Identifier
Created
Classification
Origin
08TOKYO161
2008-01-22 08:26:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 01/22/08

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 13 TOKYO 000161 

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 01/22/08

INDEX:

(1) Bill revising special taxation measures law to be submitted
tomorrow to Lower House; Upper House LDP wants bill to clear Lower
House before end of January (Mainichi)

(2) DPJ having difficulty deciding what approach to take regarding
supplementary budget bill: Decision to be made right before roll
call (Yomiuri)

(3) Consumer minister to be appointed in April (Yomiuri)

(4) Chinese military experts discussing sending troops to North
Korea to deal with a collapse of Kim Jong Il regime (Yomiuri)

(5) Think-tank headed by Yoshiko Sakurai: Delisting North Korea as
state sponsor of terrorism will undermine Japan's confidence in U.S
(Sankei).

(6) Int'l community beginning to undergo sea change: Morimoto
(Sankei)

(7) U.S. FDA declares safety of beef from cloned cattle: Cloned
pigs, goats also safe; Voluntary shipment restraint to be kept in
place (Yomiuri)

(8) Editorial: If cloned beef is marketed, labeling requirement
should be imposed (Mainichi)

(9) TOP HEADLINES

(10) EDITORIALS

(11) Prime Minister's schedule, January 18 (Nikkei)

ARTICLES:

(1) Bill revising special taxation measures law to be submitted
tomorrow to Lower House; Upper House LDP wants bill to clear Lower
House before end of January

MAINICHI (Page 5) (Full)
January 22, 2008

There is a deepening rift in the Liberal Democratic Party (LDP) over
a strategy of passing a bill to revise the special taxation measures
law to maintain the provisional tax rate imposed on gasoline. The
main issue is when the bill should clear the House of
Representatives. The Lower House LDP caucus has insisted that the
legislation should be passed in mid-February by the Lower House, but
LDP members in the House of Councillors are unhappy with the idea.
The government and ruling coalition have decided to submit the bill
on Jan. 23 to the Lower House earlier than the initially scheduled
25th. Since the Upper House LDP has still been endeavoring to
recover from the setback, the focus is on a final decision to be
made by Prime Minister Yasuo Fukuda.

In an LDP executive meeting last evening, Fukuda stated: "I leave
managing Diet affairs to the secretary general and Diet Affairs
Committee chairman. As a responsible person, I will make a decision
at a time when I should do so." He indicated in his remarks that he
wanted to curb internal discord over Diet deliberations on the

TOKYO 00000161 002 OF 013


provisional gasoline tax rate.

Meanwhile, Upper House LDP Caucus Chairman Hidehisa Otsuji stressed
in a press conference after the executive meeting: "If the bill is
sent to the Upper House in February, it will be difficult to reach a
conclusion before the end of this fiscal year (March)."

The Upper House LDP's idea is that the ruling coalition will able to
resort to a two-thirds majority override vote in the Lower House
even if the opposition does not put the bill to a vote within 60
days after it is sent to the upper chamber. This means that the bill
must be cleared the Lower House by Jan. 31 in order to secure 60
days before the end of March. Another senior Upper House LDP member
told his aides: "This issue is not logic but a battle." His view is
that force is the only way to enact the bill before the end of this
fiscal year.

The reason for Secretary General Bunmei Ibuki and other Lower House
LDP members being negative about passing the bill within January is
that they are concerned that an early passage of the bill may bring
on political turmoil. Usually a bill amending the special taxation
measures law is sent to the Upper House during the time between late
February and early March. The opposition camp is certain to toughen
its stance if the ruling coalition passes the measures by March 31
through the Lower House after the bill is submitted to the lower
chamber on Jan. 23. However, the Lower House LDP views that if it
rams through the bill, the ruling camp will give the opposition bloc
an excuse to boycott deliberations on the fiscal 2008 budget bill.
The LDP caucus in the Lower House is more concerned about a
political situation that involves the risk of escalating into Lower
House dissolution, which the ruling camp wishes to put off as long
as possible. A senior Upper House LDP member said yesterday: "The
question is how the prime minister will make his final decision."

