DAILY SUMMARY OF JAPANESE PRESS 11/05/08

UNCLAS SECTION 01 OF 10 TOKYO 003083 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 11/05/08 INDEX: (1) Japanese government hurriedly preparing position toward the Obama administration; May be gap in policy toward North Korea (Sankei) (2) U.S. Embassy in Japan hosts Presidential Election Open House, including mock election (Mainichi) (3) Stormy developments expected at Diet; DPJ to press government for presentation of second supplementary budget (Asahi) (4) Defense plan to focus on warning satellites (Sankei) (6) SOFA again blocks accident investigation (Mainichi) (7) Local assemblies file protests against U.S. military aircraft crash (Okinawa Times) (8) Prices of imported energy drop sharply: Crude oil prices fall 50 PERCENT from high; Natural gas, coal prices down 40 PERCENT (Nikkei) (9) Eyes of reporter: Japan should make its presence felt in UN (Tokyo Shimbun) ARTICLES: (1) Japanese government hurriedly preparing position toward the Obama administration; May be gap in policy toward North Korea SANKEI (Internet edition) November 5, 2008 With the approaching declaration of victory of Democratic Party candidate Obama in the U.S. presidential election, the Japanese government now plans to quickly prepare its position toward President-elect Obama and his administration. Chief Cabinet Secretary Takeo Kawamura at a press conference this morning said: "Even with a change (in the U.S. administration) to the Democratic Party, Japan-U.S. relations will not waver at all. There is nothing to worry about since the bilateral relationship has been built up over many changes of administrations." The Japanese government has calmly taken the trend toward victory of Senator Obama, having factored into its thinking the prospects of "President-elect Obama" from the final stages of the presidential election. Prime Minister Taro Aso last evening stressed to the press corps, "Strengthening the foundation of the Japan-U.S. relationship is basic, no matter what party it may be (Republican or Democratic)." Regarding the challenges for bilateral ties following the Bush administration, he said: "There are many, including economic and financial affairs, and security of the Pacific. Basically, the Japan-U.S. relationship will operate properly as it has until now." According to a government source, the Prime Minister is planning to coordinate a telephone call to Senator Obama as soon as the results of the election are final. In addition, he is asking the Obama camp to bring about a direct meeting at the time of the emergency summit TOKYO 00003083 002 OF 010 on the financial crisis that will be held in Washington on the 15th. According to an aide, the Prime Minister "has set a policy course of strengthening the bilateral alliance early on. He wants the relationship to get back on track even before the formal launching of the Obama presidency in January." Although the Japanese government does not have as many channels to the Democratic Party as it does to the Republican Party, according to a diplomatic source connected with U.S.-Japan relations, "Obama is fortunate to have influential advisors on Japan policy." Former ambassadors to Japan Mondale and Foley are honorary chairs of a group of Japan policy advisors to Obama set up in September. Since this summer, Japan's Foreign Ministry, too, has put in extra efforts to set up contacts with the Obama camp. However, Senator Obama himself during the campaign hardly mentioned specifics about his policy toward Japan, and it is a fact that in his Asia policy, there is more of an emphasis on China than there is in the Bush administration. On North Korea issues, as well, Obama has evaluated the decision by President Bush to remove that country from the list of states sponsoring terrorism as "a step forward." He has never spelled it out how he would deal with Japan's abduction issue. For that reason, inside the government, there are those who advocate strengthening links with Europe and China, for example, on the North Korea problem. (2) U.S. Embassy in Japan hosts Presidential Election Open House, including mock election MAINICHI ONLINE (Full) 12:44, November 5, 2008 By Takeshi Yamashina The U.S. Embassy in Japan (Akasaka, Minato Ward, Tokyo) hosted what it has called the "2008 Presidential Election Open House" this morning timed with vote-counting in the continental United States, including such events as a mock election to allow guests to enjoy voting American-style . Some 900 guests concerned with Japan-U.S. relations, including college students, took part in the open house. Deputy Chief of Mission James Zumwalt said in a speech: "For Americans, the presidential election is a day to celebrate democracy, and many families throw parties, as well. Please enjoy the