DAILY SUMMARY OF JAPANESE PRESS 02/09/07

UNCLAS SECTION 01 OF 09 TOKYO 000599 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 02/09/07 INDEX: (1) Interview with former US envoy to six-party talks: Freezing of old nuclear reactors insufficient; Offer of assistance to DPRK not to precede (2) Cabinet adopts USFJ realignment special measures legislation (3) US military to carry out paradrop training at Camp Schwab (4) Defense Ministry overtures several plans to eliminate Futenma airfield's danger (5) Presence of too many councils making Kantei-led promotion of policies difficult (6) LDP urgently needs "silver bullet" for elections; alarmed by unaffiliated voters shying away from the party (7) Editorial: Put measures to deal with global warming at top of cabinet's agenda (8) Editorial: Do not miss rising mood for resuming WTO trade liberalization talks ARTICLES: (1) Interview with former US envoy to six-party talks: Freezing of old nuclear reactors insufficient; Offer of assistance to DPRK not to precede NIHON KEIZAI (Page 8) (Full) February 9, 2007 Interviewer: Tsuyoshi Sunohara The six-party talks to discuss North Korea's nuclear arms programs were resumed in a more positive atmosphere than expected yesterday. Will this round be able to reach some kind of agreement? The following are questions and answers exchanged with former US Assistant Secretary of State (for East Asia and Pacific Affairs) James Kelly, the top US negotiator in the six-party talks in the first-term Bush administration. Q: What is you view about the ongoing round? A: "Every sign appears very positive at this point. I think the ongoing round will go ahead in line with the September 19 agreement in 2005. However, I think it is necessary to strictly examine what will be proposed and the meaning of the proposal." Q: There are news reports saying that North Korea would halt the operation of its graphite-moderated reactors in return for a provision of 500,000 tons of heavy oil. A: "I don't think that is everything the North Koreans want. We know what they want. What we don't know is what they will implement. If they don't do anything about their conventional weapons, plutonium, and enriched uranium, and they only freeze the reactors, they wouldn't receive ample assistance and reward. Neither the US Congress nor our ally Japan would give support to such a North Korea. Nor would China, South Korea, and Russia offer financial aid to it." TOKYO 00000599 002 OF 009 Q: Judging from what has been reported to date, it seems likely that an undesirably altered version of the 1994 US-North Korea Agreed Framework might come out, don't you think? A: "I think that is because of North Korea's 'opening demand.' You had better not think that such a demand is everything." Q: Do you think the current response by the Bush administration means a policy shift from the previous one of not holding a direct dialogue with North Korea? A: "I think that is merely a change of style. From the initial stage, some people were skeptical of the six-party talks, but I attended the three rounds while I was in the post, and following me, current Assistant Secretary of State Hill has joined it three times. I think (the Bush administration) understands (the six-party process). The ultimate goal is to dismantle North Korea's nuclear development programs verifiably and completely. No change has been made in that goal. However, we don't expect that to be realized in the initial phase." Q: Financial sanctions seemed to have a stronger impact than they were expected. A: "No one anticipated (such sanctions) were that effective. The case of Banco Delta Asia is only a drop in the ocean. Macao was one typical case where North Korea's elite put money into circulation. Similar financial bases are scattered around the world. Supposedly, the North Koreans may be afraid that their other financial bases will be subject to sanctions following the Banco Delta case." (2) Cabinet adopts USFJ realignment special measures legislation ASAHI (Page 1) (Excerpts) Evening, February 9, 2007 The government adopted at a cabinet meeting this morning US Forces Japan (USFJ) realignment special measures legislation featuring a new system to provide subsidies to municipalities accepting burdens, such as US bases and training, depending on the level of progress on realignment plans. The government also decided to allow the defense minister to designate subsidy-receiving municipalities and establish in the Defense Ministry a USFJ realignment promotion council to determine promotional plans. The envisioned council will be the first cabinet council to be chaired by the Defense Ministry. A system will be set up to advance USFJ realignment under the leadership of the Defense Ministry. The cabinet meeting also adopted a bill to amend the Defense Ministry Establishment Law to abolish the Defense Facilities Administration Agency. An outline of USFJ realignment special measures legislation 7 Designate municipalities that will bear greater base burdens as a result of USFJ realignment. Provide subsidies depending on the level of progress on realignment plans. 7 For municipalities bearing substantially large burdens, increase subsidy ratios for public works projects, such as roads, seaports, water-supply facilities, and schools. 7 Establish a defense-minister-chaired USFJ realignment promotion council in the Defense Ministry. 