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Identifier
Created
Classification
Origin
06TOKYO1224
2006-03-08 01:01:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 03/08/06

Tags:   OIIP  KMDR  KPAO  PGOV  PINR  ECON  ELAB  JA 
pdf how-to read a cable
VZCZCXRO1413
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1224/01 0670101
ZNR UUUUU ZZH
P 080101Z MAR 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9467
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 7628
RUEHFK/AMCONSUL FUKUOKA 4998
RUEHOK/AMCONSUL OSAKA KOBE 8113
RUEHNAG/AMCONSUL NAGOYA 5034
RUEHKSO/AMCONSUL SAPPORO 6186
RUEHBJ/AMEMBASSY BEIJING 0999
RUEHUL/AMEMBASSY SEOUL 7189
RUCNDT/USMISSION USUN NEW YORK 9181
						UNCLAS SECTION 01 OF 12 TOKYO 001224 

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 03/08/06


Index:
UNCLAS SECTION 01 OF 12 TOKYO 001224

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 03/08/06


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

4) LDP freshmen "83", US Embassy Eagles to play friendly
baseball game at Tokyo Dome, March 15

Defense and security issues:
5) Talks between central government and Okinawa on Futenma base
relocation remain at impasse
6) Foreign Minister Aso insists that government's priority is
to obtain local understanding for Futenma relocation in Okinawa
7) Prime Minister Koizumi wants Iwakuni City to bear fair share
of the base burden by accepting Atsugi jets
8) Atsugi noise pollution hearing turns into ruckus as locals
prevented from entering building
9) Minshuto head Maehara criticizes way that government has
been handling USFJ realignment issues

Political agenda:
10) Minshuto draws to a close its Diet strategy of attacking LDP
on set of four issues, including US beef
11) Minshuto head Maehara becoming more and more marginalized as
veteran panel shelves his China-as-threat argument
12) Last half of current Diet session may lack luster, with LDP
way behind in readying important bills
13) 10,000 rally, including group of lawmakers, against changing
Imperial Household Law to allow female on the throne

China connection:
14) China's foreign minister says Yasukuni Shrine visits are
like going to worship the Nazis
15) China's foreign minister cites Class A war criminals being
worshiped at Yasukuni as the cause of trouble between Japan,
China
16) Japan-China gas talks run out of steam

17) China suggests joint development of gas near Senkakus

18) Government plans to speed up FTA negotiations with new
formula

19) Farm ministry's insistence that US beef incident was not
"unique" case, as US insists, but "systemic" problem is the crux
of the current feud

Articles:

1) TOP HEADLINES

Asahi:
Livedoor's Horie approved money laundering beforehand

Mainichi:
LDP panel approves easing regulations on election campaigning on
Internet

Yomiuri:
Labor Ministry to abolish skill development seminar program via
satellite


TOKYO 00001224 002 OF 012


Nihon Keizai:
Firms doubling dividends on strong earnings for FY2005

Sankei:
Government to reject China's proposal for joint gas development
in waters off Senkaku Islands

Tokyo Shimbun:
Six loan sharks arrested over driving three to suicide

2) EDITORIALS

Asahi:
(1) Take advantage of momentum for talks with China
(2) Enjoying other countries' cultures

Mainichi:
(1) Diplomatic efforts necessary to have contributions to UN set
fairly
(2) New rules needed on lost property

Yomiuri:
(1) Conciliatory stance will not move gas-development talks
forward
(2) Japan should extend full cooperation to complete
construction of International Space Station

Nihon Keizai:
(1) Priority should be given to both speed and quality in FTA
negotiations
(2) GM is no longer dependable

Sankei:
(1) Japan must be cautious about China's strategy in gas
development talks
(2) Imperial couple visit Miyakejima to encourage people

Tokyo Shimbun:
(1) New Iraqi government urged to strengthen unity
(2) Enthusiasts must abide by new rules on air guns

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 7

NIHON KEIZAI (Page 2) (Full)
March 8, 2006

08:00
Met Deputy Chief Cabinet Secretary Suzuki at Kantei.

