DAILY SUMMARY OF JAPANESE PRESS 02/09/06

UNCLAS SECTION 01 OF 10 TOKYO 000727 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 02/09/06 INDEX: (1) US rejects civilian aircraft facility inside Iwakuni Air Station; Plan to bring them in by fiscal 2009 may be delayed (2) JDA chief Nukaga indicates plan to set up councils on US force realignment in local communities (3) Scanner column: Japan forced to reshape strategy on abduction issue with ending of Japan-DPRK talks (4) Minshuto suddenly moving away from LDP, New Komeito regarding referendum bill, giving priority to drawing clear line with ruling camp (5) Proposals on constitutional revision: Interviews with chairmen of constitution commissions of LDP, New Komeito and Minshuto (6) Japanese economy gaining momentum four years after emerging from recession; Potential growth once again takes upward turn (7) Editorial: US defense strategy review - need for improvement in efficacy of Japan-US alliance (8) Tyson Foods demands withdrawal of report by Minshuto delegation that points out insufficiency of anti-BSE measures ARTICLES: (1) US rejects civilian aircraft facility inside Iwakuni Air Station; Plan to bring them in by fiscal 2009 may be delayed YOMIURI (Page 1) (Full) Evening, February 9, 2006 It was learned today that the United States in connection with the extending of civilian aircraft services at the US Marine Corps Air Station Iwakuni (Yamaguchi Prefecture),as agreed by the Japanese and US governments in US force realignment talks, the US side has refused to allow the construction of a terminal on base for use by civilian aircraft, citing the need to give priority to the military facility. If the terminal is built outside the base, there is growing concern that the plan to put a civilian airport in operation by fiscal 2009, as aimed at by the local community, will be delayed. The Japanese and US governments have agreed to a plan to move 57 carrier-borne jets and approximately 1,600 military personnel from the US Navy's Atsugi Naval Air Station (Kanagawa Prefecture) to the Iwakuni base. There also was agreement in October 2005, as part of a local package to accompany the relocation of the carrier-based jets, to allow civilian aircraft to provide flight service of a maximum four takeoffs and landings a day from the base runway, as desired by the local community. The new runway (2,400 meters) being built off the coast of Iwakuni Air Station will be completed in fiscal 2008. The Japanese side has hoped to see a terminal built for passengers to board civilian aircraft on the current runway that will become unused space. However, the US side in senior working-level talks on Feb. 1 TOKYO 00000727 002 OF 010 refused to allow construction of a terminal inside the base proper, citing the need to build a military facility on a part of the current runway for such use as hangers for the carrier-based jets to use. In case the terminal is constructed on civilian land outside the base, not only would the timetable for service by civilian aircraft be delayed, the following negative aspects have also been pointed out: 1) inconvenience for users; and 2) increased construction costs. (2) JDA chief Nukaga indicates plan to set up councils on US force realignment in local communities MAINICHI (Page 1) (Full) Evening, February 9, 2006 Defense Agency Director General Fukushiro Nukaga stated in a meeting of the House of Representatives Budget Committee this morning: "We would like to set up councils that include governors and heads of local municipalities" to discuss US force realignment plans. The remark was in response to a question by Liberal Democratic Party member Kozaburo Nishime. The liaison council of the governors of 14 prefectures housing US military bases have so far engaged in negotiations on US force realignment with the central government. In his Diet reply, Nukaga indicated plans to set up new discussion panels that would include local government heads. (3) Scanner column: Japan forced to reshape strategy on abduction issue with ending of Japan-DPRK talks YOMIURI (Page 3) (Full) February 9, 2006 Takaharu Yoshiyama, Beijing Japan and North Korea wound up their official round of talks yesterday. The two nations confirmed they would continue the dialogue, but this round made it clear that there are the great differences in views between the two governments. Especially on the abduction issue, a senior Foreign Ministry official criticized the results, calling them "not a zero reply but a minus reply," meaning worse than no reply. Japan is being forced to reshape its strategy. But this time, there is a subtle change being felt in Japan, particularly since calls for tough economic sanctions, for instance, from the Liberal Democratic Party (LDP), are not rising. Subtle change in government, LDP; More calls for a cool-headed response than calls for sanctions They threw us a curve "That's out of the question. Are they working in good faith to resolve the abduction issue?" Such was the strong response from Kunio Umeda, deputy director-general of the Foreign Ministry's Asian and Oceanian Affairs Bureau during the meeting on the abduction issue on Feb. 7. This remark came out when the North Korean delegates demanded Japan hand over some members of Japan's nongovernmental organizations supporting North Korean