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Cablegate: Japan: Demarche On Postal Reform Review

VZCZCXYZ0013
PP RUEHWEB

DE RUEHC #9118 3512045
ZNR UUUUU ZZH
P 172044Z DEC 09
FM SECSTATE WASHDC
TO AMEMBASSY TOKYO PRIORITY 1647

UNCLAS STATE 129118

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN EINV PGOV JA
SUBJECT: JAPAN: DEMARCHE ON POSTAL REFORM REVIEW

REF: TOKYO 2890

1. (U) This is an action request. Please see para 3.

2. (SBU) BACKGROUND: The Government of Japan is currently
undergoing an intensive process of reviewing postal reform
policies and drafting new legislation regarding the structure
and services offered by Japan Post. The USG, though neutral
as to whether Japan Post should be privatized, is concerned
about the implementation of a level playing field for private
companies to compete in the banking, insurance, and express
delivery markets.

3. (SBU) ACTION REQUEST: Embassy Tokyo is requested to meet
with FSA/Postal Reform Vice Minister Kouhei Ohtsuka, MIC
Parliamentary Secretary Kensei Hasegawa, and other senior
Japanese Government officials to deliver the following
talking points:

-- We understand that the Japanese Government is undergoing
an intensive process of reviewing postal reform policies and
drafting new legislation.

-- We want to be clear up front that the U.S. Government
continues to remain neutral as to whether or not Japan Post
should be privatized. We fully respect that this is a
decision for Japan to make.

-- However, we have specific concerns about the preferential
treatment that Japan Post receives compared to foreign
companies and how it affects our companies' ability to
compete in the insurance market in Japan.

-- This has led to questions about Japan's compliance with
its WTO national treatment obligations in the insurance
market, which we are examining carefully.

-- (IF RAISED - Specific national treatment concerns:) One
example is access to the postal network. Japan Post
Insurance has the opportunity to offer its full product range
at more than 20,000 post offices. Meanwhile, foreign
insurance companies are only permitted to sell a small number
of products at roughly 1,000 post offices.

-- This is not just an issue for the United States. Japanese
domestic companies and other foreign companies have expressed
similar concerns.

-- We believe that there is a window of opportunity right now
during your review process for us to work together quietly to
address these level playing field concerns. If we wait, I
fear that the concerns may only grow stronger and lead to
trade friction, which is not in our mutual interest.

-- We respectfully ask that our respective teams meet in the
immediate future to discuss the issues at hand in more detail
and to see how they can be effectively addressed.

-- Although this discussion has focused on insurance issues,
we hope that you will use this opportunity to also address
our level playing field concerns in the banking and express
delivery markets.

-- As you go forward, we urge you to ensure full transparency
during the policy making process and to give interested
parties, including foreign companies, opportunities to
provide meaningful input.

-- (AS NEEDED POINT ON PRESS:) I would like to keep this
discussion private. Can we agree not to talk about this
meeting in the press?
CLINTON

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