JAPANESE MORNING PRESS HIGHLIGHTS 03/20/06

UNCLAS SECTION 01 OF 10 TOKYO 001449 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 03/20/06 Index: 1) Top headlines 2) Prime Minister's daily schedule Beef issue: 3) Ambassador Schieffer in speech warns of possible "trade war" if US beef import ban is prolonged 4) Foreign Minister Aso, Secretary Rice discuss US beef import issue while attending trilateral talks in Sidney 5) Japan will soon send a team of BSE experts to the US in effort to speed up restart of US beef shipments 6) US replies to Japan's questions on beef violation issue will be announced tomorrow Defense and security issues: 7) Ambassador Schieffer in speech urges Japan to make positive international contributions in military sphere 8) Possibility growing of minor revisions in the Futenma relocation plan to respond to local concerns 9) Ruling camp taking lead in pushing for revision of Futenma relocation plan 10) Prime Minister Koizumi to ask for reduced cost burden for Japan in relocating Marines to Guam 11) Koizumi still negative about making changes in the government's plan to relocate Futenma base 12) Cost of relocating US Marines from Okinawa to Guam to be picked up by financing from JBIC 13) Area of Sagami Depot to be jointly used by USFJ, SDF troops 14) Japan asks US to pay 75% of total 47 million yen compensation for US military helicopter's crash into Okinawa campus 15) US sailor on trial admits murder of Yokosuka woman 16) Koizumi at defense academy graduation expresses concern about China's and DPRK's military buildups Strategic dialogue in Sidney: 17) US, Japan, Australia hold strategic dialogue in Sidney, agree to cooperate on Iran nuke issue, and discuss GSDF pullout from Iraq 18) Strategic dialogue: Decision on GSDF withdrawal from Iraq put off 19) Hardliner Foreign Minister Aso, softliner METI Minister Nikai clash over policy toward E. China gas field issus Articles: 1) TOP HEADLINES Asahi: Asahi Shimbun survey of 100 companies: More than 50% plan to increase hiring of new college graduates for the first time in nine years, mainly in engineering field Mainichi: Japan defeats South Korea in World Baseball Classic Semifinals Yomiuri: Earthquake-proof measures at elementary and middle schools; Government to release survey results by municipality, starting next month TOKYO 00001449 002 OF 010 Nihon Keizai: Equipment manufacturers plan to increase capital investment Sankei: Global-scale M&As picking up speed, especially in energy, telecommunications Tokyo Shimbun: Harassment by bosses at one in six companies, according to survey by Tokyo Metropolitan Government: Merit-based pay system to blame? 2) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, March 19 NIHON KEIZAI (Page 2) (Full) March 20, 2006 09:43 Met at National Defense Academy with Defense Agency chief Nukaga and Academy President Nishihara. 10:03 Attended the NDA's graduation ceremony. 12:48 Returned to his official residence. 13:53 Met with LDP Policy Research Council Chairman Nakagawa. 3) US Ambassador Schieffer in speech expresses concern about possibility of "trade war" over US beef import issue MAINICHI (Page 2) (Full) March 18, 2006 US Ambassador to Japan Schieffer, in a speech at a Tokyo hotel before the Asian Affairs Research Council (chaired for former ambassador to the US Nobuo Matsunaga) on March 17, expressed strong hope that US beef imports now banned would be restarted soon. He stated: "It is conceivable that the issue could have an ill effect on US-Japan relations. If it is not resolved in the near future, I am greatly concerned that the US Congress might lose its patience, leading to a trade war." The Ambassador said, "It is extremely regrettable, but we are at a loss on what to do," indicating that he thought sufficient measures are being taken to prevent a reoccurrence. He revealed the US intention to accept surprise inspections by the Japanese government. However, on the issue of vertical columns having been found in a shipment of beef to Japan, he rebutted the majority view in Japan that this was a structural problem in the US' inspection system, saying, "The system if functioning properly. The meat that violated the agreement never reached consumers." He stressed the safety of the meat itself: "Though it was a violation for the meat to be attached to the bone, if the bones were removed and the meat eaten, there would be no danger." TOKYO 00001449 003 OF 010 4) US beef: Japan, US exchange principle arguments; Foreign Minister Aso denies antagonism NIHON KEIZAI (Page 2) (Full) March 19, 2006 In a Japan-US strategic dialogue, US Secretary of State Rice and Foreign Minister Aso acrimoniously discussed the underlying principles of the total embargo of US beef adopted because of the BSE issue. If the import ban on US beef becomes protracted, US Congress and industrial organizations are bound to increase pressure. It was, therefore, imperative for Rice, who is responsible for diplomacy toward Japan, to call on Japan to deal with the issue at a formal setting. At the same time, the Japanese government has faced harsh criticism at home that it succumbed to US pressure when it lifted the ban last December, so it is unable to easily assent to the US request this time. Aso told Rice, "We must not forget the peace of