UNCLAS SECTION 01 OF 15 TOKYO 002445

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 05/08/06


Index:

1) Top headlines
2) Editorials
Prime Minister's weekend schedule: Returned from overseas tour

Koizumi diplomacy:
3) Swedish premier tells Prime Minister Koizumi during
Stockholm meeting that Japan should improve relations with China
4) Koizumi's Africa tour, carried out without a hitch, in sharp
contrast to lack of policy to improve strained relations with
neighboring Asian countries

Defense and security issues:
5) ASDF considering transport of goods in and out of Baghdad
6) Deputy Undersecretary of Defense Lawless says the 3 trillion
yen cited Japan's share of USFJ realignment cost was not a hard
figure
7) Defense chief Nukaga puts Japan's share of USDF realignment
cost at less than 2 trillion yen
8) Opposition parties blast the final USFJ realignment
agreement
9) Local community finds it may have to bear 40 billion yen in
costs linked to reversion of part of USFJ's Sagami Depot
10) Paying for Guam relocations hits Japan's policy bank JBIC
just when it is undergoing drastic reform
11) US, Japanese defense chiefs agree to consider new defense
cooperation scheme
12) Government to propose at next month's summit meeting an
updating of joint US-Japan operations plans to meet contingencies
13) US, Japan to engage in talks on specific aspects of defense
cooperation
14) Nukaga expects Cabinet decision this month on Futenma
relocation, aiming at first obtaining Okinawa Gov. Inamine's
concurrence
15) Gov. Inamine positively evaluates the USFJ realignment

agreement, but seeks a temporary heliport be established at Camp
Schwab instead of current plan

16) Iwakuni mayor tells defense vice minister that he cannot go
along with the realignment plan to relocate carrier-based
aircraft to Iwakuni base
17) LDP's Kyuma in Washington states that Japan's three weapons-
export principles can be applied flexibly
18) GSDF jointly trained with US forces on riot control

Beef issue:
19) In meeting with Foreign Minister Aso, Secretary of State
Rice urges early restart of US beef imports
20) Farm minister Nakagawa concerned about USDA reducing BSE
inspections of cattle, urges US to reverse policy
21) US pressure on Japan to reopen beef market intensifies

Articles:

1) TOP HEADLINES

Asahi:
Ministry of Land, Infrastructure, and Transport to suspend
operations of truck, bus, and taxi companies if they commit
serious road law violations


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Mainichi:
Universities recruiting high school students earlier

Yomiuri:
Government to issue certificates for business people obtaining
college credits to help them get better jobs

Nihon Keizai:
Government considering offering tax incentives to individuals,
firms filing tax reports via Internet

Sankei:
Number of "Net supermarkets" expanding

Tokyo Shimbun:
Two-thirds of public corporations hired retired senior
bureaucrats in fiscal 2005

2) EDITORIALS

Asahi:
(1) Government should come up with effective comprehensive
strategy for tackling cancer
(2) Nepalese should decide on whether to keep or abolish the
royal family

Mainichi:
(1) Strengthening of information system: Failure of Tokyo Stock
Exchange is a lesson
(2) Prevent biotechnology from being used to split mankind

Yomiuri:
(1) White Paper on small and medium enterprises: Prepare for
mass retirements of older generations
(2) Nuclear power plants and earthquakes: Quake-resistant
nuclear power plants should be built

Nihon Keizai:
(1) Create vigorous schools through decentralization and
liberalization

Sankei:
(1) Grants to local governments: Allocation rate is not sacred
(2) Allergy to cedar pollen: Cure the allergy by eating rice

Tokyo Shimbun:
(1) Conspiracy bill: Ruling parties should not overpower the
opposition with their numbers
(2) China's environmental problem: China should promote
cooperation with neighboring countries

3) During summit talks, Sweden urges Japan to improve relations
with China

TOKYO SHIMBUN (Page 2) (Full)
May 5, 2006

By Shoichi Takayama, Stockholm

Prime Minister Junichiro Koizumi on the morning of May 3 (night
of the same day, Japan time) met with Swedish Prime Minister
Persson at the Swedish prime minister's office in Stockholm.

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During the talks, Persson urged Koizumi to improve relations with
China: "Japan and China are both very important countries in
Asia. It's important for the two nations to develop relations in
a friendly manner."