defectors. The demand came in response to Japan's calls for 1) returning abductees now living in North Korea to Japan, 2) shedding light TOKYO 00000727 003 OF 010 on the truth of the abductions; and 3) handing over North Korean abductors to Japan. The recent round of talks were held in a way to allow three subjects to be discussed in parallel: abductions, security issues including nuclear and missile development, and normalization of diplomatic ties. A total of 11 hours were devoted to discussions on the abduction issue held on Feb. 5 and Feb. 7. But no positive responses ever came from the North Korean delegation. Instead, North Korean delegates threw their Japanese counterparts a "curve" at one point by demanding the handover of some of Japan's NGO members, and at another, they appeared to be trying to admonish Japan. The North Korean Foreign Ministry's Asian Bureau Deputy Director Kim Chol Ho raised doubts about Japan's DNA analysis of the ashes North Korea provided to Japan as Megumi Yokota's and quoted a Korean saying: "A Korean proverb says, 'Doubts are equivalent to illness." He meant, "Doubts know no bounds." Verbal battle The negotiations on the normalization of diplomatic relations, held for the first time in three years and three months, saw a perceptions gap over the 2002 Japan-North Korea Pyongyang Declaration come to the fore. On settling past accounts, the Japanese team offered an economic cooperation formula consisting of two approaches: 1) Both sides mutually would waive claims on property and agree that claims for cash compensation relating to Japan's colonial rule of Korea, including military comfort women and Koreans forced to come to Japan have been legally settled; and 2) Japan would offer economic cooperation. The Japanese team emphasized this economic cooperation formula as the only pragmatic way for settlement. This formula stems from the method Japan and South Korea adopted when the two countries normalized relations in 1965. However, the North Koreans insisted that the "formula is not sufficient." They suggested subtly they would still want compensation for the military comfort women and forced laborers in Japan. The North apparently wished to resolve the issue with more favorable conditions than those South Korea obtained. Preparations for bills now underway "A lack of tangible progress on the abduction issue would put the Japanese public in an extremely severe mood," warned Ambassador for Japan-North Korea Diplomatic Normalization Koichi Haraguchi to his North Korean counterpart Song Il Ho during a plenary session on Feb. 8. In fact, some in Japan want to put pressure on North Korea due to its "minus reply." The LDP are preparing two bills to submit to the Diet: one specifying the requirements need to impose economic sanctions and another on the human rights of the North Korean people that calls on Pyongyang to improve such rights. The party's Foreign Affairs TOKYO 00000727 004 OF 010 Division chief Ichita Yamamoto and other party members are planning to draft the bills possibly today based on the results of the bilateral talks. On Feb. 2, the Fukuoka High Court decided that reduced tax rates and exemption to the fixed property tax of facilities owned by the General Association of Korean Residents in Japan (Chongryun) is a violation of the law. This ruling is seen as a "kind of pressure" on the North, a government source said. At a press briefing yesterday, Ambassador Song, referring to how his country would respond if Japan intensified its pressure on his country, hinted at retaliation, noting: "Newton's law of motion -- for every action there is a reaction -- would be applied." Yet, it is not safe to say that calls for sanctions are growing stronger in Japan as the stalemate continues in the bilateral talks. Many in the government remain cautious. One government official remarked: "Even if we get angry, I don't think it is a wise policy to close the door to dialogue, because a resolution of the abduction issue would then become more remote. A cool-headed response is necessary." Many also take the view that if Japan imposed sanctions unilaterally, the impact would be small. At a press briefing yesterday, Chief Cabinet Secretary Abe went no further than to say: "We will decide how to pressure that country after carefully listening to the results of the negotiations." Abe once insisted on imposing economic sanctions swiftly, but perhaps because he is a member of the cabinet now, he may find it difficult to lead advocates of sanctions. In addition, some hawkish members, including former Minister of Economy, Trade and Industry Takeo Hiranuma, have left the party, placing a damper on the moves of sanctions advocates. (4) Minshuto suddenly moving away from LDP, New Komeito regarding referendum bill, giving priority to drawing clear line with ruling camp ASAHI (Page 4) (Full) February 9, 2006 The ruling Liberal Democratic Party (LDP),its coalition partner New Komeito, and the main opposition party Minshuto (Democratic Party of Japan) decided at the end of last year to aim at submitting to the regular Diet session a bill to set up national referendum procedures for amending the Constitution. The three parties, however, will likely have trouble drafting a bill since there is strong reluctance in Minshuto to conduct