DAILY SUMMARY OF JAPANESE PRESS 03/28/06

UNCLAS SECTION 01 OF 16 TOKYO 001616 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: DAILY SUMMARY OF JAPANESE PRESS 03/28/06 INDEX: (1) Poll of LDP lawmakers on post-Koizumi candidates; ABE tops list; Consumption tax a major issue (2) Yasukuni issue likely to become major campaign issue for LDP presidential race; ABE and his support group changes (3) Light and shadow of what "Koizumi politics" has created over the past five years - Changing society (part 1): Economy has recovered but many of the weak left behind due to transitional pain, competition (4) Light and shadow of Koizumi politics-- five years of accomplishments (part 2): Regional disparity - urban areas enjoying prosperity, while regional communities stagnant (5) USFJ realignment: Japan should not flinch from negotiating relocation cost (6) Iwakuni and Okinawa plebiscites exhibited need for government to offer explanations fairly and squarely; Sources of distrust must not be expanded (7) Beef imports from Mexico, China gradually increasing, though BSE risk remains unknown (8) BSE risk: Structural defects found in US inspection system; Safety procedures must be observed to reduce BSE risk ARTICLES: (1) Poll of LDP lawmakers on post-Koizumi candidates; ABE tops list; Consumption tax a major issue SANKEI (Page 1) (Abridged slightly) March 28, 2006 The Sankei Shimbun has conducted an opinion poll of the 408 Upper and Lower House members belonging to the Liberal Democratic Party (LDP) to find out the trend for the party's presidential election in September. The results showed that Chief Cabinet Secretary Shinzo ABE was the front-runner for the LDP presidency, underpinning his popularity in public opinion polls and in the LDP. Many also cited fiscal reconstruction and policy toward Asia as major policy issues. Heated debates are likely to occur in the post-Koizumi race on both the domestic and diplomatic fronts. The survey was conducted on March 16-27. Replies came back from a total of 161 lawmakers: 136 from the Lower House and 25 from the Upper House. The retrieval rate was 39.5%. Of them, 91 named specific individuals as fit to become the LDP's new president. Possible presidential candidates were named in the following order: (1) SHINZO ABE by 27 members; (2) former Health, Labor and Welfare Minister Bunmei Ibuki (head of the Ibuki faction) by 14; (3) Finance Minister Sadakazu Tanigaki (head of the Tanigaki faction) by 12; (4) former Chief Cabinet Secretary Yasuo Fukuda by 11; (5) Foreign Minister Taro Aso by 10; and (6) former LDP Vice President Taku Yamasaki by seven. Abe has been boasting national popularity in a variety of public opinion polls. The results reflected the strong expectations of TOKYO 00001616 002 OF 016 junior and mid-level lawmakers, in addition to the Mori faction where he belongs. The list of policy issues was topped by fiscal reconstruction including the consumption tax, with 100 lawmakers citing it. The choice offered a glimpse into the lawmakers' strong interest in a tax hike, the issue that may affect the future of the administration, with the Upper House lection scheduled to take place next year. Eighty lawmakers pointed out policy toward Asia, including the Yasukuni issue, and 62 people cited the continuation and revision of the Koizumi structural reform drive. Regarding specific policy issues, 64 said the government must decide on a consumption tax hike during the term of the next prime minister, while 66 said such was unnecessary. The outcome clearly reflected the conflict between the government and the LDP. Additionally, 70 people said that the next prime minister should visit Yasukuni Shrine, while 36 opposed to a shrine visit. The list of qualities required of the new leader was topped by policy capability with 115 members mentioning it, followed by strong presence for elections, abundant experience in politics, and top-down leadership. (2) Yasukuni issue likely to become major campaign issue for LDP presidential race; ABE and his support group changes ASAHI (Page 2) (Full) March 28, 2006 Hidenao Nakagawa scrambling for prior settlement Prime Minister Junichiro Koizumi and potential candidates to succeed Koizumi, including Chief Cabinet Secretary SHINZO Abe, have stated in chorus that the issue of visits to Yasukuni Shrine by prime minister should not be made a major campaign issue in the September presidential election of the Liberal Democratic Party (LDP). However, the view is now becoming stronger in LDP regional chapters that presidential candidates should talk about their own Asia policy. Such a local perception is now reflected in LDP headquarters. The local move has boosted the momentum of former Chief Cabinet Secretary Yasuo Fukuda, and it has brought about a strategic change to ABE and his supporters. In a meeting on March 22 at the Hotel New Otani in Tokyo, LDP Policy Research Council Chairman Hidenao Nakagawa told Chon Bichien, director of the reform and liberalization forum, who is regarded as a brain-trust advisor to Chinese President Hu Jintao: "Since Foreign Minister Taro Aso is a Christian, he does not care about visiting Yasukuni Shrine. Mr. ABE has not visited the shrine since he assumed the chief cabinet secretary's post." During the meeting, Nakagawa suggested a summit between Prime Minister Junichiro Koizumi and President Hu, which the Chinese government has refused to hold. He apparently wants to put an end to the Yasukuni issue while Koizumi is in office in order to have Abe, whom he sees the most suitable person, smoothly succeed Koizumi. Should Asia policy becomes a main campaign issue and if ABE TOKYO 00001616 003 OF 016 mishandles the Yasukuni issue, he might be placed at a disadvantage in the presidential race. In consideration of