Message-ID: <25346730.1075846356332.JavaMail.evans@thyme> Date: Fri, 8 Sep 2000 06:56:00 -0700 (PDT) From: nicholas.o'day@enron.com Subject: USTR bilateral Cc: steven.kean@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: steven.kean@enron.com X-From: Nicholas O'Day X-To: Mark Schroeder/LON/ECT@ECT X-cc: Steven J Kean X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Japan X-Origin: KEAN-S X-FileName: skean.nsf Mark, As mentioned in our call on Tuesday, we have discussed with the US Embassy (State Dept) what we would like to see covered in the next round of the US Japan bilateral talks on deregulation in the energy sector. I attach a brief note which confirms in broad terms our preliminary discussions on the topic. We are encouraging a significantly more cooperative approach by the US to Japan, particularly in the wake of the telecom talks earlier this year. As mentioned in the attached note, we believe that the Japanese Government genuinely wants to implement further reform, but is having difficulty in balancing competing policy interests. We are not advocating that the USG tell Japan what its environmental policy or energy policy should be. We are suggesting more of an advisory role. The concrete outcome would be further significant reforms to the electricity and gas sectors, together with a timetable for complete deregulation. We have consciously stopped short of recommending a preferred structure for the electricity and gas sectors for a couple of reasons. Not only would it be inappropriate for the USG to dictate to the Japanese Government on what to do rather than how to do it, but determining the Enron preferred structure for Japan is a significant undertaking and something that we are currently working through. In this regard, as mentioned on Tuesday we will be looking for significant support from your group and clearly will need sign off from Europe and Houston. The approach we are recommending that the US Government adopts reflects the approach we propose adopting in Japan. To assist us in getting our message to the right people, we have been taking steps to further develop our relationships with cabinet ministers, the MITI Director General and others, including members of the following committees who are or will be reviewing various aspects of energy policy in Japan: - the LDP Comprehensive Energy Policy Study Committee (Chair - Mr Amari) - the supra partisan New Energy Policy Committee ( Chair - former PM Mr Hashimoto) - the business lead Deregulation Committee (Chair - Orix chairman Miyauchi) - the MITI sponsored Liberalization of Power Industry and Public Interest Committee ( Comprising academics) I would welcome your comments on the attached note.