Cablegate: Japan Economic Scope for September 8, 2008

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ZNR UUUUU ZZH
R 100811Z SEP 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 7147
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UNCLAS SECTION 01 OF 02 TOKYO 002493

SENSITIVE
SIPDIS

STATE FOR EAP/J

E.O. 12958: N/A
TAGS: ECON ETRD EFIN EAGR PREL JA
SUBJECT: Japan Economic Scope for September 8, 2008

SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY

1. (U) This cable contains the Japan Economic Scope from
August 25, 2008

Food and Agriculture
----------

2. (U) FM Koumura Pledges Continued Support For Afghanistan, after
Death of Non-Governmental Organization Aid worker.

Foreign Minister Koumura pledged Japan's continued efforts for
Afghanistan's reconstruction despite the recent murder of a Japanese
aid worker in the country. Koumura made the pledge in a telephone
conversation with Afghan Foreign Minister Rangin Dadfar Spanta
August 28.

Terrorists kidnapped and murdered NGO worker Kazuya Ito in eastern
Afghanistan August 26. FM Koumura said the government of Japan
condemns heinous crimes such as abduction, murder and terrorist
acts, but reiterated Japan needs to continue its effort to help
Afghanistan achieve peace and rebuild itself.

Eight Japanese NGOs are working in Afghanistan, which includes 20 to
30 Japanese citizens who go in and out of Afghanistan regularly.
According to MOFA, thirty-nine officials from the Japan
International Cooperation Agency (JICA) also provide agricultural
education and other forms of educational aid in Afghanistan.

3. (U) Japan Contemplates Russian G-8 Agriculture Ministerial
Proposal

Minister of Agriculture, Forestry and Fisheries (MAFF) Seiichi Ota
met with Russian Minister of Agriculture Alexei Gordeyev in Tokyo
August 19. They discussed Russian grain sales to Japan and
Gordeyev's proposal made during the July Toyako G-8 Summit to hold
an agricultural ministerial meeting in Japan later this year. The
ministerial would focus on food prices and food security. MAFF Vice
Minister Shirasu's August 28 press statement indicates Japan is
willing to host the summit in Japan later this year.

4. (U) MAFF Develops New Support Programs For Rice Producers

The ruling Liberal Democratic Party wants the Ministry of
Agriculture, Forestry and Fisheries (MAFF) to include additional
support for rice farmers in its JFY09 budget request. MAFF
reportedly is planning to set aside about 300 billion yen ($2.8
billion) for these measures under the auspices of programs to raise
food self-sufficiency. MAFF will likely include some incentive and
subsidy measures to promote production and consumption of non-table
rice. MAFF is also formulating a tax cut package for consideration
by the Ministry of Finance (MOF)in response to a Prime Minister's
directive to all ministries. Ministries must submit their by the
end of September.

Japan's Foreign Relations
-------------------------

5. (U) The Ministry of Foreign Affairs' Overall And ODA Budget
Requests For FY2009

MOFA at the end of August submitted its budget request of 747.1
billion yen for FY2009 (April 2009-March 2010) to the Ministry of
Finance, a ten percent increase from FY2008. The ministry is
seeking funds to set up seven new embassies (Samoa, Palau, Barbados,
Estonia, Kyrgyzstan, Benin, and Rwanda), to implement policy pledges
at this year's summit and TICAD IV, and to raise the number of
Foreign Ministry personnel by more than 200 and local embassy staff
by 174. MOFA is also requesting a 13.6 percent increase in its
overseas development assistance (ODA) budget to 500.62 billion yen.
One senior MOFA International Cooperation Bureau official said MOFA
is hoping to salvage Japan's falling diplomatic presence as a top
donor. The ODA budget request includes a 10.1 percent increase to
174.8 billion yen (approximately 1.748 billion US dollar) of grant
aid for food assistance, the Cool Earth Partnership mechanism, and
projects to achieve the 2015 millennium development goals related to
poverty elimination, health, education, and gender issues.

Politics and Reform
-------------------

7. (U)Space Policy Bureau Open For Business

The Government of Japan officially established a Space Policy

TOKYO 00002493 002 OF 002

Headquarters within the Prime Minister's Secretariat August 27,
pursuant to the Fundamental Space Law 2008. The new organization
will be chaired by the Prime Minister and report to Minister of
State for Science and Technology Policy and Food Safety, Consumer
Affairs, and Space Policy. Pursuant to the new law, the
headquarters is charged with formulating during the next year a
national space strategy that for the first time takes into account
industrial and national security interests, in addition to the
current GOJ space focus on research and development through MEXT.

One of the first issues on the Headquarters' agenda will be whether
to develop a new mid-size launch vehicle, the GX-rocket.
Development of the rocket has been hindered by a lack of
Ministry-level funding and difficulty in creating a planned
public-private partnership.

Transportation
--------------

8.(U)MLIT Begins Review of Antitrust Immunity for International Air
Transport Fares

Japan Civil Aviation Bureau's (JCAB) has started a private study
group to review current Anti-trust Immunity (ATI) for international
air transport fares, according to the ministry's web site. This
step comes in response to a December 2007 request made by the Japan
Fair Trade Commission (JFTC). The study group will focus on two
issues:

The effect of various tariff agreements(i.e. IATA Tariff Agreement,
Carrier Tariff Agreement, Code Share Agreement, Pool Agreement,
Agreement related to Multilateral Interline Traffic, Agency
Agreement, Service Agreement, FFP Agreement) on user convenience and
the international air transport market; and how ATI policy should be
applied in the future, taking into consideration recent moves by
Europe and Australia to abolish the antitrust immunity, the current
international air transport market in Asia, and the aim of advancing
aviation liberalization in the international air transport sector.

The study group will hold a total of six meetings and will publish
its findings by the end of JFY 2008 (March 2009).

9. (SBU) Nagoya Officials Express Concern over United Airline's
Discontinued San Francisco Flights

Aichi Governor Kanda, Nagoya Mayor Matsubara and Chubu Economic
Federation Chairman Kawakuchi told Consulate Nagoya Principal
Officer they have "serious concerns" about United Airlines' (UA)
recent decision to discontinue direct flights between Nagoya and San
Francisco beginning this fall due to rising fuel costs and a lack of
business class passengers.

With the projected termination of the Nagoya-San Francisco flight,
the only remaining direct flight between Nagoya and a U.S.
destination will be Northwest Airline's Nagoya-Detroit service.
Nagoyans have expressed strong interest in securing a direct flight
between Nagoya and a U.S. West Coast city, particularly Los Angeles.

ZUMWALT

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