DAILY SUMMARY OF JAPANESE PRESS 08/12/08

UNCLAS SECTION 01 OF 14 TOKYO 002215 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 08/12/08 INDEX: (1) North Korea to announce start of reinvestigation of abduction issue, premised on Japan's conditions (Asahi) (2) Postponement of removal of North Korea from U.S. list of state sponsors of terrorism - part 1 (Yomiuri) (3) Postponement of removal of North Korea from U.S. list of state sponsors of terrorism - part 2 (Yomiuri) (4) Japan welcomes U.S. decision to put off delisting North Korea as state sponsor of terrorism (Mainichi) (5) Editorial: Need for an approach that does not allow North Korea to stall for time (Nikkei) (6) Futenma Air Station noise pollution plaintiff's group adopts resolution demanding Maher leave Okinawa (Ryukyu Shimpo) (7) Man killed in traffic accident on local street in Uruma City (Okinawa Times) (8) Interview with Defense Minister Yoshimasa Hayashi: War on terror-Its significance needs to be reconfirmed (Tokyo Shimbun) (9) 90 PERCENT of DPJ prefectural chapters support Ozawa's third term in office; 60 PERCENT call for carrying out presidential election (Mainichi) (10) Poll on Fukuda cabinet, political parties (Yomiuri) (11) Gap in perspectives for economic measures between government, ruling coalition (Nikkei) (12) Interview with Daniel Berman, former U.S. Embassy minister-counselor for agricultural affairs (Part 2) (Nihon Nogyo Shimbun) (13) Interview with Daniel Berman, former U.S. Embassy minister-counselor for agricultural affairs (Part 3) (Nihon Nogyo Shimbun) (14) TOP HEADLINES (15) EDITORIALS (16) Prime Minister's schedule, Aug. 11 (Nikkei) ARTICLES: (1) North Korea to announce start of reinvestigation of abduction issue, premised on Japan's conditions ASAHI (Page 1) (Excerpts) Eve., August 12, 2008 By Yoshihiro Makino in Shenyang, China In formal working-level talks between foreign ministry officials of Japan and North Korea, North Korea has basically accepted Japan's request centering on the method of carrying out a reinvestigation of TOKYO 00002215 002 OF 014 the abduction victims, and it is expected to announce that it will start the actual reinvestigation process. In talks that started on Aug. 11, North Korea informed the Japanese side of such a course of action, and in the talks today, the timing of the investigation and the length of the process are likely to be firmed up. This was revealed by a source connected to North Korea. In the talks that are being held in Shenyang, China, Song Il Ho, North Korea's ambassador for normalization talks with Japan, and Akitaka Saiki, director general of the Foreign Ministry's Asia-Pacific Bureau participated. They met today, the final day of the talks, at a Shenyang hotel mainly to exchange views on the method of the reinvestigation. (2) Postponement of removal of North Korea from U.S. list of state sponsors of terrorism - part 1: U.S. remains hard-line about verification; North Korea waiting for U.S. to make concessions with only five months to go until term of Bush administration ends YOMIURI (Page 3) (Excerpts) August 12, 2008 U.S. Secretary of State Rice on August 11 announced the government's decision to put off the removal of North Korea from its list of state sponsors of terrorism. This is because the U.S. has yet to reach an agreement with North Korea on procedures to verify its nuclear report. The Bush administration, which was criticized for making concessions to North Korea, is standing firm when it comes to specific procedures for verification of North Korea's nuclear report. Seeing through the Bush administration's impatience as its term approached the end, North Korea is taking a strategy of buying time. Whether the U.S. can stick to its severe stance toward North Korea is unclear. With stagnation now inevitable in the six-party talks' process, bilateral talks between the U.S. and North Korea are taking on an aspect of a war of nerves. The U.S. government had at first indicated an optimistic outlook that both countries would reach an agreement on specific verification procedures and that North Korea would be removed from the U.S. list of state sponsors of terrorism within 45 days after it notified the Congress on June 26 of its intention to rescind North Korea's designation as a state sponsor of terrorism. According to a U.S. government official, North Korea had pledged to render full cooperation on verification. North Korea completely changed its attitude after the U.S. government handed over a