DAILY SUMMARY OF JAPANESE PRESS 11/10/08

UNCLAS SECTION 01 OF 10 TOKYO 003109 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 11/10/08 INDEX: (1) About 10 years needed for U.S. military realignment in Okinawa: U.S. PACOM commander (Asahi) (2) Guam relocation in 2015 or later (Yomiuri) (3) New ASDF Chief of Staff Hokazono apologizes for damaging public trust (Nikkei) (4) DPJ to pursue Tamogami essay blunder as "problem of civilian control" in summoning him to Diet for testimony (Yomiuri) (5) Tamogami essay scandal: Additional ASDF members found to have sent essays, bringing total to 94 (Nikkei) (6) Refueling bill likely to pass Diet in a week (Nikkei) (7) Japanese, Chinese chief delegates to six-party talks agree on need to codify nuclear-verification accord (Yomiuri) (8) Prime minister jumps on bandwagon of Obama popularity (Tokyo Shimbun) (9) DPJ head Ozawa sends letter to U.S. President-elect Obama (Asahi) (10) DPJ President Ozawa criticizes Prime Minister Aso as good-for-nothing (Asahi) (11) DPJ Secretary General Hatoyama calls for Prime Minister Aso's resignation (Asahi) (12) Financial crisis a boost to trading companies: Survive with M&As targeting overseas companies (Tokyo Shimbun) (13) Bidding for imported rice fails with traders avoiding impact of tainted rice incident (Mainichi) (14) Vice Agricultural Minister Ide expects next U.S. administration to take even tougher line in beef negotiations, Japan to base response of scientific knowledge (Nihon Nogyo Shimbun) ARTICLES: (1) About 10 years needed for U.S. military realignment in Okinawa: U.S. PACOM commander ASAHI (Page 2) (Full) November 8, 2008 Toshiya Umehara WASHINGTON-Japan and the United States agreed in 2006 to build an alternative facility for the U.S. Marine Corps' Futenma Air Station in Okinawa by 2014 and relocate U.S. Marines from Okinawa to Guam in that process. However, U.S. Pacific Command (PACOM) Commander Keating recently indicated that it would be difficult to do so by that year. "Depending on circumstances, it would be difficult to do so even by 2015, and it would take another 10 years or so to implement the realignment plan," Keating said in a meeting held in New York on Nov. 5. The issue of relocating Futenma airfield has TOKYO 00003109 002 OF 010 been at a deadlock. As it stands, some officials have noted that it would be difficult to carry out the U.S. military realignment as scheduled. However, this is the first time that a U.S. government official has formally admitted to a possible delay in the realignment schedule. (2) Guam relocation in 2015 or later YOMIURI (Page 1) (Full) Eve., November 8, 2008 WASHINGTON-Japan and the United States have agreed to move 8,000 U.S. Marines from Okinawa to Guam by 2014 in the process of realigning U.S. forces in Japan. However, this Guam relocation would not take place until after 2015, and its cost is also highly likely to swell. According to sources, the United States is now certain to cut its defense budget for fiscal 2010 (from October 2009) due to the current financial crisis in the United States. As it stands, the U.S. government deems it difficult to secure the budget to an extent that is needed for the Guam relocation to be completed as scheduled, the sources said. The U.S. government has informally transmitted such an outlook to the Japanese government. The relocation of U.S. Marines from Okinawa to Guam is estimated to cost a total of 10.27 billion dollars. The Marines' Guam relocation is planned to be completed in 2014 along with the relocation of the U.S. Marine Corps' Futenma Air Station to a coastal area of Camp Schwab in Okinawa Prefecture. In May, however, the U.S. Government Accountability Office (GAO) of the U.S. Congress noted that the Guam relocation plan was "too optimistic." There was also a view pointing out the necessity of infrastructure construction in Guam. If the planned relocation of Marines from Okinawa to Guam is delayed due to circumstances in the United States, it will likely affect Futenma relocation that has been falling behind schedule due to Japan's own circumstances. In addition, Japan is to pay 6.09 billion dollars-approximately 60 PERCENT of the total cost-in its burden sharing of the Guam relocation. In this regard, the United States is even likely to ask Japan for an additional burden in its share of the relocation cost. (3) New ASDF Chief of Staff Hokazono apologizes for damaging public trust NIKKEI (Page 2) (Abridged slightly) November 8, 2008 Kenichiro Hokazono, who has