Identifier
Created
Classification
Origin
06TOKYO3004
2006-06-01 01:25:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 06/01/06

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 11 TOKYO 003004 

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 06/01/06

Index:
UNCLAS SECTION 01 OF 11 TOKYO 003004

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 06/01/06

Index:

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

Iran alert:
4) President Bush asks Prime Minister Koizumi for cooperation
on Iran nuclear issue
5) Bush-Koizumi converse by telephone prior to prime minister's
upcoming trip to US
6) Japanese government supports US proposal for direct
negotiations with Iran on nuclear issue
7) US asks Japan to consider financial sanctions against Iran
if negotiations fail

Security issues:
8) Bomb hits GSDF convey Iraq, damaging Australian armored
vehicles providing security
9) JDA chief orders SDF team to Java for earthquake relief
10) US, Japan heighten alert toward North Korea's Taepodong 2
missile
11) JDA readies plan to dismantle and reorganize DFAA
12) Koizumi meets Okinawa governor at public-relations event but
neither mention USFJ realignment

Political scene:
13) Important bills being scuttled one after the other with Diet
extension impossible
14) 32 Fukuda supporters meet for the first time
15) Another senior LDP lawmaker, Yosano, weighs in against
Yasukuni visits, calls on shrine to voluntarily remove the
enshrined Class-A war criminals

Trade and economy:
16) Government sees 8 trillion yen revenue shortfall in mid to
long term fiscal outlook that will have to made up by hike in
consumption tax
17) METI's 2006 trade white paper calls on Japan to be more
investment oriented, strengthen direct investments in Asia
18) Government team proposed setting up organization to look
into IT investment
19) Japan to propose at APEC conference a redrafting of
investment rule guidelines


Articles:

1) TOP HEADLINES

Asahi:
9 prefectures considering additional regulations to restrict
openings of large stores by taking advantage of revisions to
three laws aimed to revitalize downtown districts; to limit
purposes and floor space

Mainichi:
8 trillion yen tax revenues necessary to turn nation's finances
into black; Government, ruling coalition eye consumption tax hike

Yomiuri:
To stem declining birthrate, government, ruling coalition to
propose higher allowance for children aged between 0 and 2 and

TOKYO 00003004 002 OF 011


disclosure of corporate child support efforts

Nihon Keizai:
Land, Infrastructure and Transport Ministry to adopt system in
FY2007 to let community unions to improve streetscape

Sankei:
Japan, US on high alert against Taepodong 2; Ground, Maritime,
and Air Self-Defense Forces jointly collecting intelligence for
first time

Tokyo Shimbun:
42 prefectures willing to disclose political fund reports ahead
of compulsory disclosure date

2) EDITORIALS

Asahi:
(1) Social Insurance Agency: Reform bill insufficient
(2) Tribunal against Pol Pot massacre

Mainichi:
(1) National referendum bill: Building consensus essential
(2) Policy financing reform: Financial institutions must not try
to keep status quo

Yomiuri:
(1) IP broadcasting a disappointment for viewers
(2) Aum trial must end at some point

Nihon Keizai:
(1) Central and local governments must strictly reduce public
servants
(2) Many obstacles to widespread of Net broadcasting

Sankei:
(1) Kimigayo ruling: Sabotage deserves punishment
(2) Family values must be taught to stem killings of parents on
rise

Tokyo Shimbun:
(1) What is happening to parent-child relationship?
(2) Users need thorough explanation on Hankyu-Hanshin merger

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 31, 2006

NIHON KEIZAI (Page 2) (Full)
June 1, 2006

09:19
Met at Deputy Chief Cabinet Secretary Suzuki at Kantei.

10:01
Attended a Upper House plenary session.

11:21
Met Okinawa Governor Inamine and others at Kentei.

12:53
Attended the funeral service for former Agriculture Minister

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Yoshiyuki Kamei at the Aoyama Funeral Home.

14:22
Arrived at Kantei.

15:17
Issued a credential to the potential candidate for the Shiga
gubernatorial election at LDP headquarters, with Secretary
General Takebe, Acting Deputy Director General Aizawa, Election
Bureau Director General Endo. Later, met with Takebe, joined by
Policy Research Council Chairman Nakagawa.