draft for verification procedures to North Korea at a meeting of chief envoys to the six-party talks held in Beijing for three days starting on July 10. According to the draft, which this newspaper has obtained, the U.S. called on North Korea: 1) to allow free access to all nuclear facilities and 2) accept strict verification procedures targeting nuclear weapons that are not included in the report, a nuclear program that uses highly-enriched uranium, and nuclear cooperation that it has provided to other countries. North Korean Vice Foreign Minister Kim Kye Gwan, chief envoy to the six party talks, wanted North Korea to be treated as a nuclear power. He said: "North Korea cannot grant a request for the removal of samples. We cannot approve the U.S. bringing in verification equipment, either." TOKYO 00002215 003 OF 014 The gulf between the U.S. and North Korea over verification procedures remains wide. A source familiar with the details of the talks revealed, "North Korea only intends to accept verification of nuclear facilities at Yongbyon." Given that President Bush's term of office will soon end, the DPRK is determined to wait and see if Washington will give in and make concessions. According to a former senior U.S. government official, who was involved in the nuclear talks, North Korea hopes that the U.S. will end its hostile policy toward it, once it is removed from the U.S. list of state sponsors of terrorism with its nuclear weapons still in hand. This official said that for North Korea, it is out of the question to submit to verification that involves its nuclear weapons. North Korea will likely press the U.S. to accept its demand by delaying the nuclear disabling work now under way at nuclear facilities at Yongbyon. The Bush administration's true intention is not to lose momentum: In order to chalk up achievements in its nuclear talks with North Korea, it needs to delist it as soon as possible. However, if the U.S. makes a compromise in an easy-going manner on the verification process, plans to move to the next targets for denuclearization, the six party talks' final goal, would collapse. Caught on the horns of a dilemma, the U.S. is forced to negotiate from a tough stance. (3) Postponement of removal of North Korea from U.S. list of state sponsors of terrorism - part 2: Japan welcomes move YOMIURI (Page 3) (Excerpts) August 12, 2008 Following a telephone conversation with U.S. Secretary of State Rice, in which she conveyed the U.S. decision not to remove North Korea from its list of state sponsors of terrorism, Foreign Minister Koumura, looking satisfied, told reporters, "I thought there could not be a delisting of North Korea. This is the natural outcome." Since the Japanese government had regarded the designation of North Korea as a state sponsor of terrorism as a tool to promote its own bilateral agenda, such as the abduction issue, it is welcoming the outcome. Since the U.S. government decided to take off North Korea from the list, the Japanese government has repeatedly asked the U.S. through foreign ministerial meetings and on other occasions to step up pressure on North Korea regarding the abduction issue, as well. The Japanese government takes it that North Korea agreed to hold the Japan-North Korea formal working-level talks, now going on in Shenyang, China, from August 11 after a hiatus of two months, in the form of responding to the U.S. government call with an eye on its removal from the list on or after August 11. As a matter of fact, the ongoing talks were realized when the North Korean side proposed a date in August. However, whether North Korea will come up with a positive response at the negotiating table is still unclear. Though at the outset of the talks on the 11th, Akitaka Saiki, director general of the Asian and Oceanian Affairs Bureau of the Foreign Ministry, and Song Il Ho, ambassador for normalization talks with Japan, shook hands, they remained grim through the talks. Concerning the lifting or easing of Japan's sanctions against that nation, Saiki during the talks proposed, "If North Korea takes a big step forward, Japan would take a big step forward, too. If it makes a small step forward, Japan would do the same." However, North Korea TOKYO 00002215 004 OF 014 stopped short of clarifying its stance toward a reinvestigation into abduction cases, which it pledged. If North Korea comes up with a concrete approach to the reinvestigation of abduction cases, Japan would be pressed to make decisions on when to