become new Air Self-Defense Force chief of staff, held his first press conference on the afternoon of July ¶7. In the session, touching on the assertion of his predecessor, Toshio Tamogami, who has been removed from the post due to his essay running counter to the government's view, Hokazono said: "Reflecting earnestly the fact that the inappropriate act has damaged public trust, I offer my deepest apology." Hokazono also said about Tamogami's essay, "I read it and I felt it was inappropriate." Touching on the fact that Tamogami's essay also refers to the right to collective self-defense, the new ASDF chief criticized it, saying: "It contains some problems in connection with TOKYO 00003109 003 OF 010 the Constitution, and it is inappropriate from a viewpoint of civilian control." Hokazono added that his view on history was the same as the government's view. He also explained that although he has contributed a paper on integrated operations to the ASDF journal, he has not released any essays outside the SDF. Ahead of the press conference, Defense Minister Yasukazu Hamada issued a letter of appointment to Hokazono. Hamada encouraged Hokazono, saying, "The environment is severe, but I expect that you will fulfill your duties." In taking on the post, Hokazono declared that he would abide by the Constitution and laws and would not become involved in political activities. Hokazono's post, Defense Intelligence Headquarters chief, has been filled by ASDF Deputy Chief of Staff Koji Shimohira. (4) DPJ to pursue Tamogami essay blunder as "problem of civilian control" in summoning him to Diet for testimony YOMIURI (Page 4) (Slightly abridged) November 8, 2008 Toshio Tamogami, who was dismissed over his essay contradictory to the government's view about Japan's wartime aggression in Asia, will appear as an unsworn witness before the House of Councillors Foreign Affairs and Defense Committee on Nov. 11. The focus of deliberations there is expected to be on whether the Air Self-Defense Force (ASDF) was systematically involved in an essay contest in which Tamogami's essay won a prize, as well as on future options for civilian control. Total of 94 ASDF officers submitted essays In his first press conference as ASDF chief of staff, Kenichiro Hokasono, the successor to Tamogami, said: "I deeply apologize for this problem that undermined public confidence (in the ASDF)." He then revealed that a total of 94 ASDF members had submitted essays to the contest organized by the Tokyo-based condominium developer APA Group. It has been revealed that the Air Staff Office's Education Division had faxed a paper outlining how to enter the competition to SDF troops across the nation. A member of the Air Staff Office said: "We thought writing an essay would help their training." But it is unusual for the office to let its members know about an essay contest organized by a private firm. Tamogami reportedly became acquainted with APA Group President Toshio Motoya when he commanded an ASDF unit at Komatsu base in Ishikawa Prefecture. Focusing on this fact, the Democratic Party of Japan intends to question whether the ASDF had systematically encouraged applications for the essay contest, with one member saying: "It is conceivable that Tamogami, reflecting his personal relationship with Motoya, urged members to submit essays." Allowance of retirement criticized Tamogami verbally conveyed the application of his essay to Kimito Nakae, director general of the Defense Ministry's Secretariat, but failed to submit a report in violation of a ministry rule. Defense Minister Hamada yesterday indicated that the ministry will TOKYO 00003109 004 OF 010 consider strengthening the system to check when Self-Defense Forces members plan to express opinions in public. The opposition bloc, however, has criticized this case as a problem of civilian control over ranking SDF officers. The opposition has also lashed out at the Defense Ministry for having chosen the option of mandatory retirement for Tamogami, which will allow him to receive about 60 million yen in retirement pay, instead of dismissing him. The defense minister hopes to ward off the criticism by letting Tamogami return the retirement benefit voluntarily. But many observers expect that Tamogami is unlikely to do so. In 1978, Chairman of the Joint Chiefs of Staff Hiroomi Kurisu was dismissed from his post for a controversial remark and agreed to retire early. Kurisu said: "Even if Japan were to encounter a surprise raid, it might not be