discussion with the ruling camp on drafting a bill since the two camps are clashing in the Diet over such issues as the Livedoor scandal. The ruling coalition has a scenario that the Diet would start debate on a joint referendum bill soon after the fiscal 2006 budget is approved, but such a scenario will not now be realized. In a meeting yesterday of their secretaries general and policy chiefs, the LDP and New Komeito agreed to set up a deliberative body and work on Minshuto. The ruling camp plans to hold a first meeting before the end of this week. Since the ruling bloc has already drafted a bill, they are waiting for Minshuto to enter discussion. TOKYO 00000727 005 OF 010 Minshuto Constitutional Research Commission Chairman Yukio Edano turned around and said, "We are not happy with the move the ruling camp alone is proceeding with. It is difficult for us to cooperate with such a move." The ruling parties envisioned that they along with Minshuto would start early this year discussion on their own bill and one drafted by Minshuto and then come up with a joint bill around the end of March. They expected that the bill would be submitted to the Diet and the Diet would initiate in April debate and pass it before the end of the current Diet session. However since the ruling and opposition camps from the outset of the current Diet session have been seriously at odds over the Livedoor scandal and other issues, they have yet to set up a deliberative organ of the three parties. Moreover, some Minshuto members have called for bringing the Social Democratic Party (SDP) and the Japanese Communist Party (JCP) into the planned deliberative body. One senior LDP Constitutional Research Commission member said with a tone of resignation, "Under the present Diet situation, it is difficult to move ahead with three-party consultations on the issue of drafting a referendum bill." During hearings of the House of Representatives Special Committee on the Constitution in the special Diet session last year, the ruling and opposition parties held three free-discussion sessions on the issue of drafting a national referendum bill, but they have so far made no concrete moves in the current Diet session. House of Councillors members of the LDP and Minshuto, who are more passive about drafting a referendum bill, have not yet set up a deliberative body, which would be equivalent to the special constitutional committee in the Lower House. The Minshuto caucus in the Upper House, which has many former SDP-affiliated members, who call for protection of the Constitution, has finally decided to launch a study session on the formulation of its own bill. At present, therefore, the ruling coalition and Minshuto cannot discuss the contents of their own bills. A senior LDP member said: "Since amendments to the Constitution must be endorsed by a two-thirds majority in both houses, we need Minshuto's cooperation. So, we cannot lock horns with it at the preparatory stage." If the present situation continues, some ruling coalition members may strengthen their view that since the ruling parties have a majority of the Lower House seats, they alone should get their own bill passed through the Diet. (5) Proposals on constitutional revision: Interviews with chairmen of constitution commissions of LDP, New Komeito and Minshuto YOMIURI (Page 4) (Full) February 9, 2006 Gen Funada of Liberal Democratic Party (LDP) In a move to revise the Constitution, we aim at having a national referendum bill passed by the current Diet session and paving the way for government-level talks in the latter half of this year. TOKYO 00000727 006 OF 010 We would like to start full-fledged deliberations next year and to ask the prime minister to announce (a specific constitutional reform plan) when agreement is reached in outline. I think this is the best scenario. I hope that executive members, including former Justice Minister Okiharu Yasuoka, president of the House of Councillors' Constitution Research Special Committee, will take the lead in promoting constitutional debate. Although it is impossible to amend the Constitution if only the LDP makes efforts to that end, our party wants to serve as a "sherpa" in the talks. We would appreciate it if Minshuto (Democratic Party of Japan) and the New Komeito could swiftly submit their views in preparation for the talks. Particularly, we would like Minshuto to unify views in their party as much as possible. The New Komeito has insisted on the need to add new provisions or rights for the people in the Constitution, but we expect the New Komeito will decide what should be added in the Constitution at an early date. Akihiro Ota of New Komeito The revised constitution drafted by the LDP is similar in form to ours calling for adding public rights. All parties, including our party, have already come up with their draft proposals on revising the Constitution, so we should start discussion on which plan should be adopted and what parts in the Constitution should be changed. I believe that common views will be found through debates among the parties. I think the first referendum will be held on items on which each party share the same views. If the LDP decides to delete Clause 2 (renunciation of war) of Article 9, it means that the LDP has recognized the right to collective self-defense. Based