DAILY SUMMARY OF JAPANESE PRESS 06/28/06

UNCLAS SECTION 01 OF 09 TOKYO 003580 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 06/28/06 INDEX: (1) Poll on Koizumi cabinet, political parties, LDP race, BOJ chief's investment (2) Okinawa gov. to step down this fall (3) Editorial: Japanese, US leaders should give strong warning to North Korea (4) Editorial: US-India nuclear pact raises questions about sustainability of nuclear nonproliferation framework (5) WTO ministerial to kick off on June 29; Drafting modality agreement to come to crucial stage; US concessions hold key (6) Three-party talks on Japan's policy stance in WTO talks confirm unity prior to ministerial; Japan to call for realistic level of tariff cuts (7) Agricultural trade panel Acting Chairman Oshima expresses willingness to back up Nakagawa's efforts in WTO ministerial (8) Editorial: US should become less "ambitious" (9) WTO ministerial meeting to kick off on June 29; Gap between US and Japan-EU on camp remains; Agreement before year's end appears difficult ARTICLES: (1) Poll on Koizumi cabinet, political parties, LDP race, BOJ chief's investment ASAHI (Page 4) (Full) April 25, 2006 Questions & Answers (Figures shown in%age, rounded off. Bracketed figures denote proportions to all respondents. Parentheses denote the results of the last survey conducted May 20-21.) Q: Do you support the Koizumi cabinet? Yes 45 (45) No 41 (39) Q: Why? (One reason only. Left column for those marking "yes" on previous question, and right for those saying "no.") The prime minister is Mr. Koizumi 21(9) 7(3) The prime minister is from the Liberal Democratic Party 15(6) 8(3) From the aspect of policies 37(17) 59(24) Because of the coalition government 8(3) 13(5) No particular reason 17(8) 12(6) Q: Which political party do you support now? TOKYO 00003580 002 OF 009 ; Liberal Democratic Party (LDP) 35 (34) Democratic Party of Japan (DPJ or Minshuto) 20 (19) New Komeito (NK) 3 (3) Japanese Communist Party (JCP) 2 (2) Social Democratic Party (SDP or Shaminto) 1 (2) People's New Party (PNP or Kokumin Shinto) 0 (0) New Party Nippon (NPN or Shinto Nippon) 0 (0) Liberal League (LL or Jiyu Rengo) 0 (0) Other political parties 0 (1) None 33 (37) No answer + don't know 6 (2) Q: Are you interested in the LDP presidential election scheduled for this September? Yes 59 No 39 Q: As likely candidates for the next prime minister, there are now some names coming up, such as Mr. Taro Aso, Mr. Shinzo Abe, Mr. Sadakazu Tanigaki, and Mr. Yasuo Fukuda. Who do you think is appropriate for the next prime minister? Taro Aso 5 (3) Shinzo Abe 45 (41) Sadakazu Tanigaki 3 (1) Yasuo Fukuda 25 (29) Other persons 12 (16) Q: (Only for those who named one of the four persons) Why? (One choice only) His policy and opinions are good 19 (15) He seems to be a man of action 32 (25) His personal character and image are good 46 (36) Q: (Only for those who named one of the four persons) Do you think you know well about the person you chose, or do you just recognize the person or know the person's name? Know well 31 (24) Just recognize the person and knows the person's name 66 (51) Q: Would you like the next prime minister to continue Prime Minister Koizumi's structural reforms? Would you like the next prime minister to reconsider Prime Minister Koizumi's way of doing things, or would you otherwise like the next prime minister to change it? Continue 17 Reconsider 54 Change 23 Q: Do you have expectations for DPJ President Ichiro Ozawa? Yes 45 No 48 Q: Bank of Japan Governor Fukui has profited from his investment of 10 million yen in the Murakami Fund. The BOJ head is in a position to determine Japan's monetary policy. What do you think about his investment for such profit-making purposes? TOKYO 00003580 003 OF 009 It's a problem 80 It's not a problem 15 Q: Do you think it hurts public trust in the BOJ's monetary policy? Yes 70 No 25 Q: Do you think Mr. Fukui should resign as BOJ governor? Yes 67 No 25 Polling methodology: The survey was conducted June 24-25 over the telephone on a computer-aided random digit dialing (RDD) basis. This RDD formula chooses persons for the survey from among all eligible voters throughout the nation on a three-sage random-sampling basis. Valid answers were obtained from 1,965 persons (53% ). (2) Okinawa gov. to step down this fall RYUKYU SHIMPO (Page 1) (Abridged) June 28, 2006 Okinawa Prefecture's Governor Keiichi Inamine, now determined not to run in this September's gubernatorial election for a third term, will formally announce in a meeting of the prefectural assembly tomorrow that he will retire, an aide to the governor revealed yesterday. Now that the governor will clarify his retirement, the ruling parties will likely expedite their screening