(2) DPJ having difficulty deciding what approach to take regarding
supplementary budget bill: Decision to be made right before roll
call

YOMIURI (Page 4) (Full)
January 22, 2008

The Democratic Party of Japan (DPJ or Minshuto) is having difficulty
deciding what approach to take regarding the fiscal 2007
supplementary budget bill and related bills, such as an amendment to
the Local Distribution Tax Law. Some are calling for opposing the
bills, citing the government's economic misadministration. Others
are insisting on approving the bills before the end of the current
fiscal year, because if the related laws fail to secure Diet
approval by then, it would have a major impact on the finances of
local governments. They are instead calling for focusing on a bill
amending the Special Tax Measures Law, including retaining the
provisional rate imposed on the gas tax.

The DPJ party leadership, including President Ozawa, Secretary
General Hatoyama and Diet Affairs Committee Chairman Kenji Yamaoka,
on Jan. 21 met in the Diet building and conferred on the
supplementary budget bill. However, failing to decide what approach
to take, they simply confirmed that they would decide whether to
approve them or not right before a roll call in the Lower House,
after determining the development of Diet deliberations.

The DPJ has supported a supplementary budget only once in the past

TOKYO 00000161 003 OF 013


decade. It supported the fiscal 2004 bill, which included
appropriations for reconstruction from the damage caused by the
Chuetsu Earthquake in Niigata Prefecture.

The fiscal 2007 supplementary budget includes measures to make up
for budgetary shortfalls stemming from tax revenues falling short of
the government estimate. There is strong criticism of the government
in the DPJ that the government's economic misadministration has
necessitated the compilation of a supplementary budget.

However, as Internal Affairs Minister Masuda has pointed out that if
the supplementary budget bill and related bills are not enacted
within the current fiscal year, local governments would be cornered
to a considerable extent, the DPJ is concerned that if it opposes
those bills, it could be exposed to criticism from local
governments, as one senior member said.