Koizumi told Persson: "I am an advocate for friendship with
China. Because of one issue, the Chinese leader has now refused
to meet with the Japanese leader, but I am ready to hold a summit
meeting with China at anytime." Speaking of his visits to
Yasukuni Shrine, against which China has objected, Koizumi
explained: "I visit there out of a desire for peace."

Koizumi gave an account of the abductions of Japanese nationals
by North Korea. Persson indicated his intention to cooperate to
resolve the issue, telling Koizumi: "Sweden has a strong interest
in human rights issues. We have diplomatic ties with North Korea
and have opportunities to meet with (North Korean leaders). We'd
like to offer as much cooperation as possible to you."

The two leaders agreed on the need to reform the United Nations.
But Persson did not make clear whether he would endorse Japan's
bid for a permanent seat on the UN Security Council.

4) Prime Minister's tour of Africa, Northern Europe gets passing
mark, demonstrating friendly relations with faraway countries and
a lack of measures to improve ties with neighboring countries

TOKYO SHIMBUN (Page 5) (Full)
May 5, 2006

Shoichi Takayama, Stockholm

Winding up his tour of three countries in Africa and Northern
Europe on May 4, Prime Minister Koizumi will return home on May

5. Through the tour, he has achieved some positive results
regarding mid- and long-term tasks, such as strengthening ties
with the African Union (AU). But he has put urgent challenges,
including improving ties with China and South Korea, on the
backburner.

Koizumi visited Ethiopia and Ghana in Africa. During his stay in
the two countries, Koizumi mentioned Japan's bid to get permanent
membership on the United Nations Security Council and obtained AU
Chairman Konare's pledge that "all countries in Africa support"
Japan's bid, though this may have been lip service.

Koizumi suddenly suggested establishing a Hideyo Noguchi award to
honor biomedical researchers in Africa apparently in a bid to
highlight his efforts to strengthen relations with Africa.

In Sweden, Koizumi exchanged views on common tasks facing
advanced nations, such as how to deal with the falling birthrate.

But there are no pending issues between Japan and these
countries. As an incumbent prime minister, Koizumi visited the
three countries for the first time. "The tour itself of these
three countries was seen as achievement," according to a
government official.

On the other hand, many diplomatic issues that need to be tackled
quickly have been left in limbo.


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The foremost one is Japan's Asia diplomacy. There are no
prospects for improving relations with China and South Korea,
which are both criticizing Koizumi's repeated visits to Yasukuni
Shrine. Mutual visits between the leaders of Japan and China and
the shuttle diplomacy between the leaders of Japan and South
Korea have been interrupted. Beijing and Seoul appear farther
away from Japan than Africa and North Europe.

The same holds true of the North Korean issue. Koizumi and North
Korean leader Kim Jong Il exchanged the Pyongyang Declaration in
September 2002. The two countries appeared to be moving forward
toward resolving the abduction issue and normalizing diplomatic
ties, but since then there has been no major progress, except
that some of the abduction victims and their family members
returned home.

Koizumi decided to dispatch Self-Defense Forces (SDF) troops to
Iraq despite objections at home. He wanted to pull out the
dispatched troops while he is in office, but given the chaotic
situation in Iraq, he has no choice but to delay a withdrawal of
the SDF until the fall or later. Koizumi was once keen about
resolving the Northern Territories issue, but there has been no
progress.

How will Koizumi tackle these pending issues during the remaining
five months before he steps down? Will he pass them all on to his
successor? His responsibility is now called into question.

5) Aso expresses Japan's willingness to consider extending ASDF
activities to cover Baghdad if there is a request from UN

NIHON KEIZAI (Top play) (Excerpts)
Evening, May 6, 2006

Toyofumi Amano, Brussels

Foreign Minister Taro Aso, now traveling Europe, gave an
interview to the Nihon Keizai Shimbun at a hotel in Brussels on
the night of May 4. Touching on the Kuwait-based Air Self-Defense
Force's (ASDF) activities for the reconstruction of Iraq, Aso
revealed the government's plan to consider airlifting personnel
and supplies to Baghdad International Airport, saying, "If there
is a strong request from the United Nations for airlifting
supplies and personnel to Baghdad, there won't be any problem if
Japan complies with it." It was the first case for a Japanese
cabinet minister to refer to expanding flight routes in Iraq.

The ASDF, which is now based at Ali Al Salem Air Base in Kuwait,
has been airlifting supplies to Tallil Airport for Ground Self-
Defense Force troops in the southern Iraqi city of Samawah.

