DAILY SUMMARY OF JAPANESE PRESS 03/08/06

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 03/08/06


INDEX:

(1) US envoy cheers Oh on

(2) Iwakuni referendum drawing mixed reactions from residents
with municipal merger near at hand

(3) SDF-USFJ fusion and its fate-Ahead of final report on USFJ
realignment (Part 1): Brains; Self-reliability wavering with
intelligence sharing

(4) Japan-US alliance showing signs of strains: Budding economic
dispute (Part 3)

(5) Government to adopt flexible strategy for economic pacts:
Shift to speedier conclusion of FTAs, alarmed by China, South
Korea, which are way ahead

(6) Editorial: Minshuto must not become so weak as to create a
vacuum in the Diet

ARTICLES:

(1) US envoy cheers Oh on

NIKKAN SPORTS (Web version) (Full)
19:39 March 4, 2006

Fukuoka SoftBank Hawks Manager Sadaharu Oh, now leading Japan's
national team for the upcoming World Baseball Classic (WBC)
event, received words of encouragement yesterday from US
Ambassador to Japan Thomas Schieffer.

Oh and Schieffer met at a Japan-US baseball exchange party held
in Washington in January. When they talked about baseball topics,
their faces really lit up. Schieffer was a co-owner of the Texas
Rangers, a Major League Baseball (MLB) club, with US President
Bush. "He was an owner for about 10 years," Oh said. "The
ambassador really loves baseball," Oh added with a smile.

(2) Iwakuni referendum drawing mixed reactions from residents
with municipal merger near at hand

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

A city referendum of Iwakuni, Yamaguchi Prefecture, on the
propriety of relocating US carrier-borne jets to the US Marine
Corps' Iwakuni Air Station is just four days away. Mayor
Katsusuke Ihara has been out in the streets calling for local
residents to vote against the relocation, while some residents
have been calling for boycotting it. Will the voter turnout reach
50%, the minimum line for the plebiscite to be valid? What is the
fate of the relocation plan? Perplexity is spreading among local
residents with Iwakuni scheduled to merge with seven neighboring
municipalities on March 20.

Last-minute effort

"The referendum of our city is drawing national attention. Let us
exhibit our wishes to the rest of the country."

Ihara, clad in a brown suit, delivered the above message

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yesterday afternoon to about 40 residents at a parking area near
the Iwakuni base.

Iwakuni will conduct the plebiscite in accordance with the
interim report on US force realignment, produced last October by
the Japanese and US governments. The referendum will be on the
propriety of transferring 57 carrier-borne aircraft from Atsugi
Naval Air Facility in Kanagawa Prefecture to the Iwakuni base in
Yamaguchi Prefecture. The voters will be asked to mark yes or no
about the relocation on the ballots.

Concern is deeply seated among Iwakuni residents about possible
noise pollution. Ihara is making a last-minute effort in an
effort to turn the new city's mayoral race planned for late April
in his favor, as well. If the voter turnout exceeds 50% and
becomes valid, chances are that votes against the relocation
would dominate the poll. Ihara may opt to use such an outcome to
elicit what he wants from the central government.

Ihara has been actively working on local residents to go to the
polls since the referendum was officially announced.

Conservative ground

Not all citizens are against the relocation plan. Eizo Kobayashi
who heads a supporters group for Taro Ajimura, 38, who is going
to run, backed by the LDP Yamaguchi chapter, in the new mayoral
race against Ihara, takes this view:

"We have been living with the base all our lives. The area around
here has been basically conservative, and the situation is
different from Nago."

Nago conducted a plebiscite in December 1997 over the propriety
to constructing an alternate heliport for the US Marine Corps'
Futenma Air Station. Supporters and opponents clashed fiercely,
but votes against the relocation dominated the poll. But
producing former prime ministers Nobusuke Kishi and Eisaku Sato,
the eastern part of Yamaguchi centering on Iwakuni has
traditionally been conservative, with no fierce anti-base
conflict as seen in Okinawa.

A picture of Ajimura and Chief Cabinet Secretary Shinzo Abe is
exhibited at the supporters' office for Ajimura. Kobayashi noted,
"It is meaningless to conduct the referendum. After the merger,
the city will face such pressing challenges as fiscal
reconstruction and revitalizing the economy." In a press
conference on March 3, Abe also raised questions about Iwakuni's
plebiscite.