7 The Japan Bank for International Cooperation can invest in or extend loans to the relocation of US Marines from Okinawa to Guam. TOKYO 00000599 003 OF 009 Establish a special account for management. 7 The legislation will be valid for 10 years until March 31, 2017. (3) US military to carry out paradrop training at Camp Schwab OKINAWA TIMES (Page 1) (Abridged) February 9, 2007 The US military will carry out paradrop training on Feb. 13 in a zone of training waters in Oura Bay off the coast of Camp Schwab in the northern Okinawa city of Nago, according to "sympathetic information" that came yesterday from the Defense Facilities Administration Agency's Naha bureau to Nago City and local fishery cooperatives. Such paradrop training will be carried out in the Schwab waters for the first time in eight years since the last one was conducted there in 1999. In 1996, the Japan-US Special Action Committee on Facilities and Areas in Okinawa (SACO) agreed to relocate parachute drills to an auxiliary airfield on Iejima, an island off the northwestern part of Okinawa's main island. In January this year and afterward, however, the US military carried out parachute drills in areas other than Iejima Island, such as Kadena Air Base and a zone of training waters near Tsukenjima, an island off the southeastern part of Okinawa's main island. Okinawa Prefecture's Military Base Affairs Division, in its request to the US military yesterday, proposed suspending parachute training. In addition, the DFAA's Naha bureau has also requested Regional Coordinator Joseph Weber, who is the top commander of US forces in Okinawa, to suspend such training. However, the US military is poised to carry it out. According to government officials, the US military will carry out the parachute drill in Zone 3, which is more than 500 meters away from the shore, as an amphibious drill. Schwab-based US Marine Corps soldiers are expected to participate in the parachute drill. The "May 15 Memorandum," which stipulates conditions for the US military's use of bases in Okinawa, allows the US military to use Zone 2, Zone 3, and Henoko Beach for amphibious training exercises. It also stipulates that the Japanese government will not allow continuous anchoring, mooring, diving, salvaging, stopping, or any other continuous activities in Zone 3, and that the US government will not restrict fishing operations there as long as they do not disturb US military operations during the US military's training. Reiji Fumoto, an Okinawa prefectural government official in charge of base disaster prevention, said yesterday in a strong tone of voice: "Our understanding is that they are only allowed to conduct parachute training at Iejima airfield in accordance with the SACO accord. We cannot accept such training at any other areas." (4) Defense Ministry overtures several plans to eliminate Futenma airfield's danger OKINAWA TIMES (Page 1) (Full) February 8, 2007 Administrative Vice Defense Minister Takemasa Moriya met with Okinawa Gov. Hirokazu Nakaima in Tokyo on Feb. 5 and presented the governor with several plans to eliminate the danger of the US Marine Corps' Futenma Air Station by improving the airfield's operation, sources revealed yesterday. Nakaima appreciated the Defense Ministry's proposition to a certain extent. Meanwhile, Japan and the United States have now agreed on a plan to build a V-shaped pair of TOKYO 00000599 004 OF 009 airstrips as an alternative facility for Futenma airfield. However, the governor strongly requested the government make sure to revise the V-shaped airstrips plan without fail after an environmental impact assessment. In the meeting, Moriya stressed the necessity of an environmental impact assessment, according to the sources. Moriya then suggested the possibility of revising the V-shaped airstrips plan if problems are noted in the governor's statement on the outcome of an environmental impact assessment, the sources said. Nakaima said he would study Moriya's proposition with his Okinawa prefectural government staff. The governor avoided clarifying whether he will accept Moriya's proposition, the sources said. There are still cautious views within the prefectural government. However, the Futenma relocation talks are also likely to see progress after coordination with the Japanese government. Nakaima reiterated his call for Futenma airfield to be turned into "a state of closure within three years." Moriya said, "It's possible to shorten the period of construction (reportedly eight years) by up to one year and a half, and if so, there will be no danger during the latter half of construction." With this, Moriya sought understanding on Futenma relocation with a shorter period of construction. The government plans to relocate Futenma airfield to a coastal area of Camp Schwab in the northern Okinawa city of Nago, and stony corals will begin laying eggs in waters off the coast of Camp Schwab in May or June. For this reason, Moriya stressed the need to start an environmental assessment of the relocation site by May at the latest. In the meeting, Nakaima called for Moriya to "make sure" to revise the V-shaped airstrips plan after an environmental assessment of the relocation site for Futenma airfield. In this connection, Moriya noted that the government has revised its plan to relocate helipads along with the US military's partial return of its northern