DAILY SUMMARY OF JAPANESE PRESS 12/09/08

UNCLAS SECTION 01 OF 07 TOKYO 003341 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 12/09/08 INDEX: (1) Editorial: How should Prime Minister Aso respond to public criticism? (Nikkei) (2) Some LDP members considering speeding up party presidential election as Aso cabinet's support rates entering 'danger zone' (Tokyo Shimbun) (3) WTO talks: Japan may be pressed to largely reduce tariffs on farm products, to expand low-tariff imports quotas (Nikkei) (4) New glitch found in next-generation transport aircraft; Defense Ministry to delay CX mass-production (Tokyo Shimbun) 4 (5) TOP HEADLINES (6) EDITORIALS (7) Prime Minister's schedule, December 8 (Nikkei) ARTICLES: (1) Editorial: How should Prime Minister Aso respond to public criticism? NIKKEI (Page 2) (Full) December 9, 2008 The support rates for the cabinet of Prime Minister Aso are plummeting in the opinion polls. The reason is that even though the economy and job situation are rapidly deteriorating, the Aso administration has delayed submission of a second supplementary budget to the Diet and seems be putting off economic stimulus measures until later. With the administration's centripetal force slowing down, the lead over compiling the national budget and reforming the tax system has returned to the bureaucracy and cliques of lawmakers representing special interests. A move to reverse the reform course has become noticeable. We are very concerned about the current muddled state of politics. In an opinion survey released by the Nikkei on Dec. 1, the support rate of the Aso Cabinet plummeted to 31 PERCENT . In the question about who would be more suitable to be the next prime minister, political circles were shocked by the result of Prime Minister Aso, who used to have a more than double advantage over Democratic Party of Japan President Ichiro Ozawa, now on par with Ozawa. In the opinion polls of the Yomiuri Shimbun and Asahi Shimbun that came out on Dec. 8, the support rate dropped even further into the 21-22 percent range. And in the question of who would be more appropriate as prime minister, Prime Minister Aso and DPJ head Ozawa traded places. At this point, the signboard, "Aso for the economy," that the prime minister hung out has grown faded, and the expectation that he would be the party's face going into the election has flown away. Although the prime minister's series of controversial statements that raised doubts about his qualifications account in part for his administration's going into a stall, the main reason seems to be his delay in submitting to the Diet the promised second supplementary budget that would contain economic stimulus measures, even though he has been claiming to prioritize policy over politics and to give TOKYO 00003341 002 OF 007 highest priority to the economy. Since November 15, when the prime minister decided to delay the supplementary budget, there have been continuous reductions of temporary labor and a rapidly worsening job situation. Countermeasures put off to later have not helped. Prime Minister Aso has stated: "The figures are extremely severe. I take them as an evaluation of my performance. I think it is criticism for insufficient responses to expectations about economic and job measures. I can only respond by moving ahead with proper measures to deal with them." Although the Democratic Party of Japan has been shaking the Aso administration by pursuing an early dissolution of the Diet, if there results a delay in deliberating the budget until the regular Diet session next year, the target for public criticism will turn toward the DPJ. The party should be resolved to face such a situation. A noticeable movement in the ruling camp to topple Aso has emerged. In addition to there not being a successor candidate around, the situation is that the game of musical chairs of ruling party administrations has already reached its limit. With the current low support rates, if the prime minister is unable to decide to dissolve the Diet, he will fall into a state of being under siege from all sides. In the previous opinion poll, many respondents took the view that with the financial crisis expanding, the timing for dissolving the Lower House would be better after next spring or next September at the end of its tenure. In the new poll, many replied that the election should be as soon as possible or at the start of the regular Diet session early next year. How will the prime minister now deal with those who are saying, "If you are going to delay the economic stimulus package, then quickly dissolve the Diet and make a fresh political start." (2) Some LDP members considering speeding up party presidential election as Aso cabinet's support rates entering 'danger zone' TOKYO SHIMBUN (Page 3) (Abridged slightly) December 9, 2008 The Liberal Democratic Party (LDP) has been greatly shocked by Prime Minister Taro Aso's support ratings plummeting to 25 PERCENT . With an eye on the next Lower House election, the trend of LDP lawmakers seeking chances to leave the party and opt for political realignment is likely to accelerate. Since Prime Minister Aso's term of the LDP president will end next September, some party members are now talking about speeding up the date for next presidential race as the party did in the last days of the administration of the Prime Minister Yoshiro Mori in 2001. LDP executives, meeting last