A call for abstention

Critical voices are also being heard in the seven municipalities
that will soon merge with Iwakuni. Yu Mayor Toshimitsu Makimoto,
for instance, complained, "With the merger, we are going to be
citizens of the same city, so we wanted Iwakuni to listen to our
views beforehand." Makimoto met Abe at the Prime Minister's
Official Residence on March 1 in which the mayor conveyed to the
chief cabinet secretary his plan to support the relocation plan
in essence.

A group of residents opposing the referendum has also been
conducting activities actively. The group staged a rally on the

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night of March 6, which brought together about 200 residents.

Before the crowds, the group's leader Yoshimichi Hirose said:

"It is the mayor's job to come up with innovative ideas for the
government and residents. But our mayor has been engrossed in his
own election campaign. You must not take part in the referendum,
which is unjust."

Hirose's words won applause from the crowds.

A group of citizens opposing the relocation of carrier-borne jets
and nigh landing practice to Iwakuni is unhappy with the campaign
to boycott the referendum which the group thinks will deprive the
residents of an opportunity to express their views. The dominant
projection is that the voter turnout would be around 50%.
Supporters and opponents are digging in their heels deeper.

(3) SDF-USFJ fusion and its fate-Ahead of final report on USFJ
realignment (Part 1): Brains; Self-reliability wavering with
intelligence sharing

ASAHI (Page 37) (Full)
February 19, 2006

Japan's Self Defense Forces (SDF) and US Forces Japan (USFJ) will
set up a new bilateral command post, which is named the "Joint
Operations Coordination Center" (JOCC). In October last year,
Japan and the United States confirmed this course of action in
their intergovernmental talks over USFJ realignment. JOCC is
intended for the two countries to fuse their brainpowers. USFJ
has its headquarters at the US Air Force's Yokota base, where the
Air Self-Defense Force (ASDF) will locate its air defense command
functions and where JOCC will build an underground headquarters.

"They're going to be ultimately complementary to each other's
capability and intelligence," says a high-ranking official of the
Defense Agency.

USFJ Commander Bruce Wright unveiled the JOCC initiative in a
speech he delivered five months before that. The commander
likened the new command post to the Joint Operations Command,
which the US military created with the air forces of various
countries in the Iraq war.

One ASDF official images JOCC in this way. There is a large
screen installed at the headquarters of JOCC. The screen covers
Japan and its environs, including the Korean Peninsula and even
Russia's inland areas. Japanese and US military personnel posted
there are riveting their eyes on the screen that shows the flight
paths of ballistic missiles and airplanes and also shows even
satellite-transmitted images spotting missile sites. In the event
of an emergency, Japanese and US commanding officers talk to each
other and issue operational orders to the two countries' tactical
forces through their respective chains of command...

Their fusion is shaped into a network of the two countries'
radars, satellites, and intercept missile launchers. Japan
secures intelligence from US satellites for signs indicating
ballistic missile attacks. USFJ also gets information from the
ASDF about aircraft presence around Japan. In the future, JOCC is
expected to coordinate ground, naval, and air operations.


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Japan's intelligence-gathering capability is limited. Japan is
thirsty for US military intelligence. That is why the ASDF has
desired command fusion. However, the ASDF is also aware of spin-
offs from its close links to its US counterpart.

After Wright's speech, ASDF officers raised questions about the
legal and technical feasibility of such command fusion.

There would be no problem about that at a time when Japan is in
an emergency. However, what if the US military launches combat
operations based on SDF-provided intelligence even though Japan
is not directly exposed to a threat... In this case, SDF
operations will be criticized as being linked to the US
military's use of force and unconstitutional. The targeted
country may regard Japan as an enemy.

There is a gap between the two countries' respective standpoints
over command operations. USFJ wants to set up a standing-basis
joint command. The ASDF, however, would like to have a standalone
facility of its own during peacetime and wants to set up a
bilateral joint facility during emergencies. The ASDF wants to
avoid providing all intelligence at ordinary times. If Japan is
too dependent on the United States, Japan might be provided with
intelligence that cannot be confirmed. Eventually, Japan might be
misled in its judgment. The ASDF is worried about that.