08:31
Attended a cabinet meeting in Diet.

09:00
Attended the Upper House Budget Committee meeting.

11:59
Arrived at Kantei.

13:00
Attended the Upper House Budget Committee meeting.

TOKYO 00001224 003 OF 012



17:34
Attended a meeting of the Council on Economic and Fiscal Policy
held at Kantei.

19:09
Met Secretary General Takebe, Election Bureau chief Endo, and
other members of the LDP executive liaison meeting at Hotel
Okura.

20:51
Arrived at residence.

4) New LDP lawmakers -- the freshmen "83" -- US embassy to play
friendly baseball game on March 15 at Tokyo Dome

MAINICHI (Page 2) (Full)
March 8, 2006

The Association of Hachi-san, which is made up of 83 Liberal
Democratic Party (LDP) lawmakers elected for the first time to
the Diet in last year's House of Representatives election, will
play a baseball game with the US embassy staff in Tokyo on March

15. Ambassador Thomas Schieffer, who loves baseball, will take
part in the game as manager of the embassy team.

According to the embassy, it is extremely rare for it to hold
this kind of event. Some lawmakers view that the US side has
admitted the so-called "Koizumi children's" superiority.

Ambassador Schieffer as an investor was a partner with President
George W. Bush in owning the Major League baseball club Texas
Rangers. He is wild about baseball. The game will start at 7:00
p.m. No admission fee is required. The two sides will split the
fee for Dome usage of about 800,000 yen.

5) Okinawa officials, vice defense minister differ on Futenma
relocation

YOMIURI (Page 4) (Full)
March 8, 2006

Okinawa prefectural government officials, including Lt. Gov.
Hirotaka Makino, visited Defense Agency Administrative Deputy
Director General Moriya at the Defense Agency yesterday to file a
protest against the planned relocation of the US Marine Corps'
Futenma Air Station in the city of Ginowan, Okinawa Prefecture,
to a coastal area of Camp Schwab in the city of Nago. "It's
unconvincing to the local communities from the perspective of
noise and danger," Makino told Moriya. Meanwhile, Okinawa Gov.
Keiichi Inamine will meet with Defense Agency Director General
Nukaga tomorrow to oppose the coastal plan again.

6) Foreign Minister Aso underlines sincerity for obtaining local
understanding about Futenma relocation plan

ASAHI (Page 3) (Full)
Evening, March 7, 2006

Touching on local coordination for the planned relocation of the
US Marine Corps' Futenma Air Station in Ginowan, Okinawa
Prefecture, foreign Minister Taro Aso in a press conference

TOKYO 00001224 004 OF 012


earlier today pointed to the need to obtain understanding of
Okinawa Gov. Keiichi Inamine, Nago Mayor Yoshikazu Shimabukuro
and others who are opposed to relocating the airfield to Cape
Henoko in Nago. Aso said: "It is necessary to show an attitude
not to reach a consultation easily and deal with the issue
earnestly, giving it time."

Defense Agency Director General Fukushiro Nukaga also told a
press conference today, "It is important to offer thorough
explanations and to continue working hard to obtain
understanding."

In contrast, Chief Cabinet Secretary Shinzo Abe in a press
conference today reiterated the view that in the event the
government failed to obtain local understanding, it would have to
prioritize the agreement with the US. He said: "Although we have
been conducting talks with the US while keeping local voices in
mind, decisions will be made through bilateral talks in
principle. In making decisions, we will offer explanations to
local areas."

7) Koizumi admits Iwakuni's base-hosting burden

TOKYO SHIMBUN (Page 2) (Abridged)
March 8, 2006

The House of Councillors Budget Committee held a question-and-
answer session yesterday with Prime Minister Junichiro Koizumi
and all his cabinet ministers attending.