The US military has repeatedly asked for the ASDF's transport
activities to cover Baghdad to meet the high demand there, but
the ASDF rejected the requests citing the unstable security
situation. A decision to cover Baghdad would mean the ASDF's
shift of emphasis from reconstruction assistance to logistical
support for the multinational forces' security activities.

Aso explained why the government would consider an expansion of
the ASDF's activities to include Baghdad this way:

"Over the last two years or so, there have been no terrorist or

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rocket-propelled grenade attacks at Baghdad International
Airport. The ASDF's C130 transport planes are capable of
countering guided missiles. They possess better countermeasures
than those of other countries."

Aso added, however, that there has been no formal request from
the UN for the ASDF's activities to cover Baghdad.

6) Japan's 3 trillion yen share not a detailed estimate: Lawless

YOMIURI (Page 2) (Full)
May 4, 2006

WASHINGTON-US Deputy Under Secretary of Defense Lawless met with
Fumio Kyuma, chairman of the ruling Liberal Democratic Party's
executive board, and other ruling coalition delegates on May 2 at
the Pentagon. In his recent press remarks, Lawless said Japan's
share of costs for the realignment of US forces in Japan would be
approximately 26 billion dollars, equivalent to 2.886 trillion
yen in the fiscal 2006 budget. The figure, however, was not based
on a detailed estimate, Lawless told the delegates. With this, he
admitted that the grounds for the amount were insufficient.

"In Japan, all eyes were on the cost of relocating Okinawa-based
Marines to Guam," Lawless said. "But," he added, "I wanted to
show that much more spending will be needed for the force
realignment."

On April 25, Lawless met the press and then explained that Japan
would pay 6.09 billion dollars-equivalent to 59% of the cost of
Marine relocation from Okinawa to Guam-and would additionally pay
about 20 billion dollars for the realignment of US forces in
Japan. In the meantime, Japan has raised questions about the
grounds for the estimated amount of money.

7) Japan, US defense chiefs agree to study new framework for
bilateral defense cooperation

YOMIURI (Page 2) (Full)
May 4, 2006

WASHINGTON-Visiting Defense Agency Director General Nukaga met
with US Secretary of Defense Rumsfeld for about 30 minutes at the
Pentagon. In the meeting, Nukaga and Rumsfeld agreed to study a
new framework for bilateral defense cooperation in place of the
current Japan-US defense cooperation guidelines.

"We've seen unexpected events following our 1996 joint
declaration on security," Nukaga said in the meeting. "It's
important to make steady studies to deal with new developments,"
he noted, adding, "We'll need to show the overarching objectives
and ideals of our alliance, and that will lead to transparency."
With this, Nukaga stressed the necessity of a new framework.

"I know how important it is, so it's all right to talk," Rumsfeld
responded. At the same time, Rumsfeld also said, "We're now in
the process of talking about specific defense cooperation between
our two countries, and it's important to carry it out in a steady
way." With this, the Pentagon chief noted that Japan and the
United States, on the sidelines of talks on bilateral defense
cooperation, should also go ahead with bilateral defense planning
in anticipation of emergencies in Japan and mutual cooperation

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planning in anticipation of emergencies in areas surrounding
Japan.

On May 1, Japan and the United States held a "two-plus-two"
meeting of their intergovernmental security consultative
committee and then finalized a report regarding the realignment
of US forces in Japan. "In order to implement the agreement, the
Japanese government will make a cabinet decision," Nukaga said.
"The Japanese government will also coordinate with local
governments and will take budgetary measures," he also said,
adding, "We will make efforts to obtain public understanding."

Another issue in the meeting was whether to withdraw Ground Self-
Defense Force troops currently deployed in Iraq. "We'd like to
consider it while factoring in the local political process,
security situation, and reconstruction." Rumsfeld showed his
understanding.

8) Opposition parties criticize final agreement on USFJ
realignment

MAINICHI (Page 5) (Full)
May 3, 2006

Opposition parties on May 2 released statements criticizing the
final agreement on the realignment of US forces in Japan reached
between the governments of Japan and the United States. The
opposition intends to pursue the government's accountability
regarding the grounds for Japan's share of the cost for
realigning the US military.