the suspended talks between the top leaders of Japan and China, Nakagawa is now shifting a focus on a breakthrough of the political deadlock. On Feb. 23, Nakagawa along with New Komeito policy chief Yoshihisa Inoue, who also wants to put an end to the Yasukuni issue, met in Beijing with Chon. During the meeting, Nakagawa said to Chon, "If the Yasukuni issue becomes a main issue in the presidential election, the issue will not be resolved as you have hoped in consideration of Japanese public opinion." Inoue said, "As a result of a summit between Prime Minister Koizumi and President Hu, Koizumi's successor will not go to Yasukuni Shrine." Nakagawa and Inoue called on Chon to take a forward-looking approach. The two meant that if the environment for a summit were prepared, the next prime minister would be able to choose not to visit the Shinto shrine. Chon dismissed the suggestion. He argued: "Who can guarantee the next prime minister will not pay homage at Yasukuni Shrine? Prime Minister has so far visited the shrine five times." The Chinese side cannot easily accept Nakagawa's proposal. Koizumi stated yesterday, stressing his pet view, "Because I visit Yasukuni Shrine, China does not hold a summit. I cannot understand this." Abe cautious about remarks The focus is now on Abe's movements. ABE is regarded as having hawkish foreign and security policies. At a press conference held immediately after he assumed the chief cabinet secretary post, ABE stated, "I have visited Yasukuni Shrine as a Japanese national. I would like to continue to keep this feeling." A lawmaker, who has close ties with ABE commented, "He will visit the shrine even after he becomes prime minister." On the advice of business leaders, however, he has refrained from clarifying his view since he assumed his post. He recently reiterated: "I would like to continue to have the feeling of paying my respect to those who died for the nation." Appearing on a TV Tokyo program on March 24, ABE criticized the Chinese leadership, noting, "Not closing summit and foreign minister-level communication channels shows the wisdom of a mature country. It is wrong to suspend the talks between top leaders." Meanwhile, he expressed enthusiasm for repairing the strained bilateral ties through technical cooperation in the energy area. Calls have grown in political circles for ABE to make a policy shift. Former Prime Minister Yoshiro Mori recently talked about the possibility of ABE visiting Yasukuni Shrine: "I think he will not visit the shrine. I believe he will make a decision after considering the timing, condition and place." A veteran lawmaker said: TOKYO 00001616 004 OF 016 "If he visits the shrine before the presidential race, that would become a contentious issue. If he goes there after becoming prime minister, his government would be shaken. Therefore, he should choose a realistic option." If ABE weakens his political identity, his popularity may decline. A junior lawmaker close to ABE said, "I've heard that he would express his determination to visit the shrine when he declares his candidacy for the presidential race. Otherwise, he will lose his policy imprint. Foreign Minister Taro Aso, another post-Koizumi contender, indicated that he would refrain from visiting Yasukuni Shrine. He recently said, "National interests take preference over personal interests." Finance Minister Sadakazu Tanigaki, a possible successor to Koizumi, remains unclear about his intentions regarding the Yasukuni issue. He unsuccessfully sought a meeting with a Chinese leader on the sidelines of recent Japan-China finance ministerial talks in Beijing. He is eager to improve relations with China. The existence of Yasuo Fukuda, who has gained public support even though he denies he is a candidate, has induced changes in the stances of Abe, Aso and Tanigaki. Fukuda has made it clear he would repair the strained ties between Japan and China and Japan and South Korea. According to the result of Asahi Shimbun's March poll, 20% of the respondents said that Fukuda would be the suitable person to be the next prime minister, while 47% said ABE would be the best for the post. An anti-Abe lawmaker was happy with the 20% support for Fukuda, saying, "It has now become clear that the Yasukuni issue could be the top issue in the presidential race. Fukuda may yet be able to defeat Abe." (3) Light and shadow of what "Koizumi politics" has created over the past five years - Changing society (part 1): Economy has recovered but many of the weak left behind due to transitional pain, competition TOKYO SHIMBUN (Top play and page 2) (Full) March 26, 2006 Five years ago, with the country increasingly distrustful of politics, the Koizumi administration came into power, winning exuberant support from the public. Its political style has significantly changed the paradigm of the Japanese society. The economy has succeeded in overcoming the long slump that had continued since the burst of the economic bubble around 1990. But the new competition-oriented policies have given rise to such adverse-effects as dividing the society into winners and losers, as well as widening the economic gap between big cities and rural areas. What was "Koizumi politics" anyway? With the approval of the fiscal 2006 budget bill on March 27, political challengers who want to succeed Prime Minister Junichiro Koizumi are likely to pick up steam and start campaigning (for the Liberal Democratic Party presidential election scheduled for September). Before the campaign starts, the Tokyo Shimbun probes into what has actually happened over the past five years. Balance of reforms TOKYO 00001616 005 OF 016 "When will the end of the rainy season be announced?" A somewhat out-of-season remark is beginning to come out from some government