able to respond to the attack legally in some cases. In such cases, Japan would take extralegal action." A senior Defense Ministry official, however, commented: "Mr. Kurisu spoke of the operation of the SDF, so the problem of civilian control was pointed out. In the case of Mr. Tamogami, though, it is difficult to fire him, because he just expressed his view about Japan's war role. Since he did not voluntarily offer to retire, we had to opt for retirement." Unanimous decision for Tamogami's essay Five judges examined the essays submitted to the contest while covering the names of writers. An APA group member said: "Mr. Tamogami's work was unanimously chosen to win first prize," but one judge remarked: "I felt Mr. Tamogami's essay was radical in content, so I gave it a zero." (5) Tamogami essay scandal: Additional ASDF members found to have sent essays, bringing total to 94 NIKKEI (Page 2) (Abridged slightly) November 8, 2008 It was learned yesterday that an additional 16 Air Self-Defense Force (ASDF) members had submitted essays to the contest to which former ASDF Chief of Staff Toshio Tamogami also sent an essay on history that was at variance with the government's view. This brings the total to 94 ASDF personnel. Those who are newly found to have sent essays are based at rescue teams or other units across Japan. They reportedly followed a set of required procedures, such as reporting their actions to their superiors. Kenichiro Hokazono, who became new ASDF Chief of Staff on Nov. 7, revealed the information in a press conference. He indicated that the Air Support Command and other units were conducting surveys when an announcement was made on Nov. 6. The contest collected a total of 235 essays, of which 40 PERCENT came from SDF members. Hokazono also indicated that the ASDF Personnel and Training Department director has said that he had informed ASDF troops across Japan of the essay contest run by the condominium and hotel developer APA Group at his own decision, denying Tamogami's involvement. Tamogami in a press conference on Nov. 3 indicated that he had introduced the contest to his subordinates, adding that he did not coerce them to send essays. The ASDF Personnel and Training Department faxed messages on how to TOKYO 00003109 005 OF 010 enter the essay contest to units nationwide on May 20. The ASDF has not been able to confirm a case in which its chief of staff had introduced an essay contest in the past, Hokazono said. General affairs officials assisting the ASDF chief of staff had been aware of Tamogami's essay before it came to light. Tamogami wrote in his essay: "It is certainly a false accusation that our country was an aggressor nation." He was dismissed from the post on Oct. 31 and was allowed to retire from the SDF on Nov. 3. He is scheduled to appear before the Upper House Foreign Affairs and Defense Committee as an unsworn witness on Nov. 11. (6) Refueling bill likely to pass Diet in a week NIKKEI (Page 2) (Abridged) November 9, 2008 Early in the week, the Diet will enter the final phase of deliberations between the ruling and opposition camps on a government-introduced bill extending the Maritime Self-Defense Force's refueling mission in the Indian Ocean. The leading opposition Democratic Party of Japan (Minshuto),which holds a majority of the seats in the House of Councillors, will pursue the issue of former Air Self-Defense Force Chief of Staff Toshio Tamogami's controversial essay that ran counter to the government's view. However, the DPJ will not delay taking a vote on the bill. The bill is therefore expected to clear the Diet within a week. The House of Councillors Foreign Affairs and Defense Committee will summon Tamogami on the morning of Nov. 11 as an unsworn witness, with relevant cabinet ministers attending. The DPJ will pursue the government's responsibility for the appointment of Tamogami to the post of ASDF chief of staff and the propriety of his taking ordinary retirement. Meanwhile, the DPJ, after the summons of Tamogami, will respond to set a date for taking a vote on the bill. The DPJ is wary of criticism that could come from the public in case the party delays deliberations. In addition, the DPJ is also concerned that the Tamogami issue may be put to an end after the refueling bill deliberations. The DPJ will therefore handle these two matters separately. "The refueling bill is now highly likely to pass the Diet by Nov. 14," Masashi Waki, vice chair of the ruling Liberal Democratic Party's Diet Affairs