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Cablegate: Little Progress in U.S.-Japan Civ Air Talks

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RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3117/01 3150745
ZNR UUUUU ZZH
R 100745Z NOV 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 8695
INFO RUEHBJ/AMEMBASSY BEIJING 6316
RUEHBY/AMEMBASSY CANBERRA 2860
RUEHNE/AMEMBASSY NEW DELHI 8619
RUEHUL/AMEMBASSY SEOUL 2291
RUEHGP/AMEMBASSY SINGAPORE 7247
RUEHML/AMEMBASSY MANILA 1277
RUEHBK/AMEMBASSY BANGKOK 4532
RUEHHI/AMEMBASSY HANOI 1094
RUEHNH/AMCONSUL NAHA 3239
RUEHNAG/AMCONSUL NAGOYA 8914
RUEHOK/AMCONSUL OSAKA KOBE 4664
RUEHKSO/AMCONSUL SAPPORO 1450
RUEHFK/AMCONSUL FUKUOKA 0879
RUEHHK/AMCONSUL HONG KONG 6625
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHIN/AIT TAIPEI 7183
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC

UNCLAS SECTION 01 OF 04 TOKYO 003117

SENSITIVE
SIPDIS

STATE FOR DAS JOHN BYERLY AND EAP/J
DOT FOR KEITH GLATZ AND JENNIFER THIBODEAU
USTR FOR MICHAEL BEEMAN
DOC FOR EUGENE ALFORD AND DANIEL LEE

E.O. 12958: N/A
TAGS: EAIR ELTN PGOV ETRD JA
SUBJECT: LITTLE PROGRESS IN U.S.-JAPAN CIV AIR TALKS

REF: A. TOKYO 1432
B. TOKYO 2982

1. (SBU) Summary: Government of Japan officials held out
little promise of broader liberalization of Japan's civil
aviation sector during bilateral talks in Tokyo October
29-30. As in past civil aviation negotiations, the GOJ
eschewed broader discussion of Japan's decade-old commitment
to "full liberalization." Instead, the GOJ advocated a
narrow, incremental proposal that would allow Japanese and
U.S. carriers to operate only a handful of daily flights to
the U.S. from Tokyo's Haneda Airport beginning in 2010 under
tight restrictions, something the U.S. side noted was
inherently discriminatory and would be immediately rejected
by U.S. carriers. The talks plowed familiar ground on a
number of "doing-business" issues, but without forward
movement in specific areas. The U.S. delegation, led by DAS
John Byerly, declined to set dates for a further round of
negotiations. End Summary.

2. (SBU) The USG and GOJ delegations met in Tokyo October
29-30 to discuss civil aviation liberalization. Deputy
Assistant Secretary for Transportation Affairs John Byerly
and Ministry of Land, Infrastructure, Transport, and Tourism
(MLIT) Civil Aviation Bureau (JCAB) Deputy Director-General
Kenji Takiguchi led their respective delegations. Keith
Glatz was the senior Department of Transportation
representative on the U.S. team. DAS Byerly and Glatz also
met separately with Japan Airlines, the American Chamber of
Commerce in Japan (ACCJ), and Jiro Hanyu of the Sasakawa
Peace Foundation, a former senior official at MLIT who
remains deeply engaged in transportation policy issues.

Vague MLIT Timeline for Liberalization
--------------------------------------

3. (SBU) Deputy Director-General Takiguchi noted the GOJ
ideally would like to conclude agreements with its aviation
partners by summer 2009 to prepare for expansions underway at
both of Tokyo's airports -- Haneda and Narita -- which are
expected to be completed in 2010. He seriously questioned,
however, whether a comprehensive agreement with the U.S. was
possible by that time. Discussion of the "full
liberalization" envisioned in the 1998 Memorandum of
Understanding (MOU) requires an "equitable environment" in
which to exercise those rights; it remains unclear whether
fair competition can be achieved when the U.S. holds a
disproportionately large number of slots at Narita, Takiguchi
contended. Further, the 1998 MOU on civil aviation does not
set a target date for full liberalization. Taking these
factors in to consideration, Takiguchi argued the GOJ's
proposal to begin service between Haneda and the United
States (albeit only between 10 p.m. and 7 a.m.) would be a
"step" toward liberalization. He noted that it is "extremely
difficult" to set a deadline for full liberalization due to
the limited number of new slots available in 2010 at both
Haneda and Narita Airports. This might change in the future,
but was contingent on technical issues and understandings
with local communities.

