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Viewing cable 08TOKYO3338, CODEL BOSWELL'S DECEMBER 13-15 VISIT TO JAPAN: THE

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Reference ID Created Released Classification Origin
08TOKYO3338 2008-12-08 22:51 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tokyo
VZCZCXRO1357
PP RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3338/01 3432251
ZNR UUUUU ZZH
P 082251Z DEC 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9274
INFO RUEHBJ/AMEMBASSY BEIJING 6717
RUEHHI/AMEMBASSY HANOI 1101
RUEHUL/AMEMBASSY SEOUL 2716
RUEHFK/AMCONSUL FUKUOKA 1308
RUEHHM/AMCONSUL HO CHI MINH 0121
RUEHNAG/AMCONSUL NAGOYA 9299
RUEHNH/AMCONSUL NAHA 3667
RUEHOK/AMCONSUL OSAKA KOBE 5099
RUEHKSO/AMCONSUL SAPPORO 1877
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
UNCLAS SECTION 01 OF 03 TOKYO 003338 
 
SENSITIVE 
SIPDIS 
 
STATE - H FOR CODEL BOSWELL 
USTR FOR AUSTR CUTLER AND EHOLLOWAY 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD ECON PREL JA
SUBJECT: CODEL BOSWELL'S DECEMBER 13-15 VISIT TO JAPAN: THE 
AGRICULTURAL AGENDA 
 
REF: A. TOKYO 3209 
     B. TOKYO 3204 
 
1. (SBU) Post warmly welcomes CODEL Boswell's December 13-15 
visit to Japan to discuss key agriculture-related issues. 
Your time in Tokyo provides an excellent opportunity to 
underscore the importance of U.S.-Japan trade in food and 
food products; to emphasize the vital role U.S. agricultural 
exports play in addressing Japan's food security and food 
safety concerns; and to urge Japan to adopt a comprehensive 
set of science-based regulations to allow greater market 
access for U.S. exporters.  The United States is Japan's 
largest food supplier, accounting for one-fifth of Japan's 
total agricultural imports.  Japan is the largest consumer of 
U.S. agriculture products outside NAFTA, with U.S. exports, 
aided by strong grain prices, increasing 15 percent last year 
to reach $11.6 billion.  Despite the enormous volume of 
trade, we still face serious challenges. 
 
Food Security 
------------- 
 
2. (SBU) With imports accounting for sixty percent of Japan's 
food consumption, food security is a major concern for the 
Government of Japan (GOJ).  In December, Agriculture Minister 
Ishiba announced the government's latest plan to raise 
Japan's food self-sufficiency, this time to 50 percent.  The 
target, like previous ones, is likely to fail.  However, 
setting targets such as these appeal to certain GOJ 
officials, who rely on them as useful cover to justify 
Japan's protectionist agricultural policies, which include an 
arsenal of stringent border controls and domestic price 
supports.  Several factors account for Japan's relatively low 
rate of self-sufficiency in agriculture and the steady 
decline in domestic output since the mid-1980s.  The shortage 
of arable land limits Japan's maneuverability on food 
production.  So too does the country's rapidly dwindling farm 
population; over 70 percent of Japan's farmers are aged 60 or 
older.  Large-scale agriculture is rare; the landscape is 
dominated by small farms that average only four acres in size 
(about one percent the scale of a commercial U.S. farm). 
Shifting consumption patterns have increased dependence on 
imports. 
 
3. (SBU)  The United States has been Japan's top supplier of 
agricultural products since the end of World War II.  Japan 
is the largest export market for U.S. corn, buying $2.6 
billion in 2007, and is almost totally dependent on U.S. corn 
supplies.  On average, half the calories consumed by Japanese 
livestock come from U.S. feed.  Japan is also the largest 
market for U.S pork ($1.1 billion), and wheat ($800 million), 
and buys several billion dollars in processed foods annually. 
 
Misguided Food Safety Concerns 
------------------------------ 
 
4. (SBU) Japanese consumers are preoccupied with food safety 
and are often influenced by GOJ officials and media who tend 
to conflate food safety and food security concerns.  Japanese 
policy makers are known to focus on isolated food safety 
issues in the broader debate over domestic food security. 
Recent scandals involving tainted food imports, especially 
from China, have led to calls for stricter scrutiny of 
imported food, more stringent labeling requirements, and 
other restrictive regulations with little scientific basis. 
Politicians and regulators fail to address specific problems 
from particular countries, producers, shippers and, in some 
cases, domestic sources, while repeating local concerns about 
the safety/wholesomeness of foreign food in general. 
 
5.  (SBU) The MAFF and the Ministry of Health, Labor and 
Welfare (MHLW) are charged with managing risk in Japan's food 
supply.  The Food Safety Commission (FSC), an independent 
agency responsible for risk assessment and communication, has 
been moderately successful in reviewing food safety issues 
from a scientific point of view.  USG efforts have centered 
on urging Japan to continue to adopt science-based 
 
TOKYO 00003338  002 OF 003 
 
 
regulations that align with international food safety 
standards, including in connection with sales of U.S. beef. 
 