partially lift or ease its sanctions against North Korea and whether to take part in energy assistance to that nation. If the Fukuda administration stumbles over this issue amid public opinion in Japan remaining harsh toward the arrangement, it could suffer a setback. (4) Japan welcomes U.S. decision to put off delisting North Korea as state sponsor of terrorism MAINICHI (Page 2) (Full) August 12, 2008 The Japanese government welcomes the U.S. government's decision to put off delisting North Korea as a state sponsor of terrorism, believing that it would become pressure to force Pyongyang to carry out stricter nuclear verification. The U.S. decision to delay removal of the North from its list of terrorism-sponsoring nations will likely affect Pyongyang's response in bilateral talks between Japan and North Korea, which are now going on in Shenyang, China. The U.S. government notified Congress in June of its decision to remove North Korea from the terrorism blacklist after carrying out bilateral talks on delisting. Japan, however, was concerned about the exclusion of nuclear weapons from the subjects of the North's declaration report. It was also concerned about the possibility of the process of North Korea's denuclearization becoming ambiguous. Tokyo has insisted that the verification of nuclear weapons is extremely important in order to realize the denuclearization of North Korea. Foreign Minister Masahiko Koumura told reporters: "I was convinced that (delisting) would never occur unless North Korea agreed to concrete verification." Since Japan's various efforts were meant to make sure North Korea was effectively denuclearized, the U.S. decision to postpone delisting this time around meets Japan's policy. However, there is no change in the situation that the U.S. government can remove at anytime North Korea from the list of state sponsors of terrorism. Moves over delisting will proceed centering on U.S.-DPRK talks from now on, as well. (5) Editorial: Need for an approach that does not allow North Korea to stall for time NIKKEI (Page 2) (Full) August 12, 2008/08/12 U.S. Secretary of State Condoleezza Rice has told the Japanese government that the United States will not remove North Korea from its list of terrorist-sponsoring states on August 11, which was considered the initial deadline. The reason is that North Korea failed to respond sincerely to the flexible US policy. Not only the Bush administration, but also the next U.S. presidency will be pressed to review policy toward North Korea. TOKYO 00002215 005 OF 014 On August 10 (U.S. time),45 days will have passed since President Bush notified Congress of his intention to remove North Korea from the list of terrorist-sponsoring states. The Department of State initially explained that North Korea would be delisted on August 11 unless Congress adopted a resolution opposing the move. However, Dennis Wilder, senior director for Asian affairs at the White House, gave a different interpretation at a news conference on August 4, saying, "August 11th is the opening of the window for this; it is not a deadline." While Wilder's comments indicated that the United States plans to further watch North Korea's moves, a presidential election will be held in the United States in less than three months. It would be difficult and unacceptable for the Bush administration to make concessions that would tie down the next administration. The next U.S. president, whether it be Obama or McCain, will have to review policy toward North Korea during the closing days of the Bush administration. The Bush administration initially took a hardline policy toward North Korea. At the six-party talks in September 2005, North Korea pledged to "abandon all nuclear weapons and existing nuclear programs," indicating that the Bush administration's approach seemed to be working. However, North Korea then conducted a nuclear test in October 2006, and the Bush administration suffered defeat in the midterm elections held that November. Consequently, the Bush administration shifted to a reconciliatory policy in January 2007. The result of this policy shift was the agreement reached at the six-party talks in February 2007. The US plan in June this year to delist North Korea as a terrorist-sponsoring state is also an extension of the policy shift. Although the details of an aid package for North Korea were decided at the six-party talks in July, no agreement was reached on the specifics of a verification protocol for North Korea's