In the session, Koizumi, asked about the planned realignment of
US forces in Japan, referred to the planned redeployment of US
carrier-borne fighter jets from the US Navy's Atsugi base in
Kanagawa Prefecture to the US Marine Corps' Iwakuni base in the
city of Iwakuni, Yamaguchi Prefecture. In his reply, Koizumi
stated that the burden of some base-hosting localities, including
Iwakuni, might be lessened. At the same time, however, he also
said the redeployment of US carrier-borne fighters to Iwakuni
would be an additional burden on the city. "All (in Japan) will
have to think about alleviating the burden while maintaining
deterrence," he added. With this, the premier indicated that it
would be unavoidable for some local communities to sustain the
burden of hosting US military bases.

8) Gov't briefing on Atsugi base soundproofing called off with
residents crowding

TOKYO SHIMBUN (Page 31) (Full)
March 8, 2006

The Tokyo bureau of the Defense Facilities Administration Agency
held a briefing of local residents yesterday evening in the city
of Machida, Tokyo, on its plan to cover more areas for
soundproofing subsidization against aircraft noise around the US
Navy's Atsugi base. The briefing, however, was called off because
the hall became crowded with too many residents.

The briefing was held at Machida Civic Forum Hall with a seating
capacity of 180. However, there were nearly 1,000 people
overflowing the hall.

The DFAA Tokyo bureau will postpone other local briefings

TOKYO 00001224 005 OF 012


originally scheduled for March 8 and 13. The bureau will
reschedule the briefings.

Judging from the number of households to be considered for
soundproofing subsidization, the municipal government of Machida
City had told the DFAA Tokyo bureau that it would be difficult to
brief local residents at the hall as planned, local authorities
said. "The hall was too small to let them all in," a bureau
official said. "We miscalculated," the official added.

The DFAA Tokyo bureau monitored aircraft noise levels in fiscal
2003 and 2004 to review areas for soundproofing subsidization.
The monitoring survey found an increase in the frequency of
roaring fighter jet takeoffs and landings. As it stands, an
increasing number of local residents have been affected by jet
noise in other areas situated north and south of the base. In the
city, about 80 households were subsidized for anti-noise
soundproofing. However, the municipal government estimates the
number of affected households at about 47,000.

9) DPJ's Maehara raps Abe over USFJ realignment

YOMIURI (Page 4) (Full)
March 8, 2006

Democratic Party of Japan (Minshuto) President Maehara criticized
Chief Cabinet Secretary Abe for indicating that the Japanese and
US governments would release a final report on the realignment of
US forces in Japan even without local consent. "He put the cart
before the horse," Maehara told a news conference yesterday. He
added: "If the government pushes its way through, the government
will encounter strong backlash from local communities. Such an
approach could seriously impair the foundation of Japan's
security alliance with the United States."

10) Katayama set stage for putting end to four issues ahead of
Minshuto

TOKYO SHIMBUN (Page 2) (Full)
March 8, 2006

In the Upper House Budget Committee session yesterday, Liberal
Democratic Party Upper House Secretary-General Toranosuke
Katayama took up the set of four issues, including the Livedoor
scandal. In the committee session the day before, Minshuto
(Democratic Party of Japan), still unable to recover from the e-
mail fiasco, hardly touched on them. In stark contrast, Katayama
broached the issues head on.

Touching on the Livedoor issue, Katayama said: "The scandal
sounded a loud alarm against a money worshiping mentality. People
treated (former Livedoor Co. President Takafumi Horie) like a
hero." Although Katayama stopped short of referring to Internal
Affairs and Communications Minister Heizo Takenaka and others by
name who had supported Horie in the Lower House election last
year, Takenaka turned pale at Katayama's statement.

As a persistent critic of Livedoor's management style, Katayama
unleashed his discontent yesterday.

