DAILY SUMMARY OF JAPANESE PRESS 05/28/09

UNCLAS SECTION 01 OF 13 TOKYO 001204

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 05/28/09

INDEX:
(1) Opposition parties to coordinate policies ahead of next general
election; Cautious views heard about "common pledges" regarding
security and other policies (Nikkei)

(2) DPJ Secretary General Okada unveils plan to establish
administrative vision team (Asahi)

(3) Debate on defense fails to gain ground (Yomiuri)

(4) Behind the scenes of the crisis - North Korea's nuclear test
(Part 2): U.S. Obama administration wary of nuclear proliferation;
"Nuclear arms may fall into hands of Al Qaeda" (Mainichi)

(5) "In My Opinion: column: Take one step toward "world without
nuclear arms"; President Obama's speech may change history
(Mainichi)

(6) Lawmaker Inoue questions GOJ payment of 600 million yen as
sympathy money in lieu of compensation for crimes by off-duty U.S.
soldiers (Akahata)

(7) Kadena roaring intensifies (Akahata)

(8) "Kyoto Protocol is a failure"; Business leaders make requests
one after another (Sankei)

(9) Harmful particulate matter in atmosphere; Environment ministry
to set environmental standards for PM2.5 emissions (Asahi)

(10) METI report expresses concern about reduction in global trade,
reflecting Japanese firms' wariness (Yomiuri)

(11) TOP HEADLINES

(12) EDITORIALS

(13) Prime Minister's schedule (Nikkei)

ARTICLES:

(1) Opposition parties to coordinate policies ahead of next general
election; Cautious views heard about "common pledges" regarding
security and other policies

NIKKEI (Page 2) (Abridged)
May 28, 2009

The major opposition Democratic Party of Japan (DPJ) has begun
coordinating policies with the Social Democratic Party (SDP) and the
People's New Party (PNP) in the hopes of launching a coalition
administration with them after the next House of Representatives
election. Planning to put together their common policies, the three
opposition parties will consider matters centering on a review of
the postal privatization program and a shift in the restrained
policy course for social security spending. But there are huge gaps
in opinions regarding the Constitution and national security. The
SDP and PNP are wary that they might lose their political identities
and sink into insignificance as a result of the standoff between the
Liberal Democratic Party (LDP) and the DPJ.

DPJ Secretary General Katsuya Okada held talks with his SDP and PNP

TOKYO 00001204 002 OF 013


counterparts, Yasumasa Shigeno and Hisaoki Kamei, at a Tokyo hotel
yesterday. After the meeting, Okada emphatically said to the press
corps, "It would be better to increase common policies ahead of the
(next Lower House) election." Specifically, an idea is circulating
to combine common areas after the three parties formulate their own
manifestos (campaign pledges).

The DPJ, which does not have a working majority in the House of
Councillors, needs to continue cooperating with the SDP and PNP.
Okada expressed a view before becoming secretary general that his
party would aim at a coalition government even if it wins a majority
independently through the Lower House election.

If a regime change occurs, common policies would serve as the
foundation in talks among the three opposition parties for launching
a coalition government. Behind the effort to coordinate policies
seems to lie the DPJ's intention to straitjacket the SDP and PNP,
which now hold the decisive vote, so that they will not make
unreasonable demands in the future.

There are gaps in the degree of eagerness between the SDP and the
PNP, however. The PNP is more eager than the SDP to come up with
common policies, especially on a review of the postal privatization
program.

Some in the DPJ are also cautious about reaching an accord that
might automatically set priorities after taking reins of
government.

The DPJ's effort to coordinate views with the SDP and PNP is already
facing difficulty over a review of the Worker Dispatch Law, to which
the two minor parties attach importance. The SDP and PNP are also
wide apart regarding foreign and security policies.