officials at Japan's government offices district, Kasumigaseki, Tokyo, since this the time when the cherry trees are beginning to bloom. The Japanese economy, which has suffered from deflation for years, is clearly on a recovery track now -- in terms of economic indicators and corporate performances. Can Prime Minister Koizumi crown the last phase of his tenure before stepping down in September by declaring that Japan's departure from deflation? This question, in part because of its political implications, is drawing attention. At a time when the economy was worsening, the Koizumi administration came into existence waving the banner of structural reform. In the fall of 2002, it adopted a tough policy aimed at speeding up the disposal of sour bank loans, which had crippled the economy. The administration's goal was to halve the ratios of nonperforming loans held by major banks by the end of March 2005. Business leaders and politicians were quick to erupt into anger against the reforms. In the spring of 2003, the Nikkei Stock Average dipped below the 8,000 yen level. Not only there was an increase in the number of bankruptcies but the number of suicides due to financial difficulties also jumped. Moral decay was noticeable, and heinous crimes broke out frequently across the country. But the stock market started to rise once the government made a decision to inject public money into the Resona Group. Leading banks one after the other began to restructure, and distinguished firms like Daiei were driven to the verge of bankruptcy. But owing to their efforts, they achieved the goal of halving their bad loans by the end of March 2005. Banking institutions are likened to the blood of the economy. When their businesses return to normal, the economy, too, comes to life. Big banks have recovered their business performances so remarkably that they are even being criticized now as making too much profit. They are turning around their previous recruitment scheme to an offensive one, departing from the long constraint on hiring new graduates. "It's no good to ask for everything from the government." Late last year Koizumi made this remark in a speech at a symposium hosted by an economic organization. This remark is indeed what Koizumi has insisted on in his effort to promote economic revitalization. Koizumi urged firms to dispose of their nonperforming loans using their own efforts, so he did not implement any notable economic stimulus packages for them. He had no choice but to do so perhaps because of fiscal difficulties on the government side, but this attitude made corporate executives definitely determined to think, "We no longer can depend on the government." Steel, once a star industry, is enjoying an unprecedented boom now. This is the result of their internal reforms by repeating restructuring and streamlining. Looking back on past years, Fumio Sudo, president of the JFE Holdings, a leading steel firm that was born by the merger of NKK Corp. and Kawasaki Steel in September 2002, remarked: "Prime TOKYO 00001616 006 OF 016 Minister Koizumi continued to signal a message that he would destroy old mechanisms. Private firms had the sense of crisis that the only way to survive would be self-reliant efforts. His message and this sense of crisis were both heading for the same direction." On the other hand, there are some who take a cool view that it is incorrect to say that the economy has revived owing to structural reforms, arguing: "(Mr. Koizumi) happened to be in office during the recovery cycle of the economy." But it seems possible to judge him as fulfilling his responsibility to a certain degree for the consequences of the most challenging task for his administration, even though he may be seen as a "lucky prime minister" helped by favorable winds, such as special procurement demand from China. "I hope reforms will be carried out without causing pain," Koizumi said after inspecting in mid-January a small firm manufacturing medical injection needles at Sumida Ward, Tokyo. Firms that survived the pain have succeeded in restructuring their businesses, but firms that were unable to do so were forced to go bankrupt. Middle-aged and older unemployed citizens were walking the streets. "No growth without reforms" -- under this buzzword, some successfully opened up new business opportunities to become winners, but there are many losers, too, who even now remain unable to get out of the mire. The strong enjoy more benefits in a society with widening disparity; Long struggle for employment after corporate restructuring-caused layoffs "People who are here are still lucky. Those who have abandoned their efforts to find a job do not come here." A 58-year-old man who we will call Shoichi Takahashi, made this remark at the job placement agency, Hello Work Shinjuku, located on the 23rd floor of a skyscraper at the West Exit of JR Shinjuku Station, Tokyo. Takahashi every morning from Monday through Saturday travels to the agency from Kasukabe City, Saitama Prefecture, to look for a job. Six years ago, Takahashi worked at a small firm manufacturing mailing machines. He was in charge of quality and production control, but he was forced to resign due to the company's layoff program. Since then he has been looking for a job. Finding a job is not easy for people in their fifties like Takahashi. In most cases, he has been unable to get interviews because he fails to meet the qualifications, for instance, because of his lack of experience or his age. So far Takahashi has twice found a part-time job concerned with quality and production control. But after two weeks after working as a part-timer, he was forced to quit because he did not get along with the regular workers. Looking back on that, Takahashi said: "Other workers kept away