But as a member of the ruling bloc, his purpose was not to pursue
the government's responsibility but to underscore the importance

TOKYO 00001224 006 OF 012


of preventive measures. In connection with the bid rigging
scandal involving the Defense Facilities Administration Agency,
Katayama also elicited a pledge from Defense Agency Director
General Fukushiro Nukaga to uncover all problems. Katayama seems
to have successfully set the stage for putting an end to the four
issues, outmaneuvering Minshuto.

11) Growing isolation of Maehara in Minshuto

YOMIURI (Page 4) (Excerpts)
March 8, 2006

Minshuto (Democratic Party of Japan) President Seiji Maehara
seems to sense a growing isolation from the party due to the
backlash of the e-mail fiasco caused by a party lawmaker and
other matters. The main opposition party confirmed yesterday the
implementation of the party's presidential election in September
as planned. The party, however, put off ironing out differences
of opinions in the party on Maehara's stock argument that China
is a threat to Japan. Senior party members, including former
party deputy head Ichiro Ozawa and former party head Naoto Kan,
who have distanced themselves from Maehara, launched yesterday a
study group on education issues. They are now taking action with
an eye on the upcoming leadership race. Given these
circumstances, Maehara finds himself in a tough position.

At an executive board meeting yesterday, Minshuto confirmed a
policy line of carrying out the presidential race in September,
squashing the view calling for moving up the election. He then
categorically said in a meeting of the standing secretaries
general held later in the day, "I take your severe views in a
serious manner, and I would like to make a fresh start to
revitalize our party."

With the decline of Maehara's grip on the party, internal forces
critical of Maehara have gained strength.

In a meeting yesterday morning of the party's foreign and defense
affairs divisions, the leadership planned to get a consensus in
the party on the argument that China is a threat to Japan, but
views opposing to the executive's plan were raised one after
another. A junior lawmaker said: "When we have to band together,
it's not wise to bring up the issue on which views are divided in
the party."

Policy Research Council Chairman Takeaki Matsumoto, however,
reacted strongly, saying, "If we want to arrive at a consensus on
the issue in the presidential election, we don't need any
division meeting."

Keiichiro Asao, foreign minister of the "Next Cabinet," sought
understanding from the participants, saying, "If we don't reach a
consensus, the media will release reports critical of our party."
However, a conclusion has been carried over to the next session
or later.

12) Where are the showcase issues for latter half of Diet
session? Ruling parties slow in making coordination for important
bills

YOMIURI (Page 2) (Full)
March 8, 2006

TOKYO 00001224 007 OF 012



The Liberal Democratic Party approved at its General Council
meeting yesterday 19 bills and treaties, including an
administrative reform promotion bill characterized as the summing
up of the Koizumi reform drive. The council did not discuss a
bill to upgrade the Defense Agency to ministry status, a bill
amending the Basic Education Law, and a national referendum bill
stipulating a set of procedures for constitutional revision. This
means they cannot make a cabinet decision on March 10, the
deadline for important bills. The ruling coalition, however, once
aimed to submit all these priority bills to the Diet in the
current session. The ruling bloc is also struggling to find
showcase issues for the remaining Diet session after the passage
of the fiscal 2006 budget.

LDP Policy Research Council Chairman Nakagawa and his New Komeito
counterpart Inoue confirmed yesterday to place high priority on:
(1) a Hokkaido doshu system special zone bill; (2) Basic
Education Law amendment; (3) medical reform; and (4) reform of
the public servant system. They also agreed to make a decision on
the question of raising the Defense Agency to ministry status
after watching the course of the bid-rigging scandal involving
the Defense Facilities Administration Agency.

Given the fact that former Education Minister Tadamori Oshima,
who also chairs the Lower House Budget Committee, is no longer
bound by budget deliberations as the budget bill has cleared the
Lower House, the ruling bloc intends to hurry internal party
coordination for the Basic Education Law revision bill for
discussions by the ruling party study panel chaired by Oshima.
Chief Cabinet Secretary Abe, LDP Secretary General Takebe and
others are also eager to settle those bills in the current Diet
session.