evening, were in a gloomy mood. When Senior Deputy Secretary General Mikio Hayashi was about to refer to the results of opinion polls by various news companies, Diet Affairs Committee Chairman Tadamori Oshima interrupted him, saying, "Don't talk about support rates." However, Aso mentioned them, noting, "I bear full responsibility for them." He was so disappointed that he had no choice but to refer to them. Senior LDP officials reiterated that they would not react nervously to the public's support rates for the cabinet, but Aso admitted that the responsibility was his. TOKYO 00003341 003 OF 007 If the approval rate for a cabinet drops to below 30 PERCENT , it is said that the cabinet has entered the danger zone, meaning it is approaching its final days in office. However, the Aso cabinet entered the danger zone only two months after its inauguration. The public support rates for the Abe and Fukuda administrations in the polls conducted immediately before the two prime ministers resigned were 40.5 PERCENT and 31.5 PERCENT (according to Kyodo News). What shocked the LDP further was the result of the question as to which person, Aso or Democratic Party of Japan President Ichiro Ozawa, would be more suitable for prime minister. The result was 34.5 PERCENT stated they preferred Ozawa as prime minister, while 33.5 PERCENT picked Aso. Support rates for the LDP and DPJ are now almost equal. However, Aso has now lost confidence in managing his administration. In a meeting held last evening in Tokyo, former Administrative Reform Minister Yoshimi Watanabe explained that there would be three cases for the formation of a new party: 1) forming small parties under the LDP; 2) splitting the LDP through consultations; and 3) forming a new party by leaving the LDP. Apart from whether Watanabe will actually bolt the LDP, there is a group of junior and mid-level lawmakers, including former Chief Cabinet Secretary Yasuhisa Shiozaki, who are raising strong objections to Aso's policy line. The membership of the group is gradually increasing. Former Secretary General Hidenao Nakagawa hinted at the possibility of political realignment depending on the outcomes of the next Lower House election, saying: "It is the matter to be decided after the election is over." Moves are gradually growing stronger toward resignation from the LDP and political realignment. The Aso administration, whose public support ratings have plummeted due to Aso's making of gaffes and flip-flops, resembles the final days of the Mori administration in the spring of 2001. With the July Upper House election moving closer, calls for the resignation of Prime Minister Mori became stronger in the LDP. Mori was then forced to announce his resignation in the form of carrying out the party leadership race in March earlier than due in September. If moves become strong for resignation from the party and political realignment this time around, there will be no future for the Aso administration. Aso's aide, who had taken the offensive, quipped yesterday: "It is really serious." Taku Yamasaki, former LDP vice president, clearly stated in a speech last night: "The Aso administration no longer has the power to dissolve the Lower House." Aso no longer can lead the LDP in the next Lower House election. (3) WTO talks: Japan may be pressed to largely reduce tariffs on farm products, to expand low-tariff imports quotas NIKKEI (Page 3) (Full) December 8, 2008 Japan, on the defensive, is facing difficult negotiations on farm TOKYO 00003341 004 OF 007 products. The focus of attention is on how many items will be designated as sensitive products, which are exempted from steep tariff cuts. Japan, which has imposed an over 200 PERCENT tariff on 101 items, had asserted that 8 PERCENT of all farm products should be regarded as sensitive products. The chairman's proposal in the agricultural sector, however, sets this percentage at 4 PERCENT in principle and 2 PERCENT conditionally. Accordingly, some of the current high-tariff items including rice and dairy products will no longer be regarded as mainstay items, and Japan will be pressed to significantly lower the tariffs on such items. Even if certain products are designated as sensitive items, Japan might be pressed to expand low-tariff import quotas, like rice under a minimum access formula. Japan is now obligated to import about 770,000 tons of rice under this formula annually, but if rice is designated as a sensitive item, Japan may be required to increase the volume to over 1.1 million tons. It has been said that sugar and starch, for which any low-tariff import quota is not set, cannot be designated as sensitive items, but under the new system, it will become possible for up to 1 PERCENT of all products to be designated as sensitive products if a larger low-tariff import quota than those on other items is introduced. As a result of steep rises in food prices across the world, countries began to restrict exports of farm products. Given this, the Japanese government has insisted on the need for new rules to be introduced to prevent export restrictions from being rampant. The chairman's proposal includes a new regulation requiring a country planning to restrict exports to confer with countries concerned. Focusing on this, a member of the Agriculture, Forestry and Fisheries Ministry said that the chairman's proposal merits appreciation. (4) New glitch found in