denuclearization. This outcome could have easily been predicted, considering North Korea's strategy to use the nuclear issue for political purposes. The Bush administration took the risk of pinning hopes on North Korea's "good will" and notified Congress of its intention to remove North Korea from the terrorist black list. The postponement of North Korea's delisting signifies that the Bush administration itself admitted that its hopes were betrayed. Just as expected, North Korea merely took advantage of this matter to buy time, indicating that Rice and Assistant Secretary of State Christopher Hill made an error in judgement. North Korea will likely present a small concession in the not-so-distant future and press for implementation of the aid package. Bush, who will be stepping down soon, cannot go along with that. It even appears that the six-party talks framework, which was initially established to contain North Korea, has been transformed into an organization for assisting North Korea. The next administration needs to conduct a thorough review of U.S. policy toward North Korea, including this point. The day that North Korea can be made to completely scrap its nuclear ambitions is still regrettably far away. (6) Futenma Air Station noise pollution plaintiff's group adopts resolution demanding Maher leave Okinawa RYUKYU SHIMPO (Page 3) (Full) TOKYO 00002215 006 OF 014 August 9, 2008 evening edition Ginowan - A plaintiff's group (headed by Zenjrio Shimada) in the U.S. Marine Corps Futenma Air Station noise pollution suit held its annual general meeting for fiscal 2008 on 8 August at the Ginowan City Central Community Center. The group unanimously adopted a resolution demanding that Consul General Kevin Maher of the US Consulate in Okinawa "leave the island," in response to Maher's remarks questioning "why Ginowan City has permitted construction (of homes) in off-base areas near the runway." In the "resolution demanding that Maher leave the island," the plaintiff's group explained how US military bases were established on Okinawa, pointing out that "the US military confiscated the local residents' land after landing on Okinawa during World War II and built an airfield (in Futenma)." It claimed that this was "a serious violation of international law." The plaintiff's group cited the verdict of the first hearing on the Futenma noise pollution suit, in which "the judge ruled out the central government's argument of "moving close to danger (kiken e no sekkin)," (the argument that those who built homes close to the runway should have known what to expect, and the government, therefore, does not have to pay compensation) and condemned the abnormal usage of Futenma Air Station as illegal. It went on to make the following demand: "We protest with anger against anti-Okinawa behavior that Consul General Maher has shown on a number of occasions, even though he was fully aware of the verdict, and demand that he leave Okinawa immediately." The protest resolution was addressed to the U.S. Secretary of State, the U.S. Embassy in Japan, and the U.S Consulate General in Okinawa. Shimada explained the significance of the resolution, saying: "We cannot tolerate any behavior that defies the feelings of the Okinawan people. In particular, we, who have filed a complaint, must raise our voices. Tsutomu Arakaki, who heads the defense team, called on more people to join the plaintiff's group, saying: "The fact that the court for the first time condemned the roaring noise at Futenma Air Station as illegal carries great significance. Anyone who lives in an area where the W-value (Weighted Equivalent Continuous Perceived Noise Level) exceeds 75 can become a plaintiff. Please call out to get a lot of people to join the plaintiff's group." At the general meeting, Ginowan Mayor Yoichi Iha, who returned from his US visit, gave a briefing on his petition mission. The plaintiff's group also adopted its action policy for fiscal 2008 and a general meeting declaration, among other matters (7) Man killed in traffic accident on local street in Uruma City OKINAWA TIMES (Page 5) (Full) August 11, 2008 evening edition A passenger vehicle driven by a member of the U.S. Navy in her 20s collided head-on with a motorcycle driven by a 36-year-old man around 0650 hours local time on August 11 on a local street in Taba, Uruma City. The man was seriously injured and was carried unconscious to a hospital, but was confirmed dead about ONE hour later. The Uruma police are trying to confirm the