15:59
Arrived at Kantei.

17:00
Met Public Security Intelligence Agency Director General Oizumi.
Attended a meeting of the Council on Economic and Fiscal Policy

19:31
Returned to his official residence.

20:25
Talked on the phone with US President Bush, with Foreign Ministry
Foreign Affairs North American Affairs Bureau Director General
Kawai Present.

4) US urges "Japan to consider imposing financial sanctions" on
Iran if nuclear talks failed

NIHON KEIZAI (Page 1) (Full)
June 1, 2006

Hiroshi Maruya, Washington

The US government has urged Japan to consider financial sanctions
on Iran in preparation for a failure in diplomatic efforts to
resolve the Iranian nuclear issue, sources revealed. The US made
this request, apparently bearing in mind such measures as
freezing financial transactions suspected of having links to
nuclear development and terrorist activities, as well as
suspending the start of new financial transactions with firms in
Iran, since Japan is able take such measures under its Foreign
Exchange Act. Japan will likely be forced to make a difficult
decision in the months ahead, given its close ties with Iran in
the economic area through crude oil imports from that country and
the Azadegan oil field development project.

Washington has pursued diplomatic negotiations at the United
Nations Security Council (UNSC) as well as six-nation talks of
the five UNSC permanent members plus Germany. The US has urged
Iran to freeze its uranium enrichment program in a verifiable
manner and respond to negotiations. On the other hand, assuming
these efforts may fail, the US has begun looking for ways for a
"coalition of the willing" composed of Japan and European nations
would work together to take action (against Iran) in the
financial area.

According to sources concerned, Washington has asked Tokyo to
apply the Foreign Exchange Law, which was amended in 2004 to put
stronger pressure on North Korea. The law stipulates that Japan
can independently put restrictions on remittances if "Japan needs

TOKYO 00003004 004 OF 011


to do so for the maintenance of its peace and safety." But Japan
has yet to use this provision.

As of 2005, Japan imported 13.8% of its total crude oil from
Iran. Japan's imports from Iran, now at 13 billion dollars, has
made it Iran's largest trade partner.

5) Koizumi, Bush hold talks over telephone

SANKEI (Page 5) (Full)
June 1, 2006

Prime Minister Junichiro Koizumi held talks with US President
Bush over the telephone yesterday evening. Ahead of their meeting
scheduled for June 29, the two leaders confirmed that Japan and
the United States would deepen cooperation further. The telephone
talks were held for about 10 minutes at the US government's
proposal.

"I'm looking forward to exchanging frank views in our meeting
over various challenges facing the international community," Bush
told Koizumi. "I'd like to reaffirm further cooperation between
our two countries from the perspective of our alliance in the
world," Koizumi responded. Koizumi will make an official visit to
the United States from June 28 and will meet with Bush at the
White House on June 29.

6) Government supports US proposal for talks with Iran in hope of
resumption of direct dialogue

ASAHI (Page 2) (Full)
June 1, 2006

The US government has announced its readiness to join talks along
with Britain, France, and Germany once Iran abandons its ambition
to enrich uranium. The Japanese government is pinning hopes on
the US proposal that it will prompt the United States and Iran to
engage in direct dialogue after a suspension of over 20 years. In
the early hours of June 1, Foreign Minister Taro Aso released a
statement expressing his strong hopes for Iran to respond to the
US proposal properly.

Prime Minister Junichiro Koizumi and US President George W. Bush
in their telephone talks last night touched on the Iranian issue.
Foreign Minister Aso also conveyed Tokyo's intention to support
the US proposal in his subsequent telephone talks with US
Secretary of State Condoleezza Rice.

SIPDIS

The US government is considering such options as talks with Iran
along with Britain, France, and Germany, a UN Security Council
resolution, and sanctions by a "coalition of the willing" apart
from the UN scheme. The US has also asked Japan to consider
financial sanctions. The government has already begun studying
details of sanctions.