training area on Okinawa's main island, explaining that the government has reduced the number of helipads from 7 to 6 in response to the governor's statement that came after an environmental impact assessment of newly planned helipad sites. In the case of relocating Futenma airfield as well, Moriya implied that the government would be ready to comply with the governor's call for revisions to the V-shaped airstrips plan if the governor notes environmental or noise problems in his statement that will come after an environmental assessment of the relocation site. In addition, Nakaima asked Moriya to consider relocating aircraft training from Futenma airfield to other areas, judging from the necessity of reducing the number of Futenma-based helicopters in order to eliminate the airfield's danger. Moriya frowned on this request. "That's difficult," he said. Nakaima returned to Okinawa on Feb. 6. "We talked about a lot of things, but I have nothing to say in particular for now," Nakaima told reporters at Naha Airport. (5) Presence of too many councils making Kantei-led promotion of policies difficult NIHON KEIZAI (Page 2) (Full) February 9, 2007 Prime Minister SHINZO ABE has stressed the need for the Kantei to take the lead in the policymaking process. But it seems difficult to TOKYO 00000599 005 OF 009 put this system on the right track. The difficulty is attributed to a lack of unity among responsible officials as a result of the number of councils set up in rapid succession. In order to realize drastic reforms, the prime minister's leadership is imperative. Depending on to what extent the prime minister is able to demonstrate leadership will affect the support rate of his cabinet that is now continuously falling. In responding to questions from reporters at the Kantei yesterday at noon, the prime minister clearly rejected Special Advisor (for education rebuilding) Eriko Yamatani's suggestion that the reform of the Central Education Council would be discussed at the Education Rebuilding Council. Chief Cabinet Secretary Yasuhisa Shiokawa also flatly said in a press briefing, "I have not heard of it at all." Stressing that the focus of discussion in the current Diet session is on rebuilding the education system, the prime minister instructed Education Minister Bunmei Ibuki and others to submit to the Diet by mid-March bills related to reform the education system, including the introduction of a teaching-license renewal system. The Education Ministry is drafting the bills with great urgency. The Central Education Council is deliberating on the contents of the bills. Yamatani's remarks implied that "the council has not played any role." Many take the remarks as intended to apply pressure on the council members who are cautious about a significant education policy switch. However, if the discord between the Kantei and the education panel is spotlighted under the present situation, it may become difficult to submit the bills. Besides the leadership struggle between the Education Rebuilding Council and the Central Education Council, dissatisfaction is smoldering in the Liberal Democratic Party over the lack of sufficient time. The perception gap between responsible officials stands in the way of the promoting education reform. The Potential Enhancement Strategy Team was established under the lead of the chief cabinet secretary. This study group has also been under heavy fire. Keeping in mind the opposition camp's emphasis on redressing social disparity, the team plans to come up with a package of specific measures in about two weeks, although it was only launched on Feb. 1. In the second meeting of the teams on Feb. 8, though, participants did no more than just reporting overseas cases, with no debate conducted on specific measures. One participant vented, "Compiling a package in a week is impossible." Many government officials believe that the Council on Economic and Fiscal Policy, chaired by the prime minister, is in charge of charting a long-term economic strategy. This strategy team places emphasis on environmental arrangements related to offering jobs and raising children, similar to the second-chance aid program advocated by the prime minister. On Feb. 9, the Strategy Council on Japan Supporting Children and Families, chaired by Shiozaki, was also inaugurated as part of efforts to counter the falling birthrate. A senior Finance Ministry official commented, "It will be impossible to come up with additional fresh measures." A senior ruling party member grumble, "Why is the government eager to set forth new policy measures although Diet deliberations on the budget is underway?" Each expert team is responsible for setting the direction of the ABE administration's showcase policies, but the impression that the TOKYO 00000599 006 OF 009 government has set up extra council has taken root. Major study councils of Kantei ¶1. Name(Time of establishment) ¶2. Immediate purpose ¶3. Confronting challenge ¶1. Education Rebuilding Council(October 2006) ¶2. Submit three bills related to educational reform, based on its first report, to the Diet. ¶3. In the ruling camp, there are strong calls for caution over specific reform plans. ¶1. Council on Strengthening Kantei Security Functions(November 2006) ¶2. Present by the end of February a report specifying what the new body should be. ¶3. How will it share roles with the Foreign Ministry