(3) Consumer minister to be appointed in April

YOMIURI (Page
UNCLAS SECTION 01 OF 13 TOKYO 000161 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 01/22/08 INDEX: (1) Bill revising special taxation measures law to be submitted tomorrow to Lower House; Upper House LDP wants bill to clear Lower House before end of January (Mainichi) (2) DPJ having difficulty deciding what approach to take regarding supplementary budget bill: Decision to be made right before roll call (Yomiuri) (3) Consumer minister to be appointed in April (Yomiuri) (4) Chinese military experts discussing sending troops to North Korea to deal with a collapse of Kim Jong Il regime (Yomiuri) (5) Think-tank headed by Yoshiko Sakurai: Delisting North Korea as state sponsor of terrorism will undermine Japan's confidence in U.S (Sankei). (6) Int'l community beginning to undergo sea change: Morimoto (Sankei) (7) U.S. FDA declares safety of beef from cloned cattle: Cloned pigs, goats also safe; Voluntary shipment restraint to be kept in place (Yomiuri) (8) Editorial: If cloned beef is marketed, labeling requirement should be imposed (Mainichi) (9) TOP HEADLINES (10) EDITORIALS (11) Prime Minister's schedule, January 18 (Nikkei) ARTICLES: (1) Bill revising special taxation measures law to be submitted tomorrow to Lower House; Upper House LDP wants bill to clear Lower House before end of January MAINICHI (Page 5) (Full) January 22, 2008 There is a deepening rift in the Liberal Democratic Party (LDP) over a strategy of passing a bill to revise the special taxation measures law to maintain the provisional tax rate imposed on gasoline. The main issue is when the bill should clear the House of Representatives. The Lower House LDP caucus has insisted that the legislation should be passed in mid-February by the Lower House, but LDP members in the House of Councillors are unhappy with the idea. The government and ruling coalition have decided to submit the bill on Jan. 23 to the Lower House earlier than the initially scheduled 25th. Since the Upper House
LDP has still been endeavoring to recover from the setback, the focus is on a final decision to be made by Prime Minister Yasuo Fukuda. In an LDP executive meeting last evening, Fukuda stated: "I leave managing Diet affairs to the secretary general and Diet Affairs Committee chairman. As a responsible person, I will make a decision at a time when I should do so." He indicated in his remarks that he wanted to curb internal discord over Diet deliberations on the TOKYO 00000161 002 OF 013 provisional gasoline tax rate. Meanwhile, Upper House LDP Caucus Chairman Hidehisa Otsuji stressed in a press conference after the executive meeting: "If the bill is sent to the Upper House in February, it will be difficult to reach a conclusion before the end of this fiscal year (March)." The Upper House LDP's idea is that the ruling coalition will able to resort to a two-thirds majority override vote in the Lower House even if the opposition does not put the bill to a vote within 60 days after it is sent to the upper chamber. This means that the bill must be cleared the Lower House by Jan. 31 in order to secure 60 days before the end of March. Another senior Upper House LDP member told his aides: "This issue is not logic but a battle." His view is that force is the only way to enact the bill before the end of this fiscal year. The reason for Secretary General Bunmei Ibuki and other Lower House LDP members being negative about passing the bill within January is that they are concerned that an early passage of the bill may bring on political turmoil. Usually a bill amending the special taxation measures law is sent to the Upper House during the time between late February and early March. The opposition camp is certain to toughen its stance if the ruling coalition passes the measures by March 31 through the Lower House after the bill is submitted to the lower chamber on Jan. 23. However, the Lower House LDP views that if it rams through the bill, the ruling camp will give the opposition bloc an excuse to boycott deliberations on the fiscal 2008 budget bill. The LDP caucus in the Lower House is more concerned about a political situation that involves the risk of escalating into Lower House dissolution, which the ruling camp wishes to put off as long as possible. A senior Upper House LDP member said yesterday: "The question is how the prime minister will make his final decision." (2) DPJ having difficulty deciding what approach to take regarding supplementary budget bill: Decision to be made right before roll call YOMIURI (Page 4) (Full) January 22, 2008 The Democratic Party of Japan (DPJ or Minshuto) is having difficulty deciding what approach to take regarding the fiscal 2007 supplementary budget bill and related bills, such as an amendment to the Local Distribution Tax Law. Some are calling for opposing the bills, citing the government's economic misadministration. Others are insisting on approving the bills before the end of the current fiscal year, because if the related laws fail to secure Diet approval by then, it would have a major impact on the finances of local governments. They are instead calling for focusing on a bill amending the Special Tax Measures Law, including retaining the provisional rate imposed on the gas tax. The DPJ party