JAPANESE MORNING PRESS HIGHLIGHTS 11/08/06

UNCLAS SECTION 01 OF 10 TOKYO 006420

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11/08/06

Index:

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

North Korea policy:
4) Foreign Minister Aso, Secretary Rice in telephone conversation
agree to coordinate approaches to resumed six-party talks on North
Korea issues
5) Rice, Aso confirm policy stance of not recognizing North Korea as
a nuclear power
6) US Deputy Treasury Secretary Robert Kimmitt: Talks with North
Korea on counterfeiting will be separated from six-party talks on
nuclear issue
7) Pressure on North Korea still hot and heavy one month after its
nuclear test

China ties:
8) Japan-China summit meeting being set up at APEC setting in Hanoi

9) Japan, China to set up cabinet-level council on bilateral
economic relations

10) APEC meeting in Hanoi: Members will consider proposal for a
regional FTA

11) Prime Minister Abe at international exchange forum promises
further international contributions from Japan, receives praise from
Prime Minister Blair, by satellite

12) WTO Director General Lamy, Agricultural Minister Matsuoka agree
on need to restart round of negotiations

13) Education bill expected to clear the Lower House on the 16th

Defense issues:
14) Comment by LDP's Sasagawa that Japan should consider scrapping
principle of not letting nuclear weapons transit Japan causes sharp
reaction in ruling camp
15) JDA chief Kyuma: In emergency, new runway to be built on shores
of Camp Schwab may have to be used for take offs, landings in both
directions
16) Locals strongly object to JDA chief's remark about using Futenma
alternate runway in both directions

17) Anti-Abe forces in LDP, forty strong, set up Asia policy vision
study group

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei & Tokyo Shimbun:
Tornado kills 9, injures 23 in Saroma, Hokkaido

Nihon Keizai:
Toyota to form capital, business tie-ups with Isuzu


Akahata:
Cabinet Officer apologizes for "staged questions" at town meeting

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2) EDITORIALS

Asahi:
(1) Tornado in Hokkaido: How should we prepare for unexpected
disasters?
(2) Reform of Social Insurance Agency: LDP should present
alternative plan

Mainichi:
(1) What Ishihara Sangyo did was illegal dumping
(2) Criminal trends: Take specific measures

Yomiuri:
(1) Nuclear debate should be allowed
(2) Honma-led Government Tax Commission should create tax system for
fiscal reconstruction

Nihon Keizai:
(1) Contents of discussion in the Government Tax Commission to be
questioned
(2) Environmental technology prompts realignment of auto
manufactures

Sankei:
(1) Six-party talks: Five countries must strengthen cooperation
(2) Transplants of diseased organs from sick patients: Transparency
necessary for medical treatment

Tokyo Shimbun:
(1) Government Tax Commission needs efforts to obtain public
understanding
(2) Japan, China should step up strategic dialogue for East Asia
security

Akahata:
Government Tax Commission: Let's raise a protest against the Abe
cabinet, which is trying to tax ordinary people even more

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, November 7

NIHON KEIZAI (Page 2) (Full)
November 8, 2006

08:43
Cabinet meeting in the Diet. Education and Science Minister Ibuki
remained. Then met with Foreign Minister Aso, followed by Economy,
Trade and Industry Minister Ota.

09:42
Met with Deputy Chief Cabinet Secretary Shimomura at the Kantei.

10:11
Grand Cordon Award Ceremony at the Imperial Palace.

11:00
Arrived at the Kantei.

13:25
The Order of Rising Sun, Gold and Silver Star Award Ceremony at the

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Imperial Palace.

14:44
Met with Special Advisor to the Prime Minister Koike.

16:01
Met with State Minister in charge of Disaster Management Mizote and
Deputy Chief Cabinet Secretary for Crisis Management Noda. Then
attended the government's Tax Research Commission meeting.

17:09
Japan Dream Creation Dojo (School) at the LDP Headquarters.

17:38
Met with former Foreign Minister Machimura, Lower House member
Katsuyuki Kawai and others at the Kantei. Machimura remained.