Committee in the House of Councillors, said in an executive meeting of the committee on Nov. ¶7. (7) Japanese, Chinese chief delegates to six-party talks agree on need to codify nuclear-verification accord YOMIURI (Page 2) (Full) November 8, 2008 Foreign Ministry Asian and Oceanian Affairs Bureau Director General Akitaka Saiki and Chinese Vice Minister Wu Dawei, both of whom represent their respective countries' missions to the six-party talks on the North Korean nuclear issue, held a meeting at the Chinese Foreign Ministry in Beijing on Nov. 7. They agreed on the need to codify the contents of an agreement on nuclear verification procedures in written form. Saiki explained that Japan will not join the program of economic and TOKYO 00003109 006 OF 010 energy aid under the six-party-talk framework in exchange for North Korea's denuclearization unless progress is made on the issue of North Korea's past abductions of Japanese nationals. Wu said: "The aid program is an important issue in the process of the six-party talks." After the meeting, Saiki told reporters: "There are difficult points in putting an accord into writing. It is important for the countries to cooperate with each other." Asked about the timing for the next six-party session, Saiki replied: "The Chinese side said that no specific timetable has been set yet." (8) Prime minister jumps on bandwagon of Obama popularity TOKYO SHIMBUN (Page 2) (Abridged slightly) November 8, 2008 By Akihiro Ikushima Prime Minister Taro Aso is showing eagerness to meet with U.S. President-elect Barack Obama at an early date. Building a relationship of trust between the two leaders will be essential for strengthening the Japan-U.S. alliance. Besides such an ostensible reason, the prime minister apparently wants to use the occasion to boost his cabinet's support ratings, which have been dropping. Prime Minister Aso received a telephone call from President-elect Obama shortly after seven o'clock on the morning of July 7 at the Prime Minister's Office (Kantei). Aso congratulated Obama in English, saying: "Congratulations! I have become the prime minister of Japan on my fourth attempt but you have won the presidency on your first bid." The telephone conversation ended in less than ten minutes. The prime minister requested close cooperation, citing such issues as the financial crisis, the war on terror, and the North Korean issue. The prime minister also directly expressed his eagerness to meet Obama, saying, "I earnestly want to meet with you." Aides to the prime minister have been looking for ways for the prime minister to meet with President-elect Obama by using such occasions as the emergency summit (financial summit) to be held in Washington on Nov. 15 and the Asia-Pacific Economic Cooperation (APEC) forum to be held in Peru starting on Nov. 22. Some government officials think that from a commonsense viewpoint, the prime minister should meet with Obama after he is sworn in on January 20. But the prime minister has judged that in order to address pressing issues, such as the financial crisis, the two leaders should meet with each other at an early date. A Kantei source also expressed hope that the meeting will help buoy up the Aso administration, saying: "A handshake with Mr. Obama would result in immeasurable advertising effects." The move is also aimed to counter the major opposition Democratic Party of Japan, which is trying to enliven the mood of a change of government by taking advantage of the victory of Obama, who advocates change. However, President-elect Obama will be extremely busy making preparations for taking over the helm of government. Chief Cabinet Secretary Takeo Kawamura in a press briefing still showed confidence in realizing an Aso-Obama meeting, saying: "The reaction on that TOKYO 00003109 007 OF 010 side was not dismissive, and I have an impression that (an Aso-Obama meeting) depends on coordination." Whether a concrete timetable can be worked out remains unclear. (9) DPJ head Ozawa sends letter to U.S. President-elect Obama ASAHI (Page 4) (Full) November 8, 2008 Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama revealed in a press conference on Nov. 7 that DPJ President Ichiro Ozawa had sent on Nov. 6 a letter to U.S. President-elect Barack Obama. According to Hatoyama, Ozawa expressed in the letter his determination to take over the reins of government, saying: "Japan's DPJ want to realize political change in a general election, which will hopefully be held soon. I