The DPJ's policies and key points for cooperation with the SDP and
PNP

DPJ's policies Points at issue in policy talks
Economic policy, etc. Q Provide child-rearing allowances, remove
expressway tolls.
Q Fundamentally review the postal privatization program.
Q Completely ban corporate and organizational donations in three
years' time. Q In accord on a review of the postal privatization
program.
Q The PNP will examine the propriety of a total ban on corporate and
organizational donations.
Social security Q Introduce a minimum pension benefit system funded
by consumption tax revenues.
Q Abolish the healthcare system for people aged 75 and older. Q Both
the SDP and PNP support the idea of using tax revenues for a new
pension system.
Q Coordination has run into difficulties over the scope of
regulations in a review of the Worker Dispatch Law.
Diplomacy, security policy Q Allow dispatching Self-Defense Force
troops overseas to provide assistance to civilians or to engage in
antipiracy operations based on a UN resolution, etc.
Q Promote nuclear disarmament. Q The SDF insists that Japan should
uphold Article 9 of the Constitution and is opposed to the overseas
dispatch of the SDF.
Q The PNP is against the idea of dispatching the SDF on an
antipiracy mission.


TOKYO 00001204 003 OF 013


(2) DPJ Secretary General Okada unveils plan to establish
administrative vision team

ASAHI (Page 4) (Excerpts)
May 27, 2009

Haruko Kagenishi

Democratic Party of Japan (DPJ) Secretary General Katsuya Okada gave
an interview to the Asahi Shimbun on May 26. During the interview,
Okada revealed a plan to establish shortly a team tasked with
studying an administrative vision centering on President Hatoyama.
With the participation of Deputy President Naoto Kan, who has his
own plan, and others, the envisaged team intends to formulate a
politician-led decision-making system.

The party has already set up a manifesto preparatory committee under
Policy Research Committee Chair Masayuki Naoshima. Okada said: "We
need a venue to discuss politics beyond policies centering on the
president, such as an administrative transitional period. The team
will discuss matters, including plans drafted (by the preparatory
committee),from a broad perspective." Okada indicated that he is
hoping that the final plan will be ready in June.

Kan has come up with his own plan designed to allow a council of the
three top DPJ executives who concurrently serve as cabinet ministers
to take on the functions of the Prime Minister's Office (Kantei),
centering on the DPJ president (prime minister). But it had been
left in limbo under former president Ichiro Ozawa. Okada
categorically said in the interview that Kan would naturally be a
member (of the administrative vision team).

(3) Debate on defense fails to gain ground

YOMIURI (Page 1) (Full)
May 28, 2009

Hidemichi Katsumata, editor; Keiichi Honma, Washington Bureau; Shozo
Nakayama, political reporter

At a meeting on May 26, the day after North Korea's nuclear test, of
the subcommittee on defense policy of the Liberal Democratic Party
(LDP) National Defense Division, which will compile recommendations
for the revision of the National Defense Program Guidelines (NDPG)
to be undertaken by the government by late 2009, the majority was in
favor of Japan possessing the "capability to strike enemy bases."
Many among the 30 or so participants asserted that this "should be
included in the NDPG in terms of securing a deterrent proportionate
to the threat," (House of Councillors member Ichita Yamamoto).

The reinforcement of intelligence gathering and other capabilities
will be necessary to acquire the capability to attack enemy bases
with cruise missiles and bombers, and this will be too
time-consuming and expensive for Japan to do on its own. However,
Masahisa Sato, a former Ground Self-Defense Force officer who heads
the subcommittee's secretariat, noted that, "The renovation of the
Aegis ships for the installation of cruise missiles was surprisingly
inexpensive." He thinks that this is feasible with the United
States' understanding and cooperation. The government's
constitutional interpretation maintains that attacking the enemy
bases is possible if there are no other available options for
self-defense. Gen Nakatani, chairman of the Research Commission on

TOKYO 00001204 004 OF 013


Security, stresses that, "We should not just sit and wait to die;
possessing this capability will constitute a deterrent."

In response to the Taepodong launches in 1998 and the missile crisis
in 2006, the government has taken steps such as the introduction of
missile defense systems. It is reported that North Korea has
deployed over 200 "Nodong" missiles with Japan in their range during
this period. LDP lawmakers concerned with defense issues feel that
since the UN and the Six-Party Talks are unable to restrain the DPRK
from developing missiles and nuclear arms, reactive measures will be
too late.

