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Cablegate: Fukuoka Governor Stresses the Importance of Fdi; Need To

VZCZCXRO3564
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHFK #0014/01 0730821
ZNR UUUUU ZZH
P 130821Z MAR 08
FM AMCONSUL FUKUOKA
TO RUEHC/SECSTATE WASHDC PRIORITY 0339
INFO RUCPDOC/USDOC WASHDC PRIORITY 0013
RUEHKO/AMEMBASSY TOKYO PRIORITY 0335
RUEHNAG/AMCONSUL NAGOYA PRIORITY 0133
RUEHOK/AMCONSUL OSAKA KOBE PRIORITY 0148
RUEHNH/AMCONSUL NAHA PRIORITY 0145
RUEHKSO/AMCONSUL SAPPORO PRIORITY 0139
RUEHFK/AMCONSUL FUKUOKA 0365

UNCLAS SECTION 01 OF 02 FUKUOKA 000014

SIPDIS

SENSITIVE

SIPDIS
STATE FOR EAP/J, EEP/OIA AND EEB/BTA
STATE PASS USTR FOR BEEMANSENSITIVE

E.O. 12958: N/A
TAGS: ETRD EINV PREL JA
SUBJECT: FUKUOKA GOVERNOR STRESSES THE IMPORTANCE OF FDI; NEED TO
COOPERATE WITH U.S. ON STANDARDS


SUMMARY

1. (U) Econ Minister-Counselor Robert Cekuta met with Fukuoka
Governor Wataru Aso during a March 4-5 visit to Fukuoka and
Kitakyushu. The outspoken Fukuoka Governor, who also chairs the
National Governors' Association of Japan, discussed how the
Japanese perceptions of the U.S. as a superpower have declined
in the wake of the wars in Iraq and Afghanistan and concerns
here about the subprime loan situation. He argued the EU is
increasingly important as a global leader by dint of getting its
product or technical standards accepted globally. It is
important, he continued, for the U.S. and Japan to work more
closely on standards as a result. He also stressed the
importance of U.S.-Japan policy coordination toward China. Aso,
who has a reputation as an advocate for greater local autonomy
and aggressive foreign outreach by local governments, strongly
affirmed the value of greater foreign direct investment and
castigated those in the Japanese government opposing efforts to
boost FDI. End Summary.

CHANGING JAPANESE PERCEPTIONS OF THE U.S.

2. (SBU) Governor Aso said through the 1990s, Japanese had
looked up to the U. S. as the world's superpower. However,
Japanese opinions of the U.S. have declined over the past
several years with Japanese believing, because of the wars in
Afghanistan and Iraq, that the U.S. overly depends on military
power. Moreover, he asserted that the U.S. has become seen as a
country which is extremely focused on making money - - implying
this was the root of the subprime loan situation. Aso also said
American culture, long admired in Japan, has lately lost its
luster.

3. (SBU) Connected with this situation, Aso said the EU has
done a better job of developing standards and getting them
accepted as the rule internationally than has the U.S. the EU,
which has taken the initiative in setting global standards (e.g.
safety standards for foods, budgets, corporate governance and
environmental protection), and that the EU is successfully
persuading the rest of the world to adopt their standards. He
pointed out that he often visits China and has noticed that they
are learning how to tackle environmental problems (e.g.,
implementing emission standards) from the EU. He noted that the
ASEAN countries are adopting EU rules as well. He argued USG
unwillingness to sign on to the Kyoto Protocol has created an
impression that the U.S. is not ready to cooperate in such
endeavors.

4. (SBU) Aso suggested that the U.S. and Japan should work
together on standards with the idea that they could become
adapted by other countries as well. The subprime loan situation
might provide some opportunities along this line. The two
countries should set global standards for securitization and
rating to prevent similar crises from occurring again on a
global scale.

5. (SBU) Aso also said it would be important to coordinate
policy toward China in order to incorporate it into the global
community. He expressed concern about China's growing military
budget, the need to make China observe WTO rules, and the
importance of protecting intellectual property rights.


6. (SBU) EMIN took issue with a number of Aso's points, noting
for example the problems REACH and other EU decisions had caused
for international trade problems. There were also problems with
transparency and the process with which the EU sometimes made
decisions on regulatory issues. Some of those same problems
existed in how Japan formulated regulations. EMIN also noted
work with the EU and member states on resolving regulatory
problems and the new initiative under President Bush to take a
more active approach to regulatory matters to prevent them from
becoming trade barriers. Aso agreed with EMIN that the EU's
rules are imperfect and can constrain economic growth, adding
this situation makes U.S. and Japan cooperation in creating
"reasonable" global standards all the more important.


ASO: FDI BENEFITS ARE ENORMOUS

5. (SBU) Aso said any person with "common sense" understands
the benefits of FDI. He was scathing in his remarks pertaining
to Japanese politicians and officials recently quoted as

FUKUOKA 00000014 002 OF 002


opposing or looking to constrain incoming foreign investment.
The Fukuoka Prefectural Government has opened offices to promote
FDI in San Francisco, Frankfurt, Seoul, Shanghai, and Hong Kong.
These offices also actively promote local agricultural
products. The prefecture opened a Tokyo to induce Tokyo-based
foreign companies to branch out to Fukuoka. Governor Aso also
invited members of the French Chamber of Commerce of Osaka and
Tokyo to Fukuoka last fall in an attempt to convince them to
move their Japan headquarters to Fukuoka. To diversify Asian
business links beyond China, Aso is aggressively pursuing
relationships with India, Thailand, and Vietnam. Fukuoka is
the first Japanese local government which concluded a
partnership agreement with the Government of the National
Capital Territory (NCT) of Delhi, covering such matters as
technology development, environmental policy, and personnel
exchanges. Fukuoka Prefecture has forged similar partnerships
with Hawaii, Jiangsu Province in China, Bangkok, and most
recently with Hanoi. He also regularly networks with his
counterparts in the region, including through an annual meeting
of governors from Kyushu and Korea. In the meeting, Aso added
that Japanese companies are benefiting greatly from American
FDI, particularly in the financial and information technology
sectors.,

COMMENT

6. (SBU) First elected in 1995 and now in his fourth term,
Governor Aso, a former METI bureaucrat, has a reputation as an
advocate for greater local autonomy and aggressive foreign
outreach by local governments. Given his entrepreneurial streak
and fervent belief in FDI, Governor Aso may well be a possible
partner in advocating for more openness to FDI here.
CARRINGTON

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