atmosphere." The embassy especially wanted students, who will bear responsibility for Japan-U.S. relations in the future, to join. Ballots and a ballot box were set up in the Embassy auditorium, which was decorated with blue and red balloons like an election campaign office. Takafumi Niimura, 22, a junior at Nihon University, said: "It is more festive than Japanese elections, and it's like a popularity poll for entertainers. I like it because it's less rigid." (3) Stormy developments expected at Diet; DPJ to press government for presentation of second supplementary budget ASAHI (Page 4) (Abridged) November 5, 2008 TOKYO 00003083 003 OF 010 Now that Prime Minister Taro Aso has pushed back the dissolution of the Lower House, the course of the second half of the current Diet session has become murky. With the major opposition Democratic Party of Japan taking an aggressive stance, there are no prospects for bills amending the Financial Function Strengthening Law and the refueling support law to clear the Diet. When the government will be able to submit a second supplementary budget also remains unknown. The focus is now on whether the government will extend the Diet session beyond the end of November in order to get important bills enacted (by Lower House override votes). DPJ President Ichiro Ozawa yesterday ordered an executive meeting to shift back to a confrontational mode in dealing the ruling bloc in the Diet while preparing for the next Lower House election, which he thinks will come in the not too distant future. The DPJ is first expected to urge the government to introduce a second supplementary budget bill to the Diet in the current session. The DPJ thinks the government will not be able to present a second budget because revenue sources are uncertain. If the government fails to present a budget bill, the DPJ plans to thoroughly discuss bills amending the Financial Function Strengthening Law and the refueling support law in the Upper House until the current Diet session ends in late November. The largest opposition party also thinks that would force the government and the ruling coalition to consider extending the Diet session and submitting a second budget. The DPJ has plenty of ammunition. The DPJ had insisted on revising six items in the Financial Function Strengthening Law revision bill, but LDP Diet Affairs Committee Chairman Tadamori Oshima informed his DPJ counterpart Kenji Yamaoka of a plan to take a committee vote on Nov. 5 without setting the stage for revision talks. As a result, deliberations would be carried out thoroughly in the Upper House for revising the bill. The DPJ does not hold a majority in the Upper House. Given the situation, the Diet affairs chiefs of four opposition parties met yesterday and confirmed a policy course to take coordinated actions. There is a possibility that persons connected with the Norinchukin Bank or the Shinginko Tokyo will be summoned to the Diet to give testimony in line with the DPJ's strong call. When it comes to the refueling support legislation, there are no prospects even for a vote. DPJ Upper House Caucus Secretary General Kenji Hirata in a press conference yesterday indicated that his party would pursue the government's responsibility for appointing Toshio Tamogami to the Air Self-Defense Force chief of staff knowing that he had written a similar essay before. On Nov. 5, an additional report is slated to follow the government Afghanistan fact-finding team's report that simply listed some items. If the DPJ decides that is still insufficient, the party plans to decide to invoke the right of Diet members to investigate state affairs. The protraction of deliberations is unavoidable. The current Diet session closed on Nov. 30. Diet affairs officers of the two ruling parties truly want to enact the bills amending the Financial Function Strengthening Law and the refueling law by the end of November so that the prime minister will not be forced to dissolve the Lower House at the end of the year. TOKYO 00003083 004 OF 010 Following the prime minister's decision to push back the dissolution of the Lower House, the ruling parties' principal directors of all committees met yesterday to revamp the scenario of getting bills enacted. As a result, they decided to focus only on bills that are likely to win the opposition bloc's concurrence, such as the bill amending the Swords and Firearms Control Law. How to handle a bill establishing the consumer agency remains undecided due to a lack of prospects for finding common grounds with the DPJ. The ruling bloc also decided to forgo deliberations on a bill making corporate health insurance societies take over the government's contribution to the government-managed health insurance programs due to the DPJ's strong opposition. The focus is on