and the Defense Ministry? ¶1. Asia Gateway Strategy Council(November 2006) ¶2. Finalize a draft plan on reforming the distribution system in March and a comprehensive concept in May. ¶3. How will it promote such measures as introducing a 24-hour airport operation system, breaking the current vertically divided system of administration? ¶1. Potential Enhancement Strategy Team(February 2007) ¶2. Compile a package of policy measures by the end of next week. ¶3. There is little time left until the deadline for the compilation. Its measures are similar to those in the second-chance program. ¶1. Strategy Council on Japan Supporting Children and Families(February 2007) ¶2. Finalize a basic concept in June. ¶3. Since countermeasures have presented many times, it is difficult to come up with fresh measures. (6) LDP urgently needs "silver bullet" for elections; alarmed by unaffiliated voters shying away from the party TOKYO SHIMBUN (Page 2) (Full) February 9, 2007 The candidates backed by the ruling Liberal Democratic Party (LDP) lost the Miyazaki gubernatorial and Kitakyushu mayoral elections. Also the LDP-backed-candidate faced an uphill battle in the Aichi gubernatorial race. With the summer's House of Councillors election and the April unified local elections in mind, calls for a review of the party's election policy have grown stronger in the LDP. In a general meeting yesterday of the Tsushima faction, LDP Chief Deputy Secretary General Toshimitsu Motegi pointed out the need for measures to win unaffiliated voters and young people. He commented on the Aichi gubernatorial race: "Of the LDP supporters, 30% voted for the candidate backed by Minshuto (Democratic Party of Japan). Many unaffiliated votes went to the Minshuto-backed-candidate. The number of young voters in their twenties to forties who supported our candidate was less than that of the young voters who backed the Minshuto-backed-candidate." TOKYO 00000599 007 OF 009 He then urged the party leadership to review the election strategy. At a meeting of the Tanigaki faction, as well, Chairman Tanigaki said: "We need to thoroughly analyze the outcomes of the Aichi and Kitakyushu races to prepare for the Upper House election." In a meeting yesterday of the group called "Fresh Breeze," made up of former Secretary General Tsutomu Takebe and the so-called "Koizumi's children" -- freshman LDP lawmakers elected to the Lower House last year, many members said that young and unaffiliated voters supported the LDP in the Lower House election in 2005 but not this time. The group then decided to submit a set of proposals to the party's reform implementation headquarters. The party leadership, however, said: "If there are effective measures, we would have implemented them." It is very hard for the LDP to find a silver bullet. As to what issue should be the main campaign focus in the Upper House election, views are split in the LDP. Prime Minister SHINZO Abe intends to bring up constitutional reform as the main campaign issue. LDP Election Strategy Headquarters Chief Yoshio Yatsu, on a Tokyo Broadcasting System (TBS) satellite program raised an objection to Koizumi's policy line, noting, "Constitutional reform will not become the main campaign issue. Instead, the prime minister should make issues with which the public feels familiar - including the pension and education issues, as well as the dropping birthrate - as main campaign issues." Secretary General Hidenao Nakagawa stated in a speech in Kyoto: SIPDIS "Lowering the wages of local public servants is the LDP's pledge to the public. Candidates officially endorsed and recommended by the LDP should make this their campaign pledge for the unified local elections and the upper House election." Policy Research Council Chairman Shoichi Nakagawa told reporters: "Both are important. We will start a discuss on narrowing down issues." He indicated that the LDP would speed up drafting its campaign pledges. (7) Editorial: Put measures to deal with global warming at top of cabinet's agenda NIHON KEIZAI (Page 2) (Full) February 9, 2007 The ABE Cabinet is not positive enough in its efforts to deal with the global warming issue. A mood for addressing global warming is growing not only in Europe but also in the US. With such a trend in motion, how to deal with the global warming issue will determine the future course of Japan's economy, taxes, fiscal and political affairs and corporate management. We want to see the cabinet seriously tackle the global warming issue by placing it at the top of the national agenda. When Prime Minister SHINZO ABE visited Europe in January, the focus of his talks with British and German leaders was on global warming. After returning home, the prime minister ordered the Environment Ministry to compile a 21st century strategy for a state founded on the principles of environmental protection, including measures to address global warming. The Environment Ministry wants to ready the TOKYO 00000599 008 OF 009 strategy by June and incorporate it into the basic policy guidelines on economic and fiscal management and structural reforms for fiscal ¶2008. However, preparations have just gotten underway as one official noted, "We have yet to decide on discussion themes." The global warming issue is not even one of the seven reforms proposed by the Council of Economic and Fiscal Policy (CEFP). Some CEFP members said, "It's