leadership, including President Ozawa, Secretary General Hatoyama and Diet Affairs Committee Chairman Kenji Yamaoka, on Jan. 21 met in the Diet building and conferred on the supplementary budget bill. However, failing to decide what approach to take, they simply confirmed that they would decide whether to approve them or not right before a roll call in the Lower House, after determining the development of Diet deliberations. The DPJ has supported a supplementary budget only once in the past TOKYO 00000161 003 OF 013 decade. It supported the fiscal 2004 bill, which included appropriations for reconstruction from the damage caused by the Chuetsu Earthquake in Niigata Prefecture. The fiscal 2007 supplementary budget includes measures to make up for budgetary shortfalls stemming from tax revenues falling short of the government estimate. There is strong criticism of the government in the DPJ that the government's economic misadministration has necessitated the compilation of a supplementary budget. However, as Internal Affairs Minister Masuda has pointed out that if the supplementary budget bill and related bills are not enacted within the current fiscal year, local governments would be cornered to a considerable extent, the DPJ is concerned that if it opposes those bills, it could be exposed to criticism from local governments, as one senior member said. (3) Consumer minister to be appointed in April YOMIURI (Page 1) (Excerpts) January 19, 2008 The government yesterday determined the outline of a system to promote consumer affairs administration, as declared by Prime Minister Fukuda in his policy speech the same day. With the aim of establishing a new body to promote the unification of consumer affairs administrative functions, the government intends to submit related bills to the regular Diet session in 2009. Meanwhile, the government plans to appoint a new minister in charge of consumer affairs in April. Some speculate that State Minister for Okinawa and People's Life Kishida is likely to be asked to carry an additional portfolio. As a new body, there is the plan of creating a consumer agency in the Cabinet Office. In the case of an agency, some hundreds of staff members are needed. Some persons warn that the plan may go against the government's streamlining efforts through administrative reform. Given this, some persons propose setting up a very independent committee with strong authority based on the National Government Organization Law, like the Fair Trade Commission. The government plans to recruit personnel well-versed in consumer affairs administration from such relevant government agencies as the Agriculture, Forestry and Fisheries Ministry and the Health, Labor and Welfare Ministry. What form the new body should take and other details will be discussed at the Council for Social Policy, an advisory panel to Prime Minister Fukuda. The government intends to conduct discussion in March based on recommendations from the council and determine and specify the structure of the new body in its annual economic and fiscal policy guidelines due out in June. The government plans to submit a bill amending the Cabinet Office Establishment Law and install a consumer affairs minister in April. It is looking into granting the minister with the strong power to appoint. (4) Chinese military experts discussing sending troops to North Korea to deal with a collapse of Kim Jong Il regime YOMIURI (Page 2) (Abridged slightly) January 22, 2008 TOKYO 00000161 004 OF 013 Satoshi Saeki, Beijing Should North Korea's Kim Jong Il regime face an imminent collapse, a large number of not only civilians but also armed military troops and security personnel might become refugees, too, and flock to the northeastern part of China bordering with North Korea, flowing out into China. Alarmed at such a possibility, experts of the Chinese People's Liberation Army and others are discussing a contingency plan to send troops to North Korea with the aim of restoring law and order and controlling nuclear weapons, a source familiar with China-DPRK relations revealed yesterday. Although China thinks that the situation in North Korea will be stable for the time being, it seems to be expediting efforts to draw up emergency measures against unexpected events. According to the source, the stance of the experts and others is that a decision on whether to dispatch troops following certain contingencies in North Korea, such as Kim Jong Ill's sudden death and a coup d'etat, will be made based on approval by the UN Security Council. They are also considering dispatching troops independently in the event an inflow of refugees is imminent. The Chinese leadership, which has yet to make a final decision on the matter, is expected to make a cautious decision by giving consideration to relations with the United States and other factors. Since the nuclear test in October 2006 by North Korea, concern has been growing in China over control of nuclear weapons during a national contingency. Another source underlined the need for study, saying: "The UN Security Council must discuss how nuclear weapons must be controlled multilaterally in case not only North Korea but also other unstable countries, such as Pakistan, fall into chaos." As a fruit of discussions with Chinese experts last year, the U.S. Center