from me presumably because I had worked in a similar post in the past." Since then he has been unemployed. With no one to depend on and living alone, he ended up on welfare three years ago. Setting aside the room rent, he has to live on 70,000 yen per month. Families on welfare like Takahashi reached 1,051,676 households TOKYO 00001616 007 OF 016 as of December 2005. The number of such families has jumped from 777,638 households in April 2001, when the Koizumi administration came into existence. Various statistics vividly demonstrate that the public has been hard up for money over the past five years since the Koizumi cabinet was launched. The average income of the head of a family (periodic income excluding bonuses) was 373,321 yen per month in April 2001, but it slipped to 350,099 yen in January 2006. The percentage of households that said, "We have no savings," was 12.4% in 2000 but in 2005, recorded 23.8%, the highest ever. Companies are boosting profits, while households are badly off. Dai-ichi Life Research Institute Senior Economist Naoki Iizuka gives this analysis: "That is the result that companies that were unable to pay the personnel costs pursued restructuring." According to this institute's estimation, the labor distribution rate, which indicates how much companies allocate their operating income and other profits for the personnel expenses, began dropping in the latter half of 2002, the year after the Koizumi administration came into being. In the Oct.-Dec. quarter of 2005, this rate came to 62.8%, the same level immediately after the burst of the economic bubble around 1992. The decline in this rate is negatively affecting those who were left out of the benefits of the reforms like Takahashi. It is not easy for them to rejoin the game. However, responding to the criticism that (his reforms) are widening social disparity, Prime Minister Junichiro Koizumi argues: "(Disparity) is not necessarily a bad thing." "Even though the gap is widened, if the minimum level of safety net is prepared, it's not that hard for capable persons to get a bigger slice of the pie," he adds. What is felt from Koizumi's remarks is the nature of his reforms that in order to attain the goal of economic growth, it is an unavoidable choice to give a boost first to the strong and leave measures for the weak on the back burner. Asked about the so-called Koizumi reforms, Takahashi said: "I don't agree with them. The disparity is widening. It seems our society is getting worse." (4) Light and shadow of Koizumi politics-- five years of accomplishments (part 2): Regional disparity - urban areas enjoying prosperity, while regional communities stagnant TOKYO SHIMBUN (Page 1) (Excerpts) March 27, 2006 Omotesando Hills (a huge multipurpose complex consisting of six floors above ground and six below),the newest fashionable shopping site in Tokyo, which opened in February, is crowded with as many as 60,000 to 70,000 shoppers on weekends. There are 93 tenant shops and restaurants in the complex. Among the tenants, a coffee shop sells a chocolate drink at almost 2,000 yen and another shop carries pet bugs, the prices of one species being more than 100,000 yen. Despite such expensive products, sales of the shopping mall for the first month after the opening exceeded 1.4 times the estimated level. A spokesman of the management TOKYO 00001616 008 OF 016 office said excitedly, "We can actually feel the economic recovery." The downtown sections of Tokyo have been exploding in a rush of redevelopment projects since 2001. Whenever new buildings were built, Prime Minister Junichiro Koizumi visited them -- New Marunouchi Building (Marubiru),Shiodome Shiosite and Roppongi Hills. Koizumi said, "Such good buildings are being built and they are always crowded with many people. I cannot believe Japan's economy is in a slump." However, there are few shoppers even in the evening shopping in the downtown area in front of the US base in the city of Misawa in Aomori Prefecture, where the local residents suffer from the noise of US aircraft. Many shops in the one-kilometer-long shopping street have closed their shutters. In addition to the continued business slump, the reason is because many people go to large-scale retail shops built in the suburbs of Misawa City. As part of fiscal reconstruction, Prime Minister Koizumi has drastically cut public works projects since he assumed office. Koizumi's fiscal reconstruction drive has hit hard Aomori, a prefecture whose economy greatly depends on public projects. The budget for public works projects for fiscal 2006 in that prefecture is only 55%of what it was in 2001 when Koizumi assumed office. Another serious problem is the drop in the number of private housing starts, including condominiums. The regional economic slump greatly affects employment. Aomori Prefecture's active job opening to applicant ratio for 2005 was 0.40, marking the lowest rate across the country for four years in a row. There are obvious gaps with the large cities such as the urbanized Aichi Prefecture's 1.67, and Tokyo's 1.38. Aomori's jobless rate was highest for three consecutive years until last year. The Koizumi government has promoted the so-called "trinity reform" that would rearrange the taxation and fiscal relations between the central and local governments. Regional areas where there are a few large companies, however, have suffered from a reduction in state subsidies. The government has reduced its subsidies to Aomori Prefecture by 37.6 billion yen over the past three years starting in fiscal ¶2004. Therefore, the budgets for commerce and industry and agriculture-forestry-fisheries industries were drastically cut. The prefecture was able to use freely only 400 million yen in tax revenues. While large cities enjoy