believe that we can bring about change in Japan, as well." In the letter Ozawa offered his congratulations for Obama's victory in the presidential election, saying: "I respect that you have attained your aim after overcoming various difficulties. I would like to work with you for peace and stability in the Asia-Pacific region. I am looking forward to seeing you soon." (10) DPJ President Ozawa criticizes Prime Minister Aso as good-for-nothing ASAHI (Page 4) (Full) November 8, 2008 During a meeting on Nov. 7 in Sapporo City, Democratic Party of Japan (DPJ) President Ichiro Ozawa stated: "Mr. Aso is a good-for-nothing. The fact is that he will not be able to surmount the difficulties he will encounter during the current Diet session. There is a strong possibility that he will have to dissolve the House of Representatives before the next regular session for a snap election, no matter how he tries to avoid it." Ozawa then pointed out: "Even if a second supplementary (budget) is compiled this month after much debate, it would not be submitted to the Diet until next month. Because some kind of special account budget would have to be used (to secure resources),it will be necessary to come up with budget-related bills. Anybody with even a little knowledge would realize that it will be difficult to compile a state budget (for fiscal 2009) no matter how earnestly one tries. The government, which has tried to avoid an election, repeatedly saying that the priority is on the economy, will find itself in an impossible situation." He then said: "The economic situation is deteriorating. The view that a government, which obtains the public support in an election, should implement a drastic policy will spread among the public. The prime minister will have to dissolve the Lower House and call a general election no matter he tries to pass the buck." TOKYO 00003109 008 OF 010 (11) DPJ Secretary General Hatoyama calls for Prime Minister Aso's resignation ASAHI (Page 4) (Full) November 8, 2008 Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama, in a press conference on Nov. 7, stated: "I often see too much fuzziness in Prime Minister Taro Aso's remarks. He does not at all understand the significance of his remarks. The public is perplexed at them." He then said: "I would like him to step down from his post as quickly as possible." Hatoyama criticized Aso's remarks one after the other. Regarding Aso's remarks on a consumption tax hike, Hatoyama said: "Even though he had said the consumption tax would be raised in three years, the said a tax hike should be implemented after economic recovery. Who said that the economy would recover in three years? His remarks are inconsistent." Referring to Aso's remarks on a fixed cash benefit payments plan, Hatoyama said: "He initially said that cash incentive would be provided to all households across the nation. But immediately after he made the remark, the view is being floated that income limitation should be set. The prime minister's remarks are all over the place." Hatoyama also commented on a second additional budget for fiscal 2008: "Since the prime minister announced an economic stimulus package in a high-handed manner, he should submit it to the ongoing extraordinary Diet session." (12) Financial crisis a boost to trading companies: Survive with M&As targeting overseas companies TOKYO SHIMBUN (Top Play) (Full) November 9, 2008 The total value of Japanese companies' M&As involving foreign companies in the January-October period reached a record high of approximately 6.67 trillion yen, 3.7 times larger than the amount of the same period in the preceding year, according to a survey conducted by Recof, an M&A consulting company, as of November 8. All-time high of 6.6 trillion yen marked in January-October period While European and U.S. investment funds, which have been the leading players in corporate acquisitions, are now cutting back on their operations due to the financial crisis, Japanese companies are stepping up their moves to purchase foreign companies, receiving a boost from the global stock plunges and the strong yen. Domestic manufacturers are suffering from the decline in foreign markets. However, leading trading houses, which are profiting from the sharp rise in resources prices, see the present situation as a good opportunity, as Marubeni Corporation President Teruo Asada noted. Financial institutions and food manufacturers, which have been lagging behind their competitors in Europe and the U.S., will likely