man's identity and investigating the cause of the accident. TOKYO 00002215 007 OF 014 (8) Interview with Defense Minister Yoshimasa Hayashi: War on terror-Its significance needs to be reconfirmed TOKYO SHIMBUN (Page 2) (Full) August 11, 2008 -- How will you reform the Defense Ministry? Defense Minister Hayashi: We must recover public trust, and that will lead to raising the Self-Defense Forces' morale. I will steadily implement the Defense Ministry Reform Council's report of recommendations (such as mixing the Defense Ministry's bureaucracy and the SDF's staff offices). -- On the issue of relocating the U.S. military's Futenma airfield, Okinawa is calling for the government to change its plan. Hayashi: The current plan is the ONE with a balance of various factors, including the natural environment and feasibility. So it would be difficult to change it without rational reason. -- The Maritime Self-Defense Force is currently tasked with refueling activities in the Indian Ocean under the new Antiterrorism Special Measures Law. But this law is set to run out in January next year. Will the government present a bill to the Diet to extend the MSDF's refueling mission there? Hayashi: The government has yet to decide on that matter. In the Sept. 11, 2001 terrorist attacks on the United States, Japanese nationals were also victimized. We must reconfirm the significance of the war on terror and explain it. -- Oil prices are now rising, and there is also a strong criticism of Japan's free refueling services. Hayashi: The MSDF's refueling activities there help secure the sea lane (between oil producing countries and Japan). We need to reconfirm this fact as well. -- Liberal Democratic Party Secretary General Taro Aso has come up with his idea of having the MSDF escort Japanese oil tankers. Hayashi: I have the impression that it wouldn't be so easy to do so. In that case, other countries may raise a question about Japan engaging the MSDF in the task of escorting its tankers only. -- What do you think about the idea of creating a permanent law allowing Japan to send SDF troops overseas as needed? Hayashi: That's important in the medium- and long-term. We used to legislate special measures every time something happened. This is not so beautiful a way of doing things under the legal system. But I'm not so optimistic in the current Diet situation. (9) 90 PERCENT of DPJ prefectural chapters support Ozawa's third term in office; 60 PERCENT call for carrying out presidential election MAINICHI (Page 2) (Excerpts) August 12, 2008 TOKYO 00002215 008 OF 014 The Mainichi Shimbun conducted an inquiry survey on the presidential election of the main opposition Democratic Party of Japan (DPJ) of senior officials of the DPJ prefectural chapters. The official campaign for the DPJ presidential race will start on Sept. 8 and the election will be on Sept. 21. According to the result of the survey, 90 PERCENT or 42 prefectural chapters responded that giving Ichiro Ozawa a third term in the presidency was desirable, while 60 PERCENT or 27 chapters sought the carrying out of an election with more than ONE candidate. The survey was conducted on Aug. 4-7 of the secretaries general and other senior officials (excluding Diet members) of the 47 prefectural chapters in writing and by phone. Regarding the reasons for supporting Ozawa for a third term, the Hokkaido chapter said that considering the party's victory in the Lower House by-election in the Yamaguchi No. 2 constituency, Ozawa would be a suitable person to take the lead in the next Lower House election. The Yamanashi chapter said that the party's mission was to aim at victory in the next general election by keeping unity, with an eye on a change ing government. Of the five prefectural chapters that saw Ozawa's third term as undesirable, four chapters including Fukushima and Tokushima were "ambivalent" because potential candidates have yet to announce their candidacy. The Kyoto chapter officials responded that they were still considering. (10) Poll on Fukuda cabinet, political parties YOMIURI (Page 6) (Full) August 12, 2008 Questions & Answers (Figures shown in percentage. Parentheses denote the results of a survey taken in July.) Q: Do you support the Fukuda cabinet? Yes 28.3 (26.6) No 59.7 (61.3) Other answers (O/A) 3.0 (3.3) No answer (N/A) 9.0 (8.9) Q: (Only for those who answered "yes" to the foregoing question) Give up to two reasons for your approval of the Fukuda cabinet. I can appreciate its political stance 23.7 (22.4) It's stable 23.3 (18.7) The prime minister is trustworthy 22.3 (27.8) Something can be expected of its economic policy 6.1 (5.6) Something can be expected of its foreign policy 6.3 (7.4) Because it's a coalition of the Liberal Democratic Party and New Komeito 10.7 (16.9) Because the prime minister is from the LDP 36.0 (34.2) It's better than its predecessors 11.5 (11.3) O/A+N/A 6.3 (7.6) Q: (Only for those who answered "no" to the foregoing question) Give up to two reasons for your disapproval of the Fukuda cabinet. TOKYO 00002215 009 OF 014 I can't appreciate its political stance 42.6 (44.6) It's unstable 29.1 (31.4) The prime minister is untrustworthy 20.3 (20.7) Nothing can be expected of its economic policy 42.1 (44.6) Nothing can be expected of its foreign policy 13.3 (14.4) Because it's a coalition of the Liberal Democratic Party and New Komeito 8.0 (7.7) Because the prime minister is from the LDP 5.1 (3.5) It's worse than its predecessors 9.7 (8.8) O/A+N/A 2.8 (2.0) Q: What issues do you want the Fukuda cabinet to pursue on a priority basis? Pick as many as you like from among those listed below, if any. Economic, employment measures 63.2 (57.6) Fiscal reconstruction 25.3 (25.5) Tax reform, consumption tax 34.2 (36.6) Social security reform, including pension and healthcare systems 60.2 (63.0) Low birthrate countermeasures, including childcare support 25.0 (28.0) Education reform 16.5 (17.2) Social divide 19.6 (23.5) Civil service reform 16.5 (21.1) Politics and money issues 28.2 (31.6) Asia diplomacy, including China and South Korea 12.3 (14.8) North Korea 20.6 (27.5) Defense, security 9.2 (8.9) Constitutional revision 4.4 (5.3) Crisis management, including disaster prevention 10.2 (11.4) Public security, crime prevention 18.2 (22.5) Environmental protection 22.9 (30.6) Food safety 32.0 (37.9) O/A + nothing in particular + N/A 2.9 (2.8) Q: Which political party do you support now? Pick only one. Liberal Democratic Party (LDP) 30.5 (27.2) Democratic Party of Japan (DPJ or Minshuto) 18.7 (18.8) New Komeito (NK) 2.4 (2.8) Japanese Communist Party (JCP) 1.7 (1.9) Social Democratic Party (SDP or Shaminto) 1.3 (0.8) People's New Party (PNP or Kokumin Shinto) 0.1 (0.1) New Party Nippon (NPN or Shinto Nippon) --- (0.1) Other political parties 0.1 (---) None 44.5 (47.8) N/A 0.8 (0.5) Q: When would you like the House of Representatives to be dissolved for the next general election? As early as possible 29.5 Within this year 21.3 Early next year 14.7 Sometime during the current term up until September 2009 26.6 N/A 8.0 Q: If an election were to be held now for the House of Representatives, which political party would you like to vote for in your proportional representation bloc? TOKYO 00002215 010 OF 014 LDP 31.3 DPJ 25.1 NK 3.0 JCP 2.9 SDP 1.6 PNP 0.3 NPN 0.1 Other political parties --- Undecided 35.0 N/A 1.0 Q: Would you like an LDP-led government after the next election for the House of Representatives, or would you otherwise like a DPJ-led government? LDP-led government 43.2 DPJ-led government 35.1 O/A 1.3 N/A 20.4 Q: Do you think the Fukuda cabinet is appropriately dealing with the recent rising prices? Yes 6.9 No 88.5 N/A 4.6 Polling methodology Date of survey: Aug. 9-10. Subjects of survey: 3,000 persons chosen from among all eligible voters throughout the country (at 250 locations on a stratified two-stage random sampling basis). Method of implementation: Door-to-door visits for face-to-face interviews. Number of valid respondents: 1,788 persons (59.6 PERCENT ). (11) Gap in perspectives for economic measures between government, ruling coalition NIKKEI (Page 2) (Full) August 9, 2008 The ruling Liberal Democratic Party (LDP) and its coalition partner, New Komeito, asked on Aug. 8 the government to come up with such economic measures as those against soaring crude oil prices, as well as a tax cut for low-income earners. Their purpose is to reflect them in the outline of economic measures the government will compile as early as Aug. 11. Amid a growing sense of uncertainty about the economy, pressure calling for expanding expenditures has suddenly become stronger in the ruling camp with an eye on the next House of Representatives election, propelled out by LDP Secretary General Taro Aso's remarks. A fierce battle between the government and ruling camp has intensified over the question of whether to maintain fiscal discipline. Prime Minister Yasuo Fukuda called economic measures that the government would come up with "a comprehensive