prosperity, regional areas are suffering even worse than ever from the economic slump. (5) USFJ realignment: Japan should not flinch from negotiating relocation cost ASAHI (Page 15) (Full) March 25, 2006 TOKYO 00001616 009 OF 016 Kazuhisa Ogawa, military analyst Japan and the United States are now about to enter into the final phase of intergovernmental coordination over the realignment of US forces in Japan. One of the major issues pending in the talks is where to relocate the heliport functions of the US Marine Corps' Futenma airfield in Okinawa Prefecture. Another big issue is how to share the cost of moving US Marines from Okinawa to Guam. Senior officials from the Japanese and US governments met early this month. On that occasion, the United States asked Japan to pay 75% of the Guam relocation cost estimated at 10 billion dollars, or approximately 1.18 trillion yen, in order for the Okinawa-based US Marines to move 8,000 troops. However, the Japanese government deemed it impossible to foot such a bill in a March 16 meeting of cabinet ministers. All eyes are now on h,Q_Qu#BjT^9Qj9!Xfan to shoulder an appropriate burden for it was Japan that first proposed alleviating Okinawa's burden of hosting US military bases, while securing its alliance with the United States. In April 1996, the Japanese and US governments reached an agreement to return Futenma airfield. Since then, I have suggested the need for the Japanese government to resolve other US military base issues in Okinawa and work out a package of drastic economic stimulus measures for Okinawa's self- sustainability. In Okinawa, the presence of US Marine ground troops has been the object of local resentment. I have advocated readying them in the rear for rapid deployment instead of stationing them on that island prefecture, while thinking to myself that Japan should pay for it in an appropriate way. Their transferal to Guam is based on a similar idea. Even so, what if Japan refuses Uncle Sam? That's always been a matter of primary concern to Tokyo. Japanese government officials might be thinking to themselves that in that case, the United States might even abrogate its security treaty with Japan. If they negotiate with their US counterparts while thinking that way, Japan would have to pay as much money as the United States wants. There's no doubt that the talks will be settled with the United States making some concessions. However, if Japan underlines its national interests based on objective views as noted below, it should be possible for Japan to hold down its cost sharing to below 50%. Japan's diplomatic skills will now be truly tested. Even among US allies, Japan is situated in the most strategically important place. Washington has always feared that Tokyo might call off the bilateral alliance. In fact, the United States has always been worried about Japanese sensitivities every time there has been a crime or an accident involving US military personnel. It's a far cry from its attitude toward other allies in similar incidents. Japan has become even more important in the US military's global transformation intended to deal with newly emerging threats following the 9-11 terrorist attacks. Aside from how to interpret the scope of the Far East described in the Japan-US Security Treaty, the Japanese archipelago has capabilities to back up US military operations in the hemisphere ranging from Hawaii to the Cape of Good Hope on the southern extremity of Africa, and it forms a strategic base like the bases TOKYO 00001616 010 OF 016 on the US mainland. The Japanese people currently shoulder an annual burden of approximately 600 billion yen for the stationing of US forces in Japan, including 240 billion yen from its omoiyari yosan or literally "sympathy budget" slot. This host nation support financially buttresses the US forces in Japan. However, there is an even more important factor for the United States. Japan is the only country that can provide strategic bases in this hemisphere. US forces deploying on a massive scale in this sphere are equipped with state-of-the-art weapons. Only a country with industrial, technological, and financial power at the same level with the United States can support their presence and can remain a strategic linchpin for them in the region. There can be no country but Japan to meet that requirement. In the event Japan calls off the alliance, the United States, which cannot expect to secure any alternatives for its strategic bases in Japan, would lose about 80% of its power projection capabilities. If so, the United States can no longer remain the only superpower. Russia and China wouldn't comply with the United States. Eventually, the United States will be just a lonely big power. Indeed, Japan has much to lose should it dissolve the alliance. In this case, Japan would need to make up for the US military presence with its own military capabilities. To do so, Japan will have to spend a huge amount of money. Furthermore, such an option is even likely to result in isolating Japan in the international community. However, the United States will lose much more and can no longer remain the world leader. Based on this objective perspective, Japan should display its diplomatic strength without flinching and should set forth its own standpoints. (6) Iwakuni and Okinawa plebiscites exhibited need for government to offer explanations fairly and squarely; Sources of distrust must not be expanded MAINICHI (Page 7) (Abridged slightly) March 22, 2006 By Nakae Ueno, Mainichi Shimbun Western News Department Iwakuni City, Yamaguchi Prefecture, conducted a plebiscite on March 12 in which 87% of the voters, or 51% of all the eligible voters, said "no" to a plan to relocate US carrier-borne aircraft to the US Marine Corps' Iwakuni Air