mind and safety of Japanese consumer." Commenting on the atmosphere when Rice brought up the beef import issue, Aso on the evening of Mar. 18, told reporters traveling with him, "She spoke very politely." To a question about whether she harshly urged an import resumption, Aso denied any antagonism between the two countries, saying, "She was not like that at all." 5) Japan-US vice foreign ministerial meeting: US to dispatch beef expert to Japan with eye on early resumption of exports NIHON KEIZAI (Page 2) (Full) Evening, March 18, 2006 Vice Foreign Minister Shotaro Yachi, now visiting the US, met with Under Secretary of State Burns. They discussed bilateral relations, including the BSE issue, and the international situation for about an hour. Regarding a resumption of US beef exports to Japan, Burns said: "We are becoming very frustrated. We want Japan to resume US beef imports quickly." He then revealed a plan to dispatch a beef expert to Japan shortly. Futenma relocation: Asked to persuade residents of local communities Japan imposed a second ban on imports of US beef in January, when the inclusion of vertebral columns was found in a US beef shipment. In addition, a third case of BSE was confirmed in the US on Mar. 13. Japan has requested that the US answer questions the Japanese side asked regarding the US inspection report. A forthcoming meeting between Japanese and US experts will be the first step toward a resumption of beef trade. Regarding the USFJ realignment issue, Burns told Yachi, "We want Japan to persuade residents of local communities as soon as possible for a settlement of the issue." He thus urged Yachi quickly undergo coordination with local communities, including Nago, where Futenma functions are to be relocated. Yachi explained the Japanese government's approach ahead of the TOKYO 00001449 004 OF 010 end-of-the-month deadline. Concerning Iran's nuclear development, Yachi noted, "It is important to settle the issue in a peaceful manner through repeated discussions at the UN Security Council." While pointing out the significance of diplomatic efforts, Burns indicated a stance of aiming for an early settlement, saying, "Seventeen resolutions were submitted on Iraq over a period of 17 years, and we cannot handle the Iranian issue at this pace." On North Korea's nuclear ambitions, the two agreed that it is desirable for Pyongyang to return to the six-party talks at an early date. Yachi's visit to the US is part of the Japan-US strategic dialogue. He met with Burns on March 16, as well. He also met with Under Secretary of Defense Edelman and Assistant to the President Crouch (Deputy National Security Advisor). Commenting on Japan's dispatch of Self-Defense Forces to Iraq, Edelman said: "We highly appreciate the dispatch. We want Japan to continue to contribute to the reconstruction of Iraq." 6) Agriculture Ministry possibly make public today US replies on backbones-containing veal shipment NIHON KEIZAI (Page 3) (Full) March 20, 2006 The Agriculture, Forestry and Fisheries Ministry (MAFF) indicated yesterday that it has received replies from the US government to its questions on the US report on the ineligible shipment to Japan of veal products containing backbones, a BSE risk material. MAFF and the Ministry of Health, Labor and Welfare Ministry intend to speed up the translation and analysis of the US replies with a view to making public the US reply today. The US government is expected to send experts to Japan shortly to brief Japan on preventive measures and other efforts to seek Japan's understanding. But following the discovery of backbones in a US beef shipment to Hong Kong, distrust of US beef is growing in Japan. MAFF and other offices are closely analyzing the US replies to determine if they can dissolve questions in Japan. They will determine comprehensively if, among other things, the US replies can convince the Japanese public about the safety of US beef. 7) US Ambassador Schieffer urges Japan to make positive military contributions MAINICHI (Page 2) (Full) March 18, 2006 In a speech on March 17 in Tokyo, US Ambassador to Japan Schieffer positioned Japan and the United States as "equal partners," and he urged Japan to make even more positive contributions to stabilizing the international community. On the question of how Japan should become involved, the ambassador suggested contributions in the military sphere, remarking: "The US spends close to 4% of its GDP on defense, or 10 times what Japan's spends on defense. Japan keeps its defense spending in fact at about 1% of GDP, something that the American people find hard to understand." He urged Japan to take an even larger share TOKYO 00001449 005 OF 010 of the burden. On the issues of sovereignty over the Senkaku Islands and the issue of gas-field development in the E. China Sea, he showed understanding toward Japan's ownership claim to the isles as Japanese territory. He took the stance of hoping that a peaceful resolution could be made though talks between Japan and China. 