The Ground Self-Defense Force (GSDF) is even more strongly aware
of its own self-reliability in the sense of standing on its own
feet.

Last October, the Japanese and US governments released an interim
report on the planned realignment of US forces in Japan. The
report incorporated a plan to relocate the revamped command
functions of the US Army's 1st Corps headquarters from the US
West Coast to Camp Zama in Kanagawa Prefecture and to set up the
GSDF's Central Readiness Command (CRC) there.

The US Army is strong with its overwhelming intelligence-
gathering capability and powerful firearms. The US Army's 1st
Corps can grasp enemy moves on hand with its employment of
satellites and reconnaissance planes, and the Army corps plans to
move its command to Zama. This command relocation to Japan is
encouraging to the GSDF that cannot do so.

The CRC, however, is a body the GSDF is going to set up at its
Asaka garrison in Saitama Prefecture for antiterror
counteractions and international cooperation. The CRC's role
differs from the US Army corps'. The CRC mobilizes about 3,000
troops, while the US Army corps is ready to swing 100,000 troops
at the largest and commands operations. How will the CRC team up
with the US Army corps? The CRC might only be swallowed. One ASDF
official said, "We will embed the CRC into the US military for
the time being, and we will think later about how to employ its
troops."

The GSDF will launch the CRC at Asaka as initially planned.
Meanwhile, local communities hosting Camp Zama are opposed to the
CRC's relocation to Zama. Later on, the GSDF will explore the
CRC's relocation to Zama after seeing local developments.

"If we just get on the rails the US military lays, we may only
become their subcontractor," a GSDF brass officer said while
choosing his words.

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Japan and the United States are now in the homestretch of USFJ
realignment talks to come up with a final report in late March.
This series explores how the SDF and USFJ will fuse and what
their fusion will bring about.

(4) Japan-US alliance showing signs of strains: Budding economic
dispute (Part 3)

YOMIURI (Page 1) (Slightly abridged)
March 7, 2006

Economic relations between Japan and the US have been so quiet in
recent years that a source in the US Embassy in Japan even noted,
"Unless you search for the issues, you won't find them." However,
magma of sorts is beginning to build underneath the seemingly
calm bilateral economic relationship.

The greatest immediate concern is the second ban on US beef
imports imposed in the wake of the finding of specified risk
material (SRM) in a beef shipment to Japan. The US Department of
Agriculture's official stance is that fault is totally on the US
side. However, the true feeling of the US beef industry can be
epitomized by the remark by US Meat Export Federation (USMEF)
Chairman Patrick Boyle: "It is an overreaction to totally shut
out US beef because of a careless blunder by one exporter."

A high-level US Trade representative official, speaking on
condition of anonymity, warned that if the embargo is protracted,
it could throw cold water on bilateral relations, noting, "The
beef issue has clearly caused friction between the two
governments."

If anti-Japanese sentiments mount in the US, it could spill over
into other parts of the economy. The auto industry is viewed as
most vulnerable.

Following poor business showings, such as a sharp drop in the
sales of large-size sports utility vehicles (SUVs) as a result of
a rise in gasoline prices, leading automaker General Motors (GM)
last November released a plan to dismiss a total of 30,000
employees by closing down 12 plants across North America. Ford
Motors also released a similar restructuring plan in January.
There are even crisis rumors abounding in the US auto industry,
with GM now making frantic efforts to procure capital. As part of
such efforts, it has decided to sell off the stocks of Suzuki
Motors.

In contrast, Japanese vehicles, popular because of their fuel-
efficiency, accounted for more than 30% of all new cars sold in
US last year for the second straight year.

Learning lessons from past auto disputes, Japanese automakers now
locally assemble about 70% of their vehicles sold in the North
American market. Japanese manufacturers stress that they are
contributing to creating job opportunities in the US, but there
is no guarantee that they can avoid criticism.

The rise of the Chinese economy also made Japan-US economic
relations complicated.

As a result of a sharp increase in imports of Chinese products,
the US' trade deficit with China reached a record high of 725.8

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billion dollars (approximately 84.34 trillion yen) in 2005.
Though there has been no major change in the size of the US'
trade deficit with Japan, since it is the second largest deficit
for the US after China, criticism of it has mounted in the US.
House of Representatives Ways and Means Committee Chairman Bill
Thomas even said, "When you consider the long-standing trade
barriers erected by Japan, I would say the US has a bigger
problem with Japan than with China."

