DAILY SUMMARY OF JAPANESE PRESS 02/14/06-1

UNCLAS SECTION 01 OF 10 TOKYO 000795

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 02/14/06-1


INDEX:

(1) US envoy vows to listen to counterproposal; Futenma
relocation premised on feasibility

(2) US envoy says US to "consider" local counterproposal,
indicates US not sticking to coastal plan; True intentions
unreadable

(3) Okinawa residents perplexed by US ambassador's remarks
suggesting modifications; Japanese government says, "No effect on
ongoing talks"; Nago City denies possibility of its coming up
with proposal

(4) Realignment of US forces in Japan: Perception gap may bring a
crisis to bilateral alliance; US distrustful of Japan's local-
emphasized attitude

(5) USFJ realignment: City gov't releases findings from Misawa,
Iwakuni

(6) Bid-rigging scandal involving DFAA stands in way of plan to
upgrade JDA to ministry status

(7) US steps up pressure on Japan, China due to record high of
trade deficits with two countries regarding automobiles and the
yuan

ARTICLES:

(1) US envoy vows to listen to counterproposal; Futenma
relocation premised on feasibility

RYUKYU SHIMPO (Page 1) (Full)
February 14, 2006

US Ambassador to Japan Thomas Schieffer addressed the Okinawa
Association of Corporate Executives, or Okinawa Keizai Doyukai,
in its monthly meeting held yesterday afternoon at the Loisir
Hotel Okinawa. In his speech, Schieffer indicated that the United
States is ready to consider any alternative ideas Okinawa has to
propose for the planned relocation of the US Marine Corps'
Futenma Air Station to Camp Schwab in the city of Nago, which the
Okinawa prefectural government and the Nago municipal government
have rejected. "If the people of Okinawa Prefecture and the local
citizens of Nago are opposed to the relocation and if they say
they have a better idea, we will sincerely listen to them,"
Schieffer said.

Schieffer was asked what if Nago proposes building an offshore
facility. "As a result of talking about that idea, the facility
might be built as planned," Schieffer said. "If there is a better
idea, we might choose it," the ambassador added.

However, Schieffer also said Japan and the United States are
holding negotiations based on a broad, conceptual agreement to
relocate Futenma airfield to Camp Schwab. "We will sincerely take
any proposal but will not necessarily agree to that proposal, and
an agreement, if not translated into action, will be useless."
With this, Schieffer implied that the Japanese and US governments
would work out a final report based on a coastal plan.

In the meantime, the Okinawa prefectural government has been

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seeking to relocate Futenma airfield elsewhere outside Okinawa
Prefecture. However, Schieffer ruled out the possibility of doing
so. In this regard, the envoy said reaching a settlement on the
Futenma relocation is in a "total package" with returning bases
south of Kadena base and reducing 7,000 Marines. When it comes to
the final report, he said it would come out by the end of March.

Schieffer met with Okinawa Gov. Keiichi Inamine yesterday
morning. "The governor said the Futenma relocation is the only
exception," Schieffer said. With this, he indicated that the
Okinawa prefectural government would accept the agreed reversion
of bases in the prefecture's central and southern districts.

(2) US envoy says US to "consider" local counterproposal,
indicates US not sticking to coastal plan; True intentions
unreadable

RYUKYU SHIMPO (Page 2) (Full)
February 14, 2006

"If the local communities propose a better idea, then we will
sincerely listen to them." With this, US Ambassador to Japan
Schieffer indicated yesterday that the United States would
consider any alternative ideas Okinawa has to propose for the
planned relocation of Futenma airfield to a coastal area of Camp
Schwab while the Japanese and US governments are about to reach a
final agreement on the realignment of US forces in Japan.

In October last year, Japan and the United States released an
interim report on the realignment of US forces, incorporating
their agreement on specific plans. Before that, however, the US
government had pushed a local proposal from former Nago Mayor
Tateo Kishimoto and others to install a Futenma alternative in
shallow waters off the coast of Nago's Henoko district. As it
stands, the ambassador's remarks had a certain impact on local
officials. "It's a flexible message to the effect that the US
side will not stick to the coastal plan," a senior official of
the Okinawa prefectural government says. One local official
regards the ambassador's remarks as seeking to find a way out of
the impasse over the Futenma relocation facing rough going.
However, officials in the Okinawa prefectural government, Nago
municipal government, and Japanese government are taking the
ambassador's remarks in various ways. Some even wonder what his
remarks really mean.