committee's narrowing down of post-Inamine candidates for the election. There are now 13 recommended candidates on the ruling bloc's list. The ruling camp intended to select a final candidate by the end of June but is now behind in screening the candidates. The ruling parties and the governor's backers had therefore expected the governor to avoid announcing his retirement before they can decide on one candidate. The screening committee asked the governor on June 25 to abstain from announcing his retirement during the prefectural assembly's June session. At the committee's request, Inamine considered foregoing his announcement of retirement before the prefectural assembly in its June session. However, the governor has now made up his mind to clarify his retirement. The governor probably thought to himself that a belated announcement of retirement could cause the electorate to misunderstand that he may run in the election and that such a misunderstanding could affect the screening of candidates. (3) Editorial: Japanese, US leaders should give strong warning to North Korea SANKEI (Page 2) (Full) June 28, 2006 Prime Minister Junichiro Koizumi departed for Canada and the United States. He is expected to meet with US President George W. Bush on June 29 in Washington. One of main topics of their discussion is how to respond to North Korea, which has continued preparations for launching a Taepodong-2 long-range ballistic missile. If the North launches it, Japan and TOKYO 00003580 004 OF 009 the US should give Pyongyang a strong warning to immediately end the missile threat, showing their determination to invoke sanctions. It is certain that Japan will suffer if Pyongyang launches a missile. When the North launched a Taepodong-1 missile in 1998, a booster, the first part of the missile, fell into the Sea of Japan, and a booster and warhead from the second part dropped into waters off the Sanriku coast. The outer part of the top of the missile's second part fell into waters about 60 kilometers from Japanese territorial waters. If the North launches a Taepodong-2, the possibility of a warhead falling on Japan cannot be dismissed. What the missile carries is "unknown," according to President Bush. The Japanese government does not need to worry, but it should face the fact that North Korea has physical means of threatening the Japanese public. At the same time, the government should take measures in response to any act violating its sovereignty. Prime Minister Koizumi stated that it would be better not to reveal what kind of measures Japan would take, while stressing that he would respond harshly if Pyongyang were to test a missile. Late last year, the government indicated that Japan had no choice but to impose economic sanctions unless North Korea responded sincerely on the abduction issue. The government, however, has not imposed any economic sanctions. What has made Koizumi hesitate to do so? It is clear that a missile launch would violate the 2002 Japan-North Korea Pyongyang Declaration. By taking a firm stand, the prime minister would be able to send an appropriate message warning North Korea. Japan's missile defense system will go online next year or later. Until then, Japan has not choice but to entrust its security to US military's deterrence. Two US Aegis destroyers capable of detecting and attacking missiles have already been deployed in the Sea of Japan. Koizumi and Bush will confirm in their meeting that Japan and the United States will strengthen their alliance. Looking at the severe situation in the world, they should take advantage of their summit to make the bilateral ties move one step forward. (4) Editorial: US-India nuclear pact raises questions about sustainability of nuclear nonproliferation framework YOMIURI (Page 3) (Full) June 28, 2006 How Japan should respond to the US-India pact on civilian nuclear cooperation is a significant issue for Japan's nuclear policy. The US Congress has started discussions on a revision of the law to enable the United States and India to cooperate on nuclear power. In a hearing at Congress, Secretary of State Condoleezza Rice explained two points as reasons for the need for US-India nuclear cooperation, namely that strategic ties would be strengthened and that the international nuclear nonproliferation framework would be solidified. For the United States, the pact has significant strategic meaning: It would constrain China, ensure energy security, and allow the entry of US nuclear firms into the Indian market. TOKYO 00003580 005 OF 009 It is also true that the International Atomic Energy Agency (IAEA) will be able to inspect most of India's nuclear facilities. Indian Prime Minister Singh promised US President George W. Bush in March that