The LDP and New Komeito are also in accord to send the national
referendum bill to the Upper House after the consecutive holidays
in May. The Lower House Special Research Committee on the
Constitution chaired by Taro Nakayama decided yesterday to let
its directors examine contentious points starting next week.

But it is still uncertain if the two bills can make the Diet in
the current session, as there are different views in the ruling
parties. Some fear that if the current Diet session is not
extended beyond June 18, the LDP presidential race planned for
September might overheat early.

The public servant system reform bill has recently surfaced as a
possible showcase issue.

There is a fissure between the government and labor unions over
the question of giving public servants basic labor rights. If
Minshuto (Democratic Party of Japan), backed by labor unions,
digs in its heels deeper against the LDP, it might "turn into a
good excuse to extend the Diet session," according to a senior
LDP member. LDP Upper House Secretary General Katayama advised
Nakagawa on March 2 to submit the bill to the Diet. In response,
Nakagawa revealed his intention to seriously discuss the public
servant reform bill once a prospect is obtained for the
administrative reform promotion bill.

13) Rally of 10,000 people opposing Imperial House Law revision
takes place in Tokyo

TOKYO 00001224 008 OF 012



YOMIURI (Page 4) (Full)
March 8, 2006

A private organization opposing a revision of the Imperial House
Law yesterday a rally of 10,000 people wishing to preserve the
tradition of the Imperial family. A total of 86 Diet members from
the ruling and opposition parties took part in the rally held in
Nippon Budokan Hall. The 86 lawmakers are made up of 54 Liberal
Democratic Party members, 21 members from Minshuto (Democratic
Party of Japan) and nine independent lawmakers. According to the
organizer, 10,300 persons participated in the rally.

The rally adopted a resolution calling for forming a
suprapartisan parliamentary group in a bid to oppose a revision
of the Imperial House Law.

14) Chinese foreign minister equates shrine visits with Nazi
worship, saying, "Germany, too, criticizes Yasukuni Shrine
visits"

YOMIURI (Page 1) (Full)
March 8, 2006

By Yujiro Toyoda, Beijing

At a press briefing yesterday, Chinese Foreign Minister Li
Zhaoxing again mentioned Prime Minister Koizumi's repeated visits
to Yasukuni Shrine and lashed out: "(German people) also see them
as something absurd and unethical." Equating shrine visits with
worship of Hitler or Nazism, Li repeated his assertion that the
Japanese leader's attitude holds the key to mending the chilly
relations between Japan and China.

While noting that the ordinary citizens of the two nations hope
for friendly ties, the Chinese foreign minister stated that a
high-level German official is also critical of the shrine visits.
He also insisted that the United States and his American and
Malaysian friends have told him that they remember the acts
committed by the Japanese military during World War II, including
the attack on Pearl Harbor. He added: "Not only the Chinese but
also citizens of many countries cannot accept shrine visits.
There are too many examples of this sort to mention."

On the other hand, Li said that the basic policy for Japan-China
relations remains the same. He referred to the five items
President Hu Jintao declared during the Japan-China summit
meeting last April, for example, observing the three joint papers
between Japan and China, including the Japan-China Joint
Statement, Japan's handling of the historical issue in a sober
fashion, and Japan's refusal to endorse Taiwan's independence.

15) The origin of the strained Japan-China relations rests in
Japanese leaders paying respects before Class-A war criminals at
Yasukuni Shrine, Chinese foreign minister says

YOMIURI (Page 2) (Full)
March 8, 2006

Commenting on Japan-China relations, Chinese Foreign Minister Li
Zhaoxing during a press conference held at the People's Great
Hall in Beijing said, "The cause of the setback facing China and

TOKYO 00001224 009 OF 012


Japan is to be found in the fact that some Japanese leaders still
continue to pay their respects before Class-A war criminals." He
thus strongly criticized Prime Minister Koizumi's visits to
Yasukuni Shrine.