the handling of a second supplementary budget incorporating comprehensive economic stimulus measures. A draft budget will be put together in late November, at the earliest. If the Diet begins deliberations on the second supplementary budget after extending the session, the compilation of a fiscal 2009 budget might be delayed as it might overlap with the supplementary budget. Prospects for major bills submitted to the current session to get enacted A bill amending the refueling law ? A bill amending the Financial Function Strengthening Law ? A bill amending the Swords and Firearms Control Law ? A bill amending the Citizenship Law ? A bill amending the Child Welfare Law ? A bill establishing the consumer agency ? A bill making corporate health insurance societies take over the government's contribution to government-managed health insurance programs. Note: ? denotes the government's and the ruling coalition's determination to enact at all costs; ? indicates their intention to aim at enactment; ? signifies uncertainty; and W denoted that they gave up enactment. (4) Defense plan to focus on warning satellites SANKEI (Page 2) (Abridged) November 5, 2008 The government is planning to revise the National Defense Program Guidelines, or NDPG for short, to determine a basic course of action for Japan's defense buildup. Ahead of its revision, the government decided yesterday to set up an advisory panel for the prime minister in December, moving up the original date. In its new version, the NDPG is expected to focus on establishing a general command to control the Ground Self-Defense Force's five district armies and introducing early warning satellites for Japan's homeland defense. The NDPG, formulated in 2004, is to be reviewed every five years. The advisory panel is expected to come up with a report before next summer. Based on its report, the government will make a cabinet decision in late 2009. The GSDF is currently made up of five district armies across the nation. Along with a review of the NDPG, the government wants to establish a general command that is to control the five GSDF armies. Meanwhile, another advisory panel, which was set up at the prime minister's office to reform the Defense Ministry, has recommended TOKYO 00003083 005 OF 010 the GSDF to streamline its intermediate headquarters. If the general command is to be established, the new advisory panel will likely have to discuss the advisability of abolishing or downsizing each GSDF district army and slashing the GSDF's manpower. This August, the Space Law-which has lifted Japan's self-imposed ban on its use of outer space for defense purposes-came into effect. In response, the new advisory panel will also focus on the advisability of introducing early warning satellites for missile defense (MD) and possessing reconnaissance satellites. Meanwhile, the Defense Ministry and the SDF are reluctant about substantial reductions in the SDF's manpower and hardware. Given this, there is also a plan being floated for the prime minister's office to set numerical targets for Japan's defense buildup in an annex to the NDGP's new version, instead of the Defense Ministry and the SDF. (5) SOFA again blocks accident investigation MAINICHI (Page 3) (Full) November 4, 2008 Teruhisa Mimori, Katsumi Kawakami A leisure-purpose four-seater light aircraft (Cessna-172) of the U.S. Air Force recently crashed into flames in a sugarcane field in Nago City, Okinawa Prefecture. Local people in the island prefecture, again angered and dissatisfied, calling for revising the Japan-U.S. Status of Forces Agreement (SOFA). That is because the U.S. military rejected Okinawa prefectural police's request to seize the crashed aircraft and has brought it back to its base. Whenever there was an incident or accident involving U.S. military personnel, Japan and the United States always made makeshift improvements in their SOFA implementation. The Japanese government will likely face even more difficulties since it would not try to revise the SOFA while remaining within the framework of Japan-U.S. security arrangements to blindly follow the United States. "It's strange to constrain police investigations under the SOFA. Also, I cannot understand why they have taken the aircraft away." So saying, Okinawa Gov. Hirokazu Nakaima voiced a strong feeling of dissatisfaction when he met the press on Oct. 31. A leisure-purpose aircraft should have no secrets. Even in the case of its accident, police investigations are affected by what is on the U.S. military's mind. The governor therefore expressed his displeasure. He has plans to visit the United States next spring. He indicated that he would call again for the United States on that occasion to revise SOFA provisions. The accident took place on Oct. 24. Four Kadena-based