India would accept IAEA inspections of civilian nuclear facilities. Bush also promised Singh that the United States would promote civilian nuclear cooperation, such as construction of nuclear power plants and the supply of nuclear fuel. The US-India agreement approves India's possession of nuclear weapons. India, without joining the Nuclear Nonproliferation Treaty (NPT),will obtain its benefits -- nuclear cooperation for peaceful use. The NPT imposes strict regulations on the peaceful use of nuclear energy. The treaty allows only five countries -- the United States, Britain, France, Russia, and China -- to have nuclear arms, calling on other member countries to abandon development of nuclear weapons and requiring them to accept IAEA inspections. The treaty allows them to use nuclear energy for peaceful purposes in return. Giving special treatment to India, which is not a party to the NPT, might shake the credibility of the treaty. North Korea and Iran might use the US-India accord as an excuse for their backward-looking stance and opposition to IAEA inspections. Will India sign or ratify the Comprehensive Test Ban Treaty (CTBT)? How will India deal with negotiations on the Cutoff Treaty, which bans the production of highly enriched uranium and other nuclear materials? In a meeting of the 45-nation-member nuclear supply group (NSG),to which Japan belongs, the US government has sought to apply to India the guidelines prohibiting exports of nuclear materials and technology to countries that do not allow strict inspections. If a standoff deepens between NSG members supporting Washington's proposal and member countries opposing it, the NSG will fail to function. If so, the nuclear nonproliferation system will weaken. Without making clear how to link the US-India accord to the maintaining of the nuclear nonproliferation framework, it is unreasonable for the United States to cooperate on nuclear power with a nuclear weapons state that is a non-NPT member. (5) WTO ministerial to kick off on June 29; Drafting modality agreement to come to crucial stage; US concessions hold key Japan Agricultural News (Top Play) (Full) June 29, 2006 In a bid to reach a modality agreement (guidelines for reducing trade protection) on the agricultural sector, discussions on which are destined to run into snags, the World Trade Organization (WTO) will hold a meeting of some member nations from June 29. With exporting and importing countries remaining at odds over this issue, there is no knowing whether such an agreement can be reached or not. How the US, which has major influence, will move will hold the key to negotiations. Ministerial-level officials from 30 to 40 countries, including the US, the EU, Brazil, and India, are expected to attend the meeting TOKYO 00003580 006 OF 009 with the aim of having their views reflected in modalities. Talks on sectors other than agriculture will also take place. The agricultural talks will be pursued based on the draft modalities presented on the 22nd. On many points, the draft simply listed views presented by various countries and groups. The talks will, therefore, likely aim at finding a breakthrough with a focus on major agenda items, including the rate of cuts in tariffs, the number of key trade items and the handling of such, and the rate of cuts in domestic subsidies. The expectation is that if the upcoming ministerial meeting fails to find a breakthrough, it will be extremely difficult to conclude the Doha Round (multilateral trade talks) before year's end. Because of this situation, participating countries and territories have hinted that they are ready to make concessions to some extent. In particular, how the US will move is drawing attention from various countries. Shoichi Nakagawa, Minister of Agriculture, Forestry, and Fisheries, after appearing on a TV talk show expressed strong interest in a series of US statements that hinted at its readiness to make concessions. He noted, "I cannot tell whether the US is serious, whether this represents progress, or whether they are just faking." With the off-year election close at hand in November, the US is in a situation where it finds it politically difficult to make concessions. Nevertheless, it is possible to assume that some kind of political decision by the US would prompt Japan and the EU to make a compromise, moving the stalemated talks forward. However, even if the US were to make concessions, they could be no more than marginal. The Japanese government is closely watching how the US will move, as one government source noted: "The US might try to play up small concessions. It is necessary to wait and see whether what the US calls concessions are really that for other countries as well." (6) Three-party