Japan imports about 15% of its crude oil from Iran. Japan has
also been developing the Azadegan oilfield, which has an estimate
26 billion barrels of oil reserves. In the hope of a settlement
through dialogue, the government has been watching US moves
closely, since joining a coalition of the willing would affect
its securing of oil resources.


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7) President Bush asks Prime Minister Koizumi for Japan's
cooperation on Iran's nuclear issue

NIHON KEIZAI (Page 1) (Full)
June 1, 2006

Prime Minister Junichiro Koizumi late yesterday talked on the
phone to US President Bush at the Prime Minister's Official
Residence. Bush renewed the call on Japan to cooperate to resolve
the Iran nuclear issue. Ahead of the upcoming foreign ministerial
meeting of six nations - the five permanent members of the United
Nations Security Council plus Germany - set for today in Vienna,
the president reportedly gave an account of America's position to
Japan. The conversation took place at the US' request and lasted
for some 10 minutes.

Koizumi, referring to the upcoming Japan-US summit slated for
June 29, told Bush: "I'd like to reaffirm closer cooperation
between the two countries, from the perspective of the Japan-US
alliance in the world." After this telephone conversation,
Foreign Minister Taro Aso also held a telephone discussion with
Secretary of State Rice and expressed his endorsement of the US

SIPDIS
approach to the Iran nuclear issue.

8) GSDF convoy targeted in bomb attack

YOMIURI (Page 2) (Abridged)
June 1, 2006

CAIRO-A convoy of Ground Self-Defense Force and Australian force
vehicles was involved in a bomb blast when they were running
along a road in the southern Iraqi city of Samawah on May 31
around 9:45 a.m. (2:45 p.m., Japan time). According to local
security sources, there were no injuries among the GSDF and
Australian troops. However, one of the Australian vehicles in the
convoy was damaged, and a local resident was injured in the
blast. Armed insurgents possibly targeted GSDF and Australian
troops. It is unusual that the Samawah-based detachment of GSDF
troops is targeted in an attack outside its Samawah camp. GSDF
members last came under an off-camp attack in June 2005.

According to the security sources, the nine-vehicle convoy was
made up of six GSDF vehicles and three escorting Australian
vehicles. The blast occurred right after the frontrunning vehicle
passed there. A wired detonator was discovered on a path 25
meters away.

9) Nukaga orders SDF to quake-hit Java

TOKYO SHIMBUN (Page 2) (Full)
June 1, 2006

Defense Agency Director-General Fukushiro Nukaga issued orders
last night to the Ground and Air Self-Defense Forces to dispatch
troops to engage in relief activities in the central part of
Java, Indonesia, that has been devastated by the recent
earthquake in accordance with the Japan Disaster Relief Team Law.
The two forces will send some 40 troops, mostly doctors and
nurses from the GSDF's Middle Army 10th Division. They will form
a 50-member medical relief team with part of the advance team
that is already in Java. The team will conduct medical support
activities in Jogjakarta in compliance with a request from the

TOKYO 00003004 006 OF 011


Indonesian government. The members are scheduled to depart from
the Komaki base aboard the ASDF's two C-130 transport planes.

10) Japan, US heighten alert to North Korean missile launch

SANKEI (Top play) (Abridged)
June 1, 2006

With North Korea getting ready to launch Taepodong-2 long-range
ballistic missiles, the Japanese and US governments have gone on
heightened alert, government sources revealed yesterday. Japan
and the United States have entered the final phase of
preparedness, according to the sources. US Forces Japan (USFJ)
seems to be flying RC-135S Cobra Ball electronic surveillance
aircraft in order to detect a possible missile launch. The
Defense Agency has also increased alertness with Aegis-equipped
ships and electronic intelligence aircraft on stage to gather
intelligence in the Ground, Maritime, and Air Self-Defense
Forces' first joint operation.

The Japanese and US governments have now raised their warning
levels because of the Taepodong 2 launch possibility, a
government source noted. There is no knowing if North Korea has
already fueled the missiles. However, another government source
said Japan and the United States were now in the final phase of
preparedness. Meanwhile, the six-party talks over North Korea's
nuclear programs remain deadlocked. North Korea therefore would
seem to be threatening Japan and the United States in order to
gain concessions and may not actually launch the missiles,
according to sources.