8) Futenma relocation site to be slightly adjusted; Government, ruling camp considering changing angle of runway; Local governments express some understanding YOMIURI (Page 1) (Full) March 18, 2006 The government and ruling parties on March 17 have begun to consider the possibility of making a slight revision in the plan to relocate the US Marines Corps' Futenma Air Station (Ginowan City) in Okinawa Prefecture to the coastal portion of Camp Schwab (Nago City),premised on the agreement of local governments and communities. While the main elements of the coastal plan will be maintained, the direction of the runway will be changed and the facility slightly moved toward the ocean. This should ease the noise and other factors that would impact on the neighboring residential area, so local authorities are expressing a modicum of understanding. The government until now rejected any revision of the coastal plan, but now it judges that obtaining the cooperation of the local community would be indispensable to bringing about the relocation of Futenma Air Station, it decided to seek a breakthrough in the situation. Nago City on March 8 announced that if there was a modification of the relocation site to a spot in between the coastal plan and the original plan for the offing of Henoko District, it would respond to consultations with the government. In case the relocation site is moved toward the ocean, the government is negative about a large-scale revision of the plan, judging that it would be difficult to avoid affecting the environment or to counter moves to block the construction work. However, with the US urging the Japanese government to reach an understanding quickly with local governments, Defense Agency Director General Nukaga , former Liberal Democratic Party (LDP) Vice President Taku Yamasaki, and others have been informally coordinating with local authorities the possibility of a minor revision of the relocation site, such as moving the direction of the runway in a way that leaves a good part still on Camp Schwab's land. Some local government officials have informed the government that "even if the revisions are minor, if they reflect consideration to the local community, we can give think positively about accepting the plan." Yamasaki on March 17 after meeting with senior officials of the town and city council representing the northern part of Okinawa Prefecture, stated, "With the government's plan as the base, I would like to ask that something be done, " bringing up the possibility of a slight revision in the plan. Currently, under the coastal plan, fixed wing and helicopters are expected to fly over 10 civilian houses that are situated in the flight route south of the runway. The government and ruling camp TOKYO 00001449 006 OF 010 have been considering moving the direction of the runway so that the flight route will not pass over the 10 homes. The current thinking is to only shift the runway some dozens of meters toward the ocean side. 9) LDP leaning toward modifying Futenma relocation plan ASAHI (Page 1) (Abridged) March 20, 2006 The government will not change its basic course of action regarding the planned relocation of the US Marine Corps' Futenma Air Station in the city of Ginowan, Okinawa Prefecture, to the island prefecture's northern coastal city of Nago in the realignment of US forces in Japan, Hidenao Nakagawa, chief of the ruling Liberal Democratic Party's policy board, said on an NHK TV program yesterday. "But," Nakagawa added, "the government may have to do something in the process of coordinating with local governments and in the process of making sincere efforts." Later in the day, Nakagawa met with Prime Minister Koizumi at his official residence. In the meeting, Koizumi and Nakagawa concurred on the necessity of local consent to the Futenma relocation plan. This is the first time that Nakagawa has hinted at the likelihood of modifying the relocation plan. The LDP is now leaning toward modifying the plan. Meanwhile, Taku Yamasaki, chair of the LDP's security affairs panel, has visited Okinawa time and again to continue local coordination. "The US government is flexible," one of the LDP's executives said yesterday evening. "It's not impossible to make some modifications," the executive added. Nago City is ready to talk with the government if it modifies the current Futenma relocation plan and builds a sea-based facility off the city's Cape Henoko. The focus is on how far the government will proceed with local coordination. 10) Prime Minister Koizumi plans to ask US to reduce Japan's burden of US Marines relocation TOKYO SHIMBUN (Page 2) (Full) March 18, 2006 The House of Councillors Budget Committee held on March 17 intensive deliberations on foreign and defense issues at the presence of Prime Minister Junichiro Koizumi and relevant cabinet ministers. Koizumi revealed his intention to ask the US administration to reduce Japan's burden of the costs for transfer of US Marines to Guam as part of the realignment of US forces in Japan. He stated, "The US has told us its view, but Japan has its own one." Defense Agency Director General Fukushiro Nukaga, meanwhile, clarified that his agency is now looking into various ways of shouldering the relocation costs, pointing out one method that Japan first would shoulder part of the US side's burden and the US then later would repay it to Japan. Regarding the leakage of Self-Defense Forces' information, Koizumi categorically said, "They are slackening off. We will deal with them severely in order to prevent a recurrence." TOKYO 