on the stance of not approving the right to collective self-defense, we take the view that clauses 1 and 2 of Article 9 should be retained. Debates on the Constitution are heating up to some extent in the Diet, but people seem to have no major interest in this issue. It is very important to inform the public of the details of discussed matters in the Diet in an understandable way and spark up a national debate. Yukio Edano of Minshuto Progress in constitutional debate depends on public opinion. If a majority of the people say, "Make it quick," we will speed up the pace. We intend to hold discussion with the people, but future development depends on what response the public will make. Constitutional debate should not be affected by such political schedules as a Minshuto or LDP presidential race and a New Komeito convention. Those who aim to use the Constitution for political bargaining do not understand at all what the Constitution should be, because revising it will be impossible unless agreement is reached among the three parties. The Constitution should not be made a campaign issue. If it becomes a major election issue, it will become impossible for the three parties to reach an agreement and accordingly to amend the Constitution for the time being. In my view, the New Komeito now understands this point considerably, and half of the LDP members TOKYO 00000727 007 OF 010 are aware of this. But the remaining half do not take a modest stance and totally support the current Constitution. I hope the members with good sense will continue to stand fast on their stance. (6) Japanese economy gaining momentum four years after emerging from recession; Potential growth once again takes upward turn NIHON KEIZAI (Page 1) (Excerpts) February 9, 2006 The recovery of the economy is picking up speed. Companies are highly motivated by the desire to increase capital investment, boosted by upbeat business showings. Personal consumption, which has been slow to recover, is now showing clear signs of recovery. The Japanese economy is about to start on a stable growth track, though there are some factors causing uncertainty, such as high crude oil prices and developments in overseas economies. Benchmark surpassed It has been four years since the economy began its upward turn. Experiencing two slumps during the course, the pace of the recovery has not been smooth. But the uptrend is now picking up steam. Index of industrial and mining production (base of 100 for 2000) set a record high last December at 105.0. The index exceeded 104, a mark that was not surpassed even in the bubble era. Companies have strengthened their financial standing over the past four years. Though the labor distribution share (the proportion of the added value created by a company that is distributed to workers) is beginning to stop falling, the ratio in the most recent July-September quarter of last year stood at 63%, down six points over the past four years. In the corporate sector, excesses in employment, debt, plant, and facilities have been generally resolved. The ratio of operating income to net sales, which stood at 2.5% four years ago, went up to 3.9%, exceeding the level of the bubble era. The operating income of listed companies increased by double digits in the term ending in Mar. 2005 for the third consecutive quarter. It had been estimated that operating income would increase only slightly in the term ending in Mar. 2006 due to a rise in the prices of raw materials. However, Honda Motors achieved record profits due in part to the weak yen, though it had projected a fall in profits at the beginning of the term. Takashimaya Department Store had projected a decline in income and an increase in profits, but now both income and profits are expected to increase for the first time in four years. The upward trend in business showings is spurring companies to invest. Kubota will boost investment in the machinery business, such as the production of construction and agricultural machinery, in fiscal 2006 to 14 billion yen, double the level of this fiscal year. This is the first time in eight years for the company to make investments exceeding 10 billion yen. Increase in new investment Competitive investment in relation to flat-screen television sets, led by Sharp, is also spreading. Based on the judgment that global demand for polarizing film used in LCD sets will increase TOKYO 00000727 008 OF 010 by 30% a year, Kuraray plans to invest 20 billion yen. The Cabinet Office has projected that the capital stock of manufacturing companies in fiscal 2005 would exceed the previous year's level for the first time in eight years with new investments topping the depreciation and scrapping of existing facilities and equipment. Companies are thus beginning to emerge from a mentality of retrenching. Yasuo Goto, chief researcher at the Mitsubishi Research Center, observed: "The potential growth of the Japanese economy, which has been firmed by structural adjustment, has increased." He noted that the Japanese economy's potential growth stood over 3% in the bubble era and then slipped to 1.3% in fiscal 2000, but it has now rebounded to over the 1.5% level. If the economy continues to expand while potential growth increases, it will likely continue to experience favorable conditions over the long term