Schieffer said the United States would not necessarily agree to
Okinawa's counterproposal. The ambassador drove a wedge into a
sudden spread of expectations for progress in talks over an
alternative idea.

Referring to last October's intergovernmental agreement on the US
military's realignment, Schieffer reiterated that it is a "broad,
conceptual agreement," thereby implying possible alterations to
specifics. However, there is still no knowing how seriously the
United States will explore changes to the coastal plan, such as
whether the United States will really consider an offshore site
for the Futenma relocation.

"I can't say the US side has shown a stance of responding to our
alternative idea," a senior official of the Okinawa prefectural
government says. "But," this official added, "we can clearly see
problems about the Japanese government that is sticking to the
coastal plan." With this, the official noted that the Japanese

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government holds the key to break the impasse.

Meanwhile, Nago Mayor Yoshikazu Shimabukuro is poised to sit down
at the negotiating table with the government if the government
modifies the coastal plan. However, the new mayor remains
committed to his usual stance, declaring that the Nago municipal
government would not offer to make any overtures. The Okinawa
prefectural government is also seeking to rectify the coastal
plan or otherwise to relocate Futenma airfield to another site
outside Okinawa Prefecture. The Japanese government is aiming to
reach a final agreement in the force realignment talks along with
the coastal plan. Most of its officials are taking a cool view of
the ambassador's remarks, with a senior official of the Foreign
Ministry saying the ambassador "probably played lip service."

"The ball is now in our court," says a Defense Facilities
Administration Agency source. However, the four parties-involving
the Japanese government, Okinawa prefectural government, and Nago
municipal government-remain unchanged in their respective
positions. There is no predicting what will happen to the coastal
plan from now on.

Main points from Ambassador Schieffer's remarks

Following are main points from US Ambassador to Japan Schieffer's
remarks:

-- Okinawa Prefecture and Nago City are both opposed to the
coastal plan. Will be there no change to the plan?

Schieffer: The Japan-US agreement is a broad, conceptual
agreement to relocate (Futenma airfield) to Camp Schwab. If the
people of Okinawa Prefecture and the local communities of Nago
say they are opposed to the plan and they have a better idea, we
will have to listen to them. If we can reach an agreement in
detail as a result of talks, then I hope that it will be
acceptable to the people of Okinawa Prefecture.

-- Is it a package to reach a settlement on the Futenma
relocation, return bases south of Kadena base, and reduce 7,000
Marines?

Schieffer: It's a total package. Governor Inamine said the only
exception is the Futenma relocation issue, and he indicated that
he could accept all other specific realignment plans.

-- You said you will listen to local proposals. Do you mean that
the United States will consider local proposals, or do you
otherwise mean it's a proposal on the US government's part?

Schieffer: We will sincerely take local proposals, but we will
not necessarily reach an agreement. I mean that the United
States, as a friend and as an ally, will respect and appreciate
their views. Any agreement will be of no use unless it's
translated into action.

-- How about the possibility of relocating Futenma airfield
elsewhere outside Okinawa Prefecture? Is Nago's assertion
acceptable?

Schieffer: There's no option to relocate Futenma airfield outside
Okinawa Prefecture. As a result of talks, it may be relocated as
planned, and if there is a better way, we may choose to do so.

