SCENESETTER FOR THE SECRETARY'S JANUARY 8-9 VISIT

S E C R E T SECTION 01 OF 03 TOKYO 003523 SIPDIS FROM THE CHARGE FOR THE SECRETARY E.O. 12958: DECL: 12/30/2018 TAGS: OVIP PREL PGOV JA SUBJECT: SCENESETTER FOR THE SECRETARY'S JANUARY 8-9 VISIT TO TOKYO Classified By: Charge d'Affaires, a.i., James P. Zumwalt per 1.4 (b/d) ¶1. (S) Madam Secretary, Welcome to Tokyo. Prime Minister Aso and Foreign Minister Nakasone will be eager to see you to exchange views. Your press events will serve as a concrete reminder to the Japanese public of the importance of our bilateral relationship. Currently, issue #1 for Japan is the global economic downturn coming on top of a confused domestic political situation. Although Japanese banks have avoided major losses from mortgage backed securities, Japanese exporters are suffering from the global downturn and world leaders such as Toyota and Sony are recording operating losses, paring employment rolls and extending holidays to cut factory production. Fear about Japan's economic well-being, combined with its divided Diet and now hamstrung political system, have led to increasing dissatisfaction with Prime Minister Taro Aso's leadership and a sense that it may be time to give the opposition Democratic Party of Japan (DPJ) a shot at running things. In a dramatic shift, polls show voters increasingly consider opposition leader Ichiro Ozawa to be a more suitable PM than the incumbent Aso. That said, only Aso can dissolve the Diet and call an election, and many believe that he may do so after passing his budget next spring. Others suggest he will try to hold on until the fall when the Diet's current term expires. ¶2. (S) Unfortunately, the political situation and an increased focus on domestic issues impede Japan's ability to act to help resolve global problems. There is a feeling here that Japan missed a chance as G8 chair to play a greater role in responding to the global economic crisis, despite its pledge of $100 billion to the IMF as a credit facility and $2 billion to the World Bank to launch a fund to help stabilize financial institutions in developing countries. At home, Japan's response to the global economic slowdown has been short on stimulus measures and also on measures to boost potential economic growth. ¶3. (S) Furthermore, after much political wrangling, the Diet only recently passed legislation extending Japan's refueling activities in the Indian Ocean in support of Operation Enduring Freedom. Japan continues to consider how best to respond to the Somali piracy issue, and ongoing deliberations are in stark contrast to China's relatively quick decision to dispatch ships to the region. Japan's Air Self-Defense Forces just ended operations in Iraq and Japan remains a top donor for Iraqi reconstruction. Still, there is a sense Japan can do more. We hope that you'll underline the international community's expectations that Japan play a strong role in Iraqi and Afghan reconstruction, as well as in combating piracy. ¶4. (S) Japanese leaders will want your thoughts on the U.S. transition and how it may affect bilateral relations. In particular, they will be eager to hear that support for the Alliance is bipartisan and that a new Administration will not take steps to strengthen the U.S.-China relationship at the expense of the alliance with Japan. Notably, polls show Japanese are becoming more pessimistic about the state of the bilateral relationship, partly reflecting this fear about "Japan passing" in favor of China, as well as disappointment with our decision to delist North Korea as state sponsor of terrorism. ¶5. (S) Your Japanese interlocutors will want to discuss the Six Party process. Many are highly focused on the importance of sampling as part of a written verification protocol and remain skeptical the North Koreans will ever commit to verification measures in writing. While most Japanese recognize the importance of DPRK denuclearization to Japan's security, they nonetheless remain highly emotional about the abductions issue. A statement from you on our continued commitment to progress on this matter would be welcome. ¶6. (S) Our bilateral security ties remain robust and in this area we have good news: our two countries recently reached an ad ref International Agreement on the realignment of U.S. Forces. This agreement, scheduled to go before the Diet in March, will commit Japan to completing the relocation of Futenma Marine Corps Air Station (MCAS) on Okinawa and providing funds for USMC-related facilities on Guam. Japanese officials believe the agreement, and the allotment of over $900 million in realignment funding during the next fiscal year, will buttress Japan's commitment to the May 1, 2006, Alliance Transformation Agreement even if there is a change in government here. In addition, Japan now hosts a TOKYO 00003523 002 OF 003 forward-deployed nuclear powered aircraft carrier, our missile defense cooperation is moving forward quickly and we are increasing our bilateral planning coordination and intelligence sharing. While pacifism remains deeply ingrained in Japan, there is a new consensus among the public and opinion makers -- due in part to the DPRK threat and the PRC's growing power projection capabilities -- that the U.S.-Japan alliance is vital to Japan's national security. For example, the main opposition DPJ, while taking issue with some of the details of our basing arrangements, maintains as a basic policy platform the centrality of the Alliance to Japan's security policy. We recommend that you inform your interlocutors that you will urge your successor to hold an early 2 2 meeting given the importance of the Alliance. ¶7. (S) Your visit is an opportunity to thank Japan for the help they have given in addressing climate change/energy issues, coordinating on development and disaster assistance, and joint measures to combat communicable and emerging diseases such as HIV-AIDS and avian influenza. You may wish to urge Japan to increase its efforts and work more intensely with the United States in these areas. Our back-to-back years hosting APEC (Japan in 2010, the United States in 2011) will offer opportunities to promote policies to further trade liberalization and regional economic growth and prosperity. ¶8. (C) The American Embassy community is eager to meet you. This will also be the last time for you to appear with Ambassador Schieffer, so it would be appropriate for you to say a few words about his leadership of the Mission over the last three years and nine months. ¶9. (S) A quick reference list of issues follows. Embassy Tokyo looks forward to seeing you soon. -- Six-Party Talks: While Japan shared with the United States disappointment at the outcome of the recent round of Beijing talks, the Japanese were extremely pleased with U.S.