Pacific region, Foreign and
Trade Ministry interlocutors expressed differing versions to
visiting AUSTR Wendy Cutler on how Japan and the United
States can most effectively achieve this goal. On bilateral
beef trade, Agriculture Ministry officials continued to
express opposition to full market opening, arguing for a
30-month reopening for the time being. AUSTR Cutler also
emphasized the importance of Japan re-starting tenders for
rice imports, although her counterparts could not offer a
definitive timeline for when tendering would resume. Her
Foreign and Trade Ministry counterparts discussed the need to
continue to strengthen bilateral economic and trade relations
under a new U.S. administration, including by ensuring the
U.S.-Japan Regulatory Reform Initiative (or its successor)
remains a key component of our engagement. End summary.


2. (SBU) During her October 13-14 visit to Tokyo, Assistant
U.S. Trade Representative for Japan, Korea, and APEC Affairs
Wendy Cutler raised bilateral and regional issues with
Ministry of Foreign Affairs (MOFA) Director General for
Economic Affairs Yoichi Otabe, Ministry of Agriculture,
Forestry, and Fisheries (MAFF) Director General for
International Affairs Kaoru Yoshimura, as well as Vice
Minister Hidenori Murakami, Ministry of Economy, Trade, and
Industry (METI) Director General for Trade Policy Hideichi
Okada, and MOFA Deputy Vice Minister Chikao Kawai. She also
met with the Board of Directors of the American Chamber of
Commerce in Japan.

APEC
--------------


3. (C) AUSTR Cutler engaged MOFA's Otabe and METI's Okada on
how to set the stage more effectively to make Japan's APEC
host year in 2010 and the U.S. host year in 2011 as fruitful

as possible. Both agreed with Cutler's view that an
excessive focus placed by Japan on the achievement of APEC's
Bogor Goals by developed countries before 2010 would sap the
ability to use 2010 to move forward on future-oriented work,
like the Free Trade Area of the Asia-Pacific (FTAAP). Both
also concurred with Cutler on the importance of carefully
coordinating bilaterally as we work with other APEC economies
in order to be able to set a forward looking agenda for 2010
and 2011.

Regional Economic Integration
--------------


4. (C) Responding to questions on METI's vision for
Asia-Pacific integration, Okada noted a U.S. presence in Asia
is necessary, but Japan will continue to engage its trading
partners in regional fora such as ASEAN plus 3 and ASEAN plus
6 that do not include the United States. At the same time,
he tried to assure AUSTR Cutler that METI Minister Nikai does
not intend to exclude the U.S. from regional economic and
trade initiatives. There can be no successful regional
economic integration without the United States, he stated.

Trans-Pacific Strategic Partnership FTA
--------------


5. (C) Saying he did not fully understand how the
Trans-Pacific Strategic Partnership free trade agreement (or
P-4) will benefit the United States, MOFA's Otabe
acknowledged broader participation by additional countries
might facilitate more meaningful regional trade
liberalization. METI's Okada said joining the P-4 was the
"right step" for the United States. However, both Otabe and
Okada argued Japan is not ready for the P-4, but will
continue its discussions with the U.S. about possible future
participation. MAFF's Yoshimura said Japan's agriculture
industry in particular is not interested in a free trade
agreement with New Zealand. Otabe said the GOJ prefers to
work with the USG to develop a high standard FTAAP and sees

TOKYO 00002951 002 OF 003


the FTAAP as a better vehicle than the P-4 for achieving
regional economic integration. He also said Japan would be
in a better position to take high-level decisions on trade
issues in 2010, when it hosts APEC and the Primer Minister's
Office focuses on these issues.

U.S. Beef
--------------


6. (C) Emphasizing the safety of U.S. beef and the strong
concern that continues to exist about Japan's reluctance to
adopt international standards for beef trade, AUSTR Cutler
stressed to her counterparts the need fully to resolve the
issue. She added that Ambassador Schwab will soon be in
touch with Agriculture Minister Ishiba to seek agreement on
basic principles under which we can move forward with
solutions to this issue. She stressed the United States
continues to look to Japan to agree on a concrete timeline
for further opening its market in a manner that will lead to
consistency with international (OIE) standards, and pointed
to the U.S. agreement with Korea on beef as a model for how
we can achieve this goal.


7. (C) Reflecting the high degree of incrementalism
infecting Tokyo on trade issues in recent months as Japan's
political situation evolves, visiting AUSTR Cutler's
counterparts failed to move beyond previous positions about
how the beef trade issue can be solved. MAFF Vice Minister
Murakami conceded resolution of the U.S. beef issue will be
"very difficult" given differences of approach on both sides.
Both Otabe and Yomishura asserted lingering doubts about the
safety of U.S. beef warrants a slower and more measured
approach by the GOJ. Yomishura cited research by Japanese
scientists that claims prions (infectious agents for BSE)
might exist in the neural network outside the spinal cord.
AgMinCouns said he was unaware of this research, but noted if
confirmed, this discovery will have implications for Japan's
own beef industry, which has suffered higher rates of BSE
infection in its cattle population. AUSTR Cutler expressed
surprise the GOJ still questions the safety of U.S. beef and
noted she has been told repeatedly in private conversations
Japan's reluctance to reopen fully its market to U.S. beef is
motivated by political considerations, not scientific
concerns.

Rice Tenders
--------------


8. (C) Director General Yoshimura claimed MAFF stopped rice
tenders in the wake of Japan's incident rice scandal in order
to buy the government time to restore consumer confidence.
He would not commit to a date by which tenders will resume,
but assured AUSTR Cutler every effort would be made to
restart the tender process as quickly as possible. MOFA's
Otabe speculated rice tenders will resume in December. AUSTR
Cutler said U.S. rice is safe and already tested repeatedly
by Japan, and has not been implicated in the scandal. She
expressed concern further delays in a resumption of rice
tenders made it increasingly difficult for the USG to quietly
engage the GOJ on this issue. Otabe said MOFA is working
with MAFF to resolve the issue and will push for productive
discussions in Geneva at the WTO. In particular, Japan will
consider how best to use WTO preferential treatment
provisions to "make up" for the delayed start to minimum
access (MMA) rice tenders for Japan Fiscal Year (JFY) 2008,
much as it had done earlier this year to rectify a shortfall
of tenders in JFY 2007 (eight tenders in 2007 compared to
twice per month as dictated under the terms of the MMA).

U.S.-Japan Relations: Future Initiatives
--------------


9. (C) Otabe said MOFA and METI have established a study
group to develop a set of recommendations for how the next
U.S. administration and Japan should cooperate on a range of
bilateral and multilateral issues. He has included former
METI and MOF officials as a means to better coordinate with
other Ministries on his work. Central to these
recommendations is the role the ongoing Regulatory Reform

TOKYO 00002951 003 OF 003


Initiative should play as a key component of the U.S.-Japan
economic and trade relationship, as well as the Trade Forum,
which he believes should focus more on exchanging views and
information on our respective trade initiatives. Both
countries also need to develop and coordinate a common
strategy for engaging other countries in the region such as
China, India, and possibly Russia. AUSTR Cutler suggested
the U.S. and Japan identify discreet issues for
collaboration, where both countries can set cutting edge
standards and establish models for other economies to follow.


10. (U) AUSTR Cutler cleared this message subsequent to her
departure from post.
SCHIEFFER