for Strategic and International Studies (CSIS) has released a report touching on the idea of dispatching Chinese troops to North Korea in the event of a contingency there. As purposes for sending troops, the report mentions: (1) humanitarian duties, such as supporting (civilian) refugees, (2) peacekeeping, and (3) security of nuclear weapons and materials. A Chinese Foreign Ministry spokesman, however, has denied the existence of such a concept. (5) Think-tank headed by Yoshiko Sakurai: Delisting North Korea as state sponsor of terrorism will undermine Japan's confidence in U.S. SANKEI (Page 3) (Full) January 22, 2008 The Japan Institute for National Fundamentals (JINF),a private-sector think-tank established last December, yesterday held a press conference at the Foreign Correspondents Club of Japan. Journalist Yoshiko Sakurai is executive director of the think-tank. JINF aims to contribute to building a self-sustaining nation and to study basic issues that Japan is facing. With its first press conference, the group began full-fledged activities. At the press conference, JINF announced a proposal opposing the delisting of North Korea as a state sponsor of terrorism, citing that such a move undermines Japan's confidence in the United States. TOKYO 00000161 005 OF 013 The proposal stipulates that Japan should clearly express its opposition to removing North Korea from the U.S. list of states sponsoring terrorism by explaining that: (1) the U.S. government should not remove the DPRK from its blacklist before Japan's abduction issue is resolved; (2) the U.S. Congress should adopt a resolution imposing strict conditions for delisting the communist country as a state sponsoring terrorism; and (3) the Japanese government and the Diet should inform the White House and Congress that delisting will damage Japan's confidence in the United States. JINF has sent its proposal to Japanese legislators in both houses of the Diet, to the members of the U.S. Congress, and to major American think-tanks. Prospectus (gist) We have an indescribable sense of crisis about the present situation for Japan. In contrast to growing tensions and instability in the international situation, it seems that Japan's goal of breaking away from the "postwar regime" is wavering, and public interest is leaning toward immediate issues. Historical issues exist not only in Japan's relations with neighboring countries but also with the United States, as well. Even more worrisome than a decline in academic performance and a loss of moral education is the serious problem of a lack of national awareness of such by the Japanese people. Taking pride in Japan's long and unbroken civilization, we want to rethink options for Japan from an international point of view. As a completely independent private-sector institute, JINF wants to play a role in building a self-sustaining country. JINF directors Tadae Takubo JINF deputy director (visiting professor at Kyorin University) Shintaro Ishihara (Tokyo governor) Takashi Ito (University of Tokyo professor emeritus) Tomomi Inada (Lower House member) Koichi Endo (Takushoku University professor) Yoshito Ogura (Nihon Arco-Iris (TN: phonetic) president) Tadashi Saito (Nikkei Publishing Inc. president) Katsuhiko Takaike (lawyer) Saburo Tsukamoto (Former Social Democratic Party chairman) TOKYO 00000161 006 OF 013 Takanori Nakajo (Asahi Breweries honorary advisor) Terumasa Nakanishi (Kyoto University graduate school professor Akihisa Nagashima (Lower House member) Osamu Nishi (Komazawa University professor) Sukehiro Hirakawa (University of Tokyo professor emeritus) Takeo Hiranuma (former economic planning agency head) Jin Matsubara (Lower House member) Taro Yayama (Political commentator) Shu Watanabe (Lower House member) (6) Int'l community beginning to undergo sea change: Morimoto SANKEI (Page 13) (Full) January 22, 2008 Satoshi Morimoto, director of the Overseas State of Affairs Research Institute, Takushoku University The international community will face the biggest watershed in the post-Cold War era around 2010, with changes beginning to occur in ¶2008. In the spring, South Korean, Taiwanese, and Russian leaders will change. In summer, Japan will host the Group of Eight (G-8) summit at Lake Toya in Hokkaido. After that, there will be the Beijing Olympics. In autumn, the United States will have a presidential election. These changes will have a major impact on international politics and also on the global economy. Pakistan and Afghanistan are serious issues, as is Turkey's Kurdish problem. The war on terror will also face a turning point. Among other issues are the subprime mortgage fiasco, soaring crude oil prices, and climate change. The United States-whatever administration may come into office after the presidential election-will urge its allies to take on further burdens and will become inward-looking with issues at home in order to restore its military, hurt in the Iraq war, and turn around its finances. The United States' economy is deeply interdependent with the global economy. Its economic slump and the emergence of anti-U.S. sentiment caused by the Iraq war in developing areas have reduced the United States' leadership. The biggest fantasy in the post-Cold War era was the image of a unipolar world led by the United States. However, the