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Viewing cable 08TOKYO3112, U.S.-JAPAN BUSINESS COUNCIL: BILATERAL STRATEGIC

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Reference ID Created Released Classification Origin
08TOKYO3112 2008-11-10 05:47 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tokyo
VZCZCXRO7026
RR RUEHFK RUEHGH RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3112 3150547
ZNR UUUUU ZZH
R 100547Z NOV 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 8679
INFO RUEHBJ/AMEMBASSY BEIJING 6303
RUEHNE/AMEMBASSY NEW DELHI 8611
RUEHUL/AMEMBASSY SEOUL 2278
RUEHFK/AMCONSUL FUKUOKA 0866
RUEHGZ/AMCONSUL GUANGZHOU 0001
RUEHHK/AMCONSUL HONG KONG 6624
RUEHNAG/AMCONSUL NAGOYA 8913
RUEHNH/AMCONSUL NAHA 3226
RUEHOK/AMCONSUL OSAKA KOBE 4651
RUEHKSO/AMCONSUL SAPPORO 1437
RUEHGH/AMCONSUL SHANGHAI 0508
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
UNCLAS TOKYO 003112 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR FOR AUSTR CUTLER AND DAUSTR BEEMAN 
 
E.O. 12958: N/A 
TAGS: ETRD EINV PREL JA
SUBJECT: U.S.-JAPAN BUSINESS COUNCIL: BILATERAL STRATEGIC 
DIALOGUE KEY TO GLOBAL COMPETITIVENESS 
 
REF: TOKYO 2811 
 
1. (SBU) The U.S. and Japan must build on their close 
economic relationship to become more competitive in the face 
of rapid developments in technology and the emergence of new 
global competitors, according to a new report "U.S.-Japan 
Economic Integration: Enhancing Competitiveness and Securing 
Our Future in Asia", issued by the U.S.-Japan Business 
Council (USJBC).  Developing a high-standard U.S.-Japan 
economic partnership agreement, the USJBC argues in its 
recently released report, would be an effective way for both 
countries to increase their competitiveness in East Asia (the 
report specifically cites growing competition from China and 
India) and globally by better allowing U.S. and Japanese 
companies to boost productivity throughout their value 
chains; by enabling innovative companies in both countries to 
take advantage of economies of scale as they meet rising 
demand for their products/services; by becoming a catalyst 
for needed domestic economic reforms; and enabling the U.S. 
and Japan to take the lead jointly in shaping the emerging 
trade and economic architecture in Asia -- a step that would 
improve both countries' competitive positions vis-a-vis other 
economies. 
 
2.  (SBU) Meeting with econoffs, USJBC Economic Partnership 
Agreement (EPA) Task Force Chair and AFLAC Japan CEO Charles 
Lake and AFLAC Senior V.P. and Director for Governmental and 
Legal Affairs Andy Conrad acknowledged the low probability of 
the U.S. and Japan launching comprehensive free trade 
negotiations in the near term.  They noted the report states 
"globalization fatigue" and an overcorrection to the focus on 
Japan in the eighties and nineties in the U.S., and the 
pressures of agricultural interests in Japan, as well as its 
dual economy and vertically-segmented policy making regime on 
top of the confused political outlook in Tokyo, make a free 
trade agreement/economic partnership agreement unlikely in 
the near future.  Nevertheless, the scope of U.S.-Japan trade 
and other economic relations as well as evolving 
Trans-pacific dynamics leads the USJBC to suggest a building 
block approach through which the U.S. and Japan can 
prioritize elements of their strategic dialogue on 
trade-enhancing measures to enable firms to better compete in 
each others' markets, and thereby compete better regionally 
and globally.  Citing Boeing as an example, Lake said many 
manufacturers with operations in both Japan and the U.S. 
require a borderless supply chain to remain efficient and 
competitive in the global economy.  Lake also noted 
information contained in the report showing the share of 
intra-regional trade in Asia has increased to levels almost 
commensurate with that among the EU economies; in contrast, 
the share of intra-regional trade in NAFTA is considerably 
less.  He questioned how effective Japan has been in taking 
advantage of the growth in regional trade flows.  Without 
more rapid and comprehensive reform, Japan might find itself 
sidelined in terms of regional economic integration. 
 
3. (SBU) Lake said the USJBC timed the report to engage 
policymakers during the U.S. political transition and to 
spark calls for reform within the Japanese business 
community.  He expressed concern that the slow pace of 
economic reform in Japan, as well as competing investment 
opportunities elsewhere, particularly from China, will 
continue to draw policymakers' attention away from the 
strategically important U.S.-Japan economic and trade 
relationship.  The USJBC advocates a ratcheting up of the 
U.S.-Japan strategic dialogue and greater engagement with the 
Japanese business community to drive a more robust domestic 
reform agenda.  To this end, the USJBC is promoting the 
report's recommendations in its discussions with senior 
government officials, the broader trade policy community, and 
the media. 
SCHIEFFER