U.S. servicemen, who love to fly, were onboard the light aircraft. This aircraft took off from Amami Airport on the island of Amami Oshima in Kagoshima Prefecture and crashed into a sugarcane field. Two of them were injured either seriously or slightly. Shortly after the accident, a 28-year-old airman, one of the four, told local police that their flight was for "leisure" purposes. The SOFA stipulates that Japan has primary jurisdiction over off-duty and off-base accidents. Experts also say Japan has the first right to investigate. What became a barrier to local police investigations was a SOFA-annexed record of agreements reached in consultations between the Japanese and U.S. governments. It stipulates that Japan, as long TOKYO 00003083 006 OF 010 as there is no consent from the United States, waives its right to investigate, verify, and seize U.S. military property. Based on this stipulation, the U.S. military claimed the crashed aircraft to be its property and took it back with no account. The SOFA annex also has a description of Japan's special law concerning criminal investigations. This domestic law was promulgated in 1952 when Japan was under the occupation of U.S. forces. Japan's investigative authority, though not restricted under the SOFA, is constrained under the special law. This law requires Japan to ask for the U.S. military's consent when investigating U.S. military property. This SOFA annex is a de facto barrier that blocks Japan's right to investigate. "It's a leisure-purpose aircraft, so we expected to investigate..." So saying, a senior official of the prefectural police bit his lip. Questioning the crashed aircraft's crew is also up to the U.S. military. When the accident occurred, the four U.S. servicemen onboard the crashed aircraft refused a local police interview, maintaining that they need their officer's permission. Time and again, the prefectural police asked for requestioning the crew. However, it was not until the evening of Oct. 29, five days after the accident, that the U.S. military allowed the local police to question the pilot at a US. naval hospital. Okinawa's prefectural and municipal assemblies were also upset. On Oct. 27, the prefectural assembly's special committee on U.S. military bases met. In the meeting, committee members from the ruling Liberal Democratic Party, which is in a position to uphold the bilateral security alliance, expressed their dissatisfaction, claiming that the U.S. military expands its interpretation of the SOFA. The Defense Ministry's Okinawa Defense Bureau and the Foreign Ministry's Okinawa Liaison Office also faced protests from the ruling and opposition parties' local chapters and various local organizations. The municipal assemblies of Nago City and Kadena Town have passed protest resolutions. Gov't hesitant to revise SOFA The accident this time is another example of showing how awkward the SOFA is. However, both the Japanese and U.S. governments are reluctant about any revisions that may expressly stipulate Japan's right to investigate. This time as well, the two governments will try to soften the local backlash with improvements in the SOFA's implementation and will wait for things to calm down. There is no change in such a practice of using cheap tricks. "In the past as well, there were problems. But we resolved and handled them with improvements in the SOFA's implementation. Local residents may think the SOFA should be revised. In point of fact, however, we have done things well (with the SOFA's improved implementation)." With this, Foreign Minister Hirofumi Nakasone stressed his view when he met the press on Oct. 31. In the 1995 incident of three Okinawa-based U.S. servicemen's schoolgirl rape in Okinawa, however, Okinawa's population cried out for SOFA revisions. At that time, the Japanese and U.S. governments settled the incident with ambiguous improvements in their SOFA implementation, with the United States giving "sympathetic consideration" for its pre-indictment handover of suspects in the case of serious crimes only. In August 2004, a U.S. military helicopter crashed into the campus of Okinawa International TOKYO 00003083 007 OF 010 University. At that time, the U.S. military, based on the SOFA, rejected a request from local police for an on-the-spot inspection of the crashed chopper at the scene of the accident, and this became a problem. In April 2005, the two governments reached a settlement on creating guidelines for how far Japanese investigative authorities will be allowed to take part in on-site security should such accidents occur. The two governments agreed to continue negotiations over expanding Japan's investigative authority in an aim to hold down a public backlash. However, this matter is still up in the air. Expanding the scope of Japan's