00001449 007 OF 010 11) Prime Minister Koizumi: "No intention of revising" US Marine Futenma relocation plan TOKYO SHIMBUN (Page 2) (Full) March 18, 2006 Asked by reporters about the plan to relocate the US Marine Futenma Air Station to the coast of Camp Schwab (Nago City in Okinawa Prefecture),Prime Minister Junichiro Koizumi responded on the night of March 17: "We have been making efforts to obtain an agreement from (the local community) on the current government's plan. I have no intention of (adjusting it). With this regard, Chief Cabinet Secretary SHINZO ABE indicated in a press conference the same day that the government intends to get the understanding of the local government before the end of March. He stated: "We will do our best to obtain an agreement (between the governments of Japan and the United States) basically before the end of March, as well as the understanding of the local government." 12) Okinawa US Marines relocation cost: Government plans to extend loans to the US through JBIC to limit use of tax money NIHON KEIZAI (Page 2) (Full) March 18, 2006 The government yesterday began earnestly searching for ways to pay for the planned relocation of US Marines from Okinawa to Guam. In order to limit the use of tax money, the government is planning to finance a large portion of the costs with loans through the Japan Bank for International Cooperation (JBIC). The government also envisages making some changes to the JBIC Law, which basically applies to aid to developing countries. Bureau-director-level foreign and defense officials of Japan and the US are scheduled to resume talks in Tokyo on March 23-24. In the previous talks, the US indicated that the relocation would cost 10 billion dollars, or 1.18 trillion yen, asking Japan to pay 75%, or 880 billion yen, of the total cost. Japan, estimating the total cost at 8 billion dollars, or 940 billion yen, intends to directly contribute 40% and lend the US the remaining 60%. Japan and the US remain far apart in their views. But in the upcoming talks, Japan intends to clarify its intention to limit direct contributions by conveying its plan to the US to amend legislation to accommodate the US with loans. The JBIC Law classifies loans into three categories: exports, imports, and finance of investment. The law is not applicable to loans to the US for the planned Marines relocation to Guam. For industrialized countries, loans are limited to JBIC-invested joint ventures. The JBIC is scheduled to be merged into a new organ in fiscal 2008. With the merger, the yen-loan department will be centralized in the Japan International Cooperation Agency. 13) Japan, US to share 37 hectares at Sagami Depot TOKYO 00001449 008 OF 010 YOMIURI (Page 4) (Full) March 18, 2006 The Defense Facilities Administration Agency yesterday informed Kanagawa Prefecture, Sagamihara City, and Zama City of agreements reached between Japan and the United States in their recent intergovernmental talks held in Hawaii over the realignment of US forces in Japan. When it comes to the US Army's Sagami Depot in Sagamihara covering an area of about 214 hectares, the United States will return the 15-hectare site of housing for US military and their families at open-air storage covering about 52 hectares on the depot's west side. In addition, the remaining space of about 37 hectares will be shared by Sagamihara City, the Ground Self-Defense Force, and the US Army. This will make it possible to extend a railway and a prefectural road to Sagamihara Station on the JR Yokohama Line as requested by local communities. 14) Gov't pays 47-million-yen damages for US military helo crash, asks US to pay 75% YOMIURI (Page 4) (Full) March 18, 2006 The government adopted a parliamentary statement in a cabinet meeting yesterday, recounting that it has paid damages totaling 47 million yen for 70 cases by the end of this February in connection with the crash of a US military helicopter at the campus of Okinawa International University in August 2004. The statement was prepared for a question from Kantoku Teruya, a House of Representatives member with the opposition Social Democratic Party (SDP or Shaminto). According to the statement, Okinawa International University sustained damage in 22 cases, including buildings and vehicles. The government has paid damages amounting to about 32 million yen for 16 cases. There were 55 other cases to be compensated for the damage caused to houses, vehicles, and other properties near the university. In those cases, the government has paid about 15 million yen for 54 cases. The Japanese government has asked the US government to pay 75% of the total damages under the Japan-US Status of Forces Agreement (SOFA) and has been receiving repayments. The SOFA treaty stipulates bilateral burden sharing for Japan at 25% and the United States at 75% to compensate damage that is entirely attributable to the United States. 