Li went on to say, "No German leaders have ever expressed their
respects for Hitler or Nazis after the end of World War II." He
also said, "The peoples of not only China but also many other
countries cannot accept Japanese leaders worshipping Class-A war
criminals."

Prime Minister Koizumi rejected Li's criticism, noting, "I visit
Yasukuni to offer prayers to all the war dead."

16) Japan, China still wide apart on gas field development; Japan
to reject China's proposal for joint development in two oceanic
areas

NIHON KEIZAI (Page 3) (Excerpts)
March 8, 2006

By Yuri Momoi, Beijing

The fourth round of senior working-level talks in Beijing, hosted
by the Chinese government, wound up a two-day schedule yesterday.
In the talks, Chinese negotiators proposed conducting joint
development in two oceanic areas: 1) one slightly closer to the
Chinese territory from the equidistant line in the north of the
East China Sea and 2) one near the Taiwanese territory in the
south of the East China Sea. Both governments refrained from
disclosing details of China's new proposal in order to avoid any
possible impact on bilateral talks.

Minister of Economy, Trade and Industry Toshihiro Nikai yesterday
indicated that given the present circumstances, it would be
difficult to accept the new proposal. The Japanese government as
early as today will decide to reject China's new proposal.

A total of seven and a half hours were devoted to discussions
during the two-day session this time. The Japanese team called on
China to halt its development of the Shirakaba (or Chunxiao in
Chinese) gas field and provide relevant information on the
development to Japan. But Chinese negotiators refused to do so.
They did not respond to Japan's proposal made in the third round
of the talks last year on joint development of four gas fields,
including Shirakaba.

The Japanese negotiators stated that they would take home China's
new proposal for discussion. Both Japan and China agreed on a
plan to hold the next round in Tokyo at an early date. The two
nations have shared the perceptions on joint gas field
development, for instance, that even if both sides strike a deal
on joint development, the deal is a provisional arrangement, so
it would not affect negotiations over the national boundary; and
that such a deal would be reciprocal.

According to a government source, the Japanese negotiators made
it clear that China's new proposal is far from what Japan has
asserted.

Chief Cabinet Secretary Shinzo Abe told reporters yesterday
evening: "We'll continue negotiations in order to turn the East

TOKYO 00001224 010 OF 012


China Sea into the sea of cooperation while firmly securing our
sovereignty." Meeting the press, Prime Minister Junichiro Koizumi
said: "Our team will bring it home for discussion."

17) Gas field development talks; China proposes joint development
near Senkaku Islands; Government to decline

SANKEI (Top Play) (Excerpts)
March 8, 2006

The fourth round of talks between the Japanese and Chinese
governments to discuss the development of gas fields in the East
China Sea ended yesterday. According to a Japanese Foreign
Ministry source, the Chinese side came up with a new proposal for
jointly developing gas fields off the Senkaku Islands, which
belong to Japan, and the continental shelf belonging to Japan and
South Korea. China declined Japan's call to stop the development
of the Shirakaba gas field, known as the Chunxiao gas field in
China.

A Foreign Ministry source noted that it has long been believed
that there are gas reserves near the Senkaku Islands and the
Japan-South Korea continental shelf, but since there is no test-
drilling data, the existence of reserves is unclear.

The Chinese proposal is thus seen as an attempt to rattle the
Japanese government by including the Senkakus, Japanese
territory, in its proposal for joint development.

Emerging from the meeting, Foreign Ministry Asia-Oceanian Affairs
Bureau Director General Kenichiro Sasae, who represented Japan,
indicated that it would be difficult to accept the Chinese
proposal. He noted: "I believe the Chinese side is willing to
move ahead through cooperation, but whether that was reflected in
the actual contents of its proposal is another matter." The next
round of the talks will be held in Tokyo.