image of a multipolarized world is also a misunderstanding. The world will not be multipolarized. It will only be of a pluralistic structure. TOKYO 00000161 007 OF 013 The United States and Russia will come out with their new administrations' policies by 2010. China will hold an international exposition. Meanwhile, China will outpace Taiwan in their military balance. China, backed by its military power, will plot a political turn of events for Taiwan. The Korean Peninsula is highly likely to show a big change by that time. The six-party talks will develop into a regional framework for East Asia. In that process, the truce will turn into a peace pact. Actually, inter-Korean reunification is highly likely to be on the agenda. There is no doubt that the United States will choose China over Japan to get over issues in Asia. Lately, Japan and the United States are not getting along well in their alliance. Japan says it will strengthen its alliance with the United States. However, Japan is still holding on to its conventional policy standpoint based on its constitutional interpretation. Japan is trying to be a free rider in its security arrangement with the United States. In the United States' eyes, Japan is neither ready nor effective as an ally. The alliance is now at a crisis. The question is how to overcome it. It is about time for Japan to decide on what to do. The biggest problem for Japan's domestic politics is the Diet's current lopsidedness, with the ruling coalition holding a majority of the seats in the House of Representatives and the opposition parties dominating the House of Councillors. Last year's election for the House of Councillors ended in the ruling coalition's rout with no public appreciation of the Abe cabinet's job performance. However, the Fukuda cabinet is also in a fix due to the balance of strengths in the two Diet chambers. Public dissatisfaction, mainly in outlying areas, remains undissolved. The rate of public support for the Fukuda cabinet is on the decline. The government is therefore promoting policy measures with emphasis on public life. This is understandable. However, there is still no way out of the current political deadlock, resulting in stagnated foreign, security, and defense policies. This will lead to serious damage to Japan's national interests. One possible way for Japan's domestic politics to function is to form a coalition of the ruling and opposition parties or hold policy talks between the ruling and opposition parties. Before that, however, the ruling and opposition parties may change places. A coalition of the ruling and opposition parties would not last long. Political realignment is also conceivable. Meanwhile, the United States and its European allies see Afghanistan as the main theater of their antiterror operations. They may pull their troops out of Iraq. However, they tend to reinforce their military presence in Afghanistan. Japan will now send Maritime Self-Defense Force vessels back to the Indian Ocean. Then, the question is if it is all right for Japan to only provide fuel and water in its Afghan aid. The Diet, in its extraordinary session to be called this fall, may repeat what it did last year over a newly enacted antiterrorism special measures law as temporary legislation with a one-year time limit. In addition, the United States may pressure Japan to cooperate and send ground troops to Afghanistan. There is a limit to the option of repeating such temporary legislation. That is why some insist on the necessity of establishing a permanent TOKYO 00000161 008 OF 013 law to send the SDF overseas. This also could trigger political realignment. At any rate, Japan, in its current status, cannot be a major power in East Asia. The United States will choose China over Japan and is now about to build a security framework for Northeast Asia while acknowledging North Korea as a nuclear power. The question is whether Japan should strengthen its alliance with the United States or whether it should otherwise explore its own security and defense policies in the belief that the Japan-U.S. alliance has now come to the end of its life. One other question is whether Japan should choose to maintain its national stability in its partnership with China while depending on a regional framework. The Japanese people must decide what Japan should do. The most effective option for Japan is to change its bilateral alliance with the United States into a positive asset. To do so, Japan will have to be prepared to pay necessary costs and make sacrifices. Japan cannot entrust its national security to a security framework for Northeast Asia. Discussing permanent legislation for Japan to send the SDF for overseas missions is to opt for Japan's own fate at a crossroads. (7) U.S. FDA declares safety of beef from cloned cattle: Cloned pigs, goats also safe; Voluntary shipment restraint to be kept in place YOMIURI (Page 1) (Full) Evening, January 16, 2008 The U.S. Food and Drug Administration has examined the safety of food products made from cloned cattle, pigs and goats and their offspring and released a final safety assessment report noting that meat and dairy products from cloned animals are as safe as that from their counterparts bred the old-fashioned way. Following the decision, the U.S. Agriculture Department (USDA) plans to create a system that will enable food products from cloned animals to be smoothly accepted by the market. As a transitional measure, the livestock industry will continue its voluntary shipment restraint, which was started in 2001, for some time to come. In making a safety assessment, the FDA analyzed the health condition of cloned animals. As a result, it has reached the decision that many cloned animals die before they are born, but those that have grown big enough for food use are normal in terms of not only physical conditions but also reproductive capability and behavior. The FDA also analyzed the constituents of meat and dairy products from cloned animals and reached the decision that the data show that the safety of food products from cloned animals is indistinguishable from their counterparts bred the old-fashioned way in all aspects. Regarding other animals, such as sheep, the FDA stopped short of reaching a decision, citing that there are no sufficient data available. The FDA says that it will be unnecessary to label food products from cloned animals as such. In that case, chances are that beef from cloned cows could be exported to Japan the same as products from cows bred the old-fashioned way. However, should that happen, consumers might shy away from U.S. meat as a whole. As such, the USDA's stance on such issues as labeling is that it depends on the market's requirement. TOKYO 00000161 009 OF 013 The FDA released the safety assessment results with the same conclusion as this time in late 2006. However, since consumer anxieties about and opposition to food products from cloned animals were deep-seated, many leading food companies declared that they would not use such products, even if they were approved. According to the Ministry of Agriculture, Forestry and Fisheries (MAFF),535 cows cloned from somatic cells were born in Japan as of the end of September 2007. Clonin technology in Japan is very close to perfection. The Ministry of Health, Labor and Welfare (MHLW)'s research team in 2003 released a report noting that it is hard to think that the safety of meat from cows cloned from somatic cells is undermined. However, MAFF ordered a voluntary restraint on the distribution of products from cloned cows. However, since there are no legal grounds for banning imports of products from cows cloned from somatic cells, there is the possibility of U.S. meat from cows cloned from somatic cells or their offspring imported, contained in ordinary meat shipments. Japan's Food Safety Commission has yet to release a safety assessment report on food products from cows cloned from somatic cells. Provided that their safety is confirmed, in how such products can be distributed on the domestic market is unclear, because the production cost of cloned cows is high and it is not known whether consumers will accept such products. (8) Editorial: If cloned beef is marketed, labeling requirement should be imposed MAINICHI (Page 5) (Full) January 21, 2008 The U.S. Food and Drug Administration (FDA) released its report that declared that "meat and milk from cloned cattle are as safe as that from conventionally bred adult cattle." The FDA also regarded milk and meat from cloned pigs and goats as safe to eat. But on cloned sheep, the agency said that it is impossible to make a judgment due to a lack of data. In part because of opposition from consumer and other groups, products from cloned cattle and their offspring will unlikely land on grocery shelves immediately. Even so, since such products may be brought into Japan in the future, the government should prepare what response it should make to such products. Cloning is to produce an identical copy of an animal using the genetic material of the original. The cloning process is accomplished through implanting nuclei of an adult somatic cell from the preferred donor animal into eggs whose nuclei have been removed and placing the produced cell - similar to a fertilized egg - into the uterus of the female. Since the sheep Dolly was created through this process, various kinds of cloned animals have been produced. In Japan, the first cloned cow was born in 1998. Attention was paid to the creation as a technology to make it possible to mass-produce cattle whose meat is delicious and which has plenty of milk. The creation of such animals without the sexual reproduction process, though, requires much caution in ascertaining whether their products are safe for human consumption. In Japan, 535 cloned TOKYO 00000161 010 OF 013 animals were produced by the end of last September. Of them, 30 PERCENT were born dead or died after they were born. Experts attribute this high mortality to the imperfection of the initiated cell. The Ministry of Agriculture, Forestry and Fisheries (MAFF) released a report in 2003 noting: "In an experience in which animals are fed products from cloned cattle, there was no major difference observed from when they were fed with products from cattle raised through ordinary methods." A research team of the Ministry of Health, Labor and Welfare also announced its report in 2003 stating: "It is inconceivable that products from cloned cattle as foods will pose a health risk to humans." Nonetheless, these are not their final conclusions. MAFF is calling on industries to exercise