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

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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