In early May, there were signs that North Korea was readying
missiles for launching. Radio communications were exchanged more
frequently than usual at a missile test site in North Korea's
northeastern district. Japan and the United States also have
notices recent changes in radio communications.

The Defense Agency has dispatched the Chokai, an MSDF Aegis
vessel based at Sasebo. The ASDF is also staging YS-11E
electronic monitoring aircraft to collect intelligence. USFJ has
been deploying the Cobra Ball to Kadena airbase in Okinawa since
late this May. The US Air Force is already flying the Cobra Ball
on surveillance missions, according to the sources.

11) Defense Agency formulates plan on new organization to replace
DFAA

YOMIURI (Page 4) (Full)
June 1, 2006

The Defense Agency has decided to dismantle the Defense
Facilities Administration Agency (DFAA). The Defense Agency
yesterday compiled a draft plan featuring the establishment of a
new organization (tentatively called the Local Planning Bureau)
as an internal bureau after abolishing the DFAA. It intends to
incorporate the plan in its budgetary request guidelines for
fiscal 2007.

12) Okinawa Gov. Inamine gives Prime Minister Koizumi traditional
Okinawan shirt but does not mention USFJ realignment

YOMIURI (Page 4) (Full)

TOKYO 00003004 007 OF 011


June 1, 2006

Okinawa Gov. Kenichi Inamine met yesterday with Prime Minister
Junichiro Koizumi. He then held talks Yuriko Koike, minister in
charge of Okinawa issues. Inamine has expressed opposition to the
basic policy on the realignment of US forces in Japan, which the
government approved in a cabinet meeting on May 30. He, however,
did not mention the realignment issue in his meeting with
Koizumi, as the meeting had been arranged for the purpose of
Inamine presenting Koizumi with a traditional Okinawan shirt
known as yukari. Koizumi, wearing the shirt, seemed to be happy,
but Inamine kept a firm expression. After the meeting, Inamine
told reporters, "(I did not refer to the US military realignment)
because the occasion was not appropriate."

In his meeting with Koike, Inamine expressed his appreciation for
her making specific requests of relevant cabinet ministers to
listen to Okinawa's views, saying, "I thank for your special
consideration." Koike as well showed consideration to Okinawa by
revealing regional promotion measures.

13) Important bills shelved with no possibility of extension of
current Diet session

MAINICHI (Page 5) (Excerpts)
June 1, 2006

A bill revising the Basic Education Law will be carried over to
the next Diet session since the government and the ruling parties
have decided not to extend the current session. Since Minshuto
(Democratic Party of Japan) President Ichiro Ozawa has taken the
stance of facing down the ruling camp, bogging down current
deliberations, Prime Minister Junichiro Koizumi brushed off calls
for an extension of the session. As a result, it is now certain
that many important bills will be put on the backburner.

Koizumi yesterday told LDP Secretary General Tsutomu Takebe and
Policy Research Council Chairman Hidenao Nakagawa that he would
not extend the current Diet session. He instructed them to
consider steps to carry over bills to an extraordinary Diet
session. Asked about the possibility of a minor extension,
Koizumi told reporters, "I have no such intention now."

The government and ruling coalition aim to pass by June 6 a set
of bills to reform healthcare services that focus on an increase
in medical payments by the elderly, A bill amending the Public
Offices Election Law designed to "cut 4 seats and increase 4
seats" of the fixed number of the House of Councillors seats,
will be approved at today's House of Representatives plenary
session.

Since priority is being given to passage of the medical reform
bills, deliberations will not be carried out until then on such
contentious legislation as a bill to revise the organized crime
law to make "conspiracy" a crime, and a referendum bill for
amending the Constitution. If the government and ruling camp
defiantly conduct deliberations on other bills, Minshuto might
boycott the sessions. Therefore passage of other bills is
impossible in terms of the Diet schedule.

