JAPANESE MORNING PRESS HIGHLIGHTS 03/06/06-2

UNCLAS SECTION 01 OF 09 TOKYO 001169 SIPDIS SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/06/06-2 Index: 1) Iwakuni referendum, announced yesterday, to query populace on accepting carrier-jets from Atsugi 2) Though government is watching Iwakuni referendum, results may not affect the USFJ realignment process 3) New radar at Aomori base designed to deal with North Korean ballistic missiles Foreign policy issues: 4) Aiming at checking China, Japan forging security ties with India, starting with joint drill in Indian Ocean 5) Former chief cabinet secretary Fukuda calls for repairing ties with China and South Korea 6) Japan's UN reform proposal would make Russia, China pay a fair share of UN budget 7) Poll shows record 65% favoring constitutional revision 8) New Komeito readying for Upper House election by sweeping change of top party posts Minshuto in turmoil: 9) New Minshuto Diet affairs chair Watanabe sets off storm of denials by suggesting early election of party president 10) As Minshuto mulls early election of party head, names of Hatoyama, Ozawa being floated already as Maehara replacement Articles: 1) TOP HEADLINES Asahi: Financial Services Agency to tighten regulations on excessive loans Mainichi & Yomiuri: China's National People's Congress comes up with a new five-year plan predicting it will rank third in GDP with an annual growth rate of 7.5% on average Nihon Keizai: Toshiba to construct a new flash memory factory in Yokkaichi City by investing 50 billion yen Sankei: Abductees' families, including Yokota's, to testify before US Congress, aiming to raise international pressure Tokyo Shimbun: GM to sell its-held Suzuki shares in dissolving capital tie-up 2) EDITORIALS Asahi: (1) China's National People's Congress: Farmers in trouble with high medical expenses (2) Reform for decentralization of power: Local allocation tax comes into focus Mainichi: (1) ODA reform settled: Strategy is the prime minister's job TOKYO 00001169 002 OF 009 (2) Taiwan's pro-independence platform: Can legal arguments help the president restore public support? Yomiuri: (1) Budget bill approved: Keep tight rein on financial reconstruction (2) Soccer lottery: Can it break free of bureaucracy? Nihon Keizai: Do not misread change in nuclear policy Sankei: (1) Attitudes of senior high school students: Aspirations are necessary (2) Bird flu: Swift information disclosure is essential Tokyo Shimbun: (1) Doshu system (reorganization of prefectures into larger regional blocs with devolution of central government power): Debate should start with propriety of doshu system (2) Interest rate caps: Why is there is no end to cases of heavily indebted people? 3) Japan still has no exit strategy from Iraq even though time for withdrawal of troops is drawing close; US is trying to constrain exit moves of Japan, Britain, Australia ASAHI (Top play) (Full) March 4, 2006 When will Japan actually exit Iraq? The Japanese government is finding itself facing a difficult decision in setting a timetable for the Ground Self-Defense Force (GSDF) troops to leave Samawah in southern Iraq, where they are not deployed. Although the British conceive a complete withdrawal of their forces by June, the United States, which would like to first see the establishment of the new Iraqi government, is trying to constrain the British government from moving toward that goal. However, the move toward establishing a new Iraqi government is not progressing as armed conflict spreads across the country. The Japanese government would like to wait until the last minute to make its decision, and one proposal being floated is to withdraw the GSDF troops temporarily to Kuwait and wait there until the new Iraqi government is established. Quadrilateral conference Britain: "The British troops will complete their training of Iraqi forces in mid-May. Once that condition is fulfilled, we will complete our troop withdrawal by June." US: "You should more carefully observe the Iraqi political process." On Feb. 24, such a gap in views was revealed between US and British delegates to a quadrilateral meeting in London that also included Japan and Australia. The Australian delegate stated: "Australian forces will move in tandem with Japan's Self-Defense Forces." If that is the case, then when will Japan withdraw? Japan: "We would like to carefully observe public security, the political process, the reconstruction assistance situation, and TOKYO 00001169 003 OF 009 moves of the British and Australian forces." According to sources in the Japanese government, the delegation, consisting of division-director level officials from the Foreign Ministry (MOFA),Defense Agency (JDA),and the Cabinet Secretariat avoided to the end any mention of a withdrawal SIPDIS timetable at the conference. The first time that Britain, which is responsible for security in southern Iraq, mentioned withdrawal was in talks last September. The reason was because the British were being pressed to