strengthen their corporate acquisition strategies. TOKYO 00003109 009 OF 010 According to Recof, the record of M&As involving foreign companies in annual terms was registered in 2006 with about 8.61 trillion yen. However, the figure achieved as of the end of October this year has already topped the figures from the comparable period in 2006. The largest M&A this year was the investment of about 900 billion yen into Morgan Stanley, a leading U.S. securities firm, by Mitsubishi-UFJ Financial Group, followed by Takeda Pharmaceutical Company's investment of approximately 890 billion yen into Millennium Pharmaceuticals, a U.S. biotechnology-based drug manufacturer. Foreign companies are finding it difficult to procure funds. On the other hand, Sumitomo Corp. can reportedly use funds totaling approximately 1 trillion yen drawing from its current bank deposits and bank loans. Vice President Noriaki Shimazaki made a bullish remark, "We still have more room for investment." In the face of the financial crisis, the major aim of corporate acquisition has shifted from money games for investment's sake to surviving the harsh business environment. Mitsui Bussan Vice President Junichi Matsumoto said, "The role of Japanese trading companies, which have real work, will increase." Anticipating contraction of the domestic market, food manufacturers have successively bought foreign companies. Suntory has set up a section exclusively dealing with M&As. As the first M&A, the company has decided to purchase a leading New Zealand soft drink company for about 75 billion yen. Daiwa Institute of Research senior analyst Masami Hamaguchi expects that moves by Japanese companies, centered on food and pharmaceutical manufacturers, which have relatively ample funds available, to buy foreign companies will continue for some time. (13) Bidding for imported rice fails with traders avoiding impact of tainted rice incident MAINICHI (Page 2) (Full) November 8, 2008 The Ministry of Agriculture, Forestry and Fisheries (MAFF) on November 7 said that no contracts were concluded in public bidding for imported rice, which took place for the first time in about two month. Tenderers were invited for three brands. However, the three brands received either no bids or only one bid from traders. Since MAFF included among contract conditions a ban on the sale of tainted rice even for emergency use, importers apparently shied away from signing a contract. Japan is obligated to import approximately 770,000 tons of minimum access rice under the World Trade Organization (WTO) agreement. Bidding is held to sell such rice. The government had suspended bidding since early September following the revelation of the illegal sale of tainted rice. Tenderers were invited for open bidding for three brands of rice totaling 51,000 tons. Two brands, including Thai rice, received one bid respectively. U.S. rice received no bids. Since the bidding requires participation by more than two companies, it ended in failure. There will be another round of bidding. Before the tainted rice incident was discovered, importers were TOKYO 00003109 010 OF 010 allowed to sell tainted rice discovered in quarantine for industrial use. Commenting on the failure of the bidding, one official at the MAFF grain trade division said, "Traders were presumably unable to make preparations, such as concluding insurance contracts in readiness for an event that necessitates them to dispose of purchased rice, in time." (14) Vice Agricultural Minister Ide expects next U.S. administration to take even tougher line in beef negotiations, Japan to base response of scientific knowledge NIHON NOGYO SHIMBUN (Page 3) (Full) November 7, 2008 Ministry of Agriculture, Forestry, and Fisheries (MAFF) Vice Minister Michio Ide on Nov. 6 expressed his views to the press corps on the issue of import conditions for U.S. beef, now that Senator Obama has been elected president. "Until now, the U.S. has been hard-lined, and that won't change," he said. He then added, "Our major premise is food safety and the securing of consumer confidence. He will handle the issue not based on political decisions but based on scientific knowledge." On trade policy, such as the World Trade Organization (WTO) negotiations, Ide pointed out: "From the statements made in the election campaign by candidate Obama, we cannot see a clear direction." He said it was first necessary to pay attention to the cabinet lineup, including who becomes U.S. Trade Representative (USTR). SCHIEFFER