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Cablegate: Japan Hopes Toyota's Ills Do Not Damage Bilateral

VZCZCXRO7263
RR RUEHAG RUEHBZ RUEHGI RUEHMR RUEHPA RUEHPB RUEHPOD RUEHSL
DE RUEHKO #0319/01 0490420
ZNR UUUUU ZZH
R 180420Z FEB 10
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 9462
INFO RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 3121
RUEHFR/AMEMBASSY PARIS 6625
RUEHBY/AMEMBASSY CANBERRA 3369
RUEHRO/AMEMBASSY ROME 2331
RUEHUL/AMEMBASSY SEOUL 9802
RUEHRL/AMEMBASSY BERLIN 1688
RUEHOT/AMEMBASSY OTTAWA 0053
RUEHNAG/AMCONSUL NAGOYA 5881
RUEHNH/AMCONSUL NAHA 1212
RUEHOK/AMCONSUL OSAKA KOBE 2695
RUEHKSO/AMCONSUL SAPPORO 9366
RUEHFK/AMCONSUL FUKUOKA 8879
RHEHAAA/NSC WASHDC
RUEATRS/TREASURY DEPT WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEHBS/USEU BRUSSELS
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS SECTION 01 OF 02 TOKYO 000319

SENSITIVE
SIPDIS

STATE FOR EAP/J
STATE ALSO FOR EEB/TRA, S/SECC, OES/EGC, AND EEB/IEP
PASS TO NSC D. RUSSELL
PASS TO USTR FOR AUSTR CUTLER AND M. BEEMAN
PASS TO COMMERCE FOR H. MISISCO, K. ROTH, D. BARZDUKAS
PASS TO EPA FOR S. FULTON
PASS TO DOT FOR L. LAWSON, C. MILTTELHOLTZ
PASS TO NHTSA FOR R. MEDFORD AND M. KOUBEK

E.O. 12958: N/A
TAGS: EIND ETRD SENV PREL WTRO ENRG JA
SUBJECT: JAPAN HOPES TOYOTA'S ILLS DO NOT DAMAGE BILATERAL
RELATIONSHIP

REF: TOKYO 221

TOKYO 00000319 001.4 OF 002


1. (SBU) Summary: The GOJ does not want Toyota's recent
problems to damage the U.S.-Japan relationship, Ministry of
Land, Infrastructure, Transport and Tourism (MLIT) Minister
Seiji Maehara told the Ambassador February 10. Minister
Maehara met the Ambassador to discuss Toyota's safety recalls
and the eco-car subsidy program (reftel) due to his concern
that these auto issues could damage bilateral relations.
Maehara also used the meeting as an opportunity to raise two
additional issues: high-speed rail and Kadena Radar Approach
Control (RAPCON), but press coverage of the meeting focused
almost exclusively on Toyota. End summary.

Toyota Vehicle Recalls
-----------------------

2. (SBU) In a February 10 meeting with the Ambassador,
Maehara said the GOJ wants to ensure that Toyota's problems
do not undermine U.S.-Japan relations nor create obstacles to
trade. Maehara told the Ambassador the U.S.-Japan bilateral
relationship is the cornerstone of Japanese international
policy, so it is important to resolve the issue amicably.
Maehara does not view filing for a recall as negative;
rather, it is the right thing to do, and manufacturers should
be willing to do so for the sake of consumers. Toyota
President Akio Toyoda plans to visit the United States to
explain the situation to stakeholders, including Congress,
and to convince the American public of the company's "good
faith," Maehara continued. (Note: Toyota representatives
told emboffs Toyoda will visit the United States in March.
End note.) The Ambassador responded it is crucial for Toyota
to stay ahead of the issue and also that both governments do
what is necessary to ensure Toyota's problems do not affect
the bilateral relationship. After the meeting, the
Ambassador told the press Toyota's safety recall is a safety
issue that does not affect the strong bilateral relationship
between the United States and Japan.

Eco-Car Subsidy Program
-----------------------

3. (SBU) Maehara stated that although USTR requested the GOJ
use the U.S. Environmental Protection Agency (EPA) combined
mileage rating to determine eligibility of U.S. imported
vehicles for Japan's eco-car subsidy program (reftel), the
GOJ decided to use the EPA city mode, which MLIT believes
better corresponds to the Japanese mileage rating. These
eligibility parameters ensure that roughly 50 percent of
imported U.S. vehicles and 40 percent of European vehicles
qualify for the program. In contrast, the combined mileage
rating would have qualified 90 percent of imported U.S.
vehicles, which would have provoked complaints from Japanese
and European companies, Maehara asserted. Since most U.S.
vehicles are imported under a special preferential program
(the Preferential Handling Program, see reftel), use of the
combined mileage rating would constitute a "double"
preference. The Ambassador replied that the USG was
disappointed with the GOJ's decision to use the city mileage
rating, and that the eco-car subsidy issue will likely
continue to garner attention in the United States. The

TOKYO 00000319 002.2 OF 002


Ambassador also stressed it is crucial for the GOJ to remain
committed to transparency and opening the market for free
trade.

High-Speed Rail
---------------

5. (SBU) Maehara thanked the Ambassador for cooperation from
Secretary LaHood and from Congress during the recent
high-speed rail seminar in the United States.

Kadena RAPCON
-------------

6. (SBU) Regarding the Kadena Radar Approach Control
(RAPCON), Maehara said, the GOJ requests final agreement from
the USG on this issue before the beginning of March so that
the GOJ has time for a period of notification and public
announcement.

Comment
-------

7. (SBU) Japanese media reported widely on the meeting but
focused almost exclusively on the Toyota issue. The press
has speculated on the cause of Toyota's safety problems, with
many analysts suggesting they are a harbinger of the decline
of Toyota and of the Japanese manufacturing sector more
broadly. For many GOJ bureaucrats and Japanese auto
executives, any and all auto issues seem to trigger memories
of bilateral trade friction in the 1980s and 90s. Since the
global economic downturn began in late 2008, on many
occasions these stakeholders expressed informally to emboffs
their desire to avoid renewal of trade friction in the auto
sector; Maehara's message appears to have been an official
expression of those simmering concerns.
ROOS

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