18:30
International exchange forum "The Japanese Renaissance" at Palace
Hotel.

19:02
Met secretaries and others at Grand Arc Hanzomon.

20:35
Returned private resident in Tomigaya.

4) Foreign Minister Aso holds telephone dialogue with his US
counterpart: Both agree to work together to resume six-party talks

TOKYO SHIMBUN (Page 2) (Full)
November 8, 2006

Foreign Minister Taro Aso yesterday evening talked with US Secretary
of State Condoleezza Rice over the phone for about 10 minutes. They
shared the perception that it is important for the five countries
other than North Korea to work together for the resumption of the
six-party talks on North Korea's nuclear program. They will
undertake coordination of views with foreign ministers of other
countries on the sidelines of the Asia-Pacific Economic Cooperation
(APEC) forum meeting starting Nov. 15. Aso and Rice also confirmed
their refusal to recognize North Korea as a nuclear power. They also
vowed to continue the sanctions resolution adopted by the United
Nations Security as long as the North does not abandon its nuclear
arms.

5) Aso, Rice agree not to recognize North Korea as nuclear power

YOMIURI (Page 4) (Full)
November 8, 2006

Foreign Minister Taro Aso had a telephone conversation with US
Secretary of State Condoleezza Rice last night. As a result, they

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confirmed the policy course that (1) the two countries will not
recognize North Korea as a nuclear power; and (2) the international
community must not weaken pressure on North Korea, such as sanctions
measures under the UN Security Council resolution, just because the
North would return to the six-party talks. They also agreed on the
need to coordinate views among Japan, the United States, South
Korea, China, and Russia ahead of the next round of the six-party
talks through the upcoming Asia-Pacific Economic Cooperation (APEC)
cabinet meeting and other occasions.

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6) Interview with US Deputy Secretary of Treasury Kimmitt: May
confer on fake US bills and other issues with North Korea "outside
of working group under six-party talks"

NIHON KEIZAI (Page 8) (Full)
November 8, 2006

Visiting US Deputy Secretary of the Treasury Robert Kimmitt
yesterday announced that the US Department of the Treasury was ready
to hold direct discussions with North Korean officials in order to
call on them to stop their illicit activities, including
counterfeiting (US) bills, which led Washington to impose financial
sanctions. Kimmitt indicated a plan to confer on financial sanctions
outside of a working group to be established under the six-party
talks as a forum to discuss the issue.

Kimmitt made these statements in an interview with the Nihon Keizai
Shimbun in Tokyo.

There is a gap between North Korea and the other members of the
six-party talks, including Japan and the United States, about how to
manage the working group in the multilateral forum. North Korea
wants to see the financial sanctions removed quickly, while Japan,
the US, and other countries want to lift the sanctions on the
condition that the North stop illicit activities. This gap could
derail the working group from the moment it is set in motion and
impede progress in the six-party talks.

The remarks made by Kimmitt are taken to mean that the US will
effectively separate the financial sanctions from the six-party
talks by showing a willingness to confer on the issue in a separate
arena even if the North falls short of assuring it will stop illicit
activities. The aim is to avoid a case of North Korea boycotting the
talks citing slow progress in coordination on the financial
sanctions issue.

Citing the direct talks with North Korea held in New York in March
of this year for the US to detail the financial sanctions to that
country, Kimmitt stated firmly: "There is a possibility that a
Department of the Treasury-led bilateral dialogue between the US and
North Korea will take place." When asked about the relationship
between the US-North Korea dialogue and (the six-party talks),
Kimmitt stated, "That dialogue will have nothing to do with
denuclearization," and emphasized that the dialogue would not be
linked to the working group under the six-party talks.

If the dialogue is realized, "We will discuss whether the North
Koreans will act in accordance with American and other countries'
laws," Kimmitt said, indicating the US would prod the North to end
its illicit activities. The illicit activities cited by him include
(1) counterfeit bills, (2) cigarette smuggling, and (3) procurement
of technology relating to the manufacture of nuclear weapons.

