US embassy cable - 05TOKYO1458

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 001458 
 
SIPDIS 
 
DEPT FOR EAP/J, EB/TPP/ABT-WALL AND EB/TPP/BTA-HONAN 
NSC FOR E.ALTBACH AND M.GREEN 
PASS USTR FOR CUTLER, NEUFFER, MURPHY, OCONNOR, BOMER 
PASS USDA FOR OSEC U/S PENN, DEP. U/S LAMBERT,BECHDOL, 
BUTLER 
PASS USDA FOR TERPSTRA, DLP WETZEL, ITP FOR SHEIKH 
 
E.O. 12958: DECL: 03/14/2015 
TAGS: EAGR, ECON, PGOV, PREL, ETRD, JA 
SUBJECT: CHARGE DISCUSES BSE, DOMESTIC POLITICS WITH LDP'S 
HIDENAO NAKAGAWA, HIROSHIGE SEKO 
 
 
Classified By: Charge d'Affaires, a.i., Michael Michalak.  Reasons: 1.4 
 (b) (d). 
 
1. (C) Summary.  Over dinner with the Charge March 9, LDP 
Diet members Hidenao Nakagawa and Hiroshige Seko agree that 
the process for resuming the importation of U.S. beef should 
be accelerated and that Japan's consumers should be allowed 
to make their own choices.  Nakagawa expects the Diet to pass 
a postal privatization bill during this session.  Nakagawa, 
who supports LDP DepSecGen Shinzo Abe as the next Prime 
Minister, believes Abe should take advantage of his activism 
in party and constitutional reform efforts to promote his PM 
candidacy.  End summary. 
 
BSE 
--- 
 
2. (C) The Charge met March 9 over dinner with Lower House 
Diet member and LDP Diet Policy Chairman Hidenao Nakagawa and 
with Upper House Diet member Hiroshige Seko to discuss a 
range of political and economic issues of bilateral interest. 
 The Charge stressed to them that the BSE issue is becoming a 
major bilateral problem and must be resolved soon, noting 
that it would be the major topic in a telephone call that 
same evening between President Bush and PM Koizumi.  Nakagawa 
acknowledged the problem, but insisted that the GOJ 
ministries and politicians were basically in agreement on the 
need to settle the issue promptly and that the problem lay 
with the Food Safety Commission.   A number of women's and 
consumer groups are also vocally pressing for maintaining 
strict standards, Nakagawa noted, urging Washington to be 
patient. 
 
3. (C) The Charge reminded Nakagawa that there was no 
scientific basis for delay and that the U.S. side was running 
out of patience.  The matter now requires a political 
solution, he stated.   Seko commented that BSE was nearly the 
only issue his USG interlocutors wanted to talk about during 
his December 2004 Washington visit.  Nakagawa and Seko agreed 
that Japanese consumers should be allowed to decided for 
themselves and that the process to resume beef imports should 
be hastened. 
 
Postal Privatization; Party, Constitutional Reform 
--------------------------------------------- ----- 
 
4. (C) The Prime Minister, Nakagawa maintained, has been too 
engaged with his domestic political agenda to become very 
involved with BSE.  He has been totally consumed with 
promoting postal privatization.  When the Charge welcomed the 
prospects of further reform of the Japanese banking and 
insurance sectors, Seko cautioned that if the United States 
is perceived as too active in its support of these reforms, 
it will be criticized for merely championing the interests of 
U.S. companies.  In response, the Charge insisted that the 
United States simply seeks a level playing field.  Nakagawa 
noted that in the end, the LDP would come up with an 
agreement on privatization bills during this Diet session. 
 
5. (C) Constitutional reform is the other key topic of 
discussion within the LDP, Seko observed.  Discussions 
include a proposal to move to a unicameral system, a move 
Seko supports despite the fact that, as an Upper House 
member, he may lose his position.  Seko said he is part of 
Abe's study group, along with Yasuhiro Shiozaki, on 
constitutional reform-related security issues.  Nakagawa said 
he believes the group will approach the topic in general 
terms, including the issue of collective security, and not 
specifically address the U.S.-Japan bilateral security 
relationship, which he believes should be handled through 
other mechanisms, like treaties.  Former Prime Minister 
Nakasone and Deputy Secretary General Abe are concentrating 
on the preamble to the constitution.  A complete draft of the 
constitution should be complete by mid-November, in time for 
the LDP's 50th anniversary celebration. 
 
6. (C) Nakagawa separately noted the complexity of base and 
realignment issues.  Because of strong interest at the local 
level, U.S. negotiations with MOFA and JDA are only part of 
the process.  The local communities have to be dealt with, 
too, and that process will take a lot of time.  For this 
reason, Nakagawa stressed, it was important to move the 
entire process along expeditiously. 
 
PM Prospects 
------------ 
 
7. (C) Invited by the Charge to speculate on who might follow 
Koizumi as Prime Minister, Nakagawa insisted that Fukuda, at 
68, has absolutely no interest.  He (Nakagawa) supports Abe, 
who at 50, he admitted, is a bit young for the job.  Masahiko 
Koumura and Taro Aso, both in their late 50s, strongly 
support Fukuda.  The two are sandwiched in age between Fukuda 
and Abe ("mezzanine" generation, in Japanese terms), and if 
they would be skipped over and the "young" Abe were to become 
PM, they would likely lose any opportunity to become PM. 
8. (C) Nakagawa nonetheless believes that Abe should pursue a 
strategy to promote his future candidacy.  Abe should take 
advantage of his activism in efforts to reform the party and 
his role in constitutional reform study groups.  The 
unveiling of these reform plans coincides with the party's 
November 2005 50th anniversary, Nakagawa observed, 
potentially setting the stage for Abe to highlight his 
reformist role.  Nakagawa believes a possible cabinet 
reshuffle in the late fall could result in a ministerial 
position for Abe and help set the stage for Abe to appear the 
logical successor to Koizumi (who must step down by September 
2006, when his term as party president expires). 
 
Small Government 
---------------- 
 
9. (C) Abe, Seko remarked, is carefully studying the recent 
history of the Republican Party, in part for the lessons to 
be learned about party transformation, but also to examine 
the Republican approach toward "small government."  Nakagawa 
believes that Japan suffers from a bloated bureaucracy and 
over regulation.   Too many regulations, Nakagawa observed, 
stifle competition and economic growth.  He cited as an 
example the fact that 8,000 Ministry of Agriculture officials 
are solely engaged in recording annual rice statistics.  He 
understands that, as civil servants, they cannot be fired and 
will have to be transferred to other positions.  Nakagawa 
said he also recognizes that the process of shrinking the 
government will take time, and is thinking long term -- not 
five, but 25 years.  Both Seko and Nakagawa acknowledged, in 
response to a comment by the Charge, that even a "small 
government" would still require an adequate number of people 
to monitor economic activity and serve as "watchdogs." 
 
MICHALAK