14) 32 lawmakers attend first meeting of group of like-minded
members led by Yasuo Fukuda

TOKYO 00003004 008 OF 011



MAINICHI (Page 5) (Full)
June 1, 2006

A group of Liberal Democratic Party (LDP) like-minded lawmakers,
who were first elected to the Diet at the age of 50 or older,
held its first general meeting yesterday since former Chief
Cabinet Secretary Yasuo Fukuda assumed its chairmanship. The
members call the group "Association of Kuronin (persons who have
gone through a lot). Fukuda in a speech sought to check a
generational change argument in the LDP, saying, "Of course,
young people are important, but seniors like us can do good,
too."

Because support rates for Fukuda in opinion polls have risen
rapidly, the membership of the group increased by 20 in May to 53
lawmakers from both Diet houses. A total of 32 members from the
factions of Mori, Tsushima, Niwa-Koga, Yamasaki, Ibuki, and
Tanigaki attended the meeting yesterday. Fukuda also stated in
his speech: "We should hand over to young people matters that
should be turned over to them." Many group members assume that if
calls for Fukuda to become the next LDP president become
stronger, the group may become his main support group. Some
members, however, will likely watch quietly from afar the moves
of Chief Cabinet Secretary Shinzo Abe.

15) State Minister Yosano advocates separate enshrinement of
Class-A war criminals: "I expect Yasukuni Shrine to come up with
a decision to realize it"

MAINICHI (Page 2) (Full)
June 1, 2006

By Arisa Ota

State Minister in Charge of Economic and Fiscal Policy Kaoru
Yosano was interviewed by the Mainichi Shimbun. When he was asked
about the enshrinement of Class-A war criminals at Yasukuni
Shrine, Yosano stated: "I think it is Yasukuni Shrine that can
return itself to the former state when the imperial family,
politicians, and bereaved relatives were visiting the shrine
without hesitation to console the souls of the war dead. It is
also Yasukuni Shrine that will decide how to bring itself back to
the former state, including separate enshrinement of Class-A war
criminals." Yosano thus expressed his hope that the shrine will
move to bring about separate enshrinement. Yosano is the first in
the Koizumi administration to clearly advocate the need for
separate enshrinement.

Yosano cited two assertions made by Yasukuni Shrine: 1) the
shrine is free from state interference as a religious
corporation; and 2) the shrine is the only memorial facility for
the state. Yosano stated, "The shrine needs to think of various
factors if it wants these two points to be accepted." "It is an
important thing to respect the war dead and console their souls.
The government hosts the war memorial service at the Nihon
Budokan Hall in Tokyo on every Aug. 15. The ceremony is
participated in by the Emperor. The government does not think
that anything more is needed," Yosano added.

Another cabinet member, Foreign Minister Taro Aso has stated: "I
wonder if the problem is that one religious corporation has been

TOKYO 00003004 009 OF 011


assigned such an important role as enshrining the spirits of the
war dead." Aso has thusly revealed the need for the government to
consider ways for separate enshrinement of Class-A war criminals,
envisioning the possibility of removing religious cooperation
status from Yasukuni Shrine.

16) To put fiscal policy into the black, government, ruling
parties mull hike in consumption tax in order to make up for 8
trillion yen revenue shortfall over medium to long term

MAINICHI (Top play) (First paragraph)
June 1, 2006

As part of fiscal reconstruction reforms over the medium to long
term to bring together outlays and revenues, the government and
ruling parties have started to consider the option of bringing
about the basic fiscal balance into the black by fiscal 2011,
which involves filling a resource gap amounting to 18 trillion
yen. Although this revenue shortfall can be reduced in part by
cutting expenditures, the scale of such cost-cutting measures
would make up approximately 10 trillion yen. The plan is to cover
the remaining 8 trillion yen in shortfalls by tax hikes and tax
revenues that would increase due to rising economic growth. The
target for achieving such a balance is fiscal 2011. If a simple
calculation using only the consumption tax is done, the 8
trillion yen shortfall could be covered by raising that tax by
about 3%.