strengthen their forces deployed to Afghanistan between this spring and summer. America immediately responded: "Iraq will have a national assembly election in December (2005). Do you think it is acceptable to let Iraq fall apart?" The discussion ended there. The US, though, is no longer saying "no" to withdrawal, according to a JDA senior official. A senior MOFA official analyzed: "The US, too, realizes that the game will be won or lost in Iraq in the next several months." However, of the 28 countries now deploying troops to Iraq, not a one has announced that it will withdraw. The British, as well, are no different than the Japanese in giving priority to relations with the US. At first, the British talked about February as the date for starting to withdraw but recently, they have started to say, "We don't mind if it is April." A high-level Japanese official sees March as no longer the date for the start of Japan's pullout. Until the new government, now being prepared, is launched, the British troops will not start to withdraw, according to informed sources. The London meeting ended without setting the next date. On March 18, there will be a security dialogue in Australia that will include the US and Japan. Foreign Minister Aso noted: "Chances are high that the withdrawal of (ground troops) will be discussed." A senior SDF office also said, "It will take a political judgment at this point," indicating that Prime Minister Koizumi is expected to make the final decision. Scenario "After comprehensively considering various factors, Japan will make a judgment on its own." On the evening of March 3, Prime Minister Koizumi made this remark to the press corps that was trying to nail down a withdrawal timetable. A government sources stated: "Koizumi's psychology is complicated. Though he hates to be told he is blindly following the US lead, he also does not want to damage the Japan-US alliance." A judgment on Japan's own, though, would not be a simple thing. About the time when the British and the Australian troops are getting ready to pull out, the JDA chief would obtain the Prime Minister's approval and issue a withdrawal order telling the SDF to pull up stakes in Samawah, "while giving their regrets to the local community," according to a senior officer. This is the optimum scenario envisioned by the government. However, it will take two to three months to completely pull out. If according to the US' desire, the political situation, including the establishment of a new government, is watched TOKYO 00001169 004 OF 009 carefully, the withdrawal will not line up with the plans of the British government, which would pull out its troops completely by June. At this point, as a stopgap measure, a proposal has come up among some Japanese officials. It involves not waiting for the Tokyo withdrawal order per se, but to let the local commander on his own judgment decide to move the GSDF troops to Kuwait. When the new government is installed, the Prime Minister would then order a withdrawal. The JDA chief then would issue the final order. However, several senior high-level government officials point out: "Will there be an explanation of this to domestic and foreign audiences?" and "Will there be a problem from the standpoint of civilian control?" If such is the case, and the withdrawal timetable cannot be shortened, another proposal being floated is to send a security support unit to provide additional coverage in Samawah. However, if the basic plan that sets the maximum number of troops at 600 is exceeded, there would need to be prior cabinet approval of a change in the plan. Dispatching troops for the sake of expediting withdrawal has the possibility of leading to a de facto withdrawal announcement, according to a Cabinet Secretariat official. The government at this point only has a policy course of avoiding being the first to announce the intention to withdraw from Iraq, according to a senior JDA official. 4) Japan-US deputy-director-level talks to start tomorrow to find common ground for US force realignment; Deadline approaching for tough issues, including relocation costs, Yokota RAPCON NIHON KEIZAI (Page 2) (Full) March 6, 2006 Talks between senior foreign and defense officials of Japan and the United States are scheduled to open in Hawaii tomorrow to discuss the realignment of US forces in Japan. The talks are expected to center on the two countries' shares of the expenses for the relocation of the US Marines from Okinawa to Guam and the return to Japan of the right to air traffic control over Yokota, commonly called Yokota RAPCON. Bilateral coordination is in the final stretch with a view to producing their final report before the end of this month. On Feb. 4, Defense Facilities Administration Agency Director General Iwao Kitahara asked Okinawa Gov. Keiichi Inamine for his support for the planned relocation of the US Marine Corps' Futenma Air Station. But the governor flatly rejected the request, saying, "We cannot accept such a plan." The US