JAPAN-RUSSIA SIGN NUCLEAR COOPERATION PACT

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 001107

SIPDIS

MOSCOW PASS VLADIVOSTOK
HELSINKI PASS ST. PETERSBURG
DEPT INS/NESS FOR RICHARD STRATFORD
DOE OFFICE OF NUCLEAR ENERGY FOR ED MCGINNIS

E.O. 12958: DECL: 05/15/2017
TAGS: PREL PARM ENRG TRGY NRR MNUC PUNE JA RS
SUBJECT: JAPAN-RUSSIA SIGN NUCLEAR COOPERATION PACT

REF: A. TOKYO 0667

B. TOKYO 1081

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Classified By: Minister-Counselor for Political Afffairs W. Michael Mes
erve. Reasons 1.4 (B) (D)


1. (C) Summary. Nuclear cooperation and trade and investment,
rather than the Northern Territories issue, dominated Prime
Minister Vladimir Putin's May 11-13 Tokyo visit. The
countries signed an historic accord on nuclear cooperation
and agreed to expand economic and other cooperative efforts
in several fields, including law enforcement coordination,
fisheries management, and oil and gas exploration in the
Russian Far East. Putin and Japanese Prime Minister Taro Aso
agreed to put off discussion of the contentious Northern
Territories issue until the July G-8 Summit - an arrangement
which one leading Japan-Russia observer characterized as
fostering the "illusion" of progress in Tokyo-Moscow
relations. End Summary.

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Economic, Business Focus
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2. (U) Russian Prime Minister Vladimir Putin's May 11-13
visit to Tokyo focused on steps to expand bilateral economic
cooperation, but achieved no new breakthroughs on the
political front, including resolution of the contentious
Northern Territories issue, according to several leading
Japanese media reports. During a busy May 12 schedule, the
Russian leader met with Prime Minister Taro Aso, opposition
Democratic Party of Japan leader Ochiro Ozawa, former Prime
Ministers Yoshiro Mori and Junichiro Koizumi, delivered a
speech to Japan's Keidanren business association, and met
with leaders of Japan's three economic organizations,
including Keidanren President Fujio Mitarai. The two sides
signed a series of agreements in several areas, including an
accord governing cooperation in the peaceful uses of nuclear
energy (septel),a pact to ease visa procedures, a customs
duty mutual assistance deal, a legal mutual assistance pact,
and separate Memorandum of Understandings (MOU) on trade and
economic cooperation. (Post will report details of these
arrangements septel.)

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Nuclear Energy Pact
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3. (C) The signing of a bilateral agreement on nuclear
cooperation was the media highlight of the visit. The
accord, which the two sides had been expected to confirm
following several months of negotiations (Ref A),is designed
to facilitate cooperation and trade in the field of civil
nuclear power, including uranium and uranium enrichment
services. MOFA officials highlighted the fact that Russia
agreed, for the first time, to allow IAEA inspections at
relevant facilities, a point press reports also emphasized.
Foreign Ministry officials are pleased with provisions which
allow Japan to suspend or halt cooperation if Moscow violates
the agreement.


4. (U) After the signing of the agreement, the Ministry of
Economy, Trade and Industry issued a joint statement with
Russia's State Atomic Energy Corporation (ROSATOM) noting
their intent to facilitate corporate cooperation. According
to press reports, Japanese firms have already begun
negotiations with Russian companies for nuclear business, and
post will report these developments septel.

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Other Accords on Economic, Energy Cooperation
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5. (U) The Foreign Ministry announced officials from both
sides inked additional deals covering a broad range of
topics, including:

-- Cooperation in Energy Efficiency and Renewable Energy.

-- Joint Statement on Peaceful Use of Nuclear Energy.

-- Cooperation to Prevent Illegal, Unreported and Unregulated
Fisheries and Smuggling of Marine Products.

-- Cooperative Program Regarding Research on Environmental
Conservation, Sustainability and Rational Use of the
Ecosystem Surrounding Japan and Russia.

-- Implementation of the Agreement Regarding Construction of
Nuclear Reactors and Storage Facilities.


6. (U) Agreements and MOUs between other governmental
organizations included:

-- Japan Oil, Gas, and Metals National Corporation
(JOGMEC)-Irkutsk Oil and Gas Exploration Agreement

-- Nippon Export Insurance (NEXI)-Russian Bank for
Development and Foreign Economic Affairs (VEB) Memorandum of
Understanding.

-- Japan Bank for International Cooperation (JBIC)-VEB
Memorandum of Understanding.

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Political Subjects Delayed
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7. (U) Aso and Putin agreed to leave talks on political
topics, especially the dispute over the Northern Territories
issue, for the Japanese leader to discuss with President
Dmitry Medvedev on the margins of the July 2009 G-8 Summit in
Italy. Even before he arrived, PM Putin set about lowering
expectations he and Aso would find common ground on the
disagreement, telling Japanese media that conditions had not
yet been met for Russia and Japan to achieve a breakthrough
on the issue. Putin was quoted as saying "It is necessary
(for the two countries) to prepare the conditions, to develop
the relations in all directions" ahead of the visit. He
added, "In order to resolve such high-level and difficult
problems, it is necessary to show patience."


8. (U) Putin's uncooperative stance disappointed the
Japanese. Yomiuri, Japan's largest daily, reported that
"Pundits give thumbs down to progress on territorial issue
during Putin visit," (Ref B) echoing the sentiments of many
analysts who felt let down by Putin's approach, including
former Japanese Ambassador to Russia Minoru Tamba. Tamba
noted that the nuclear accord carried "significance," but
with regard to "the most crucial issues of resolving the
Northern Territories row and concluding a peace treaty, the
statement was dotted with only some expressions that were
used in past summits. No progress was made."

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Grand Illusion

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9. (C) Aoyama Gakuin University Professor Shigeki Hakamada, a
leading Japan-Russian relations expert, told Embassy Tokyo
the Putin visit permitted both sides to project the
"illusion" that progress on the Northern Territories was
being made, when in fact, neither side is in a position to
compromise. In Hakamada's view, a final settlement will
require individual leaders in both countries who are strong,
powerful, and confident enough to overcome domestic
constituencies opposed to compromise. Putin lacks the
ability to overcome nationalistic forces within the Russian
military and security establishment opposed to giving up even
one centimeter of territory, Hakamada asserted. Aso's
political position remains perilous, as his ruling Liberal
Democratic Party (LDP) hangs on the verge of being removed
from power by the DPJ in elections that must take place no
later than September. At the same time, Tokyo and Moscow
view each other as essential to pursuing policies aimed at
diversifying their respective energy and economic bases. As
a result, Hakamada concluded, neither leader can afford to
risk appearing to close the door to compromise on the
Northern Territories issue.
ZUMWALT