On the other hand, wherever there are areas of common interest
between the US and Japan in terms of China, there is an emerging
mood of searching ways to establish a new kind of "alliance"
relationship.

For example, China is under fire as being a manufacturing base
for pirated or copied computer software and household electric
appliances. Japan and the US, joined by Switzerland, demanded
that China submit a report on its crackdowns on violations of
intellectual property rights in compliance with on World Trade
Organizations (WTO) rules. The three countries jointly applied
pressure on China.

Former US Trade Representative Clayton Yeutter pointed out,
"Since US and Japan are the world's largest and second largest
economies, respectively, trade friction is unavoidable." "But,"
he hastened to add, "unlike the 1980s, when the US and Japan
fought fierce trade disputes, bilateral relations have matured so
much that the two countries can now settle issues without falling
into a worst-case situation."

Is it just as he said that the two countries are now able to nip
economic disputes in the bud and continue to cooperate in pursuit
of common interests? Indeed, economic relations between Japan and
the US are now at such a crossroads.

(5) Government to adopt flexible strategy for economic pacts:
Shift to speedier conclusion of FTAs, alarmed by China, South
Korea, which are way ahead

NIHON KEIZAI (Page 5) (Excerpts)
March 8, 2006

The government has switched to a strategy of pressing ahead more
flexibly in signing economic agreements on such areas as trade
and investment with other countries. That is because there is a
growing view in the Liberal Democratic Party (LDP) and business
circles that if Japan alone sticks to comprehensive economic
partnership agreements (EPA) amid the global trend for signing
free trade agreements (FTA),it would find it difficult to push
forward with the drive to sign economic agreements, which will in
turn undermine Japan's international competitiveness. The
government intends to speed up efforts with a focus on signing
FTAs, but its potential negotiation partners are differently
motivated, particularly regarding the agricultural sector. FTA
talks will not necessarily go smoothly.

China and South Korea are way ahead of Japan in talks with the
Association of Southeast Asian Nations (ASEAN). It appears that
the government had decided to give priority to speediness in
economic negotiations, because it feels pressed by China, which
is increasing its presence through a buildup of military
strength.


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The LDP Special Committee on FTA and EPA, chaired by former
Agriculture Minister Yoshio Yatsu, urged the prime minister to
speed up FTA talks, noting, "It is necessary to have somebody who
directs efforts out of the need to speed up FTA talks." This
proposal has triggered the policy switch by the government.

Business circles joined forces, because they felt impatient about
Japan lagging behind China, South Korea and India. The Japan
Federation of Economic Organizations (Keidanren) has cited
efforts to tackle FTAs as a yardstick in making financial
contributions to political parties. The LDP had to take that into
account because of the Upper House election in 2007.

Japan has thus far signed EPAs with three countries, including
Malaysia. Talks are now under way with various other countries.
However, signing EPAs involves a lengthy process, including
mutually scrapping tariffs and consolidating procedures for
settling disputes and an intellectual property rights system.
While Japan is having trouble proceeding with EPA talks, China
and South Korea have abolished tariffs with a number of trade
partners. Chances are that Japanese companies may be placed at a
disadvantage in exporting their products.

Government to speed up talks with China, India and other Asian
countries; Whether deals can be reached, while leaving
agricultural area intact, unclear

Acting on the strategy shift, the government will speed up
efforts to sign a trade accord with India, China and other Asian
countries. The plan is to consolidate conditions for smoother
exports in key industries, such as autos and household electric
appliances, while avoiding lowering tariffs in delicate areas,
including the agricultural sector. However, as agricultural-
exporting countries may find such agreements less beneficial,
whether Japan can swiftly sign pacts as it hopes is unclear.

The government will prepare a prototype for such an agreement,
under which inconvenient items will be removed, depending on
negotiating partners, so that it can speedily sign an agreement
with negotiable countries. It will also seek an agreement that
covers investment rules but not tariffs. This method will be
adopted toward Asian countries, because what they expect from
FTAs matches that of Japan, as many of them import mined and
manufactured goods and export agricultural, marine and forestry
products, contrary to Japan's trading pattern. The strategy is to
speed up negotiations, by using the prototype, while avoiding
items on which reaching an agreement is difficult.