Takeaki Matsumoto, chairman of the largest opposition party
Minshuto's (Democratic Party of Japan) Policy Research Committee,
stated: "The public will have to bear an enormous burden. The
government has a significant responsibility." He gave a modicum
of praise to a plan of relocating US Marines from Okinawa to
Guam, saying, "The agreement would reduce some of Japan's
burden." He, however, argued, "Fundamental discussions were not
conducted on whether Japan should bear the costs, and the process
of negotiations was unclear."

Japanese Communist Party Policy Committee Chairman Akira Koike
sad:

"Japan and the United States have agreed to expand and strengthen
the Japan-US military alliance on a global scale. The two
countries have also agreed to greatly change the alliance to an
aggressive one."

Social Democratic Party Secretary General Seiji Mataichi stated:
"The final accord will substantially change Japan's security
policy exceeding the Japan-US Security Treaty. Therefore, we
cannot accept it."

9) Local government reacting to central government's demand for
40 billion yen payment to take back land used for US Army Sagami
Depot

MAINICHI (Top Play) (Excerpts)
May 3, 2006

The US military has agreed to return to Japan 17 hectares of the

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land now used for US Army Sagami Depot in Sagamihara City,
Kanagawa Prefecture. If the Sagamihara municipal government
redevelops the returned land, it will be required to pay 30 to 40
billion yen to the central government. The municipal government
intends to ask the central government to transfer it free of
charge, claiming that the city has greatly suffered from the
presence of the base for nearly 70 years since the rule of the
Imperial Japanese Army. But the Finance Ministry, keeping the
current financial difficulties in mind, wants to allow the local
government to use the land based on an onerous contract. One
ministry official said: "There is the possibility that if the
city is unable to purchase the land, the government might sell it
to the private sector."

Of the 214 hectares of the Sagami General Depot, the first-class
area with a space of 17 hectares in front of JR Sagami Station
will be returned to Japan. The central government possesses most
of the area now used for the depot. The Imperial Japanese Army
used it as a plant to manufacture tanks and bombshells beginning
in 1938, but the US military took over the land in 1949. The
municipal government began to call on the US to return the land
about 40 years ago. In response, the US has finally agreed to the
request.

The local government hopes to redevelop the land in front of the
station. According to the Finance Ministry, however, it is
required as a general rule for the central government to transfer
property returned from the US military to base-housing local
governments for value based on market rates. Should a road be
constructed, the land will be transferred free of charge, but if
the land is used for a park, the local government concerned will
be asked to pay for one-third of the area. According to its
estimate, the Sagamihara government has worked out 30 to 40
billion yen as the acquisition fee. The local government has
already paid a total of 18.4 billion yen to the central
government for 37.9 hectares of land vacated by the US military.

10) Plan to finance US Marine relocation to Guam under JBIC loan
arrangement may affect reforms of government-affiliated financial
institutions

SANKEI (Page 2) (Excerpts)
May 7, 2006

The government has decided to finance its share of the total cost
for relocating Okinawa-based Marines to Guam with loans from the
Japan Bank for International Corporation (JBIC). This plan,
though, goes against its policy direction of scaling down the
JBIC as part of its planned streamlining of government-affiliated
financial institutions. It is also uncertain whether the
government will be able to submit to the current Diet session
legislation to make it possible to earmark money for the
realignment of US forces in Japan. The government has been torn
between administrative reforms and financial assistance for the
US military.

The government has decided to pay approximately 700 billion yen
as its share of the total Guam relocation cost. Of the amount, it
will finance about 380 billion yen in costs for constructing
housing for troops' families and infrastructures with loans and
investments. Most of them will be funded by loans from JBIC.


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The administrative reform bills, which the government has deemed
as the most important legislation in the current Diet session,
was passed the House of Representatives in mid-April and is now
under deliberations at the House of Councillors. The legislation
proposes that the international financing section should be
separated from JBIC and be merged with four banks into a new
policy finance institution in fiscal 2008. This legislation also
comes up with the numerical target of halving the total loans
outstanding of public financial institutions in terms of gross
domestic product (GDP) by the end of fiscal 2008, based on the
principle of forming a simple, effective government.

Japan, however, is urged to take an emergency step to finance its
huge share of the cost of US Marines to Guam. The government is
willing to set up a special account in JBIC to offer loans only
for the Guam relocation plan and place it outside the reach of
the targeted reduction of the loans outstanding.