has come up with a plan to relocate up to 8,000 US Marines from Okinawa to Guam, an increase of 1,000 from the number specified in the interim report released last October. The US has also asked Japan to bear a large portion of the relocation cost estimated at 8 billion dollars, or 940 billion yen. Japan's slow reaction to the Futenma relocation plan has elicited an extravagant price tag from the US. Although Japan plans to sound out the US on compressed costs and installments, there is no TOKYO 00001169 005 OF 009 prospect that the US will accept Japan's proposal. Finding a relocation site for 12 aerial tankers based at Futenma Air Station is another challenging task. Although the interim report says that the Maritime Self-Defense Force's Kanoya base in Kagoshima Prefecture should be studied on a priority basis, the US has begun calling for redeployment to Iwakuni Air Station in Yamaguchi Prefecture. In addition, meeting with opposition from Chitose in Hokkaido and Komatsu in Ishikawa Prefecture, the two governments have been struggling to find a new site for fighter training now conducted at Kadena Air Base. "It is absurd for the US to have the right to air traffic control over Japan's airspace," a government source said. There is no sign of the US accommodating Japan's call for the joint military- civilian use of Yokota Air Base and returning Yokota RAPCON. Japan wants to establish a new council to finalize specific plans in order to prevent the US from drawing a curtain on the issue. The return of a base in Kanagawa Prefecture is also a sticky issue. The government has asked for the return of Sagami Depot in return for the establishment of the US Army 1st Corps headquarters at Camp Zama. But the US has balked at Japan's proposal. The US is scheduled to deploy in 2008 a nuclear-powered aircraft carrier at its Yokosuka Naval Base, the first time for this to happen in Japan. Japan's failure to have Sagami Depot returned might draw a strong backlash from the local governments that will be forced to shoulder a greater burden. 5) Strong possibility of final USFJ realignment agreement without Okinawa on board since government unable to bridge gulf MAINICHI (Page 2) (Full) March 5, 2006 Defense Facilities Administration Agency Director General Iwao Kitahara on Marcy 4 met in succession in Okinawa Prefecture with Governor Keiichi Inamine and Nago City Mayor Yoshikazu Shimabukuro in order to try to repair relations between the central government and Okinawa's local government strained by a feud over the relocation of the US forces' Futenma Air Station to the coastal portion of Camp Schwab (in Nago City). However, he was completely unsuccessful in bridging the gap between the two sides. Although the talks between Japan and the US on completion of a final report on the realignment of US forces in Japan by late March are reaching the home stretch, there is a strong possibility that the government-to-government agreement will be sealed without acquiring the concurrence of the "main actor" Okinawa. Immediately after Director General Kitahara uttered words of congratulations to Mayor Shimabukuro for his election, the mayor beat him to the punch by directly stating, "I won't listen to any talk about the coastal plan." After that, the mayor hardly uttered a word, and Kitahara, unable to broach the main theme, briefed him on the measures planned to reduce the burden on Okinawa, such as the reduction of US Marines. The meeting ended in only 15 minutes with the atmosphere just as awkward as it started. The government until now has sought the understanding for the relocation of Futenma to Camp Schwab's coastal area by insisting, TOKYO 00001169 006 OF 009 "It is a proposal with a high probability of being implemented, and it also takes into the consideration the environment." In response, the prefecture touted the appropriateness of the first plan of 1999 to build a facility off the shoreline of Henoko in Nago City. Nago City insisted that if the facility was going to be moved closer to the coastal portion of Camp Schwab, the plan would need major revision, so there ended up a three way split in views. It is true that though Gov. Inamine has given a certain amount of praise to the specific measures to reduce the burden on Okinawa, such as the coordination to fully return the Naha Military Port facility, which local communities have bee hoping for. The government as these plans harden up, has been thinking of using the burden reduction measures as leverage to promote understanding toward the Camp Schwab coastal plan. But the prefectural side has given no sign of slackening its attitude. The Japanese and the US governments will carry out senior working level meetings again in Hawaii, starting March 7, with talks heading into the last stretch on plans to consolidate and reduce bases in southern potion of the main island of Okinawa. However, the US side sees the USFJ realignment as a package deal, and consider the realization of the Futenma relocation plan