JAPAN: DNSA PRICE PRESSES FOR PROGRESS ON DOHA AND

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 000829

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E.O. 12958: DECL: 03/25/2018
TAGS: ETRD EAGR PGOV WTRO EINV JA
SUBJECT: JAPAN: DNSA PRICE PRESSES FOR PROGRESS ON DOHA AND
BEEF


Classified By: Ambassador J. Thomas Schieffer for reasons 1.4 b/d.

Summary
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1. (C) During bilateral talks with senior Japanese officials
and politicians March 19 in Tokyo, Assistant to the President
and Deputy National Security Advisor for International
Economic Affairs Daniel Price underscored the need for Japan
to show more leadership now, particularly on agriculture, to
conclude the Doha Development Agenda. He pressed for a
clearly defined way forward to open Japan's beef market by a
date certain in accordance with OIE guidelines. In addition,
DNSA Price stressed the importance of foreign direct
investment to Japan. Interlocutors, including senior Diet
members, all said the DDA needs to be concluded this year
with ministers meeting this spring to reach an agreement on
modalities, but they showed little flexibility on
agricultural market access. On beef, they said the best
roadmap Japan can offer included a partial liberalization to
beef from cattle 30 months and younger, followed by movement
toward OIE guidelines later. End Summary.

Doha Development Agenda
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2. (C) DNSA Price told senior GOJ officials and
parliamentarians Japan needs to do more to conclude the Doha
talks successfully. Japan is with the developed countries on
NAMA and services, but with the most recalcitrant of the
developing countries on agriculture. Meeting with Assistant
Chief Cabinet Secretary Ando and METI Vice Minister Toyoda,
he noted Japan's insistence on bracketed language on zeroing
in the rules text is also causing problems. In all his talks
he stressed Japan's obstinacy threatens the real progress
that has been made, e.g., between the U.S. and the EU on
agriculture. Some of the WTO's most protectionist members --
including Brazil and India -- invoke Japan's posture in
agriculture to justify their hard line in non-agriculture
market access (NAMA) and services talks. Japan, Price
underscored in all his meetings, stands to gain a great deal
in a successful conclusion to the DDA.


3. (C) DNSA Price's Japanese interlocutors generally muted
the notion Japan was to blame for the slow progress, but
offered little to suggest Japan would play a substantially
more flexible role going forward. Assistant Chief Cabinet
Secretary Hiroyasu Ando stated the GOJ too wants a trade

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ministerial by early May at the latest. He noted Secretary
Rice had talked with the Chief Cabinet Secretary about
zeroing when she met with him in February and that Ando hoped
the problem had been resolved. DNSA Price noted more
progress is needed on the Round.


4. (C) Ministry of Economy, Trade, and Industry (METI) Vice
Minister Masakazu Toyoda also asserted Japan wants to see a
deal concluded as soon as possible, ideally before the
current U.S. Administration ends. DNSA Price said ministers
would have to agree on modalities no later than early May to
accomplish that. Toyoda noted he had not talked recently to
the head of Japan's team negotiating agriculture, but would
confer with the official about timing.


5. (C) Toyoda attempted to explain Japan's hard-line position
on rules, saying the committee text was one-sided. DNSA
Price stressed Japan's negotiators should not allow the rules
text to bog down negotiations. In any case, if Japan does
not like the rules text, it could demand changes later, just
as the U.S. could raise issues later. Toyoda said Japan
"feared" the U.S. would harden its position on rules if the
current text remained on the table and therefore needed some
"comfort" on the text, though he could not define what that
meant.


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Political Heavyweights
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6. (C) In separate meetings, senior Diet members from the
ruling Liberal Democratic Party (LDP) all professed to want a
Doha deal, but argued Japan's "difficult" position. Above
all, rice is key. Former Chief Cabinet Secretary Kaoru
Yosano told DNSA Price the GOJ is doing its best, but is
pessimistic Japan can go as far in the DDA as the U.S. and
other developed countries want. He fretted the LDP lacks a
strong leader on agricultural policy; the best people are
retired or no longer in power, he told DNSA Price.


7. (C) Former Agriculture Minister and current head of the
LDP's Diet Affairs Committee -- analogous to party whip --
Tadamori Oshima, told DNSA Price he too wants progress on
Doha, but is concerned about Japan's declining food
self-sufficiency rate, now at 39 percent. Japan cannot do
much more to improve market access, he asserted.