economic stimulus package to realize peace of mind." Fukuda also called his new cabinet formed on Aug. 1 "a peace of mind realization cabinet." The reason for giving the same name is because the Fukuda government considers the upcoming economic stimulus a showcase policy. TOKYO 00002215 011 OF 014 However, there are gaps in views on the showcase policy between the Prime Minister and the ruling coalition. Fukuda instructed to Economic and Fiscal Policy Minister Kaoru Yosano to keep sound public finance policy, including a surplus (in the primary balance) for fiscal 2011. Secretary General Aso, who also assumed his post just recently, announced a policy shift fairly and squarely, noting: "It would be difficult to compile comprehensive economic measures while implementing fiscal reconstruction." Aso's remarks ignited pressure calling for an expansion of expenditures in the ruling bloc. After his meeting with Yosano on Aug. 8, LDP Policy Research Council Chairman Kosuke Hori told reporters: "There are factors that would bloat spending." Hori also referred in an interview to the possibility of issuing deficit-covering government bonds in a supplementary budget for fiscal 2008 as revenue sources for pump priming. The New Komeito, too, proposed measures for reducing and exempting taxes for a certain period of time. It is said that if about 50,000 yen is exempted, nearly 2 trillion yen in resources would be needed per year. A senior LDP official expressed expectations, saying: "It depends on a decision by the Prime Minister, but the trillion-yen range of economic stimulus will be needed since business is slow. The government is desperately trying to put out the fire. Vice Finance Minister Kazuyuki Sugimoto underscored that the ministry would use reserve funds for revenue sources for economic measures. Yosano also threw a wet blanket on it by saying: "We will consider structural reforms and fiscal discipline as consistent with each other." Former Secretary General Hidenao Nakagawa, who attaches importance to boosting tax revenues through economic growth in implementing the fiscal reconstruction policy, criticized Aso severely on Aug. 6 on his home page: "I cannot believe that a person opposing the Prime Minister's policy is included in the party leadership, because a policy shift means a change in the political situation." Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama at a press conference on Aug. 7 said: "(Aso) may come up with some fairly bold actions in compiling the budget. I want to see the LDP splitting." (12) Interview with Daniel Berman, former U.S. Embassy minister-counselor for agricultural affairs (Part 2): Key to spreading GM products lies in promoting understanding NIHON NOGYO SHIMBUN (Page 3) (Full) August 3, 2008 -- What approach are you going to take to spread genetically modified (GM) farm products? I think it will become a major challenge to promote understanding of biotechnology, including GM, among consumers and producers. Biotechnology is environment-friendly and contributes to enhancing productivity. I believe Japanese farmers should introduce this technology and bolster their competitiveness. A Japanese farmer, my acquaintance, TOKYO 00002215 012 OF 014 harbors strong dissatisfaction at the unavailability of biotechnology. Japanese consumers tend to judge that products are good or not. They are negative about biotechnology. Japanese companies are quite conservative and don't want to be the first to introduce (GM farm products). But it is strange that there are few options about GM foods in Japan. There might be consumers who opt for GM foods if they are confirmed safe and low-priced. It is necessary to give freedom to choose to consumers. (13) Interview with Daniel Berman, former U.S. Embassy minister-counselor for agricultural affairs (Part 3): Emphasizes seller's market, pressuring Japan to open market wider NIHON NOGYO SHIMBUN (Page 3) (Full) August 3, 2008 "The global supply-demand relationship of farm products has significantly changed, and we are now experiencing a switch from a buyer's market to a seller's market," Berman said in the interview. He indicated that with the end of an age in which Japan can buy farm products from countries across the world without any restrictions, the position of sellers is now stronger than that of buyers. Berman pointed out the possibility that if Japan's government and consumers continue to ignore the international "standards" over the BSE issue and GM farm products, Japan