To do so, the government will have to make legal preparations to
ensure JBIC loans and financial support for base-hosting local
communities on which a heavier burden will be imposed following
the planned US force realignment. One government official said:
"We must explain to the public the necessity of setting up a
separate framework for loans for Guam relocation through Diet
deliberations."

11) Defense Agency chief Nukaga: Expenditures for USFJ
realignment, excluding cost of relocating US Marines to Guam,
will be less than 2 trillion yen

YOMIURI (Page 8) (Full)
May 8, 2006

Defense Agency Director General Fukushiro Nukaga, appearing on an
NHK talk show yesterday, said that expenditures for troops
relocations within Japan, which were incorporated in a final
agreement on the realignment of US forces in Japan "should not
cost two or three trillion yen." He then indicated that the cost
for the USFJ realignment, excluding the cost of relocating US
Marines from Okinawa to Guam, would total less than 2 trillion
yen.

Nukaga, however, denied a possible tax hike, saying, "It is not
being considered at this time."

US Deputy Under Secretary of Defense Lawless stated in late April
that Japan's share would total 20 billion dollars (2.22 trillion
yen). He, however, in a meeting on May 2 with Liberal Democratic
Party General Council Chairman Fumio Kyuma and others said, "The
figures are not specific ones."

12) Japan-US defense cooperation: Government to propose at next
month's summit meeting an updating of joint operations plan to
specify deployment, use of forces, premised on emergency and
heightened deterrence capability

NIHON KEIZAI (Top play) (Full)
May 5, 2006

The government has decided to completely update the joint Japan-
US operations plan that sets the specific cooperative
relationship between the Self-Defense Forces (SDF) and the US

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armed forces during a Japan defense emergency, and the Japan-US
mutual cooperation plan for use in an emergency in areas
surrounding Japan. The rewriting of the plans will stipulate in
detail the deployment and use of troops, as well as such other
features as the emergency use of private facilities. It also will
heightened the defense capability toward North Korea and other
countries. The government is considering the creation of a new
scheme to replace the existing Japan-US defense cooperation
guidelines set in 1997 and making this core document. It aims at
completion of the rewriting of the plans by next summer at the
earliest.

With Japan-US consultations on US force realignment concluded,
the Japanese government is aiming now at giving more effective
content to the bilateral alliance as it enters a new stage. Final
coordination is proceeding in the direction of having Prime
Minister Junichiro Koizumi propose the revisions at the summit
meeting with US President Bush in late June. Legally-based
responses to a Japan defense emergency and to contingencies in
areas neighboring Japan have largely been set by such legislation
as the Self-Defense Forces Law, defense emergency legislation,
and the national protection legislation. However, although this
series of laws mention comprehensive defense cooperation between
Japan and United States, they lack specificity.

The joint operations plan once revised would become the
implementation guidelines that specifically indicate what
tactical operations the three self-defense forces and the US
forces will carry out during a contingency. Although the 1997
defense cooperation guidelines clearly mention such, the effort
to draft specifics was slow, irritating the US. For example,
should North Korea fire missiles at Japan and there are
casualties, the safety of local residents must be secured, and
the SDF and US forces must be ready to counterattack. There needs
to be a plan that would specify the units to be deployed in an
emergency and the quantity of goods to be transported and the
transport means. In addition, the plan must specify by name the
roads, ports, airports, and medical facilities to be used.

Although the existence of a plan to handle secrets has been
mentioned, "the timetable for drafting such has lapsed, and there
is a lack of specificity," noted a senior Defense Agency
official. For that reason, the government has decided on a policy
course of drafting a detailed plan covering the following areas:
1) a Japan emergency, premising aggression by North Korea or
another country; 2) a regional contingency, premised on such on
the Korean Peninsula or Taiwan Strait; and 3)Japan-US cooperation
in case of international terrorism, as well as a large-scale
natural disaster.

With the Japan-US agreement on USFJ realignment, the Japanese and
US governments have basically concurred on studying the
possibility of a new defense cooperation scheme to replace the
old set of guidelines. The government's thinking is to clearly
position the new scheme as the means for responding to such new
threats as terrorism, as well as to update the joint operations
plan. Consideration is being given to issuing a new declaration
that would revise the joint security declaration of 1996.
However, the deep-seated view of the US is that if the joint
operations plan is updated, there would be no need for a new
defense scheme, too; so coordination on this will be a challenge.