as a condition a condition for other measures to reduce the burden placed on Okinawa, such as moving the US Marines to Guam. If the final report is signed without having obtained the concurrence of local governments, it could become an agreement filled with the possibility of other burden reduction measures being withdrawn, as well. 6) US Embassy security division director would tolerate revision of Futenma relocation proposal to location toward the ocean, indicating flexible response to local wishes SANKEI (Page 1) (Full) March 5, 2006 Director of the Security Division Kevin Maher in the US Embassy in Japan -- a main player in the Japan-US senior working-level talks on the realignment of US forces in Japan -- gave an interview to the Sankei Shimbun. In it, he expressed a view tolerating a revision of the plan to relocate MCAS Futenma (Ginowan City) to the coastal portion of Camp Schwab (Nago City) that would reposition toward the ocean as the local community desires. "If there is need for technical adjustments, we will respond flexibly," he said. The coastal plan, which was agreed to by Japan and the US last October, would construct an alternate facility for Futenma Air Station in a form that straddled the land and sea portions of Camp Schwab. However, in that case, since the flight route would pass over the roofs of neighboring homes, both Nago City and Okinawa Prefecture have remained opposed to the plan. Diet members who represent Okinawa, too, share the same view as Nago City and have asked the government to shift the construction site to a spot slightly off shore. Maher pointed out that the coastal plan "may need technical adjustments if it is to be carried out as agreed in the basic plan." In addition, he stated, "We will respond flexibly to adjustments in the details." Although he did not refer to any TOKYO 00001169 007 OF 009 specific revision in contents, he indicated, "It would be impossible without assuring the local community that we have given consideration to their safety and the noise problem." He apparently was indicating a stance of responding to a revision that would shift the relocation spot toward the ocean off Camp Schwab. The US government in negotiating the relocation of Futenma Air Station once proposed a plan for the shallow waters off Camp Schwab. The Japanese side, including the Foreign Ministry, was then positive about revising the plan in the direction of the ocean, but the Defense Agency (JDA),which took the lead with the current plan, would not budge. As one JDA officials stated, "Once the plan was revised, we would not be able to keep up with requests for revisions from other local governments." But now with the US government taking a tolerant stance, it seems likely that pressure will mount on JDA to revise its position. 7) Okinawa rally to oppose Futenma heliport relocation brings together 35,000 participants TOKYO SHIMBUN (Page 2) (Full) March 6, 2006 In the planned realignment of US forces in Japan, Tokyo and Washington have agreed to relocate Futenma Air Station to the coastal part of the US Marine Corps' Camp Schwab. A rally to oppose this coastal plan was held yesterday at Kaihin Park in Ginowan City, bringing together approximately 35,000 citizens, according to organizers. Participants criticized the government for having bypassed the people of Okinawa in agreeing to the coastal plan. They resolved to have the will of the people of Okinawa reflected in a final report on the USFJ realignment to be mapped out before the end of March. The rally was the largest one ever regarding USFJ realignment. It is the second largest ever, following the 1995 rally to protest to the rape of an elementary school girl by three US service members, which was attended by 85,000 people. The organizer of the rally was the Implementation Committee consisting of the Social Democratic Party, Okinawa Social Mass Party, Japanese Communist Party, Democratic Party of Japan (DPJ = Minshuto),trade unions, and citizen groups. Though the Liberal Democratic Party and the New Komeito are against the coastal plan, they did not take part in the rally fearing that their participation would worsen their relations with the government. Neither Okinawa Governor Keiichi Inamine nor Nago Mayor Yoshikazu Shimabukuro took part. Tokunobu Yamauchi, leader of the organizing group and former chief cashier of the prefectural government, noted in a speech: "The position of the people of Okinawa is that they do not accept the coastal plan. Democracy means listening to that. . . . Let's work to protect the future of Okinawa by opposing this agreement that was reached without regard to local residents." A housewife participant from Sedake, Nago City, close to the relocation site, spoke from the stage, "I just want to protect a quiet and tranquil life and hand down a wonderful natural TOKYO 00001169 008 OF 009 environment to children." The rally also resolved to oppose special legislation designed to enable the recovery of land from the sea in the