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(3) Okinawa residents perplexed by US ambassador's remarks
suggesting modifications; Japanese government says, "No effect on
ongoing talks"; Nago City denies possibility of its coming up
with proposal

OKINAWA TIMES (Page 2) (Full)
February 14, 2006

By Go Watanabe of the politics and economics desk and Ou Yoshida
at the Tokyo branch office

During a question-and-answer session after a speech yesterday, US
Ambassador to Japan Thomas Schieffer indicated a stand that could
be taken as being flexible about modifying the present plan for
relocating the US Marine Corps Futenma Air Station to the coastal
area of Camp Schwab. Many in the Okinawa prefectural government,
as well as in the central government, are perplexed by his
apparent display of flexibility, wondering what is his real
intention. Some are, however, taking it cool-headedly. A senior
prefectural government official, for instance, remarked: "It'll
never happen that Okinawa Prefecture or Nago City will come up
with a modification proposal." A central government official also
stated, "That's unlikely to affect Japan-US talks." The fate of
Japan-US talks is drawing wide attention, as the end-of-March
deadline for a final report on the realignment of US forces in
Japan is nearing.

Subtle difference felt

"I thought there was a subtle difference in nuance from the
previous US position," a senior prefectural government official
said. This official felt a "change" in the US stance from
Ambassador Schieffer's answer when he said in response to
questions on the coastal relocation plan: "If local residents
have better plans, we have the responsibility to listen to them."

Late last month, US Secretary of Defense Donald Rumsfeld, keeping
in mind the interim report released last October, urged Japan to
make efforts, telling Liberal Democratic Party lawmakers and
others while they were in the US: "We need to implement the
agreed items in a steady manner." Regarding the Futenma
relocation issue, too, the US had never hinted at revising or
changing the coastal relocation plan until recently.

Schieffer, however, went as far as to say that as a result of
accepting local ideas, "we may go ahead with the present plan or
may look for ways to find better ideas."

"This remark could be taken as being flexible, but it depends on
how you interpret it," the same prefectural government official
noted. In actuality, however, the prefectural government remains
unable to discern the real intention of the remark.

Another senior prefectural government official commented: "Isn't
the US still sticking to the shallow-water plan (to relocate the
airfield to somewhere within the Henoko reef)?" This official at
the same time said flatly: "The shallow-water plan is worse (than
the coastal plan) from the prefectural government's point of
view."

No surprise


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A senior Foreign Ministry official who looked perplexed said:
"Supposedly such a remark came out, perhaps out of consideration
for locals, but we have no idea about the real intention."

Another official of the same ministry pointed out: "At one point
in the past before the interim report came out, the US promoted
the shallow-water plan in response to Nago City's proposal. Given
this, the remark emphasizing the wishes of locals is not
surprising."

This official interpreted Secretary Rumsfeld's disapproval of
revising the coastal plan as "indicating his desire to see the
Japanese government fulfill its responsibility as it has promised
before the release of the interim report to implement without
fail the coastal plan."

Yet, the official had not taken (Scheiffer's) remark this time as
expressing a US intention to respond to modifying the coastal
plan. He has taken it coolly, noting: "There was no proposal for
revising the plan in the recent working-level talks, nor was
there any change felt from the prevailing mood of the US. It is
unlikely that there will be any effect on the future talks."

(4) Realignment of US forces in Japan: Perception gap may bring a
crisis to bilateral alliance; US distrustful of Japan's local-
emphasized attitude

SANKEI (Page 1) (Full)
February 12, 2006

By Naohisa Hanzawa

The Japanese and US governments yesterday ended the three days of
working-level talks on the realignment of US forces in Japan
(USFJ). In the meeting, the United States emphasized its
strategy, while Japan prioritized the wishes of local
municipalities. The perception gap between the two nations
apparently obstructed progress in the talks. The recent
revelation of the bid-rigging scandal involving the Defense
Facilities Administration Agency (DFAA) has forced Japan to stop
local coordination, and the Defense Agency (JDA) official in
charge of negotiations was replaced recently. All these events
have also helped the US to harbor a sense of distrust of Japan. A
number of tasks, for instance, when to pull out Self-Defense
Forces (SDF) troops from Iraq, are yet to be addressed. If the
talks on the USFJ realignment broke down, the failure could bring
the bilateral alliance to a crisis.

No strategic dialogue

"Local coordination has often cropped up, but what is important
for Japan? You should think hard of this point."

"We know what is important for us. But holding discussion with
locals is also necessary."