Station in the city. Seeing the results, I said to myself, "Will the local residents be let down for the third time?" I have covered Nago, Okinawa Prefecture, and Iwakuni since Tokyo and Washington adopted last October an interim report on the realignment of US forces in Japan. I strongly feel that if the government intends to push ahead with US force realignment believing that the Japan-US security system has entered a new age, it needs to spell out why such is necessary to the people openly and squarely. Prior to the Iwakuni poll, two local plebiscites took place in Japan: one in 1996 in Okinawa over the propriety to realign and downsize bases in the prefecture, and another one in 1997 in Nago over whether to approve the construction of an alternate heliport for Futenma Air Station. In both cases, residents said "no" to the US bases. But immediately after the prefectural referendum, then Okinawa Gov. Masahide Ota refused the prime minister's order to sign papers necessary to force landowners in the prefecture to TOKYO 00001616 011 OF 016 continue to lease land to the US military. Then Nago Mayor Tetsuya Higa also announced shortly after the local poll that his city would accept the construction of the heliport. Their steps drew criticism as conflicting with the popular will. I got a hunch from then Iwakuni Mayor Katsusuke Ihara's four press conferences that the local residents would be "betrayed" for the third time. Ihara's statements lacked coherence. He described the plebiscite as a golden opportunity for Iwakuni to determine its future course, while indicating that the responsibility for national defense rested with the central government. Asked if Ihara would be able to negotiate with the central government during his term of office, he simply said, "I will convey local views to the central government." Ihara resigned from office on March 19, the day before Iwakuni's merger with seven neighboring municipalities. Whether to accept the carrier-borne unit has been a campaign issue for the April 23 mayoral election for the new city. Until then, no one will be in charge of talks with the central government. Tokyo intends to produce a US force realignment final report by the end of this month. In other words, Iwakuni's popular will for a dialogue with the central government would be left up in the air. What was the Iwakuni plebiscite all about? It is undeniable, however, that the two previous plebiscites prevented the base issue, as symbolized by the Futenma relocation, from moving forward. In that context, I find Ihara's strategy somewhat agreeable. Ihara, an opponent of the relocation plan, proposed the plebiscite to challenge business circles, which were eager to accept the relocation plan in anticipation of a hefty economic revitalization package from the government. Ihara continued to urge residents to go to the polls knowing that chances for rejecting the relocation would grow with voter turnout in excess of 50 percent. The Iwakuni Chamber of Commerce and Industry (ICCI) led by Tokumitsu Sasagawa adopted a resolution to entice some Atsugi base functions to the city conditioned on the construction of an additional runway and other factors last June when Iwakuni, the city assembly, and the seven neighboring municipalities were in agreement to block the relocation. An ICCI executive blamed then ICCI President Sasagawa's ambition. In his New Year statement last year, Sasagawa painted a rosy picture with Okinawa in mind, saying Iwakuni would benefit tremendously from its acceptance of carrier-borne jets. The government provided Nago and other municipalities in the northern part of Okinawa with economic stimulus measures in return for accepting the alternate facility for Futenma Air Station. But the efficacy of such measures is not clear. One local head noted, "The Okinawa Summit was held, and there were many other projects, but all those were short-lived, like a flash in the pan." Job-creating US bases can be helpful to revitalize local economies on one hand, and they could also dampen local communities' independent efforts to foster industries on the other. The US military's strict restrictions on the height of smokestacks and other facilities have driven major plants away from the Iwakuni area. A strong sense of lost earnings is looming TOKYO 00001616 012 OF 016 over Iwakuni, where people do not get any military land rent in stark contrast to Okinawa. It is easy for the central government to dismiss the outcome of the Iwakuni poll as regional arrogance. But the government should give thought to the weight the 51% of the eligible voters carries. I believe many people feel uneasy about being embroiled in the realignment of US forces in Japan that is said to reflect qualitative change in the Japan-US security system. They also resent being exposed to greater noise levels. A man in his 60s who accepts the relocation plan commented, "The plebiscite has awakened those citizens who may have had doubts about the existence of the base." If the central government firmly believes that US force realignment is necessary for the future of Japan, it should explain its reasons sincerely without taking advantage of local expectations for economic packages. Otherwise, sources of distrust in the Japan-US security system would spread across Japan. (7) Beef imports from Mexico, China gradually increasing, though BSE risk remains unknown SANKEI (Page 5) (Excerpts) March 28, 2006 Mexican and Chinese beef imports have gradually been increasing recently. In these countries, even a single case of BSE has not been discovered. Some experts, though, warn that the BSE risk of Mexican beef is as high as American beef. Japan has imported far smaller volumes of beef from Mexico and China than imports from Australia, but restaurant