relocation site without the authorization of the governor, something the government is reportedly looking into. 8) Kadena mayor reacts negatively to joint use of Kadena Air Base with ASDF ASAHI (Page 38) (Full) March 6, 2006 Defense Facilities Administration Agency Director General Iwao Kitahara held talks with Mayor Tokujitsu Miyagi of Kadena hosting US Kadena Air Base at the town hall yesterday. In the talks, Miyagi expressed his unwillingness to accept Tokyo and Washington's plan for allowing the Air Self-Defense Force to jointly use Kadena Air Base as part of US force realignment. The mayor said, "In view of Okinawa's history (that a large number of local residents were killed by the Imperial Japanese Army during the Battle of Okinawa),there is a strong allergic reaction to the Self-Defense Forces. So we cannot accept the plan." The partial relocation of F-15 fighter training from Kadena Air Base to mainland Japan is specified in the Japan-US interim report produced last October. The joint use of Kadena Air Base with the SDF is expected to result in a greater burden on local residents. Kitahara sought Miyagi's understanding, saying, "I will assure you that the government will take proper steps to reduce the burden (in the end)." 9) US: Difficult to return (RAPCON of) Yokota Air Base NIHON KEIZAI (Page 2) (Full) March 4, 2006 It was learned on March 3 from a written government reply on the question of the possible return of air traffic control rights by the US Air Force's Yokota Air Base, the US has answered, "It would be difficult for operational reasons." But the government reply states that Japan "would continue to make further efforts" to seek its return. On the reversion of Yokota Air Base itself, the statement read: "The base plays an important role from the perspective of the Japan-US Security Treaty. There is no current thinking about seeking its reversion." The replies were to questions by Upper House lawmaker Shizuo Oyakata. 10) Japan to propose setting up consultative body for specific steps to return Yokota base air traffic control NIHON KEIZAI (Page 1) (Full) March 6, 2006 Japan and the United States will resume intergovernmental working- level consultations tomorrow in Hawaii over the realignment of US forces in Japan, with their senior officials for foreign affairs and defense attending. The Japanese government will then propose setting up a new consultative committee for the overall reversion of air traffic control from the US military's Yokota base in Tokyo. Meanwhile, the Japanese and US governments are expected to release a final report on the US military realignment in March at TOKYO 00001169 009 OF 009 the earliest. The Japanese government will specify a course of action in the final report for US Forces Japan (USFJ) to return the Yokota airbase's air traffic control to Japan. As the next step, Japan wants to hammer out specific procedures in the proposed consultative committee. At present, most civilian aircraft avoid the Yokota base's airspace. The Japanese government wants to improve the efficiency of flight routes for commercial airlines. The consultative committee consists of senior officials from the Japanese and US governments. The Japanese government wants to accelerate discussions, envisioning the overall return of air traffic control by 2009, when Haneda Airprot's offshore extension will be completed. In October last year, the Japanese and US governments released an interim report incorporating an agreement to explore steps to facilitate civilian aircraft flights through Yokota airspace. However, the United States has said that it would be difficult to return air traffic control for operational reasons. As it stands, it will be difficult for the two governments to reach an agreement at an early date. The Japanese government would like to pave the way in the new panel to joint military-civilian use or overall reversion in the future. The Yokota base's airspace is hexagon-shaped and extends to an altitude of 7,000 meters, stretching over Tokyo and eight other prefectures from the Izu Peninsula in Shizuoka Prefecture to Niigata Prefecture. Commercial airliners are allowed to fly through the airspace if they have permission in advance from the US military. Actually, however, most civilian airplanes avoid the Yokota airspace. Narrow air corridors are crowded with civilian aircraft, causing near misses. Among regular flights, air routes between Haneda and northern Kyushu are most affected. If the Yokota airspace is returned to Japan, it will be possible to double-track their flights in that airspace. "The flight time will be about five minutes shorter, and commercial airlines can save tens of billions of yen a year in fuel costs," an official says. After Haneda Airport's offshore extension work, the total number of flights to and from Haneda-including those to and from Narita Airport-will increase from 470 at present to 650. The government has therefore been tasked with Yokota airspace utilization. SCHIEFFER