17) Draft trade white paper for 2006 proposes making Japan an
investment-oriented nation, boosting investment in Asia

NIHON KEIZAI (Page 5) (Full)
June 1, 2006

The draft trade white paper for 2006 proposes making Japan an
investment-oriented nation by increasing its surplus in the trade
balance, based on the prospect that its trade surplus is expected
to shrink given the current population decrease. The paper
reiterates the necessity for Japan to boost direct investment
particularly in growing Asia.

The Ministry of Economy, Trade and Industry, which drafted the
paper and released it yesterday, will submit it in a cabinet
meeting late June. Japan's surplus in the income balance in
fiscal 2005 totaled about 12.6 trillion yen, outstripping the
surplus in the trade balance (about 9.6 trillion yen) for the
first time. The white paper, though, notes that the rate of
Japan's earnings from its overseas assets is still at the upper
range of 2%, lower than those of the US and Britain (the upper
range of 3%).

Japanese firms have invested mainly in securities, on which the
earning ratio remains low. The ratio of Japan's foreign direct
investment (FDI) to its all assets overseas is 17%, lower than
Britain's 17% and the United States' 33%. The white paper defines
this result as one of the main reasons for Japan's low earnings
rate.

In 2004, 38% of Japanese firms invested in the US, while 19.5%
invested in Asian countries. The white paper suggests that
Japanese firms should shift their investment destinations to Asia
with high growth potential, in order to increase their earning

TOKYO 00003004 010 OF 011


rates. The paper emphasizes the importance of removing
restrictions on trade and investment by promoting EPAs.

18) IT Strategy Headquarters suggests setting up committee to
evaluate IT investment

NIHON KEIZAI (Page 2) (Full)
June 1, 2006

The government's IT Strategy Headquarters, headed by Prime
Minister Junichiro Koizumi, unveiled its draft priority plans for
2006 yesterday. The draft proposes setting up an expert
evaluation group composed of academics and engineers from the
private sector to examine whether the government has invested in
the information and technology (IT) sector in an effective
manner. The government's investment in IT has been criticized as
squandering budget allocations. In addressing the issues of the
introduction of IT in medical institutions and e-governance, the
draft suggests that committees should be established for the two
issues to conduct even stricter assessments.

The Strategy Headquarters will instruct relevant government
agencies to make improvements based on assessment results. The
government will publicize the draft plan in a meeting today of
the Strategy Headquarters and adopt it in July.

19) Japan to propose in APEC formulation of guidelines on
investment rules

NIHON KEIZAI (Page 5) (Full)
June 1, 2006

Takenori Kawana, Ho Chiminh

In a trade ministerial meeting of the Asia-Pacific Economic
Cooperation (APEC) forum to start on June 1 in Ho Chiminh,
Economy, Trade and Industry Minister Toshihiro Nikai will propose
setting guidelines on rules for bilateral investment. By
introducing the principle of national treatment to offer equal
conditions for foreign and domestic firms and requiring each
member nation to abolish their nationality restrictions for
executive posts, Japan aims to enable APEC member countries to
conclude high-quality economic partnership agreements (EPA).

Japan's proposal is likely to be incorporated in the APEC
chairman statement to be adopted on June 2. Japan aims to start
the compilation process with other member countries at a working
level and come up with a final plan by 2008. In promoting
investment among APEC countries, barriers exist, such as
restrictions on foreign capital and employment of foreigners. In
addition, their laws, like tax systems, and regulations remain
non-transparent. If model investment rules are prepared, it will
become possible for Asian nations to smoothly conclude bilateral
accords.

Specifically, each nation will be banned from seeking or
restricting foreign firms' exports and from mandating such firms
to procure local materials. Foreign capital will also be allowed
to remit money to their home countries without restrictions.

In the two-day APEC ministerial, discussion will be conduced on
how to accelerate the multilateral trade negotiations (Doha

TOKYO 00003004 011 OF 011


Round) of the World Trade Organization (WTO) in the first-day
unofficial meeting. In the plenary session on the second day, the
participants are expected to discuss trade and investment
liberalization, including the formulation of guidelines to
eradicate pirate and imitation goods.

SCHIEFFER