8. (C) Oshima said his political responsibilities mean he
does not watch trade issues as closely as he would like, but
he would consult with Japan's Chief Agriculture negotiator
Murakami, who briefs him regularly. Oshima defended Japan's
protectionist agriculture position, saying several times that
Japan is "anguished" by the problem. Japan and the U.S. have
"major differences," he conceded, but must cooperate to open
markets. He stated Japan's reasons for its stance on
agricultural trade are many-fold and Japan has "bought what
(it) can buy." He suggested Japan and the U.S. start talking
on a product-by-product basis, hinting a solution on rice
would make success elsewhere easier to reach.


9. (C) Former Agriculture Minister and current Chairman of
the LDP's Research Committee on Trade in Agriculture, Yoshio
Yatsu, told DNSA Price he had talked one-on-one with the
Prime Minister about the political importance of reaching a
Doha deal -- and what this would mean for the
"sustainability" of the Fukuda government. He otherwise
echoed the views expressed by Yosano and Oshima, including
repeating familiar talking points on Japan's low food
self-sufficiency rates and the difficulty for Japanese policy
makers in addressing the country's agricultural problems.


10. (C) Yatsu digressed into a long explanation of the
country's rice sector, where domestic consumption keeps
declining as pressure to expand market access grows. "We
need an open and honest discussion with our trade partners,"
he said. Alluding to the beating the LDP took in rural
districts in last summer's Upper House election, Yatsu
underscored the need to work around rice. If Japan's rice
farmers can be saved, Japan's intransigent position on
agriculture would soften, he hinted. He stressed he would
like the Doha Development Agenda to end successfully and said
he would urge Japan's negotiators to sort out what can be
solved at the working level to allow the upcoming ministerial
to focus on broader political questions.

Beef
--------------


11. (C) In all his meetings, DNSA Price pressed hard for full
opening of Japan's beef market to U.S. producers by a date
certain. The current standoff has gone on far too long, he
said. The GOJ should be mindful that the issue will most
likely come up in the bilateral with the Japanese PM at Lake
Toya; we need to see a resolution by the July meeting.


12. (C) At the Prime Minister's Office, Assistant Chief
Cabinet Secretary Ando urged the USG to accept a compromise
that would expand the market to allow for beef from cattle of
30 months old or younger. DNSA Price said he was not opposed

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to a step-by-step formula, but the way to full market opening
would have to be clearly defined, that is, a step that means
full compliance with OIE guidelines.


13. (C) Ando asserted the differences over beef are becoming
more difficult given recent food scares involving imported
dumplings from China and the scandal involving a downer cow
in a California slaughterhouse. Even moving to 30 months is
becoming more difficult. Moreover, according to Ando, moving
to OIE standards is not possible at this time. Ando urged
beef not be on the agenda at G8 bilaterals and asked whether
the leaders could focus on more constructive areas. DNSA
Price replied the way to do that is to set a timeline for
fully resolving the issue by a date certain. He suggested
Japan invest someone with the authority to negotiate and have
the person discuss a plan for full OIE compliance with USTR
Schwab. "Let us put this behind us," he concluded.


14. (C) In separate meetings, senior politicians were not
optimistic. Oshima said moving to 30 months was the best
Japan could do now and argued the sooner the issue is moved
to the Food Safety Commission for its risk assessment on 30
months, the better. He added the Japanese would not accept
OIE standards without further scrutiny by their own
authorities, as they are very sensitive to food safety
issues. Offering "frank advice from a friend," Oshima
suggested it would be counterproductive for the U.S. to raise
the problem at the G8. Yatsu, for his part, expressed some
understanding of U.S. frustration with Japan's inability to
map a route to full compliance, but offered little in the way
of concrete suggestions.

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


15. (C) DNSA Price noted USG misgivings over recent
statements by some GOJ officials relating to foreign
investment and the Ministry of Land, Infrastructure,
Transportation, and Tourism to have a law passed that would
have limited foreign ownership in Japan's airports. He
thanked Ando for the PM's intervention on the airport
investment question. Ando stated the GOJ continues to
welcome FDI. Airports present a special situation, however,
and so the government has decided it needs to have a study
conducted. Toyoda understood the U.S. concerns. Diet member
Yosano said Japanese invest abroad and "foreigners should
come to Japan and make money if they are bright enough."

WIPO DG
--------------


16. (C) Vice Minister Toyoda raised Japan's candidate to head
the World Intellectual Property Organization. He stated WIPO
has problems and needs someone who understands developed
country concerns, but can work with developing countries to
recreate the organization. Toyoda said he had talked to EEB
Assistant Secretary Sullivan, but needed DNSA Price's
support. DNSA Price offered no comment on the issue.


17. (C) DNSA Price cleared this cable subsequent to his
departure from Tokyo.

SCHIEFFER