may become unable to acquire products on the international market. This remark appears to be reflecting his irritation at the fact that he could not achieve satisfactory results during four years of his term of office in Japan. The U.S. Agricultural Department has its overseas agencies in 68 countries and regions. Their major mission is to exploit new markets for U.S. agricultural products. Berman made efforts to cultivate the Japanese market, leading 20 members stationed in Tokyo and Osaka. The Japanese market used to be the most valued customer for U.S. agriculture, but the situation changed over the past several years. In 2004, when Berman assumed office in Japan, Mexico became the top importer of U.S. farm products, replacing Japan, affected by Japan's suspension of U.S. beef imports in reaction to the discovery of the first case of BSE in the U.S. Exports of U.S. farm products to China are sharply increasing. The value of exports to China was 1.3 billion dollars in 1998, accounting for less than 3 PERCENT of the total. But its share topped the 9 PERCENT level in 2007. During this period, U.S. exports to Japan dropped from 18 PERCENT to 11 PERCENT . Berman's main duty was to put trade in beef with Japan on the right track and accelerate sales to the Japanese market. The value of U.S. exports to Japan started increasing in 2006, but the rise is attributed to soaring grain prices due to a tight global supply-demand situation, and it is not true to think that only the value of exports to Japan has boosted. In exploiting the Japanese market, the U.S. gives priority to having Japan to further open up its market for U.S. beef. The U.S. is TOKYO 00002215 013 OF 014 expected to ratchet up pressure on the Japanese market. Its second priority is to spread genetically modified farm products across Japan. The U.S. might be considering that it is necessary to change Japanese consumers' consciousness about GM products, because it plans to shift U.S.-made corn and beans to GM ones. (14) TOP HEADLINES Asahi: Mainichi: Sankei: Akahata Kitajima wins second gold medal Yomiuri: Russian troops advance into Georgia: French president to broker ceasefire today Nikkei: Retailers ready to kick drug over-the-counter drug sales into high gear Tokyo Shimbun: South Ossetia: Georgia signs ceasefire paper (15) EDITORIALS Asahi: (1) Postponement of US removal of North Korea from its list of state sponsors of terrorism: Forward movement impossible without verification (2) Gold medalists smile in Beijing Olympic Games after 1400 days of effort Mainichi: (1) Kitajima wins gold medal: We hope to see him win second gold medal in men's 200-meter breaststroke (2) Recommendation by National Personnel Authority: Can its recommendation to reduce working hours help restore attractiveness of working as bureaucrats? Yomiuri: (1) Delisting of North Korea from U.S. list of state sponsors of terrorism: North Korea must accept nuclear verification first (2) Minimum wages: Consistency with welfare benefits still long way to go Nikkei: (1) Approach that does not allowing North Korea to gain time needed (2) Terrorism in Xinjiang Uygur Autonomous Region reflects ethnic problems Sankei: (1) Kitajima wins second gold medal, following Athens Olympic Games (2) Attack on police in Xinjiang Uygur Autonomous Region Tokyo Shimbun: (1) Kitajima wins gold medal (2) 23rd anniversary of JAL plane crash: We should not forget basis of safety Akahata: (1) Food self-sufficiency at 40 PERCENT : It is urgent to fundamentally change agricultural administration TOKYO 00002215 014 OF 014 (16) Prime Minister's schedule, Aug. 11 NIKKEI (Page 2) (Full) August 12, 2008 07:55 Had dental checkup at dental clinic in Shin-Aoyama building in Minami-Aoyama. 10:30 Phoned Masato Uchishiba, judo gold medalist of Beijing Olympics. 12:06 Met at Kantei with Chief Cabinet Secretary Machimura, later joined by Economic and Fiscal Policy Minister Yosano and Finance Minister Ibuki. 13:01 Attended government-ruling coalition meeting on measures for stimulating the economy. 14:25 Met with Finance Services Minister Motegi and National Civil Servant System reform Promotion Headquarters Chief of Secretariat Tachibana. 15:03 Met with expert panel head to discuss Ainu policy Kato, attended by Machimura and deputy chief cabinet secretaries Iwaki and Futahashi. 15:32 Met with National Personnel Authority President Tani. Met later with Machimura and Futahashi. Machimura remained. 17:58 Returned to his official residence. SCHIEFFER