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The rewriting of the joint plan would fall under the purview of
such bodies as the bilateral planning committee (BPC), whose
participants include the deputy commander of the US forces Japan
and the chairman of the Joint Staff Council. With local
governments expressing their reluctance to accept the USFJ
realignment agreement, the task of drafting a new plan that has
combat in mind is likely to run into objections from opposition
parties and local governments.

13) New framework proposed with aim of attaching importance to
efficacy of defense cooperation; Specific discussion with US to
kick off

YOMIURI (Page 4) (Excerpts)
May 3, 2006

(Washington, Reporter Tatsuya Fukumoto)

Defense Agency Director General Nukaga on May 1 proposed holding
talks to discuss a possible creation of a framework for new
defense cooperation that will replace the existing bilateral
defense cooperation guidelines mapped out in 1997. He made this
proposal, based on the US position: "It would be desirable to
create a more effective framework rather than reviewing the
existing guidelines." Nukaga intends to discuss the specifics of
the new framework in concrete terms during a meeting with Defense
Secretary Rumsfeld on the 3rd.

SIPDIS

Nukaga on the evening of the 1st (morning of the 2nd, Japan time)
told reporters traveling with him at a hotel in Washington: "Just
reviewing the guidelines will be very limited in terms of scale.
The US side has also said, 'such an approach will lack
flexibility.'"

The JDA had at first undertaken coordination of views with the
possibility of incorporating the revision plan in a final report
on USFJ realignment, because Rumsfeld on April 2 told Nukaga, "I
agree with the revision plan." However, a number of Foreign
Ministry officials voiced a negative view toward the idea of
revising the existing guidelines with Foreign Minister Aso
noting, "We are not considering reviewing the guidelines
immediately." Vice Foreign Minister Shotaro Yachi also said, "I
do not think there is any insufficiencies in the guidelines that
would require immediate revision." The US side called for a
framework to replace the existing guidelines from a perspective
of attaching importance to bringing about cooperation between the
Self-Defense Force and the US military, including the formulation
of a mutual cooperation plan in the event of emergencies in areas
surrounding Japan.

14) Futenma relocation: Nukaga aims for cabinet decision later
this month upon winning Inamine's concurrence

ASAHI (Page 3) (Excerpts)
May 3, 2006

Defense Agency Director General Fukushiro Nukaga, now visiting
the United States, expressed his desire on the night of May 1
(around noon May 2, Japan time) for a new cabinet decision later
this month that would adopt a new relocation agreement and cancel
Japan's old agreement with the US to relocate the US Marine
Corps' Futenma Air Station from Ginowan to waters off the Henoko

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district. The defense chief expressed the view to journalists
traveling with him to Washington. Nukaga also plans to hold talks
with Okinawa Gov. Keiichi Inamine after the Golden Week
consecutive holiday period to win his concurrence on the final
agreement. The defense chief also intends to urge Inamine to hold
talks with Prime Minister Koizumi.

Defense Facilities Administration Agency Director General Iwao
Kitahara is scheduled to brief Inamine on the final agreement on
May 4. Nukaga, too, intends to seek Inamine's support for the
Futenma relocation plan by explaining that such steps as
relocating Okinawa-based US Marines to Guam and returning US
military facilities would help reduce Okinawa's burden.

Inamine stated in a press meeting on May 2, "I would like to
respect Okinawa's stance (of seeking a relocation site outside
the prefecture except for the Henoko offshore plan)." Inamine
also expressed his intention to look for ways to prevent a
relocated base from becoming a permanent fixture and seek
emergency measures to eliminate Futenma's risks based on the
agreed plan. They are regarded as Inamine's alternative
conditions to replace such previous conditions as placing a 15-
year time limit on the use of the alternate facility by the US
military.

Nukaga intends to make a cabinet decision on a new relocation
plan upon obtaining Inamine's consent to the final agreement.
Once talks between Inamine and Prime Minister Koizumi were held,
Nukaga wants to reflect Okinawa's intention in a cabinet
decision.
A senior government official noted May 1: "A cabinet decision
does not require Okinawa's agreement. But because there is an
agreement with Nago, the central government is seeking the
understanding of the prefectural government." Thus he indicated
that it was desirable for the government to make a cabinet
decision after winning the concurrence of Okinawa in order to
avoid a local backlash.

