METI MINISTER NAOSHIMA CALLS FOR STRONGER, MORE

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002440 SIPDIS STATE FOR E, EEB AND EAP/J NSC FOR JIM LOI USTR FOR WENDY CUTLER, AAROW AUGEROT AND MICHAEL BEEMAN E.O. 12958: DECL: 10/22/2019 TAGS: ECON EFIN PREL ETRD JA SUBJECT: METI MINISTER NAOSHIMA CALLS FOR STRONGER, MORE COMPREHENSIVE ECONOMIC RELATIONSHIP WITH U.S. DURING MEETING WITH AMBASSADOR ROOS Classified By: Ambassador John V. Roos, Reasons 1.5 (B) and (D) ¶1. (C) SUMMARY: New Minister of Economy, Trade and Industry (METI) Masayuki Naoshima told Ambassador Roos he hopes the U.S. and Japan can build a stronger, more comprehensive economic relationship over the next few years during an October 21 courtesy call. The Minister said bilateral economic relations are the foundation for the U.S.-Japan alliance and added a closer economic relationship would strengthen the security relationship. On specific areas for greater cooperation, Minister Naoshima highlighted the need for U.S. leadership on climate change, in particular to ensure a comprehensive, multilateral agreement which includes important developing countries such as China. He also pointed to energy, innovation, and trade and investment as areas where the U.S. and Japan can deepen cooperation during our years as APEC chairs as we strive to make progress in the Asia-Pacific. Naoshima added the USG should not be concerned with PM Hatoyama's East Asian Community (EAC) proposal because it will not detract from the alliance. The U.S.-Japan relationship is the foundation of Japan's endeavors in Asia and the EAC is an effort to strengthen Japan's links in the region, he said. END SUMMARY. ¶2. (C) METI Minister Naoshima told Ambassador Roos he hopes to continue METI's good working relationship with the Embassy and the United States, and noted the positive tone of the September 23 meeting between Prime Minister Hatoyama and President Obama on the sidelines at UNGA, in which they agreed to promote U.S.-Japan cooperation. He said our two countries have a very close economic relationship and expressed hope he and the Ambassador could work together to further cooperation between the world's two largest economies. In particular, he said we could cooperate to promote trade, investment, and innovation in the areas of the environment, IT, and energy. He also mentioned he believed strong bilateral economic relations are the foundation for the U.S.-Japan alliance and added a closer economic relationship would strengthen the security relationship. CLIMATE CHANGE POLICY A PRIORITY -------------- ¶3. (C) Naoshima specifically mentioned Prime Minster Hatoyama's policy of cutting CO2 emissions by 25% from 1990 levels by 2020, and stressed this policy is predicated on the establishment of a fair and inclusive framework agreement that binds all nations to ambitious reduction targets. Furthermore, he said it is important all major economies make commitments to this legal instrument. Specifically, it is necessary to get China to take responsible actions, and Naoshima said Japan will continue to work with the U.S. in this regard. Minster Naoshima said he had recently met with Department of Energy Secretary Stephen Chu at an International Energy Agency conference in Paris and had a very good discussion. He said Secretary Chu was optimistic the U.S. Congress would pass climate legislation, but qualified his comments to Minister Naoshima by adding scientists have to be optimistic. Naoshima said the GOJ hopes deliberations on climate legislation in Congress lead to a good result because although U.S.-Japan cooperation on climate change is important, U.S. leadership is even more important. ENERGY POLICY -------------- ¶4. (C) Minster Naoshima recounted how he told Secretary Chu Japan shares the view, reflected in President Obama's policy, of promoting the peaceful use of nuclear energy in parallel with non proliferation and that Japan and the U.S. should pursue further cooperation in this regard. He also said he agreed with Secretary Chu that the U.S. and Japan should speed up cooperation in research into the development of the smart grid, carbon capture and storage, and other renewable energy areas. Naoshima agreed with the Ambassador that the U.S. and Japan are two of the most innovative and technologically advanced nations in the world and that innovation and entrepreneurship in the renewable energy field can help address climate change. NO GOJ POLITICAL DECISION ON A U.S.-JAPAN ECONOMIC DIALOGUE -------------- -------------- ¶5. (C) Minister Naoshima stated the GOJ had not yet started TOKYO 00002440 002 OF 002 discussion at the political level on the future of a U.S.-Japan economic dialogue. He said working-level officials are discussing structure and substance, and some studies continue. Embassy and METI staff, for example, are discussing a factsheet on bilateral economic cooperation (NB: we believe he was referring to the Investment Initiative), and that he wanted these discussions, which are going well, to advance. Minister Naoshima noted there is likely insufficient time for in-depth discussions of energy, environment, climate change and other economic issues prior to the November APEC meeting between Prime Minister Hatoyama and President Obama and, with the Ambassador's consent, he would like METI officials and Embassy staff to summarize related ongoing discussions for a work sheet the Prime Minster and the President could consider endorsing. Ambassador Roos replied it would be prudent to flesh out the details of these discussions more before both sides took it to their leadership. APEC AND EAC NOT COMPETITORS -------------- ¶6. (C) Ambassador Roos told the Minister he looks forward to working with METI to define a quality agenda for the APEC meetings. Minster Naoshima agreed the Japan and U.S. back-to-back chairmanships of APEC is an important step in regional integration and mentioned the Prime Minister's thinking on an East Asian Community (EAC). He said he understands EAC developments may "bother" the U.S. at times, but stressed the U.S.-Japan alliance is the base of Japan's endeavors in the Asia-Pacific region. He assured the Ambassador it is because of this base with the U.S. that Japan can promote cooperation and engage its neighbors. Ambassador Roos responded the U.S. does not look at its relationship with Japan as a zero-sum game and that the U.S. has long encouraged cooperation in Asia. ¶8. (C) Minister Naoshima mentioned that for the next two years, while Japan and then the U.S. chair APEC, he would do his best to facilitate APEC development, which he expects to have positive consequences for the future. Ambassador Roos mentioned that Japan is viewed by some in the high tech industry as the sleeping giant when it comes to new technologies and that he would like to help Japan unleash this potential. Minster Naoshima agreed, but said Japan is not so good at deploying these technologies and hoped the Ambassador could advise him and his METI staff in this regard. He went on to say that innovation will be an important driving force and that he would like this to be discussed at the staff level between METI and the Embassy. ROOS