chains have begun to use beef imported from the two countries. Japan and the US are scheduled to hold their expert talks this week on the recent incident in which a specified risk material (SRM) was found in a US veal shipment to Japan. Isn't there any blind spot in the safety measures our nation has taken to prevent BSE at the water's edge? Japan imported about 460,000 tons of beef in 2005, of which 410,000 tons came from Australia, accounting for 90% of all. Those from Australia and New Zealand make up 98%. In 2003, when the first case of BSE was found in the US, Japan imported 0.2 tons of beef from Mexico. As the ban on US beef imports has dragged on, however, the volume increased to 1,800 tons in 2004 and 6,700 tons in 2005. This figure is 30,000 times larger than the 0.2 tons. The volume of imports from China also grew from 17 tons in 2003 to 27 tons in 2005. An industry source made the following analysis on the increase of Mexican beef imports: "there certainly is the aspect of covering the drops in imports from the US, but the taste of Mexican beef is similar to American beef." Japan has attached the condition of removing SRMs but no threshold age for importing beef from Mexico and China, taking into consideration the fact that no case of BSE has been reported there. But a prion panel member has begun to suggest: "Mexico and the US are connected by land, so the BSE risk of Mexican beef, like TOKYO 00001616 013 OF 016 American and Canadian beef, should not be disregarded." Immediately after the first case of BSE was announced in the US, the US Department of Agriculture set up a team of experts from Britain, Switzerland, New Zealand, and other countries to examine its safeguard measures. The international survey team issued a report with unexpectedly severe comments: "It is impossible to draw a line between contaminated districts and clean districts in the North American area. It is necessary to work out measures that cover all the member countries of the North America Free Trade Agreement (NAFTA),including Mexico." A survey team of Minshuto (Democratic Party of Japan) members also noted in its report: "About 900,000 head of cattle, beef, and animal feed have been traded annually between the US and Mexico." As if to prove this, beef with the label bearing the mark "produced in America" was found in a shipment from Mexico to South Korea in July 2004. Following this, South Korea banned beef imports from Mexico. Regarding Chinese beef, as well, there are many uncertain factors. According to the international survey team, meat-and- bone meal that had been produced in large quantities in the US until the first case of BSE was confirmed was exported to China, Southeast Asia, and Latin America. Another expert commented: "A BSE-infected case could be discovered anytime in China." Japan requires all cows for human consumption to be tested. The US has increased the number of cattle subject to inspection to 670,000 since June 2004. The number of inspected cows was about 3,500 in Mexico and about 3,500 in China both in 2004. A virus expert said: "(The two countries) are negative about disclosing information on infection diseases. The countries are black boxes." The Cabinet Office's Food Safety Commission (FSC) will launch a country-specific BSE risk survey. Some give a warning particularly about Mexico and China, a member remarking: "No case of BSE has been reported, but there may be cattle infected with the diseased." Reflecting such a view, a prion panel - chaired by Yasuhiro Yoshikawa - will collect data related to production, inspection, and distribution, and will examine to see the safety of Mexican and Chinese beef. Since each nation has a different inspection system, it is difficult to compare the BSE risk of their beef in an objective way. When Japan resumed US beef imports, Japan attached the conditions of importing only beef from cattle 20 months of age or younger and removing all SMRs. For Mexican beef, Japan attaches only the SMR-removal condition. A survey team member said: "The risk of Mexican beef is higher than American beef." Restaurant chains have begun to use Mexican or Chinese beef, keeping in mind the risk of BSE infection of US beef. Focusing on this recent trend, Chairman Yoshikawa said: "We must not ignore BSE risk on humans." In assessing BSE risk, the FSC needs to obtain data from the countries concerned, but it is uncertain whether Mexico and China will respond to its call, although the US and Canada positively responded in hopes of resuming exports. An expert panel member was overheard saying: "It would be TOKYO 00001616 014 OF 016 impossible to make assessments due to a lack of data. Whether to continue imports (from Mexico and China) even under such a situation will be decided not by scientists but by the government in charge of risk management." Another member, though, called for caution, remarking: "If the risk of BSE remains unknown, it is rational to suspend imports." An Agriculture, Forestry and Fisheries Ministry source said: "It is difficult to ban imports under international rules only for the reason of there being suspicions." Given this, the government has required meat-processing plants in Mexico to submit the certificates of origin and has conducted sampling tests on more than 5% of imported beef from cattle grown in Mexico and carrying rough records. Restaurant chains that use Mexican and Chinese beef are calling on the government to strengthen its quarantine system. A member of the Japan Food Service Association commented: "It will be impossible to assess BSE risk because (Mexico and China) are unlikely to provide data. It is essential for the government to thoroughly manage bilateral trade." A restaurant industry source familiar with meat-eating habits in