On Feb. 10., in this way US Deputy Under Secretary of Defense
Richard Lawless and JDA Director-General Fukushiro Nukaga
exchanged views at the JDA. This exchange has projected the
difference of stances between the two nations. The US has pursued
military rationality, while Japan has considered what impact
there will be on locals and called for figures necessary to make
an explanation at home. "The US is becoming increasingly

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irritated at the fundamental gap of perception," a government
source said.

On the transfer of US Marines in Okinawa to Guam, the US has
indicated about 8 billion dollars, or approximately 950 billion
yen as the transfer cost Japan and the US would pay. Japan asked
the US to quickly come up with the basis of the calculation. But
the US' priority is on "promoting discussions on expanding, for
instance, the SDF's role along with the transfer of Marines, in
order to maintain deterrent force," a senior uniformed official
explained.

Local coordination hits a snag

The realignment of USFJ is also a base issue for Japan. Many in
the JDA firmly believe that if they miss this opportunity, burden
reduction, for instance, would become impossible. In order to pay
part of the cost of the transfer of Marines to Guam, however,
Japan needs budgetary measures, and for that, data showing how
the cost is calculated is also indispensable. But some officials
in the Foreign Ministry expressed concern that if the present
negotiating approach of focusing on burden reduction is not
modified, "the talks with the US could hit a snag."

Smoldering US discontent with Japan stems from the lack of
tangible progress in local coordination. The US also appears
unable to understand at all Nago Mayor Yoshikazu Shimabukuro's
attitude. As a candidate backed by the ruling camp, Shimabukuro
was recently elected mayor of Nago in Okinawa, but he is
reluctant to respond to negotiations on the transfer of the
Futenma Air Station to the coastal area of Camp Schwab.

Late January, the JDA transferred its Defense Policy Bureau's
Deputy Director-General Chisato Yamauchi, a responsible official
for talks on the USFJ realignment. Rumor has it that Yamauchi,
before his transfer from the post, consulted with Lawless on the
transfer. This replacement, too, has become a "factor that has
made the US distrustful of Japan, wondering whether the JDA is
serious enough to conclude the talks," a Liberal Democratic Party
lawmaker familiar with national defense said.

Aftermath of DFAA-led bid-rigging scandal

The DFAA plays a leading part in local coordination as a working
group. But it is being rocked by the recent bid-rigging scandal
involving itself and finds itself unable to function properly. A
proposal for dismantling the DFAA is also beginning to have an
unexpectedly adverse effect, because local governments cite such
a dismantlement plan as an excuse not to sit at the negotiating
table with the central government, arguing that it would be
useless to hold discussions with officials whose organization is
set to disappear.

Challenges facing Japan on the security front are not limited to
the USFJ realignment. One is related to Ground Self-Defense Force
(GSDF) troops now stationed in Iraq. Japan intends to withdraw
all of them from there by May. Another is associated with the
dispatch of Maritime Self-Defense Force (MSDF) troops to the
Indian Ocean. Japan is looking for ways to end this dispatch by
September, when the tenure of Prime Minister Junichiro Koizumi
expires. Given these factors, Japan is likely to face
difficulties in negotiations with the US in the first half of
this year. Japan plans to resume working-level talks before the

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end of the month and after intensive discussion, reach a final
agreement in late March. But should domestic issues derail talks
on USFJ realignment, a crisis could develop in the alliance with
the US.

(5) USFJ realignment: City gov't releases findings from Misawa,
Iwakuni

CHITOSE MIMPO (Web version) (Full)
February 11, 2006

While Japan and the United States are currently in the process of
holding intergovernmental consultations on their planned
realignment of US forces in Japan, the municipal government of
Chitose City (in Japan's northernmost main island of Hokkaido)
has released findings from its recent monitoring surveys of
Misawa airbase in the city of Misawa, Aomori Prefecture, and
Iwakuni airfield in the city of Iwakuni, Yamaguchi Prefecture.
The surveys both in Misawa and in Iwakuni monitored more frequent
noise occurrences than in the case of Chitose airfield on
Saturdays and Sundays. However, the surveys also found that both
bases have generally exercised self-restraint on flights during
the late night and early morning hours from 10 p.m. to 6 a.m.