15) Inamine proposes temporary heliport for Futenma airfield,
appreciates USFJ realignment

YOMIURI (Page 1) (Full)
May 5, 2006

Okinawa Prefecture's Governor Keiichi Inamine met with Defense
Facilities Administration Agency Director General Iwao Kitahara
yesterday at the Okinawa prefectural government office. In the
meeting, Inamine expressed the prefectural government's view of
the final report on the realignment of US forces in Japan,
saying, "We appreciate it on the whole." However, Inamine
rejected the planned relocation of Futenma airfield in the city
of Ginowan to a coastal area of Camp Schwab in the city of Nago.
As an emergency measure to eliminate the airfield's danger,
Inamine proposed building a temporary heliport in an inland area
on the premises of Camp Schwab. Kitahara answered, "We'd like to
obtain Okinawa Prefecture's understanding on the relocation plan
that has reached an agreement between the Japanese and US
governments."

After the meeting, Inamine held a press conference, in which he
clarified his positive view of the final report, noting that it
incorporated an agreement to move about 8,000 US Marines from

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Okinawa to Guam and return Futenma airfield in its entirety. "On
the whole, I highly appreciate the final report as alleviating
our base-hosting burden in a way that visible to the prefecture's
people."

The city of Nago and the village of Ginozason, which are to host
Futenma airfield's alternative in its relocation, have basically
agreed with the government on the Futenma relocation to Camp
Schwab's coastal site. However, Inamine said he could not accept
it. For one thing, Inamine said Futenma airfield's relocation to
a coastal area of Camp Schwab differs from Okinawa Prefecture's
basic stance of seeking to move the Marines elsewhere outside of
Okinawa Prefecture. For another, he noted that the prefectural
and central governments agreed on a basic plan to relocate
Futenma airfield to a site in waters off the Henoko district of
Nago, whereas the government changed the basic plan in the recent
realignment talks.

Inamine also remarked that the original purpose of relocating
Futenma airfield was to get rid of danger, adding: "Aside from
the relocation issue, the most important thing is to take
emergency measures." It will take at least eight years to
complete the construction of V-shaped airstrips, so the governor
called for building a temporary heliport for provisional use.

16) Iwakuni mayor tells deputy JDA director general, "I will not
agree on the transfer of carrier-based aircraft"

YOMIURI (Page 4) (Full)
May 3, 2006

Katsusuke Ihara, mayor of Iwakuni, Yamaguchi Prefecture, on May 2
met with Deputy Defense Agency Director General Takemasa Moriya.
Regarding the relocation of carrier-based aircraft from US Atsugi
Naval Air Station (Yamato, Kanagawa City) to Iwakuni Marine Corps
Air Station as part of USFJ realignment, Ihara said, "I cannot
agree on the proposal." He agreed to continue talks, though.

17) Kyuma calls for flexible application of three weapons-export
rules to allow Japan to repair US military aircraft, other
equipment

NIHON KEIZAI (Page 1) (Full)
Evening, May 6, 2006

Hiroshi Marutani, Washington

Liberal Democratic Party General Council Chairman Fumio Kyuma, in
a press conference in Washington on the evening of May 4 (morning
of May 5, Japan time), indicated that Japan should flexibly
operate the three principles restricting arms exports and
technology based on the final agreement reached between Tokyo and
Washington US force realignment. As a specific example, Kyuma
suggested allowing Japan to repair US warships and military
aircraft in Japan.

Traveling to the US with LDP defense policy experts, Kyuma
exchanged views with senior US government and military officials.
Touching on US force realignment, Kyuma underlined the need to
prevent the defense industry from weakening, saying: "The Japan-
US alliance has been enhanced and improved. In order to preserve
Japan's technology, the industrial sector needs to conduct

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exchanges with the US, in addition to intergovernmental and
defense exchanges between the SDF and the US military."

Kyuma went on to say, "The three weapons-export principles must
be relaxed to a certain extent, as is the case with the joint
development of missile defense." Technology transfer to the US
and the joint development of missile defense are allowed as
exceptions under the three weapons-export principles. Kyuma's
statement highlighted the need to expand the scope of exception
further.

Kyuma also noted in connection with his talks with US officials:
"Some US officials indicated that Japan would probably have to
join the trend of developing defense technology multilaterally."