Asked about the reconstruction of Iraq, Kimmitt commented: "The Bush
administration's stance of assisting Iraq will remain unchanged,
regardless of the results of the midterm elections."

Kimmitt indicated a plan to have full-fledged consultations with the
concerned countries starting this month about international
assistance in order to meet a reconstruction roadmap announced this
summer by the Maliki government of Iraq.

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7) Differences in level of pressure on North Korea evident one month
after nuke test

YOMIURI (Page 2) (Full)
November 8, 2006

Since North Korea conducted a nuclear test on Oct. 9, one month has
passed. Various countries have implemented sanction measures against
the North, based on a resolution adopted by the UN Security Council.
With North Korea's announcement of its return to the six-party
talks, however, the five other nations of the six-party talks are
beginning to impose different levels of pressure on the North.

United States Under Secretary of State Robert Joseph met Deputy
Foreign Minister Tsuneo Nishida and Australian Foreign Vice Minister
David Richer at the Foreign Minister on Nov. 6 to discuss sanctions
against North Korea.

China's strengthened overland cargo inspections reportedly prompted
North Korea to return to the six-party talks. The US intends to
inspect suspicious ships in ports, increasing the possibility that
Japan will not have to invoke the Regional Contingency Law to assist
US maritime inspections for the time being.

However, in the Oct. 6 meeting, too, the US did not rule out the
possibility of forcible maritime inspections. A government source
said, "In the event that the US takes a forcible measure toward an
apparently dangerous ship, Japan will immediately offer cooperation
based on the Regional Contingency Law."

Meanwhile, South Korea takes the stance that sanctions have already
been implemented with such conventional measures as cargo
inspections of ships heading toward third countries via South Korea
and a ban on money remittances. President Roh Moo Hyun also
announced that South Korea would continue the tours to Mt. Kumgan in
North Korea. Russia reportedly has yet to take any specific action.
These countries' responses are an element of concern before the
six-party talks are resumed.

Australia, which is not a member of the six-party talks, has banned
North Korean ships from entering its ports. Prime Minister Howard
indicated an eagerness about vessel inspections in the Sea of Japan,
but Australia, like Japan, is watching US moves.

The Japanese government has almost completed work to form a list of
"luxury items" subject to embargo under the resolution. It plans to
disclose the list possibly on Nov. 13, the deadline for Japan to
report on the state of sanctions to the UNSC Sanctions Committee,
and then intends to start banning trade in the listed items by
revising the government ordinance on export and trade control based
on the Foreign Exchange and Foreign Trade Control Law. Included in
the list are likely to be automobiles, liquor, cigarettes, air
conditioners, perfume, and high-class beef. Japan, though, has
already prohibited North Korean ships from entering ports and has
imposed an embargo on luxury goods. The effect of the new sanctions
is likely to be limited.

8) Japan, China to hold a summit in Hanoi in mid-November

ASAHI (Page 4) (Full)
November 8, 2006

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Nobuyoshi Sakajiri, Beijing

Chinese Foreign Ministry Assistant Minister for Asian Affairs Cui
Tiankai yesterday announced at a press conference that President Hu
Jintao and Prime Minister Abe would hold a summit on the sidelines
of the upcoming Asia-Pacific Economic Cooperation (APEC) Summit
Conference in Hanoi slated for mid-November. What is expected to be
high on agenda for the summit includes strengthening the strategic
reciprocal relationship, the North Korean nuclear issue, on which
the six-party talks will resume shortly, and how to implement
sanctions against the North.

Cui revealed that the Japanese and Chinese governments agreed to
have a bilateral summit in Hanoi and indicated that the two leaders
"will exchange even more in-depth views on international and
regional issues that involve the two countries and are a matter of
concern for both, building on Prime Minister Abe's recent visit to
China."

According to Cui, a US-China summit will be also held in Hanoi.