self-restraint on shipments. Meanwhile, the meat of cloned cattle made from a fertilized egg has already been marketed. The FDA concluded, as a result of studying how cows cloned from somatic cells were raised and what ingredients are included in their meat and milk, as well as the outcome of an experience of using rats, that meat and milk products from animal clones are no difference from that from conventionally bread cattle. The agency said it would allow the meat and milk of these cloned animals and their offspring to be sold without any special labeling. This stance makes us feel uneasy. Even though there are many points that are common to animals raised in ordinary breeding methods, since cloned animals are bred with a special technology, importance should be placed on consumers' right of choice. To that end, it will be necessary to require an identifying label o cloned food products. In actuality, it costs a lot of money to produce cattle cloned from somatic cells, so their offspring are likely to be targets for distribution. MAFF is now engaged in work to compare cloned cattle's offspring and ordinary cattle. We should also pay attention to the outcome of this study. It is also necessary to have the Cabinet Office's Food Safety Commission assess the safety of cloned food products. On that occasion, a labeling requirement should also be discussed. (9) TOP HEADLINES Asahi: Japan Paper Association admits to falsifying recycling data Mainichi: NHK Chairman Hashimoto to resign to take responsibility for insider trading scandal Yomiuri: Social Insurance Agency to review pension record probe system Nikkei: 52 PERCENT of elderly welfare recipients remain without pension benefits Sankei: Diet battle over gasoline tax: Views calling for passing annual revenue-related bills within January TOKYO 00000161 011 OF 013 Tokyo Shimbun: Chuetsu Pulp and Paper president aware of falsified recycling data one year ago Akahata: Antipoverty movements to stop decline in standards for welfare benefits (10) EDITORIALS Asahi: (1) Diet debate: Competition for persuasive power (2) Iwakuni mayoral election: Policy of using carrots and sticks being questioned Mainichi: (1) Diet interpellations: Is waste of public funds a DPJ proposal? (2) U.S. economic measures not good enough to break out of the vicious cycle Yomiuri: (1) DPJ's claims at Diet leave many questions (2) Need for looking at "negative aspects" of 100 million cell phones Nikkei: (1) Conclusion on provisional tax rates should be reached before end of March after thoroughgoing debate (2) Transparent rules necessary for next generation network Sankei: (1) Gasoline Diet: Do not repeat needless confrontations Tokyo Shimbun: (1) Start of Diet debate: Focus on gasoline and pension issues (2) Emission trading: It better to start early Akahata: (1) Demand for easing arms embargo is dangerous idea to facilitate conflicts (11) Prime Minister's schedule, January 18 NIKKEI (Page 2) (Full) January 19, 2008 09:01 Cabinet meeting at the Kantei. Environment Minister Kamoshita remained. Then met with Foreign Ministry Economic Affairs Bureau Director General Obabe and Assistant Deputy Chief Cabinet Secretary Ando. 09:58 Met with Financial Services Agency Sato and Supervisory Bureau Director General Nishihara. 11:30 Plenary meeting of LDP members of both chambers of the Houses. Then attended a lawmakers' meeting. Then met with Secretary General Ibuki and Diet Policy Committee Chairman Oshima. TOKYO 00000161 012 OF 013 12:02 Lower House plenary session. 12:08 Arrived at the official residence. 15:46 Upper House plenary session. 17:21 Monthly economic report-related cabinet ministers meeting at the Kantei. 18:02 Met with Japan Business Federation (Nippon Keidanren) Chairman Mitarai, chairman of the Japan-China Culture and Sports Exchange Year Implementation Committee. Then met with Chief Cabinet Secretary Machimura, Deputy Chief Cabinet Secretary Iwaki, Special Advisor to the Cabinet Nishimura and Assistant Deputy Chief Cabinet Secretary Saka. 19:22 Met with Finance Ministry International Bureau Tamaki. 20:33 Arrived at the official residence. Prime Minister's schedule, January 19 NIKKEI (Page 2) (Full) January 20, 2008 Spent the day at the official residence. 18:23 Dined with Secretary Fukuda, his eldest son, at a Chinese restaurant in Higashi-Azabu. 20:13 Arrived at the official residence. Prime Minister's schedule, January 20 NIKKEI (Page 2) (Full) January 21, 2008 09:18 Returned to his private residence in Nozawa. 13:06 Arrived at the official residence. Prime Minister's schedule, January 21 NIKKEI (Page 2) (Full) January 22, 2008 10:00 Met with Deputy Chief Cabinet Secretary Ono at the Kantei. 11:45 Met with Okuda and Kurokawa, special advisors to the cabinet. TOKYO 00000161 013 OF 013 13:02 Lower House plenary session. 16:24 Met with Machimura at the Kantei. 17:00 LDP executive meeting in the Diet. 17:29 Met with Vice Health, Labor and Welfare Minister Erikawa and Internal Affairs Ministry Administrative Evaluation Bureau Director General Seki. Deputy Chief Cabinet Secretary Futahashi was present. Then met with National Police Agency Director General Yoshimura. 18:22 Met with Machimura, Iwaki and Nishimura. 19:57 Arrived at the official residence. SCHIEFFER

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