4. (SBU) DAS Byerly said the U.S. seeks full Open Skies with
Japan. The large expansion of Tokyo slots in 2010 presents
Japan and the United States a "historic opportunity" to
realize full liberalization of their aviation relations,
consistent with the commitment of both countries in the 1998
MOU as well as with the APEC Bogor Declaration. Rather than
seek a "mini-deal" that only addresses narrow issues, the GOJ

TOKYO 00003117 002 OF 004


should work with the United States on a roadmap to a
comprehensive agreement, which could include transitional or
phased-in steps to Open Skies, DAS Byerly said. He noted it
was difficult to envision how Japan would reach full
liberalization if a comprehensive agreement cannot be
concluded by 2010. Open Skies is possible even with space
constraints and a shortage of slots, a point made clear by
the Open Skies relationship between the U.S. and the UK
notwithstanding slot constraints at London-Heathrow. Japan
and the United States should focus on the broader interests
of consumers and the U.S. and Japanese economies, and not
just the narrow interests of carriers, DAS Byerly said.

Haneda Airport
--------------

5. (SBU) Takiguchi noted MLIT's support of Haneda's
expansion, as evidenced by new regulations to
internationalize Tokyo's "in-town" airport, covering such
areas as slot allocation and time curfews for international
flights (ref A). Operating hours and other details of
Haneda's operations cannot be changed, he claimed, since the
Council of Economic and Fiscal Policy (CEFP), chaired by the
Prime Minister, has already approved the plan. (Note: On
October 30, the second day of the talks, MLIT
Director-General Maeda announced at a Council for the
Promotion of Regulatory Reform (CPRR) meeting a possible
further increase of 20,000-30,000 international slots at
Haneda Airport. End note.)

6. (SBU) Based on MLIT's new regulations, Takiguchi proposed
three nighttime flights per day for U.S. carriers at Haneda,
with a prohibition against the aircraft flying to beyond and
from behind points. (Note: Takiguchi subsequently conceded
that MLIT would not limit beyond rights if requested by the
U.S. carriers. End note.) His proposal also included ending
limitations on charter flights. (Note: ANA flies nighttime
charters from Haneda Airport to Guam. End note.) Takiguchi
claimed U.S. and Japanese carriers would benefit equally from
the proposed new opportunities at Haneda. When pressed,
Takiguchi conceded that under the new MLIT rules, Japanese
carriers could theoretically fly up to twenty flights per day
-- in comparison to the three he was offering for U.S.
carriers -- but asserted Japanese carriers were very unlikely
to do so.

Narita Airport
--------------

7. (SBU) Takiguchi said the GOJ did not at this time intend
to allocate to U.S. carriers any of the 20,000 new slots at
Narita after the airport's 2010 expansion. He suggested the
GOJ might even consider asking (or requiring) U.S. carriers
to return some of their slots. DAS Byerly made clear that
the United States would view an MLIT decision to preclude
U.S. carriers from consideration for new Narita slots as
contrary to the IATA (International Air Transport
Association) World Scheduling Guidelines, the principle of
fair and equal opportunity, and the specific understandings
reached at the time of the 1998 MOU.