The Japanese and US governments have released an interim report
regarding the planned realignment of US forces in Japan,
incorporating a plan to redeploy US jet fighters from three bases
at Kadena in Okinawa Prefecture, Iwakuni, and Misawa to the Air
Self-Defense Force's Chitose base (Chitose airfield) for some of
their training flight missions. The Chitose municipal government
sent personnel to Misawa and Iwakuni and conducted fact-finding
surveys in the two cities.

According to findings from the surveys, Misawa airfield, though
there are no arrangements between US forces and their local hosts
regarding flight restrictions, conducts training that complies
with local requests, such as: 1) considering noise even during
routine training flights; 2) refraining from conducting training
flights during the late night and early morning hours; 3)
notifying local governments in advance of training flights
scheduled for the late night and early morning hours; and 4)
conducting no routine training flights on Saturdays, Sundays, and
holidays.

When it comes to facts about aircraft noise (around Misawa
airfield),annual data is not available because the Misawa
municipal government has not disclosed findings from its own
monitoring surveys. However, the Chitose municipal government
found from its hearings with local residents that noise occurs
frequently and that there are a little more frequent noise
occurrences on Saturdays and Sundays than in the case of Chitose.

In addition, Misawa-based US military personnel and local
citizens are animatedly communicating through a number of
programs, such as holding Japanese and American cross-cultural
events, opening an on-base golf course to the local public, and
sending English teachers to local primary schools. In addition,
the city of Misawa is also constructing American Village to
revitalize its local economy.

In the case of Iwakuni Air Station, the Iwakuni Japan-US
Consultative Council-a four-party body consisting of the Iwakuni
municipal government, the Japanese government, the Yamaguchi

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prefectural government, and US forces-has confirmed that the US
military would refrain from conducting flights during the late
night and early morning hours and would not conduct flights over
the city's industrial zone situated north of the base's runway.
The US military has generally abided by these arrangements,
according to the Chitose municipal government.

However, actual aircraft noise in Iwakuni City, when compared
with Chitose City's Sumiyoshi district, is about five times more
frequent on Saturdays and Sundays and about 30 times more
frequent during the late night and early morning hours.

Iwakuni has a population of about 106,000, and US military
personnel based there number about 5,300. In FY2004 (April 2004
through March 2005),there were 21 crimes (involving US military
personnel). This crime rate is equivalent to 0.88% of all crimes
that occurred in the Iwakuni Police Station's district during
that fiscal year. In the meantime, traffic accidents (caused by
US military personnel) numbered 41 or 1.06% of all traffic
accidents in the district. Based on these findings, the Chitose
municipal government will refer to the data when specifics about
training flights are revealed.

(6) Bid-rigging scandal involving DFAA stands in way of plan to
upgrade JDA to ministry status

YOMIURI (Page 3) (Excerpts)
February 14, 2006

Speaking to reporters at his official residence yesterday, Prime
Minister Junichiro Koizumi reiterated a cautious stance about the
submission of related bills to the current Diet session to
upgrade the Defense Agency (JDA) to ministry status. Koizumi
said: "I will closely watch the development of talks (by the
Liberal Democratic Party and the New Komeito). Upon seeing the
situation, I would like to make a judgment." When he held a
meeting with former LDP Vice President Taku Yamasaki and others
late last year, the prime minister had indicated his
determination to carry out the JDA-upgrading plan during his term
of office. But Koizumi has now made an about-face.

LDP Policy Research Council Chairman Nakagawa told reporters the
same day: "We need first to see what measures the JDA will
present to prevent a recurrence of bid-rigging practices." He
indicated that priority should be given to efforts to investigate
the bid-rigging scandal involving the Defense Facilities and
Administration Agency (DFAA) late last month and to work out
preventive measures. A senior New Komeito member also stated: "In
our party, there is strong opposition to the plan to raise the
JDA to a ministry. The atmosphere in the party is that there will
be no other option but to put the related bills on the
backburner."