9) Japan, China to establish annual conference of economic
ministers, with such topics as energy and intellectual property

NIHON KEIZAI (Page 1) (Full)
November 8, 2006

The governments of Japan and China have agreed to establish a
Japan-China economic ministerial conference (tentative name),which
would be tasked with promoting mutual economic cooperation on a wide
range of issues. The ministers would meet once a year, and energy
and the protection of intellectual property are expected to be on
the first agenda list. When Prime Minister Shinzo Abe visited China
in October, Abe and President Hu Jintao agreed in their meeting to
launch a program to promote establishing a strategic reciprocal
relationship. Setting up a new high-level conference is part of this
program. Following the bilateral summit in October, Japan and China
will construct multilayered government-to-government channels under
a framework of cabinet-level talks.

Abe and Hu will reach an official agreement on the new forum at
their meeting to be held on the sidelines of the Asia-Pacific
Economic Cooperation (APEC) summit in Hanoi in mid-November.

Japan and China held economic ministerial meetings even when their
relations remained strained over former Prime Minister Junichiro
Koizumi's visits to Yasukuni Shrine, but there was no framework for
relevant cabinet ministers to regularly meet. By establishing a new
council, both sides aim to effectively promote talks in economic
policy areas. They intend to use this conference as the major
framework for bilateral economic talks between Japan and China,
lined up with summit meetings and comprehensive policy talks by the
foreign ministers.

Participants in the cabinet-level meetings are likely to include
Foreign Minister Taro Aso, Finance Minister Koji Omi, and Economy,
Trade and Industry Minister Akira Amari. It is still unknown who
will attend from the Chinese side, but coordination seems to be
underway focused on Vice Premier Wu Yi, Foreign Minister Li
Zhaoxing, and Commerce Minister Bo Xilai. In a bid to produce
results early, the two governments plan to set up sector-specific

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panels of experts after the first meeting of the ministers.

In the energy area, Japan will provide China with energy-saving
technology and know-how on developing alternative energy. For the
protection of the environment, the two countries will work out
specific measures. They have also decided to discuss the problem of
China's violation of intellectual property rights, such as the
spread of fake brand-name appliances and clothing. The ministers
also are expected to discuss: (1) financial deregulation and the
problem of bad loans in Japan; (2) IT (information technology); and
(3) medical issues, such as coping with infectious diseases.

10) APEC: FTAs involving all member nations to be put on meeting's
agenda; Hanoi declaration draft unveiled

YOMIURI (Page 1) (Excerpts)
November 8, 2006

An Asia-Pacific Economic Cooperation (APEC) forum meeting is to be
held in Hanoi, Vietnam on Nov. 18-19. The draft of a Hanoi
declaration to be issued at a summit meeting to be held on the
sidelines of the APEC meeting was unveiled yesterday. The draft for
the first time incorporated a policy of looking into the feasibility
of a free trade area for the Asia-Pacific (FTAAP) to be formed by 21
APEC member nations.

The realization of an FTA involving all APEC member nations means
the formation of a huge free trade zone that accounts for 40% of the
world's population and 60% of the world's gross domestic product
(GDP).

The US wants to embark on joint research for the materialization of
FTAAP with the summit declaration this time as the occasion.
However, China and some other countries are bound to oppose the idea
of the US deepening its involvement in Asia over East Asia's
economic integration. To what extent APEC can come up with a
forward-looking stance at the summit is drawing attention.

11) International Exchange Forum; Prime Minister pledges further
promotion of international contribution; British premier highly
evaluates Japan's diplomacy

YOMIURI (Page 1) (Excerpts)
November 8, 2006

Prime Minister Abe attended the reception for the international
exchange forum "the Japanese Renaissance," held at a hotel in the
Chiyoda Ward, Tokyo. The forum was co-hosted by The Times of Britain
and The Yomiuri Shimbun. In a speech given at the reception, the
prime minister stressed: "Japan will contribute to the peace and
stability of the world more than ever before. It is important to
discuss what is needed to that end without fearing old taboos." He
also noted: "Japan will also make efforts to promote freedom,
democracy, basic human rights and the rule of law in Asia. Sixty
years have passed since the end of the war. We now must challenge
various issues in a courageous manner."