Beef Talks Stalled 
------------------ 
 
6. (SBU) Japan was the largest overseas market for U.S. beef 
($1.3 billion) up until 2003, when the GOJ banned U.S. 
imports following the discovery of Bovine Spongiform 
Encephalopathy (BSE) in a single cow in Washington State of 
Canadian origin.  Japan partially reopened its market in July 
2007, but has allowed little improvement in access for U.S. 
producers since then.  GOJ regulators zealously enforce the 
technical agreement we have for trade in beef and beef 
products.  Currently, Japan limits imports of U.S. beef to 
certain cuts from animals aged 20 months or less.  The USG 
intervenes regularly on behalf of U.S. exporters to gain 
entry for beef shipments, which Japanese officials frequently 
stop on the basis of minor packaging or paperwork 
discrepancies that have nothing to do with food safety.  The 
GOJ has also suspended two major U.S. beef plants (located in 
Nebraska and Kansas) for technical violations.  Thanks to the 
U.S. Meat Export Federation and other advocacy groups, the 
image of U.S. beef has improved among Japanese consumers, 
with beef exports to Japan increasing 64 percent to $265 
million during the first eight months of 2008 compared to the 
same period last year. 
 
7. (SBU) Japan continues to delay moving towards World 
Organization for Animal Health (OIE) consistency for imported 
U.S. beef products.  In May 2007, the OIE designated the U.S. 
as a controlled-risk country for BSE.  The OIE guidelines 
indicate all beef and beef products from controlled risk 
countries may be imported provided certain tissues are 
removed prior to export (i.e., specific risk materials or 
SRMs).  Japan has suggested it might consider somewhat 
relaxing restrictions on U.S. beef (e.g., possibly allowing 
cuts of beef from animals up to 30-months of age), but 
continues to propose steps that fall short of full market 
access based on OIE guidelines and science. 
 
Pork Trade a Success, but also Troubled by Fraud 
--------------------------------------------- --- 
 
8. (SBU) Japan is the largest market for U.S. pork ($1.1 
billion in 2007) and trade is growing; imports increased 27 
percent in the first eight months of 2008, the result of 
competitive U.S. prices and a shift in Japanese preferences 
for pork over other meats.  The U.S. Meat Export Federation 
has introduced an effective new subway-based marketing 
campaign and seeks to consolidate U.S. market share, which 
has risen to 44 percent compared to 33 percent three years 
ago.  Against this backdrop of success, Japan's method for 
collecting import duties on pork (i.e., the "gate price 
system") distorts trade and encourages legitimate traders to 
import a mix of high and low value pork cuts out of synch 
with actual demand:  the "gate price" imposes higher tariffs 
on lower priced pork imports and encourages tariff fraud via 
over-invoicing of lower value pork cuts.  On September 1, 
Tokyo Customs revealed that Mitsubishi Corporation, a major 
Japanese trading house, allegedly failed to report some 4.2 
billion yen (about $40 million) in tariffs on pork imports. 
The USG is concerned that hard-won successes by U.S. pork 
exporters could be undermined should the GOJ take too 
heavy-handed an approach in dealing with tariff-related fraud. 
 
Agricultural Biotech 
-------------------- 
 
9. (SBU) The GOJ's regulatory system for biotech crops is 
complex, costly and causes problems for U.S. farmers and 
exporters.  The accidental low-level presence of unapproved 
biotech events has been a frequent source of trade tension 
between the U.S. and Japan.  Since the late 1990s, U.S. 
potatoes, papayas, corn, and rice have all been subject to 
expensive testing or segregation or have been temporarily 
banned.  Progress has been made to persuade the GOJ to 
 
TOKYO 00003338  003 OF 003 
 
 
eliminate some of its superfluous biotech testing 
requirements for U.S. feed corn.  Despite the country's 
wariness of biotech products, Japan is the largest per capita 
importer of biotech crops in the world.  However, Japanese 
consumers are largely uninformed about the benefits and lack 
of risk connected with biotech food.  Given the importance of 
Japan's market, major U.S. biotech crop companies and farm 
organizations have told us they have no incentive to grow new 
biotech varieties of corn or soybeans until after they have 
been approved in Japan.  Japan's regulators therefore stand 
to influence the access U.S. farmers have to new production 
technologies. 
 
Animal Cloning 
-------------- 
 
10. (SBU)  Following the U.S. Food and Drug Administration's 
January finding that cloned animals do not pose unique food 
health concerns, Japan's Food Safety Commission began 
conducting its own food safety review.  This review is 
scheduled to be completed in early 2009.  Japanese regulators 
have hinted that countries that use somatic cell cloning 
technology in commercial livestock production may face 
process-based labeling requirements. 
SCHIEFFER