unfortunately impossible to include measures to prevent global warming in this year's basic policy guidelines." This is unacceptable. To begin with, Japan has yet to obtain prospects for cutting greenhouse gas emissions, such as carbon dioxide, an effort to be started next year in compliance with the Kyoto Protocol. Japan has committed to cut 6% of emissions of such gases, compared with the 1990 level. However, since its emission amount has increased 7% from the 1990 level, it must cut approximately 14% in total. European countries have set up an emissions-right trading system, under which a central authority setting a cap on the amount of a pollutant that can be emitted by each company and companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances. Japan has yet to establish such a system due to opposition from industrial circles. Under the Protocol, when a company contributes to developing countries in conserving energy consumption, the amount can be counted as reductions achieved by the company's country. Promoting this system requires funds allowing the government to purchase emissions rights from companies. However, how to fund this system has yet to be settled. Foreign countries have already started a post-Kyoto Protocol framework after 2012, when the first commitment period under the Kyoto Protocol ends. The European Union has released its target for cutting carbon dioxide emissions by 20%, compared with the 1990 level. The US, which had previously been negative to the idea of addressing global warming, has proposed a long-term target, such as a reduction by plus or minus 0% by around 2020, from the 1990 level. If the process of establishing a post-Kyoto Protocol framework progresses at the initiative of European countries and the US, it might include details disadvantageous to Japan. This issue will be on the agenda of the Summit next year to be hosted by Japan. It will be a good opportunity for Japan to exercise leadership, but it will miss such a chance, if it fails to consolidate domestic views. Depending on the nature of the new framework, Japan might be able to sell its distinguished energy-conserving environmental technologies, which can help bring about economic growth. In that sense, too, global- warming preventive measures can be a viable economic policy. The issue should be one of key themes to be discussed at the CEFP presided over by the prime minister. (8) Editorial: Do not miss rising mood for resuming WTO trade liberalization talks NIHON KEIZAI (Page 2) (Full) February 9, 2007 A mood for resuming the multilateral trade talks (Doha Round) at the World Trade Organization (WTO),which have been put on hold since last July, has emerged. US President Bush has asked Congress to extend his special trade negotiation powers, known as fast-track authority. He also released a plan to cut domestic agricultural TOKYO 00000599 009 OF 009 subsidies. In response, WTO Director General Pascal Lamy declared an end to the freeze on the talks. Promoting WTO talks for free trade, which will benefit 150 economies, is a trade policy that Japan should prioritize along with free trade agreements (FTA),a framework for agreements between individual countries. In view of the growing possibility of a resumption of the talks, Japan must not neglect necessary preparations on the domestic front. If it continues to remain reluctant to open its agriculture market, Japan will be labeled protectionist. It is time for it to accelerate efforts for structural reforms, including reform of agricultural regulations to enhance productivity. US Congress holds the key to resumption of the talks. In the US, Congress grants special trade negotiation powers to the president on a temporary basis. The United States Trade Representative (USTR) pursues trade talks as the president's proxy. The US government is unable to engage in trade talks with foreign countries without this authority. The current authority lapses on July 1. There are some unclear elements, such as whether Congress, where the Democratic Party commands a majority, will approve extending the authority or not. However, the president has opted to tackle coordination of views with Congress, which is expected to be difficult, intertwined with the agricultural subsidies issue. It is significant that the US administration has indicated eagerness to restart the trade talks. The positions of Congress and the Democratic Party are divided. Some protectionists directly oppose the idea of extending the powers given to the president, while leading congressmen who have a strong voice on economic diplomacy are indicating a flexible stance, albeit under the condition that domestic jobs must be protected. The Democratic Party certainly does not want to be stigmatized as a "round crusher" by the international community. We want to see swift deliberations on the issue of extending the president's authority. We wonder whether Japan's agricultural regulators and persons involved in agricultural affairs have not been relaxing their attention. If they intend to slowly advance intensive farming while continuing to protect farmers with high tariffs, taking advantage of the talks being at an impasse, it is completely wrong. The possibility of resuming the talks has actually emerged. The role Japan should play as a trade-oriented country is to elevate this mood spearheading the world. SCHIEFFER