NEW ASSURANCES FOR JAPAN'S FOOD SECURITY

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 003209 SIPDIS FOR EAP/J AND AMBASSADOR HASLACH STATE PASS USDA FOR DUS TERPSTRA, USDA/FAS DANIEL BERMAN AND SUZANNE HALE HHS/FDA/CFSAN FOR DAVID ACHESON USTR FOR AUSTR CUTLER, MICHAEL BEEMAN, RON MEYER, ERIC HOLLOWAY, AND JANE DOHERTY NSC FOR JIM LOI E.O. 12958: DECL: 11/18/2018 TAGS: EAGR ETRD PREL ECON TBIO PTER JP SUBJECT: NEW ASSURANCES FOR JAPAN'S FOOD SECURITY Classified By: Ambassador J. Thomas Schieffer; reasons 1.4 (b) (d) ¶1. (C) Summary: Japan's current approach to food security undermines its economic interests and is an irritant in U.S.-Japan bilateral trade relations. Fears among the Japanese public that foreign sources of food are by definition unreliable and that foreign food, whether from China or the U.S., can easily be tainted, has provided grist for Japanese officials and politicians to advocate policies calling for greater self sufficiency in agriculture. This policy course, however, falls short of meeting Japan's food security objectives. From the U.S. perspective, the GOJ's ineffective and misguided food import policies could, in the event of a sustained crisis, render Japan a weaker and less effective strategic partner. At the very least, they threaten to distort further Japan's agricultural trade the way non-science based regulations have cut and kept limited U.S. exports of beef. Japan's position on boosting agricultural output and promoting its inefficient domestic agricultural sector also limits its ability to engage fully in the Doha Development Agenda or in regional and bilateral trade liberalization agreements that include meaningful commitments on agriculture. In order to move our bilateral agricultural trade discussions forward and forestall new regulatory or other barriers to our agricultural trade with Japan, Post supports the proposal that the USG offer formal assurances to Japan that the United States will remain a reliable supplier of agricultural products, even in times of shortage -- i.e., re-state long-standing U.S. policy in order to redirect the GOJ's focus on food security away from exacerbating poor domestic agricultural policies and impeding imports of U.S. agricultural products. The upcoming U.S.-Japan Sub-Cabinet talks, tentatively scheduled for December in Washington, offer a good opportunity, perhaps in the form of a joint statement, to raise Japan's food security concerns and to offer assurances of this kind. As part of this process, Japan should be encouraged to recognize imports are an integral part of its food security needs. End summary. The World's Most Important Agricultural Relationship -------------- -------------- ¶2. (SBU) Japan, while restricting imports of beef and other products, is our largest agricultural customer outside NAFTA and agricultural trade has been a key component of the overall bilateral relationship since 1945. Japan imports 60 percent of its calories and the United States is Japan's largest and most reliable food supplier. Almost 60 percent of the wheat consumed in Japan came from the United States in 2007, as did 75 percent of the soybeans and 100 percent of the corn. The effects of a disruption in U.S. commodity sales would be devastating for Japan. Americans may have forgotten, but Japanese often note President Nixon's 1973 announcement to suspend soybean exports and say the U.S. might do so again. ¶3. (SBU) Were sources of feed for livestock disrupted, for example, Japan's 4.4 million cattle, 10 million pigs, and hundreds of millions chickens would begin to starve within four to six weeks. It is unlikely other countries could supply on short notice the 15 million tons of corn Japan needs annually. American agricultural exports to Japan totaled $11.6 billion last year. Japan is the largest market for U.S. wheat, corn, pork, and potatoes, in addition to several billion dollars worth of processed food products. Prior to the 2003 discovery of BSE in the U.S., Japan was also the largest market for U.S beef, with imports valued at $1.3 billion. A Renewed Commitment is Needed -------------- ¶4. (C) This issue is a national priority for Japan and the government cites food security frequently to justify its protectionist agricultural policies. In response to tight commodity markets in 2007 and 2008, the GOJ stepped up its rhetoric designed to denigrate food imports and extol the TOKYO 00003209 002 OF 002 benefits of domestically produced (and much more expensive) alternatives. Recent food scandals regarding frozen dumplings and other foods from China, and tainted rice from Japan's storehouses getting into the food supplies, have raised public anxieties. The GOJ has tended to fold the food safety question of tainted foreign food into the domestic debate over food security, as well one result is to exacerbate public perceptions of foreign food as generally suspect rather than looking at specific problems from particular countries, producers, shippers or even domestic sources. The GOJ and Japanese media have overlooked the fact that the U.S. continues to supply safe, high quality products to Japan or that the U.S. kept its market open while many of Japan's other key trading partners imposed export restrictions and related taxes in response to recent global food shortages and rising prices. ¶5. (C) Restating the USG's existing and long-standing policy to not limit agricultural exports to Japan could help move the GOJ away from its familiar refrain that food imports are unreliable. We suggest using the language to press Japan to recognize its food security-based need to promote greater understanding and application of science-based trading rules to enhance its sourcing options, something that would directly benefit U.S. exporters, and potentially reduce Japan's ingrained protectionist tendencies. A renewed gesture by the USG to ensure a reliable source of agricultural goods would also complement our efforts in APEC to address, together with Japan and other economies, broader food security concerns. ¶6. (C) The best food security measure for Japan is unfettered access to U.S. supplies. The best way for Japan to ensure the United States continues to be a reliable supplier is for Japan to be a reliable buyer. To do so, Japan must take concrete steps to eliminate technical barriers to trade and enhance market access for U.S. companies. The GOJ must also avoid, however politically expedient it might seem, the tendency to conflate food safety and food security concerns. USG assurances of continued access to U.S. agricultural products will make it more difficult for the GOJ to use food security concerns as an excuse for protecting its domestic farmers and food processors. SCHIEFFER