talks on Japan's policy stance in WTO talks confirm unity prior to ministerial; Japan to call for realistic level of tariff cuts NIHON NOGYO SHIMBUN (Full) June 27, 2006 Prior to the planned World Trade Organization (WTO) ministerial meeting to be held in Geneva, Switzerland, with a view to setting modalities (standards for protection cuts),representatives from the Liberal Democratic Party (LDP),the government, and the Ministry of Agriculture, Forestry, and Fisheries (MAFF) decided on Japan's policy stance in their meeting at LDP headquarters yesterday. In the meeting, MAFF Minister Shoichi Nakagawa indicated his determination to do his best to have rules reflecting the stance of importer nations laid down, saying: "Japan will protect what should be protected. In the talks, I will make utmost efforts with the help of the party and agricultural groups." MAFF officials explained that Japan will take a positive stance in the talks on strengthening cooperation with the nine other major food-importing economies (G-10). In the thorny market-access area, Japan will call for setting realistic levels for tariff cuts and oppose the proposed introduction of tariff caps. TOKYO 00003580 007 OF 009 Before leaving for Geneva as chairman of the LDP delegation in conjunction with the WTO ministerial, LDP Research Commission on comprehensive Agriculture Chairman Yoshio Yatsu said: "We will indirectly support the ministerial talks." JA Central Union of Agricultural Cooperatives Chairman Isao Miyata emphatically said: "We will tenaciously work in cooperation with agricultural groups from the other G-10 members." (7) Agricultural trade panel Acting Chairman Oshima expresses willingness to back up Nakagawa's efforts in WTO ministerial NIHON NOGYO SHIMBUN (Full) June 27, 2006 LDP Research Commission on Trade in Agricultural, Forestry, and Fisheries Products Acting Chairman Tadamori Oshima said in a WTO meeting of representatives from the government, the Liberal Democratic Party, and agricultural groups yesterday: "We expect Agriculture, Forestry, and Fisheries Minister Nakagawa will make utmost efforts. I hope he will take care of himself and do his best." Oshima thus encouraged Shoichi Nakagawa prior to his departure (for Geneva) to attend the WTO ministerial as a representative of the Japanese government. He also revealed the party's plan to dispatch a delegation to offer indirect support, saying: "We don't know what difficulties lie ahead under this severe situation. We will back up Minister Nakagawa in cooperation with agricultural organizations." (8) Editorial: US should become less "ambitious" NIHON NOGYO SHIMBUN (Page 13) (Full) June 23, 2006 In agriculture talks under the World Trade Organization (WTO), negotiations on modalities will come to the crucial stage from late this month through early next month. The JA group will hold a WTO national rally in Tokyo today, with the aim of preventing an upper limit from being set on tariff rates on mainstay farm products. The group is pursuing the policy of "coexistence of diverse forms of agriculture." In the process of establishing modalities (standards for protection cuts),this global desire must be respected. A ministerial meeting on farm products will be held in Geneva, Switzerland, where the WTO headquarters is located. Agriculture, Forestry, and Fisheries Minister Shoichi Nakagawa will also participate in the meeting in an effort to establish modalities, but difficult negotiations are foreseen, as the United States has stuck to its proposal giving priority to its own interests. The proposal is lenient on the US but severe for other countries. The US proposal is overly "ambitious." The world's largest food exporter proposes that tariffs on general products should be reduced by up to 90%. The US has continued to refuse to pull back this proposal designed to completely remove tariffs. Such a stance is tantamount to an attempt to destroy the Japanese and other importers' agriculture industry and is quite high-handed. Under the current system, the margin of reduction in tariff rates on mainstay farm products is set at a low level. The US, however, insists that the ratio of key products to all products should be kept at only 1%, while Japan on behalf of the Group of 10 (10 food-importing economies) calls for 15%, including rice, wheat, dairy products, sugar, and starch. The 1% proposal is extreme. TOKYO 00003580 008 OF 009 The US is also maneuvering to introduce a tariff cap system for mainstay farm products and lower tariff rates to below 75%. Under this proposal, Japan's current 778% tariff rate on imported rice would be reduced to less than one-tenth. Food-exporting economies under the lead of the US propose that low-tariff import quotas for farm