next-generation transport aircraft; Defense Ministry to delay CX mass-production TOKYO SHIMBUN (Page 1) (Full) December 9, 2008 A new defect has been found in a prototype of next-generation transport aircraft (CX),now being developed by Kawasaki Heavy Industries (KHI) as the follow-on mode of the Air Self-Defense Force's C-1 transport plane. The Defense Ministry as a result has begun final coordination for postponing the acquisition of a second prototype, planned for fiscal 2009, until fiscal 2010 or later. The mass-production of the CX is likely to slip to fiscal 2010 or later. The maintenance of the CX is noted in the current National Defense Program Guidelines (NDPG) that specify the basic policy for defense buildup. A reexamination of the CX development program is certain to take center stage when the NDPG is reviewed at the end of fiscal ¶2009. The CX is being developed at the KHI Gifu plant (Kakamigahara, Gifu Prefecture). The new glitch occurred in a test in late September to apply pressure on the prototype. A breakage was found in the fuselage rear part to load and unload cargos. The Defense Ministry Technical TOKYO 00003341 005 OF 007 Research and Development Institute and KHI are racing to determine the cause, suspecting that it could be a serious defect concerning the structure of the fuselage. A series of glitches have been found regarding the CX, including the discovery in February last year of the rivets in the prototype that did not meet the strength criteria, as well as of a lack of strength of the fuselage supporting the main landing gear. The first flight, planned for September last year, has yet to take place. The development of the aircraft has been significantly behind schedule. The ministry was scheduled to purchase the second prototype for some 50 billion yen from its fiscal 2009 budget. In the wake of the discovery of the new glitch, the ministry has concluded that it would be difficult to procure the second prototype in fiscal 2009. (5) TOP HEADLINES Asahi, Mainichi & Yomiuri: Decentralization panel recommends cutting 35,000 workers in central government's local branches Nikkei: FY2009 general account expenditures to top 50 trillion yen for first time Sankei: More than 15,000 companies may go bankrupt, highest figure in five years Tokyo Shimbun: Panel recommends abolishing only one central government's local branch Akahata: Government must refuse to accept WTO chairman's plan: Import expansion would destroy our agriculture (6) EDITORIALS Asahi: (1) Plummeting Aso cabinet's support rates: The public is calling for political change (2) Six-party talks: How to pass the torch to the Obama administration Mainichi: (1) Prime Minister Aso's responsibility to put on track panel's recommendation to cut 35,000 jobs in central government's local branches (2) North Korea talks: Codify sampling of nuclear materials Yomiuri: (1) Plummeting popularity bodes ill for Aso, LDP (2) Government must drastically cut jobs in central government's local branches Nikkei: (1) How will Prime Minister Aso respond to the public's criticism? (2) Merger of central government's local branches is not the final goal TOKYO 00003341 006 OF 007 Sankei: (1) Communities as whole should protect children (2) Panel's recommendation on decentralization insufficient Tokyo Shimbun: (1) Prime Minister Aso can't see the big picture (2) Falsification of court ruling outrageous Akahata: (1) Can U.S build relationship of equality with Latin American countries? (7) Prime Minister's schedule, December 8 NIKKEI (Page 2) (Full) December 9, 2008 10:30 Met with Mexican Foreign Minister Espinosa. Ambassador Amano to the Delegation to International Organization in Vienna was present. 11:11 Science and Technology Council meeting. 12:08 Government-ruling party liaison council meeting. Finance Minister Nakagawa and State Minister for Economic and Fiscal Policy Yosano remained. 12:48 Government-ruling camp joint meeting and related ministers' joint meeting to discuss tax revenues for road construction. 13:07 Met with LDP Tax System Research Commission Chairman Tsushima, followed by Ambassador to Tanzania Nakagawa and Ambassador to Slovakia Nomoto, followed by Amano. 14:04 Met with Yotaro Konaka, chairman of the New 21st Century Japan-China Friendship Committee and supreme advisor to Fuji Xerox, Reform and Liberalization Forum Executive Director Zheng Bijian, the Chinese side's chairman and others. Chinese Ambassador to Japan Cui Tiankai was present. Then met with Foreign Ministry Economic Affairs Bureau Director General Otabe, METI Trade Policy Bureau Director General Okada and Agriculture Director General for Policy Coordination Yoshimura. 15:03 Met with National Economy Minister al-Makki, followed by Land, Infrastructure and Transport Minister Kaneko. 16:03 Met with Chief Cabinet Secretary Kawamura. Then, experts council "Rising Agricultural, Mountain, and Fishing Villages." 17:03 LDP executive meeting 17:45 Met with Decentralization Reform Promotion Committee Chairman Niwa TOKYO 00003341 007 OF 007 at the Kantei. Internal Affairs Minister Hatoyama was present. Then met with Yosano and Assistant Deputy Chief Cabinet Secretary Fukuda. 19:09 Dined with his friend from collage days in the U.S. at a Japanese restaurant in Yurakucho. 19:37 Met with Kawamura at a bar in Imperial Hotel. 20:45 Met with his secretary 23:31 Returned to the private residence in Kamiyaya-cho. SCHIEFFER