investigative authority, however, could incur repulsion from U.S. military personnel who want U.S. interrogations. In addition, the United States has a SOFA pact with foreign countries where U.S. troops are stationed. Under this pact, the United States turns over its military suspects to the investigative authorities of host countries after they are indicted by their prosecutors. Revising the SOFA with Japan could have repercussions on its SOFA pacts with other countries. "Both the Japanese and U.S. governments do not want to touch this matter," said a senior official of the Foreign Ministry. (7) Local assemblies file protests against U.S. military aircraft crash OKINAWA TIMES (Page 27) (Full) November 5, 2008 In the wake of the recent crash of a U.S. military light aircraft in Nago City, representatives from Kadena Town's assembly and Chatan Town's assembly visited the U.S. Kadena Air Base yesterday, where they filed a protest against the accident. They called for the U.S. military to disclose the cause of the accident, move such light aircraft from the Kadena base, and pay damages to victims. They also visited the Defense Ministry's Okinawa Defense Bureau. Toshiaki Okahisa, director general of the Management Department Director of the bureau, met the local assembly representatives, including Chatan Town Assembly Speaker Tomotsune Miyazato. Okahisa told them, "The (Kadena) Aero Club is a social welfare facility, and the sympathy budget is used for that. There are various items, so let us check." According to Miyazato, Lt. Col. Barbara Carson (TN: phonetic),a Kadena base public affairs officer, answered: "I can't tell anything about financial support from Japan unless we check it. Users pay flight charges." According to Kadena Town Speaker Masayoshi Irei, the public affairs officer said the U.S. military has been looking into the cause of the accident and would disclose matters later. The officer only said the request to move the club elsewhere would be reported to the base leadership. Concerning the claim for compensation, the base officer indicated that the U.S. government would pay damages in the end. However, the officer did not specify when, according to Irei. (8) Prices of imported energy drop sharply: Crude oil prices fall 50 PERCENT from high; Natural gas, coal prices down 40 PERCENT NIKKEI (Top Play) (Full) TOKYO 00003083 008 OF 010 November 5, 2008 Import prices of energy resources have significantly dropped across the board. The price of crude oil imported via direct-deal (DD) contracts from Saudi Arabia and other oil producing countries hit 69.9 dollars per barrel in October, falling 49 PERCENT from the high recorded in July. The prices of natural gas and coal have also fallen 40 PERCENT -50 PERCENT , compared with the peak period. Following the depressed demand for energy due to the slowdown in the global economy in the wake of the financial crisis, the international prices of energy resources have declined. This is because the fall in demand has affected procurement prices. Gasoline and electric power prices are also expected to fall, fuelled by the strong yen and the weak dollar. The benefits of dropping prices will likely be increasingly passed along to consumers. It was learned on the 4th that the prices of DD crude oil shipped in October fell 30 PERCENT , compared with shipments in September. DD crude oil accounts for 80 PERCENT of crude oil Japan imports. Nippon Oil Corporation, Idemitsu Kosan, etc., imports DD crude oil, based on long-term contracts. A record decline in crude oil prices has pushed prices below the level of summer 2007, prior to the time when prices started soaring. This is because demand for crude oil has begun slackening throughout the world. There is reportedly an excess-supply of 2 million barrel a day. Other energy resource prices have slumped in the wake of nose-diving crude. Liquefied natural gas (LNG) prices for discretionary contracts have markedly declined. LNG from the Middle East has slumped to 12-14 dollars for 1 million BTUs (British thermal unites),shedding 38 PERCENT from the record highs of February. Australian coal price have dropped 43 PERCENT since July. The fall in energy prices is beginning to be reflected in the price of end products. Showa Shell Sekiyu KK has, for instance, lowered the wholesale price of November retail gas shipments 16 yen per liter from the previous month. Regular gas at the gas stations cost 151.3 yen per liter at the end of last month. There is now a strong possibility of prices falling below 150 yen per liter for the first time since last November. The likelihood is strong that electricity rates will be lowered after April next year. TEPCO will raise rates for the January-March quarter by 409 yen per month to about 7,200 yen. Current crude prices