The government and the ruling coalition had decided to submit
related bills to the current Diet session to raise the JDA to a
ministry. New Komeito Vice President Shozo Kusagawa also listed
on Jan. 25 these conditions for upgrading the JDA: (1) integrate
the JDA and DAFF; and (2) ensure civilian control of the
military.

The disclosure of a bid-rigging scandal involving the DFAA in
late January applied the brakes to the moves favorable for the
JDA-upgrading plan. JDA Director General Nukaga and other

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officials had initially envisioned a scheme under which the JDA
would be upgraded to ministry status and the DFAA would be kept
in place." After the DFAA scandal was reported, the JDA officials
worked out a strategy to have the agency dissolved and integrated
into the JDA and then to have the JDA upgraded to a ministry. But
arguments urging caution about raising the JDA status have
emerged in the ruling camp. One ruling party member said: "If we
come up with the JDA-upgrading plan before bringing out the truth
of the DFAA scandal, the result will be that we provide the
opposition camp, including the Democratic Party of Japan
(Minshuto),with ammunition to attack us."

Later, more bid-rigging cases were found in construction and
engineering projects at US military, such as the US Marines
Corps' Iwakuni Base in Yamaguchi Prefecture and the US Navy
Sasebo Base in Nagasaki Prefecture. The series of scandals are
likely to affect the ongoing US force realignment talks. Under
such a circumstance, the JDA and the DFAA have no leeway to
tackle the JDA-upgrading issue.

The LDP, though, incorporated the promotion plan in its action
program for 2006 at the January convention. The party has
referred to the defense ministry plan in ruling party agreements
since 2002. An LDP member who once assumed the prime ministership
said: "The issue should not be put off forever. We should decide
on a specific timeframe for implementing the plan, even if it is
difficult to do so during the current Diet session."

Given this, some in the ruling camp suggest forming a new
agreement in the camp to ensure the defense ministry plan, and
others propose that bills should be submitted at the last stage
of the current Diet session and carried over to the next Diet
session.
(7) US steps up pressure on Japan, China due to record high of
trade deficits with two countries regarding automobiles and the
yuan

MAINICHI (Page 11) (Full)
February 11, 2006

With the new record high in US trade deficits with Japan and
China in 2005, US political circles will inevitably become more
sensitive about trade relations with Tokyo and Beijing with an
eye on the fall off-year congressional election. Intertwined with
the second ban on imports of US beef, there is the possibility
that the US Congress will heighten criticism of Japan and that it
will urge China to move ahead with the revaluation of the yuan.

The US trade deficit with Japan expanded in 2005 due to the
strong US economy, as well as the depreciation of the yen. US
imports of Japanese automobiles also increased. Exports of
Japanese automobiles and auto parts accounted for 60% of the
entire US deficit with Japan. Although Japan has refrained from
intervening in the market to prevent yen appreciation, the US
auto industry, which is in a predicament, has been criticizing
Japan's exchange policy for failing to allow the yen to
strengthen.

The US livestock industry and the Congress are growing
dissatisfied with Japan's re-imposition of a ban on US beef
imports. If Japan prolongs the ban on US beef imports, calls for
invoking economic sanctions on Japan might flare up again in the
United States because of huge US trade deficit with Japan.

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Chances are slim that trade friction will become serious because
the Bush Administration has urged US automobile makers to make
their own efforts to revitalize the industry and because the
administration has been negative about imposing sanctions again
Japan due to the beef issue. However, with the fall election in
mind, the US Congress' criticism of Japan cannot be ignored.

Secretary of the Treasuries John Snow asserted: "There are limits

SIPDIS
to the Japanese and EU purchasing power of US products because
their economic growth rates are low." Japan will likely be urged
to accelerate further the growth of its economy at the G-8
finance ministerial conference to be convened on Feb. 10.

China revalued the yuan in July 2005. However, since the US
deficit with China, expanded, the US is growing dissatisfied with
the meager appreciation of the yuan. In his State of the Union
address in late January, President Bush characterized China as a
competitor of the US. He will likely strengthen pressure on China
to revalue the yuan in consideration of a visit to the US by
Chinese President Hu Jintao in April.

SCHIEFFER