18) GSDF received security training March 2005 from US forces
premised on quelling riots

MAINICHI (Page 1) (Excerpt)
May 8, 2006

It was learned yesterday that the Ground Self-Defense Force
(GSDF) received live-ammunition security training last year in
March from the US Marines at Camp Hansen's training ground that
encompasses four towns and cities in Okinawa including the town
of Kin. The training was to enable the GSDF to quell riots and
other acts of reckless violence. According to a report obtained
by the Mainichi Shimbun, putting down rioting groups are
mentioned, but the MSDF command indicates that such is training
to protect the units. This is the first time that joint training
between Japanese and US forces have been revealed as aimed at
cooperating to quell violence.

19) Japan, US during foreign ministerial meeting agree to aim for
early resumption of US beef imports

YOMIURI (Page 2) (Full)
May 4, 2006

(Washington, Reporter Hiroshi Oyama)

Foreign Minister Aso on the morning of May 3 (late at night on
May 3, Japan time) met with his US counterpart Rice at the
Department of State for about 40 minutes. The two agreed to make
efforts to aim for an early settlement of the US beef import
resumption issue.

During the talks, Aso said: "There are many people who want to
eat meat back in Japan. There are many people who want to sell
meat here in the US. Though we have had trouble over import
procedures, we must carry out inspections strictly." Aso thus
pointed out the need to make sure that as a precondition to
reinstate the beef trade, inspections must be carried out on meat
packers that are authorized to export products to Japan. He made
this comment bearing in mind the fact that the inclusion of
vertebral columns, a material banned in Japan as a mad cow
disease risk, in US beef shipment has led to the second ban on US
beef imports by Japan.

Regarding Iran's nuclear development issue, Aso indicated his
view that Iran has not correctly received a critical message from
the international community, noting, "Their message has not been

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correctly transmitted to Iran."

20) Japan-US agriculture ministers' meeting; US indicates plan to
reduce number of cattle subject to BSE inspection; Nakagawa urges
to reconsider decision

NIHON KEIZAI (Page 3) (Full)
May 4, 2006

(Geneva, Reporter Takafumi Ichimura)

Agriculture, Forestry and Fisheries Minister Shoichi Nakagawa and
US Department of Agriculture Secretary Mike Johanns on May 2 met
in Geneva. Regarding the issue of resuming US beef imports by
Japan, Johanns conveyed to Nakagawa the US plan to scale down the
number of cattle subject to BSE inspections, based on the
inspection result that the rate of BSE-infected cattle in the US
is near zero." Nakagawa urged Johanns to reconsider the decision,
saying, "Such a plan will not work positively for Japan."

Johanns explained cattle inspection results: "Among 42 million
cows, only 4 to 7 head are suspected of being infected with BSE.
US cattle's BSE risk is in effect zero." He revealed a plan to
present an inspection report to the Japanese government possibly
next week to have it vetted. He then handed copies of e-mails
seeking economic sanctions against Japan from supporters of
members of the House of Representatives who are against the
second ban on US imports placed by Japan. Johanns has thus once
again urged the Japanese side to resume US beef imports, by
indicating that the US side is becoming impatient.

Nakagawa said after the meeting: "The problem is not so much
safety as whether the US can strictly observe the rules,
including the removal of specified risk materials (SRM). Some
members of the Food Safety Commission have pointed out that the
US cattle inspection is lenient." Japanese consumers are
increasingly becoming distrustful of the US inspection system,
following the discoveries of SRM in US beef shipments to Hong
Kong and Taiwan. Nakagawa indicated his view that under such a
circumstance, it would not be appropriate to scale down the
number of cattle subject to inspection.

21) Last resort proposal for resumption of US beef imports: Japan
to inspect and verify safety of 37 facilities and remove ban in
order; Full-scale negotiations with US after consecutive holidays

YOMIURI (Top play) (Excerpt)
Evening, May 6, 2006

Negotiations between Japan and the United on resuming US beef
imports, halted when BSE-related risk materials were found in a
shipment of US beef, will start full-scale following the
consecutive holidays. Voices are rising in the Japanese
government from those who wish an early resumption of imports.
They say that even if the safety of meat packers in the US cannot
all be confirmed, those that have been ascertained by Japanese
inspections to be safe could be allowed to resume shipments in
order. However, regarding the essential timetable for restarting
imports, Japanese officials find themselves sandwiched in between
the US, which is pressuring for an early resumption, and Japanese
consumers, who demand the beef be safe.


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DONOVAN