15) Yokosuka murder case: US sailor admits charges in first hearing; Lawyer does not deny willful negligence TOKYO SHIMBUN (Page 27) (Abridged slightly) March 18, 2006 The Yokohama District Court held yesterday its first hearing for William Reese, a 21-year-old crewmember of the USS Kitty Hawk based at the US Navy Yokosuka Base, in connection with a murder- robbery case involving Yoshie Sato, a 56-year-old part-time worker of Yokosuka City. In the hearing trial, Reese admitted charges, answering, "That is correct." The hearing opened with a prosecutor's statement that Reese had assaulted Sato as she cried out loud in resistance when he tried TOKYO 00001449 009 OF 010 to rob Sato of her bag. The prosecutor also maintained that the sailor had spent the stolen money at adult entertainment establishments and other places. Reese pleaded guilty, saying, "Although I did not intend to kill the woman, I did kill her." Reese's lawyer said: "I understand that he did not have any premeditated intent, but I do not deny his willful negligence (from the fact that he continued assaulting her knowing that she might die). I will not contend the charges." After the hearing, Sato's brother, Shuichi Sanada, 56 said angrily: "Reese does not seem to have any sense of guilt. The US Navy should teach its troops about the preciousness of human life and other basic values." 16) Koizumi expresses concern over North Korean, Chinese military expansion YOMIURI (Page 1) (Full) March 20, 2006 Prime Minister Koizumi pointed out at yesterday's graduation ceremony of the National Defense Academy in the city of Yokosuka, Kanagawa Prefecture. Referring to challenges facing the international community, Koizumi noted that some countries have been pushing for nontransparent military expansion in recent years. "Affected by the intentions of these countries, there has been a proliferation of technologies relating to weapons of mass destruction and ballistic missiles," Koizumi said. The premier avoided singling out any country in the remark. However, his remark can be taken as expressing concern over the military expansion of China and North Korea. Koizumi also indicated that he would expedite settlement of the ongoing intergovernmental consultations between Japan and the United States, underscoring the "critical significance" of the Japan-US security alliance for the security of not only Japan but also the Asia-Pacific region. 17) Trilateral Strategic Dialogue among Japan, United States, and Australia: Cooperation on Iran's nuclear issue; Talks on the timing of withdrawal of GSDF troops from Iraq NIHON KEIZAI (Page 1) (Excerpt) Evening, March 18, 2006 By Naoya Yoshino in Sidney Foreign Minister Taro Aso, visiting Australia, joined US Secretary of State Rice and Australian Foreign Minister Downer on SIPDIS March 17 to the first Trilateral Strategic Dialogue among the three countries. They later issued a joint statement that included a call on North Korea to return to the 6-party talks on that country's nuclear development program. They also hammered out a policy course toward Iran of urging that country to immediately halt its uranium-enrichment activities and to submit to inspections by the IAEA. The talks also covered the timing of withdrawal of Ground Self- Defense Force troops now operating in Samawah, Iraq. TOKYO 00001449 010 OF 010 18) Japan, US, Australia agree to continue Iraq assistance; Government to postpone decision on GSDF withdrawal NIHON KEIZAI (Page 1) (Excerpt) March 19, 2006 Naoya Yoshino, Sydney Foreign Minister Taro Aso, now visiting Australia, held his first strategic talks with US Secretary of State Condoleezza Rice and Australian Foreign Minister Alexander Downer on March 18 in which they agreed to continue their countries' assistance for Iraq's reconstruction for the time being. After the talks, Aso indicated to reporters that the government would postpone its decision on the withdrawal of Ground Self-Defense Force troops from Iraq, saying, "It is not appropriate to withdraw troops from Iraq while there still is no new government." 19) Gap in views on China's gas exploration between Foreign Minister Aso, who takes hard-line stance, and METI Minister Nikai, who is cautious TOKYO SHIMBUN (Page 9) (Full) March 20, 2006 A gap in views between Foreign Minister Taro Aso and Economy, Trade and Industry Minister Toshihiro Nikai has now become clear over negotiations with China on gas exploration in the East China Sea, a pending bilateral issue. Asked about what Japan would do if China started exploration in the Shirakaba gas field at a House of Representatives Foreign Affairs Committee, Aso responded March 15, "Japan has to consider countermeasures at that stage." Nikai, however, at a cabinet meeting on March 17, said, "If we announce (countermeasures) in advance, the negotiations will not move ahead. Dealing with the matter through discussion is an positive view." He then expressed unhappiness with (Aso's statement),saying, "A senior Foreign Ministry official also takes part in the negotiating table (on the gas issue)." Nikai takes pride in resuming the bilateral talks on the gas exploration, which has been suspended in effect since last fall. The Foreign Ministry, however, is concerned that if Nikai, a pro- Chinese politician, takes the lead in the gas talks, China may twist Nikai round its finger. The Japan-China relationship has been cold due to Prime Minister Junichiro Koizumi's repeated visits to the controversial Tokyo's Yasukuni Shrine. Under such circumstances, a senior METI official commented, "A standoff between the Japanese ministers will benefit China as China would see it as discord in the cabinet." SCHIEFFER