Potential negotiation partners in the future include India, China
and Australia. The government is expected to use the prototype in
talks with those countries. There is also a possibility of its
aiming for an early signing of pacts, by revising the contents of
the ongoing talks with ASEAN and South Korea, with which the
agricultural area is causing a bottleneck.

Candidates for FTA partners include many agricultural-exporting
countries, such as Asian countries and Australia. Regarding the
signing of an investment accord, too, China and India will not
easily agree to remove investment restrictions in order to
protect their domestic undeveloped industrial areas.

Though Japan has shifted its economic alliance policy at the
initiative of politicians, chances are slim that its negotiating

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partners agree to sign FTAs or investment pacts that are
advantageous to Japan alone. In addition, on the domestic front,
the interests of concerned government agencies, such as the
Ministry of Economic, Trade and Industry, the Ministry of
Agriculture, Fisheries and Forestry and the Ministry of Foreign
Affairs, differ. The reason for the stagnation in signing
economic agreements is not just the circumstances of negotiating
partners. It is essential for Japan to reform the domestic
situation as well.

(6) Editorial: Minshuto must not become so weak as to create a
vacuum in the Diet

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

Maybe we missed something but in Upper House deliberations on the
fiscal 2006 budget that started yesterday, the major opposition
party Minshuto (Democratic Party of Japan) seemed to hardly try
to pursue the Koizumi administration on a set of four issues that
includes a bid-rigging scandal involving government officials.

The House of Representatives Discipline Committee will begin
discussing the imposition of a punishment on Hisayasu Nagata for
launching charges by using a copy of a fake e-mail at the Diet. A
Minshuto team tasked with mapping out measures to prevent another
such fiasco has just been set in motion.

There is every reason for Minshuto lawmakers to feel hesitant
about reassuming the offensive against the ruling bloc until the
e-mail fiasco is settled.

But that does not mean the largest opposition should shrink from
its duties, however.

The opposition block had the edge over the ruling camp early on
in the current Diet session, though this might sound ages ago to
Minshuto members.

Minshuto led the opposition camp in pursuing a set of four issues
-- the Livedoor scandal, the earthquake-resistance data
falsification scandal, bid rigging involving the Defense
Facilities Administration Agency, and US beef trade issue. All of
these are closely associated with the safety and livelihood of
the public.

Has income disparity widened over the last five years under the
Koizumi administration? The public was hopeful that the ruling
and opposition blocs would conduct heated debate to answer such a
question, examining both the bright and dark sides of the Koizumi
reform drive, and mull Japan's future.

Although the e-mail fiasco seems to have blown away everything,
the government and the Liberal Democratic Party are not totally
blameless, either.

A possible close relationship between LDP Secretary General
Tsutomu Takebe and former Livedoor Co. President Takafumi Horie

SIPDIS
surfaced in connection with the Livedoor scandal. In campaigning
for the general election last year, Takebe referred to Horie as
"my son."

The Political Ethics Hearing Committee failed to determine the

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seriousness of the good offices of former National Land Agency
Director General Kosuke Ito, who served as intermediary between
the developer and the Land, Infrastructure and Transport Ministry
in building substandard condominiums.

The bureaucrat-involved bid-rigging scandal exposed the harmful
effects of the amakudari practice of retired senior government
officials taking up cushy executive posts at corporations and
government-affiliated organizations. Such arrangements have been
underpinning the bid-rigging system.

All those issues have been left unfinished. Each case deserves
testimony by sworn and unsworn witnesses and long deliberations.

Later this week, the government is planning to submit to the Diet
an administrative reform promotion bill to reduce special
accounts and labor costs for public servants. It will be a good
opportunity for Minshuto, as a party that uses a counterproposal
approach, to present another option to the public by going back
to its original starting point.

President Maehara's declining leadership in Minshuto at this
point, well before the end of the current Diet session, has
triggered speculation that the largest opposition party may
conduct its presidential election early.

Minshuto cannot afford to take whimsical action or stand still
during the current Diet session. The "vacuum" created in the Diet
by the e-mail hullabaloo must be filled immediately.

To restore public trust, Minshuto has no other choice but to
buckle down and make steady efforts.

SCHIEFFER