He also stated: "I want to drastically increase the number of
international conferences held in Japan so that it can become a
gateway to Asia. I want to change the image of Japan, such as that
it is closed or it has too many regulations."


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British Prime Minister Blair made a speech to the conference carried
live from No. 10 Downing Street.

12) Matsuoka, Lamy agree on early resumption of WTO talks

NIHON KEIZAI (Page 3) (Full)
November 8, 2006

Takafumi Ichimura, Geneva

Agriculture, Forestry and Fisheries Minister Toshikatsu Matsuoka,
now visiting Europe, met on Nov. 7 in succession with individuals
connected with World Trade Organization (WTO) talks, including
Director General Pascal Lamy. As a result, they agreed to make
efforts for resuming the Doha Round, which has been suspended since
July. After the series of meetings, Matsuoka said: "We are planning
to resume the talks around the Christmas holidays in December or the
Davos Conference (World Economic Forum) to be held in Switzerland in
late January."

Lamy did not mention any specific timeline, according to Matsuoka.
The farm minister also underlined the need for major players, such
as Japan, the United Sates, and European nations, to mutually
confirm a willingness to make concessions. He said: "In order for
the United States to deeply cut agricultural subsidies, it has to
determine whether (such countries as Japan and European nations) are
willing to open up their markets in return."

13) Education reform bill to clear Lower House as early as Nov. 16

TOKYO SHIMBUN (Page 2) (Full)
November 8, 2006

The House of Representatives Special Committee on Basic Education
Law decided yesterday to hold on Nov. 9 a session to hear views from
experts and on the 13th a public hearing in a local city. The ruling
parties suggested taking a vote on a bill revising the Basic
Education Law at the Lower House plenary session on the 14th, but
the opposition camp turned it down. Therefore, chances are that the
bill will clear the Lower House on the 16th or later.

The ruling camp initially proposed holding a public hearing on the
10th and putting the bill on a vote on the 13th at the committee,
but they made a concession to the opposition, which insisted that
more time would be needed for deliberations on the bill.

14) LDP lawmaker Sasagawa's remarks suggesting a review of three
nonnuclear principles irritate New Komeito, LDP leadership

ASAHI (Page 4) (Full)
November 8, 2006

At a liaison meeting yesterday of the Liberal Democratic Party (LDP)
executives, Party Ethics Committee Chairman Takashi Sasagawa
referred to a review of the three nonnuclear principles and later
caused a stir inside and outside the party. His reference could
damage the Abe administration, so the party leadership was desperate
to limit the repercussions. Meanwhile, junior coalition partner New
Komeito expressed displeasure.

After the plenary session yesterday, LDP Diet Affairs Committee
Chairman Toshihiro Nikai asked Sasagawa about his remarks: "As a

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personal view, that would be fine, but it is problematic to say such
a thing at a meeting, the details of which are publicized."
Secretary General Hidenao Nakagawa, too, negated Sasagawa's remarks

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in question, noting: "Such a thing will never be put on the agenda
for official discussion in the party."

At a time when deliberations on the bill amending the Basic
Education Law -- a priority bill -- are at a crucial stage, the
party leadership is highly sensitive to problematic remarks. After
meeting with Nikai, Sasagawa explained to reporters: "I didn't
mention a review of (the three nonnuclear principles). What I said
was it's questionable how the United States can defend Japan if it's
not allowed to bring (nuclear weapons) into Japan."

On the other hand, Nakagawa stated in a speech on Nov. 6: "Our
party's position is to adhere to Prime Minister Abe's policy of
observing the three nonnuclear principles." Given this, Sasagawa's
remarks could be taken to criticize the administration as well as
the party leadership. A senior New Komeito member made this comment:
"(The LDP) has a wrong view of the situation. Abe is being
disrespected." On the other hand, Prime Minister Abe was asked late
yesterday by reporters about Sasagawa's remarks and stated: "There's
no change in the government's policy."