North America assailed: "US has invested capital and technology in the Mexican cattle industry, but the money and technology have not necessarily reached the processes of production, processing, and distribution. ... It is more important for the government to strengthen coastal examinations, instead of adding fuel to public concern and distrust by making a fuss, only out of scientists' curiosity and without confirming if such assertions are true or not." (8) BSE risk: Structural defects found in US inspection system; Safety procedures must be observed to reduce BSE risk SANKEI (Page 7) (Slightly abridged) March 26, 2006 Question by a female reader in Kanagawa Prefecture: Case after case of BSE infection among Japanese cattle has been discovered here. If Japan resumes US beef imports again, is the BSE risk higher in the US product than that in Japanese beef? Should a person eat beef from a BSE-infected cow contract the Variant Creutzfeldt-Jakob Disease (vCJD),who will assume the responsibility? Answer: Both humans and animals can be infected with BSE. Should a person eat specified risk materials (SRM),such as the brain and spinal cord, from infected cattle, that person will die of vCJD after showing typical clinical symptoms, such as the spongy appearance of the brain tissue, disturbance in perception, and walking difficulty. As of now, 169 cases of vCJD have been reported across the world. Of them, 154 cases occurred in Britain. In Japan, the first patient of this disease was confirmed in 2005. It was learned that the patient (who died in 2004) had been in Britain for about one month around 1989. He is considered to have contacted the disease in that country. TOKYO 00001616 015 OF 016 Though vCJD is a dreadful disease, it might not be necessary to become excessively concerned about catching that disease. The Cabinet Office's Food Safety Commission (FSC) estimates that vCJD is extremely rare, and a simulation predicts that one person or less in Japan might have picked up the disease from eating domestic beef. Scientific assessment difficult Is there any difference in the level of BSE risk between American and Japanese beef? The Agriculture, Forestry, Fisheries Ministry (MAFF) and the Health, Labor and Welfare Ministry (MHLW) asked the FSC in May 2005 to make equivalence assessments of the BSE risk of US and Japanese beef. As a result, the government set the following conditions for Japan to resume US beef imports: (1) only beef from calves 20 months of age or younger should be imported; (2) Japan's SRM standards should be adopted, although the US has different standards. The prion expert study group (chaired by Yasuhiro Yoshikawa) has finalized a report of recommendations. The report noted that since much remains unknown about the quality and volume of data on US beef, "it is difficult to make scientific equivalent assessments." But it concluded that as long as the conditions were met, "the difference in the levels of BSE risk of Japanese and US beef is small." The panel gives this explanation: Even if a cow younger than 20 months of age is infected with BSE, only a small amount of agents causing the disease are accumulated in it; so under the current inspection method, the cow will test negative. There is also no possibility of the disease being contracted even if one eats meat. It concluded that as long as SRM are properly removed in the slaughtering process; imported beef will have little BSE risk on humans. This means the risk of US beef imported to Japan based on severe import conditions is far smaller than that of beef consumed in the US, and the risk of imported beef is almost the same level as that of domestic beef. Based on this view, Chairman Yoshikawa stated: "Should a person who has never left Japan ate American beef and then developed the disease, the responsibility would rest with those who assessed the risk of US beef." He thus referred to the responsibility of the expert panel if the case of vCJD is found in Japan. Yoshikawa, though, added: "It is inconceivable that such a case will happen." Separated process necessary Japan reinstated its ban on US beef imports, following the discovery of vertebral columns in a US veal shipment to Japan this January. Bones were also found in a shipment to Hong Kong in March. The meat-processing facility that shipped the banned material to Hong Kong had cleared Japanese government inspection. This incident posed questions on not only the US management system but also Japan's inspection system. TOKYO 00001616 016 OF 016 In response to the US violations in its beef shipments, Chairman Yoshikawa commented coldly: "These incidents are apparently the United States' unilateral violations of our contract that are on a different level from risk assessments by scientists. I am dumbfounded by such incidents, rather than feeling outrage." Some point out that behind the United States' ineligible shipments, there are faults in its processing system. In exporting beef to Japan, American plants have to carry out meat processing based on both Japanese and American. Cattle 30 months of age or younger are separated from other cattle first. Later, cattle 20 months of age bound for Japan are separated from them. In addition, Japan and the US have adopted different SRM standards. Based on the view that many mistakes will unavoidably be made under such a processing system, Yoshikawa has proposed these preventive measures to be taken by the US: (1) The process of cattle bound for Japan and that for the US should be separated; and (2) Japan should reopen its market only to beef produced at facilities authorized by Japanese inspectors. Yoshikawa added: "Exercising the right to choose beef upon seeing country-of-origin markings is also one of the risk assessments." SCHIEFFER