-Japan-ROK coordination. Japan remains firm in its refusal to provide energy assistance to the DPRK absent progress on the abductions issue. The DPRK's August pledge to open a reinvestigation into the abductions remains unfulfilled, in spite of a Japanese promise to reciprocate by partially easing its unilateral sanctions. -- U.S.-Japan Alliance: Our Alliance is the cornerstone of U.S. policy in Northeast Asia, and essential for preserving peace and stability throughout the region. Force transformation spelled out in the Defense Policy Review Initiative (DPRI) will help sustain Japanese public support for the Alliance and will strengthen Alliance capabilities. Both countries are preparing the first set of major fiscal expenditures for projects on Okinawa and Guam. It is crucial that we implement our agreed upon plans without change. -- Iraq: With $1.5 billion in grants, up to $3.5 billion in concessionary loans, and $6 billion in debt relief, Japan is the second-largest contributor to Iraqi reconstruction. Japan's Air Self-Defense Forces had deployed 200 personnel and three C-130 aircraft in Kuwait to transport cargo and personnel in Iraq; they returned home in December 2008. -- Afghanistan: In December 2008, Japan passed legislation to extend by one year the refueling operation in support of Operation Enduring Freedom. Japan is working more closely with the PRTs and has assigned a full-time liaison officer to NATO's office in Kabul. Japan is the third highest bilateral contributor (behind the U.S. and UK) to Afghanistan, with $1.4 billion pledged since 2002. Japan has included an additional $300 million in its latest supplemental budget to support the 2009 Afghan elections and other security programs. It has also funded the upgrade of the Self-Defense Force's expeditionary capabilities in anticipation of a future political decision to deploy forces to ISAF. Japan's most visible endeavor in Afghanistan is the construction of a 114-kilometer stretch of the southern ring road. This project, originally scheduled for completion in 2005, has been beset by delays stemming from Japan's security concerns. We have been pressing them to complete the road and have also been asking the Japanese to consider other ways to support Afghanistan that are politically and constitutionally feasible. -- China: Former Prime Minister Fukuda worked hard to improve relations with China, but his sudden resignation in TOKYO 00003523 003 OF 003 September -- and the subsequent political uncertainty -- has led to a slow-down in progress on bilateral issues such as food safety and an agreement on joint development of East China Sea resources. While Japanese acknowledge that good U.S.-China relations are in Japan's interest, they also fear that the United States will discount Japan's interests in pursuit of more robust relations with China. -- South Korea: Although the Takeshima/Tokdo issue remains an irritant, both sides have expressed a desire to build a Japan-ROK relationship that is "different from the relationship up until now," including through high-level shuttle diplomacy. -- Burma: Japan has scaled back its aid to Burma, but has not imposed economic sanctions, although it discourages companies from investing in Burma. Japan could do more, but fears driving Burma closer to China. -- Middle East Peace Process: Japan is moving forward with its "Corridor for Peace and Prosperity" initiative that will establish an agro-industrial park in the West Bank, and pledged $150 million in project assistance at the December 2007 Paris donors' conference. Last August, Japan resumed direct assistance to the PA, contributing $20 million. Japan has urged Israel and Hamas to adopt an immediate ceasefire. -- Iran: Japan is implementing UNSCRs 1737, 1747 and 1803. Japan is among Iran's top export markets (mostly oil) and is Iran's 10th largest supplier of machinery and manufactured goods. A great deal of Japan-Iran trade is covered by government guaranteed short-term credits. Still, since April 2006, the Japan Bank for International Cooperation (JBIC) has ceased issuing Iran new long-term export credits and Japan has promised to begin closing outstanding long-term credits. -- Beef: Japan remains closed to U.S. beef and beef products from animals older than 21 months of age. We continue to insist Japan allow full market access for U.S. product based on World Organization for Animal Health (OIE) guidelines and science. Once our largest export market for beef, Japan now receives less than 25 percent of pre-2004 export levels. Japan needs to take a science-based approach and open the markets to all ages and all cuts of U.S. beef by a date certain. -- Climate Change: Japan has been a leader in the Major Economies process and close cooperation on climate remains one of the bright spots in our relationship. Japan has been pushing a bottom-up, sectoral approach to determining national greenhouse gas reduction goals, as opposed to the top-down, cap-and-trade policies promoted by the EU. Japan agrees with the United States that China, India and other emerging market economies need to be integral parts of any new global climate change agreements. -- Child Pornography: Public opinion has responded positively to the Ambassador's public campaign to encourage Japan to criminalize the possession of child pornography, which remains legal in Japan and Russia alone among the G8 member countries. We hope that a law criminalizing possession will be passed in the next Diet session. The Asahi newspaper will publish Ambassador Schieffer's op-ed on December 31 that urges Japan to criminalize possession. -- Hague Convention on Parental Child Abductions: We and our Canadian and EU colleagues continue to press Japan to accede to the Hague Convention on the Civil Aspects of International Child Abduction. However, our Japanese interlocutors remain insistent that bureaucratic, legal and cultural barriers make near-term progress difficult. ZUMWALT