Cablegate: Postal Reform: Mic Minister Haraguchi Welcomes

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UNCLAS SECTION 01 OF 02 TOKYO 000170

SENSITIVE
SIPDIS

STATE FOR E, EEB AND EAP/J
NSC FOR LOI, RUSSELL
USTR FOR AUSTR CUTLER, BEEMAN, LEE, AND HOLLOWAY

E.O. 12958: N/A
TAGS: ECON EFIN PGOV JA
SUBJECT: POSTAL REFORM: MIC MINISTER HARAGUCHI WELCOMES
OPPORTUNITY TO HEAR U.S. INDUSTRY VIEWS

REF: A. 09STATE 129118
B. 09TOKYO 2921

SENSITIVE BUT UNCLASSIFIED. CONTAINS BUSINESS SENSITIVE
INFORMATION.

1. (SBU) SUMMARY: Minister for Internal Affairs and
Communications (MIC) Kazuhiro Haraguchi said he was aware of
USG and industry concerns regarding postal reform in response
to DCM's delivery of RefA points on January 27. Minister
Haraguchi also offered to meet with U.S. industry
representatives to hear their views. He cautioned, however,
that the government's goal is to make the postal system work
for all Japanese citizens, in particular the rural elderly,
and therefore he is unable to guarantee the outcome of postal
reform will satisfy everyone completely. END SUMMARY.

2. (SBU) The DCM delivered points in reftel to MIC Minister
Kazuhiro Haraguchi on January 27. Also present at the
meeting were Senior Vice Minister Masamitsu Naito and
Parliamentary Secretary Kensei Hasegawa. Both Haraguchi and
Naito are from the majority Democratic Party of Japan, while
Hasegawa hails from the minor coalition partner People's New
Party (PNP), which was founded to oppose the postal reforms
of the Koizumi Administration. All three MIC officials were
open and friendly, and appeared well-briefed on the issue.

3. (SBU) The DCM emphasized the need for a level playing
field and asked that USG and U.S. industry views be given a
fair hearing as the GOJ goes forward with its review of
postal services and crafts the legislation to enact reform.
The DCM also presented Haraguchi with a copy of the USG
comment submitted to the Postal Reform Promotion Office on
January 20 as part of its solicitation of views. Haraguchi
appeared to have seen the USG comments already. Naito also
mentioned being aware of American Chamber of Commerce in
Japan (ACCJ) views.

4. (SBU) Haraguchi assured the DCM postal services would not
be re-nationalized. He claimed that even Postal Reform
Minister Shizuka Kamei of the PNP agrees on this point. The
goal, said Haraguchi, is to improve social protection by
improving postal services, especially for the elderly in
rural areas who do not have easy access to private financial
service providers. Naito said the Koizumi-Takenaka reforms
of postal services had disregarded completely the concerns of
rural inhabitants. Haraguchi added that Japan Post Group
companies have been losing a lot of money for a long time,
and something must be done to halt losses. He further
emphasized the need to improve the corporate governance of
Japan Post Group companies.

5. (SBU) Haraguchi noted the bill to reform postal services
is still being worked on and probably will not be ready for
another three weeks or so. It has been delayed because of
other government business. Legislators are still considering
many questions, such as how much stock the government should
hold in the Japan Post Group companies. Going forward,
Haraguchi said they would look at creative ways for postal
companies to partner with private sector companies. In this
regard, Hasegawa pointed out that Aflac insurance products
are distributed via some post offices.

6. (SBU) Haraguchi acknowledged the importance of working
with private industry to ensure "an equal footing." In that
regard, he said he welcomes the opportunity to meet with
representatives from the ACCJ to hear their views. (NOTE:
Minister Kamei plans to meet ACCJ representatives on January
29. END NOTE.) Haraguchi closed by saying that although he
can not guarantee everyone will be completely satisfied with
decisions made regarding postal reform, he wants to conduct

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an open and transparent process.

7. (SBU) COMMENT: Econoff has conveyed to ACCJ
representatives Haraguchi's interest in hearing their views.
Embassy Tokyo continues to raise level playing field and
transparency points related to postal reform with GOJ at
every opportunity. The press has begun carrying more stories
and comments from Japanese industry groups opposing the
lifting of deposit and insurance caps for Japan Post Bank and
Japan Post Insurance (issues we and U.S. industry continue to
raise with the GOJ) as well as statements emphasizing the
importance of a level playing field. END COMMENT.
ROOS

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