18) Government to adopt speed-oriented FTA strategy, reflecting
deadlocked EPA negotiations

NIHON KEIZAI (Page 1) (Full)
Evening, March 7, 2006

The government decided in its ministerial talks yesterday morning
that it would adopt a new strategy to promote negotiations with
various countries with the aim of concluding only a free trade
agreement (FTA) or an investment accord, turning around from the
conventional policy of focusing only on signing a comprehensive
economic partnership agreement (EPA). Keeping the recent heating-
up global FTA race in mind, the government has decided to adopt a
speed-oriented FTA strategy, instead of the current quality-
oriented one, under the lead of the Prime Minister's Office. The
focus of future discussions will be on concluding an investment
agreement with China on a top priority in response to strong
requests from industrial circles.

The FTA is designed to scrap tariffs and other trade barriers.
Under an EPA, in addition to the deregulatory measures under an
FTA, investment rules will be abolished, and dispute-settlement
procedures will also be arranged. The government has so far
focused on concluding high-quality EPAs.


TOKYO 00001224 011 OF 012


However, because it takes time to reach a quality-oriented
accord, the government is now concerned that Japanese companies
might be put at a disadvantage in exporting and other business
areas. Japan started negotiations with the Association of
Southeast Asian Nations last April, but the talks fell apart at
the very beginning. China and South Korea have already signed
FTAs with ASEAN.

Attending the ministerial meeting yesterday were Foreign Minister
Taro Aso, Economy, Trade and Industry Minister Toshihiro Nikai,
Finance Minister Sadakazu Tanigaki, Agriculture, Forestry and
Fisheries Minister Shoichi Nakagawa, Health, Labor and Welfare
Minister Jiro Kawasaki, and Chief Cabinet Secretary Shinzo Abe.
The cabinet ministers also confirmed the need to speed up the
ongoing negotiations and sign EPAs at an early date. In a press
conference after the meeting, Abe stated: "It is significant to
speedily promote negotiations on FTAs, besides EPAs, with as many
countries as possible."

19) Inclusion of SRM in US beef shipment to Japan: Differences in
perceptions of both countries noticeable, with Japan seeing it as
a "structural" problem and the US claiming it as a "unique" case

TOKYO SHIMBUN (Page 9) (Full)
March 8, 2006

Differences in the perceptions of Tokyo and Washington on the
inclusion of specified risk materials (SRM) in a US beef shipment
to Japan are becoming pronounced. In a report issued last month,
the US government concluded that the problem was a unique case.
On the other hand, the Japanese government has raised doubts
about that comment, claiming that the matter is a structural
problem concerning US safety control, with Agriculture Minister
Nakagawa noting, "Characterizing the incident as a unique case
must be avoided."

The Japanese government on Mar. 6 submitted a written inquiry
comprising 20 questions regarding the US report. It called on the
US to determine whether the incident was a unique case and
whether the authorization of other facilities handling products
shipped to Japan and inspections there were appropriate.

The government intends to examine the US reply and ask more
questions, if necessary. Japan has also submitted written
inquiries regarding the 2005 Japan Export Investigation Report,
which noted inappropriate points found in the US beef inspection
system. The US side is determined to speed up efforts to offer
replies to both inquiries.

Differences in the views of the two governments are attributable
to the stance of their legislatures. Some members of US Congress
are assuming a hard-line stance in pursuit of an early resumption
of US beef exports to Japan, by hinting at the possible
implementation of sanctions against Japan, while in the Japanese
Diet, both the ruling and opposition parties are cautious about
reinstating beef trade.

The next focus of attention will be on US replies. Agriculture
Minister Nakagawa will attend an informal ministerial meeting of
the World Trade Organization (WTO) to be held in London from Mar.
10 through 12 and will likely meet with US Secretary of
Agriculture Johanns on the sidelines.

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SCHIEFFER