will be priced into electricity rates for the April-June quarter of 2009. The present estimate for that quarter, based on 105 against the dollar and 100 dollars per barrel, stands at about 7,500 yen. However, there is a possibility of the rate could take a downward turn, compared with the level of the January-March quarter. There is also a likelihood that fuel surcharges added to airfares will drop again in April, following January next year. JAL and ANA fuel surcharges for a round trip to Europe are now 66,000 yen. It will likely drop to less than 44,000 yen in January next year, when fuel prices in the August-October period are reflected in market prices. Chances are that such charges could drop even to 23,000 yen. Declining energy prices will have a positive impact on the economy as well. According to the NLI Research Institute, trading losses -- the amount of domestic income that has effectively flowed out of the TOKYO 00003083 009 OF 010 country due to rising import prices -- came to 31.9 trillion yen for the July-September quarter. The figure is likely to shrink in the October-December quarter when current prices are reflected. The decline in the outflow of income will likely shore up domestic spending. A significant decline in energy prices, which have been the major factor for price rises, could serve as a deflationary factor. (9) Eyes of reporter: Japan should make its presence felt in UN TOKYO SHIMBUN (Page 6) (Full) November 3, 2008 Japan will become a nonpermanent member of the United Nations Security Council (UNSC) in January 2009, when a debate on reform of the UNSC will move into full swing. The government is enthusiastic about becoming a nonpermanent UNSC member as a chance for Japan's bid for a permanent UNSC seat. However, a rocky path still lies ahead for Japan's quest for a UNSC seat. Japan should make its presence in the UNSC, not always following the U.S. policy lead. If a situation that threatens world security comes up, the UNSC will decide on diplomatic, economic and military measures to resolve the situation. The UNSC is composed of five permanent members -- the United States, Russia, the United Kingdom, France and China -- and ten nonpermanent members, which are elected by the General Assembly. The terms of ten nonpermanent members are two years. A half of the ten members are reelected every year. The ten members are selected by region. To become a nonpermanent member, approval of more than two-thirds of the 192 UN members is required. In the Oct. 17 election, Japan and Iran contested for the Asia seat, with Japan winning by a landslide. Japan garnered 158 votes, while Iran secured ¶32. Japan will be serving a 10th term, which is the largest number among the UN members. It is believed that the UNSC members have a number of advantages in collecting information. When North Korea fired missiles in 2006, the UNSC adopted a resolution criticizing the North under the initiative of Japan, which was then a nonpermanent member. It has been decided government-to-government talks on UNSC reform will start by the end of February in 2009. Foreign Minister Hirofumi Nakasone said enthusiastically: "Japan aims at an early implementation of UNSC reform, including its bid for a permanent UNSC seat, while fulfilling its role as a nonpermanent UNSC member. However, a bid for a permanent UNSC seat is a hard work. Although Japan, Germany, India and Brazil jointly aimed for permanent UNSC membership in 2005, the four countries' efforts unavoidably hit a roadblock because the African Union withdrew its once-promised support. It was said that China's opposition and discord in African countries were reasons for Japan failing to secure a permanent UNSC seat. But it is also said that African countries had a distrust of Japan that Tokyo would not side with developing countries and that the United States alone would gain benefits if Japan became a permanent UNSC member. TOKYO 00003083 010 OF 010 In order to sweep away such distrust, Japan should accumulate international contributions that can be done by Japan alone, not trying to gauge the United States' feelings. Japan should actively work in such areas as nuclear disarmament, peace and humanitarian assistance. As the only atomic-bombed country, Japan should display its leadership in eliminating nuclear weapons. A resolution calling for nuclear disarmament that Japan presented was adopted on Oct. 29 in a first committee session of the General Assembly. The resolution called on all nuclear powers to reduce nuclear weapons in a transparent manner. Japan should make efforts to realize the resolution. The world is now shifting to multipolar from the age of U.S. unipolarism. Japan's foreign policy is now required to change its position during this turning point in time. SCHIEFFER