U.S. Carriers Disadvantaged
---------------------------

8. (SBU) DAS Byerly stated the GOJ's complex plans for
partial internationalization of Haneda Airport would
disadvantage U.S. carriers and run counter to the principle

TOKYO 00003117 003 OF 004


of fair and equal opportunity in Article 10 of the bilateral
air transport agreement. Japanese carriers would be
advantaged by the plan, not only because of the disparity in
the number of flights, but also because of their ability to
make better use of the departure and arrival windows at
Haneda offered by the new regulations. For example, Japanese
carriers could depart Haneda as early as 10 p.m. In
contrast, U.S. carriers could not realistically depart before
midnight, as they would have to fly to Haneda first and would
require at least two hours to "turn" their flights. Japanese
carriers could thus better appeal to Tokyo-area passengers
(earlier, more convenient departure times), to behind-Japan
passengers (shorter layovers at Haneda), and passengers
wishing to fly beyond the U.S. gateway (10 p.m. departures
from Haneda would allow Japanese carriers to connect to the
last bank of flights from the west coast to the east;
passengers on U.S. carriers arriving two hours later would
likely be stuck on red-eye flights or have to overnight).
DAS Byerly also noted the GOJ's proposed steps would saddle
U.S. carriers with costly split operations between Haneda and
Narita Airports, a concern that did not affect either JAL or
ANA, each of which already has major operations at both
airports. He underscored the benefits of Open Skies for both
Japanese and U.S. consumers and carriers and described the
potential for antitrust immunity for airline alliance
partners.

Yokota Air Force Base Dual Use
------------------------------

9. (SBU) Having previewed the matter privately with Byerly,
Takiguchi formally raised possible dual use of Yokota
airspace, asserting use of Yokota's runway would alleviate
crowding at Tokyo's metropolitan airports. Takiguchi
acknowledged DOD and MOFA have the lead on this issue, and
the civ air talks are not the venue for further discussion,
but nevertheless wished to inform the USG of MLIT's position.
(Note: On October 29, a MOFA official told Econoff MOFA did
not support raising this in the civ air talks, but that Tokyo
Governor Ishihara pressured MLIT to do so. End note.) DAS
Byerly said he would convey MLIT's suggestion to Washington.
(Comment: In a private meeting prior to the talks, former
MLIT negotiator and now JCAB Director-General Maeda also
informed Byerly and Glatz of the Tokyo government's interest
in dual use of Yokota. Both Maeda and Takiguchi gave the
impression that they had no personal interest in pursuing the
matter but instead were raising the issue on instruction and
in order to report back that they had indeed done so. End
Comment.)

"Doing-Business" Issues
-----------------------

10. (SBU) As expected, Takiguchi raised several
long-standing doing-business issues.

--Backcatering: He requested the U.S. to continue
indefinitely its current rules on backcatering. DAS Byerly
assured Takiguchi the USG would inform the GOJ of any
developments in this area and urged Japanese carriers to
comment during the rule-making period.

--JAL/Jalways stopovers in Hawaii: Takiguchi asked whether
Open Skies could lead to a change in U.S. cabotage rules so
as to allow JAL/Jalways stopovers in Hawaii. DAS Byerly
answered "no" but noted that, if the GOJ were prepared to
reach an Open Skies agreement if the law were amended, he

TOKYO 00003117 004 OF 004


would recommend to senior officials that they consider a
narrow exception in this specific case. (Comment: Takiguchi
did not bite. End comment.)

--Transit Without Visa (TWOV): Takiguchi asserted TWOV
restricts operation to beyond points and requested the USG
lift this requirement. DAS Byerly reviewed the history of
this issue and the reasons for suspension of TWOV after the
terrorist attack of September 11. He noted that there were
no prospects for near-term reinstatement of TWOV.

--US-Exit: Takiguchi raised concerns about the
Administration proposal to require airlines to fingerprint
departing passengers, arguing that this would place an
unjustified burden on carriers. In response, DAS Byerly
described recently enacted legislation that defers
implementation of this proposal pending further study.

11. (U) DAS Byerly cleared this message after he departed
Tokyo.
SCHIEFFER

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