15) Kyuma: US aircraft may land on planned runways from two
directions in emergencies

YOMIURI (Page 4) (Full)
November 8, 2006

Touching on the operation of a facility to be constructed on the
coastline of Camp Schwab to replace Marine Corps Air Station
Futenma, Defense Agency Director-General Fumio Kyuma said before the
Lower House Security Committee yesterday: " US aircraft could land
on the runways from any direction in emergency situations where
saving life is top priority." He thus indicated that Japan would
have to allow US aircraft to land on the planned V-shaped pair of
runways from both directions strictly in emergency situations.

16) Kyuma: US aircraft could make landings on Futenma alternate
runways from two ways; Local objections inevitable

MAINICHI (Page 2) (Full)
November 8, 2006

Defense Agency Director-General Fumio Kyuma indicated before the
Lower House Security Committee yesterday that the government would
allow US military aircraft to make landings on a V-shaped pair of
runways to be constructed on the coastline of Camp Schwab from two
directions in emergency situations. He said: "In a life-or-death
situation, aircraft could make a landing from any direction." US
aircraft would then fly over residential districts, so local
residents are likely to raise objections.

In April, the Defense Agency reached an agreement with Nago City and
other affected municipalities to allow US military aircraft to use
only two spots on the seaside for landings in order to remove flight
paths from residential district. But the US side later requested
approach lights be installed on the either side of the two runways.
The Defense Agency intends to specify "emergency use" in a facility
operation agreement to be concluded with affected municipalities.


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17) Asia diplomacy vision study group launched, 40 LDP lawmakers
take part in it

MAINICHI (Page 5) (Full)
November 8, 2006

Ruling Liberal Democratic Party (LDP) lawmakers, including Koichi
Kato and Taku Yamasaki, who place priority on Japan's foreign policy
toward Asian countries, yesterday convened an inaugural meeting of a
study group on Japan's "vision" of its Asia foreign and security
policies. The formation of the group was decided during the LDP
presidential campaign. The group initially seemed to have aimed at
rallying together LDP lawmakers who do not favor Prime Minister
Shinzo Abe. But since Abe has taken a stance of placing his own
emphasis on Asia by making trips to China and South Korea soon after
assuming office, the group appears to have been neatly sidestepped.
In order to blur the image of it being an anti-Abe group, the
organizers tried to call on lawmakers belonging to the Machimura
faction, from which Abe hailed, to join. As a result, the
inauguration of the group failed to have a major impact.

At the inaugural meeting, Kato was chosen chairman and Yamasaki a
standing adviser. Yamasaki praised Abe, saying, "I greatly welcome
that he was able to overcome the first critical phase," but he
criticized former Prime Minister Junichiro Koizumi, saying, "Japan
has three foreign policy principles: placing importance on UN
diplomacy; on the Japan-US alliance, and on being an Asian country.
But Mr. Koizumi attached little importance to Asia diplomacy."

The organizers came from all LDP factions except the Kono faction.
They included Shinya Izumi, a Nikai faction member, who backed Abe
in the party's presidential election. About 40 lawmakers took part
in yesterday's meeting. The lineup of organizers appears to be aimed
at emphasizing internal harmony, having switched tactics from an
Aug. 24 meeting, in which members of the factions supporting Abe did
not participate.

In the statement revealed yesterday, the group sought to constrain
the Yasukuni issue and noted that China and South Korea believe that
the prime minister would not visit Yasukuni Shrine while he is in
office. It went on to state that if he betrays them, there is a
possibility that bilateral relations would return to again being
"politically cool, economically hot." Regarding the fact that LDP
Policy Research Council Chairman Shoichi Nakagawa and other official
have advocated a debate on a nuclear option for Japan, the statement
noted that there seems be a move to force a review of the three
nonnuclear principles. The group underscored a stance against such a
move.

Yet a person closed to Kato said, "There is no need now to lock
horns with Mr. Abe." Therefore, the challenge at present is for the
group to have its say, while closely watching the prime minister's
stances for the time being.

SCHIEFFER