products be expanded as compensation for the high tariffs on mainstay products. For instance, Japan is mandated to import 767,000 tons of rice under the so-called minimum access formula. If the proposal is adopted, Japan will be required to import one to five million tons more of rice. The chairman of the agricultural talks, in a bid to set modalities, has urged the member countries to coordinate views based on the proposal made by the group of 20 potential developing countries (G-20),including Brazil. But the G-20 proposal is extremely close to the US proposal, and Japan cannot accept it. The JA group has expressed "absolute opposition." The US, Brazil, Australia, and other food-exporting economies should be aware that as long as the principle of "coexistence of diversity in agriculture," as called for by Japan and other many importers, is not reflected, modalities will never be established. Importers also should make significant concessions if they want to see the talks end successfully. The agricultural talks have reached an important phase. Set off by the WTO national rally by the JA group today, the importer nations should reiterate the need for coexistence and strengthen cooperation within and outside the nation so as not to allow exporter nations to take act as they like. (9) WTO ministerial meeting to kick off on June 29; Gap between US and Japan-EU on camp remains; Agreement before year's end appears difficult NIHON KEIZAI (Page 5) (Excerpts) June 27, 2006 Multilateral trade talks (Doha round) at the World Trade Organization (WTO) have entered the home stretch. A ministerial meeting is to take place in Geneva, Switzerland, starting on June 29, with the aim of reaching a consensus on trade liberalization rules for agricultural goods and mined and manufactured products. The growing view is that it will be difficult to reach a consensus with the US seeking substantial market liberalization and Japan and European countries wishing to constrain the margin of tariff cuts. The ministerial meeting will have the participation of about 40 countries and territories, including Japan, the US, and European countries. Minister of Economy, Trade, and Industry Toshihiro Nikai and Minister of Agriculture, Forestry, and Fisheries Shoichi Nakagawa will represent Japan. In the agricultural sector, the US is seeking an average 66% tariff cut, creating a division with Japan, which wants the margin of such a cut to be no more than 28%, and the EU, which wants a 41% reduction. The US is being urged to substantially cut its agricultural subsidies. Brazil and some other countries that want to increase exports to industrialized countries have been asking for cuts on mined and manufactured products. The agricultural talks are showing signs or becoming a three-sided or even a four-sided fight. On June 23, the chairman presented a set of proposals for both the TOKYO 00003580 009 OF 009 agriculture and mined and manufactured sectors, which are to form the basis for the ministerial meeting. The contents of the package were no more than the list of arguments already presented by various countries. Coordination of views is needed on about 700 items, including the rates of reductions in tariffs. The US, a food exporting country, holds the key to the fate of the talks. It has been decided that modified rates will be applied to some products, including Japan's rice, as exceptions. The US has called for holding the number of items treated as exceptions to 1% of all items. It is also calling for capping tariff rates on such exceptional items at 75%. Japan, which imposes a 778% tariff on rice, and the EU are opposing the US proposal as unrealistic. Chances are that if the talks bog down, the US may be criticized as the culprit. However, some suspect that the US, which is unable to move with the midterm election close at hand, might make concessions within narrow limits, thereby blaming Japan and European countries in the event the talks break down. Should that occur, Japan would bear the brunt of criticism for having opened its agriculture market only on a piecemeal basis. Unless progress is made to some extent, it will be impossible to discuss other subjects, such as the services sector and assistance to developing countries. If that happens, it would be hopeless to reach a final agreement at year's end. The Trade Promotion Authority that the US Congress has granted to the Bush administration will expire next July. According to a government source, if that happens, it will take one or two years for the US government to be ready to pursue trade negotiations, meaning that trade talks will be effectively put on hold. There is fear in Japan of losing opportunities to expand trade with developing countries. DONOVAN