without overheating. Cause for concern still remains, though. The US economy is saddled with high crude oil prices and a speculative bubble in the housing sector. The fallout of the Livedoor incident is still being felt. Even so, the Japanese economy is "in an excellent state of balance," according to Bank of Japan Governor Toshihiko Fukui. Chances are that the Japanese economy will maintain sustained growth barring an unexpected external shock. (7) Editorial: US defense strategy review - need for improvement in efficacy of Japan-US alliance SANKEI (Page 2) (Full) February 7, 2006 The US Department of Defense unveiled its Quadrennial Defense Review (QDR) report recently. The report comes up with guidelines to follow, for example, in dealing with the war on terrorism. It also raises a fundamental question about the role of the security alliance with Japan. The report positions the war on terrorism as a long-term conflict, projecting an image of a US military capable of responding swiftly and flexibly to any attacks. One feature of the report is that in expresses concern about the Chinese military, describing China as the country that holds the highest potential of becoming a military competitor. The report essentially regards China as a threat, explaining that its military buildup since 1996 has put the military balance in the region in danger. According to the QDR report, the United States will shift its emphasis in naval strength to the Pacific and deploy, for instance, six or more aircraft carriers there on a regular basis. The aim is presumably to enhance deterrent force in the so-called arc of instability extending from the Middle East to the Korean Peninsula, including China and a number of other countries. It is worth noting that the report cites Japan, Australia, and South Korea in this order as allies in the Pacific and appreciates bilateral ties, such as those with Japan, as maintaining world peace and security. Moreover, the report stresses that the Pentagon cannot deal with the complex challenges of today single-handedly and that it needs to work in TOKYO 00000727 009 OF 010 close cooperation with allies and friends. How to deal with the arc of instability is a national challenge facing Japan, because its own peace and security hang in the balance. It is safe to say that the only possible approach is for Japan and the US to work together to counter international terrorism and defeat groups that threaten peace in the region. In the Security Consultative Committee (SCC) meeting last February, Japan and the US released a joint statement urging China to resolve the tensions across the Taiwan Strait in a peaceful manner. With this, Japan as well has made clear its position that it will not condone the use of force against Taiwan. Japan therefore has a greater responsibility than the US to enhance the efficacy of the Japan-US alliance. But joint defense is a mirage so long as the government adheres to the present constitutional interpretation of the right to collective defense, namely that Japan possesses the right but cannot exercise it. Even if terrorists attack friendly forces, Japan's Self-Defense Forces cannot deal with them. The moment this flaw is exposed, the alliance will face a crisis. There is an agreement between Japan and the US that they will come up with a final report in March on the realignment of US forces in Japan. In compiling that report, it is imperative to have the perspective of strengthening deterrent force. Japan should be flexible enough to review its defense capability in terms of whether it can counter threats. (8) Tyson Foods demands withdrawal of report by Minshuto delegation that points out insufficiency of anti-BSE measures NIHON KEIZAI (Page 2) (Full) Evening, February 9, 2006 The Democratic Party of Japan (Minshuto) delegation, including House of Representatives member Kenji Yamaoka, recently visited a plant owned by Tyson Foods and later announced: "Its anti-BSE measures are insufficient." The largest meatpacker of the US has fiercely reacted to the delegation's report. The Minshuto delegation visited the meat-processing facility of Tyson Foods in Kansas in late January. Later, the delegation announced to reporters that the removal of specified risk materials (SRM) had been carried out in a sloppy way, for instance, broken pieces of the spinal cord had splattered over the meat during the slaughtering process. Tyson Foods President Bond sent a letter dated Feb. 2 to the delegation, in which he assailed that the party's announcement was inaccurate and "will hurt our company's reputation." The company demanded that the delegation "offer an apology and retract its statement." The letter stressed that the Minshuto delegation had not expressed concern about the safety of removal of SRM while visiting the facility and "had indicated even its approval and confidence in our operation of the facility." A spokesman of Tyson in response to an inquiry by the Nihon Keizai Shimbun yesterday said: "We have yet to receive any reply from the Minshuto delegation." The official was doubtful that political motives might lie behind the opposition party's moves. TOKYO 00000727 010 OF 010 An LDP delegation of five members will also leave for the US today to visit the same facilities the Minshuto delegation had visited. SCHIEFFER