Japan's neighbors have been very sensitive to how North Korea's
disruptive behavior will affect Japan.

Russian newspaper "Independent News" reported on the LDP's debate on
the capability to strike enemy bases on May 26 and opined that
Japan's countermeasure may not be the reinforcement of the American
"nuclear umbrella," but "probably the possession of nuclear bombs."
South Korea's JoongAng Daily also expressed concern that, "If the
international community's efforts are unsuccessful, Japan may go
down the road of nuclear armament."

In a telephone conversation with Prime Minister Taro Aso on May 26,
U.S. President Barack Obama, who advocates abolition of nuclear
arms, reiterated the United States' commitment to provide
deterrence, including the "nuclear umbrella." It is believed that
this was "meant to preempt calls for nuclear armament," (senior
Ministry of Defense official).

However, such a sense of urgency is still absent among government
and ruling party officials other than the LDP defense-minded
lawmakers and the number one opposition party Democratic Party of
Japan (DPJ).

The party leaders' debate on May 27 devoted only five minutes to
this issue. Concrete sanctions against the DPRK were not discussed
and the exchanges centered on whether the U.S. had given advance
notice to Japan. DPJ President Yukio Hatoyama stressed to reporters
in the early evening on the same day that, "We should not get
engulfed in advocating nuclear armament and should refrain from
discussing preemptive strikes on enemy bases."

Fifteen years have passed since the North Korean nuclear crisis of

1994. The threat has not diminished but has intensified instead.
Japan is facing serious issues in terms of its defense capability
and diplomatic skills.

(4) Behind the scenes of the crisis - North Korea's nuclear test
(Part 2): U.S. Obama administration wary of nuclear proliferation;
"Nuclear arms may fall into hands of Al Qaeda"

MAINICHI (Page 1) (Full)
May 28, 2009

Kazuhiko Kusano, Washington

About 14 hours after North Korea's underground nuclear test, U.S.
President Barack Obama stated at the White House on the morning of
May 25 that, "North Korea's actions endanger the people of East Asia
(sic; should be "Northeast Asia")." He also pledged to redouble
efforts for a "more robust international nonproliferation regime."

TOKYO 00001204 005 OF 013



May 25 was Memorial Day and a holiday in the U.S. The President
played golf for about four hours in Virginia that afternoon, as if
demonstrating his composure in the face of North Korea's repeated
provocations.

The current level of the DPRK's nuclear and missile technology does
not present a direct threat to the U.S. mainland. However, North
Korea is now posing a direct challenge to the President's ideal of a
"world without nuclear weapons" as he advocated in his "Prague
speech" in April.

The next day, on May 26, U.S. ambassador to the UN Susan Rice
appeared on a TV program and told the American people that, "Our top
priority is to prevent North Korea's nuclear materials from being
transferred to other countries and rogue states." She disclosed that
the inclusion of the inspection of North Korean ships suspected of
transporting nuclear or missile-related materials was being
considered in the new UN Security Council resolution under
discussion. This is because North Korea has a record of past
offenses.

In a report submitted to Congress in March, Director of National
Intelligence Dennis Blair enumerated the DPRK's proliferation
activities, such as selling ballistic missiles to Middle East
countries dabbling in nuclear arms development, including Iran; and
assisting Syria with constructing nuclear reactors.

According to Blair, "North Korea might find a nuclear weapons or
fissile material transfer more appealing" for the regime's survival
if it faces an extreme economic crisis, for instance.

Harvard University Professor Graham Allison, who was assistant
secretary of defense under the Clinton administration, gave an even
more ominous warning. He told the Associated Press in an interview:
"The international community regularly underestimates North Korean
leader Kim Jong Il's willingness to do the unexpected. He could sell
a nuclear bomb to (the international terrorist organization Al
Qaeda's) Osama bin Laden."

Meetings of the preparatory committee for the Nuclear
Non-proliferation Treaty (NPT) Review Conference were held at the UN
headquarters until May 15. Representatives of the 190 UN member
states and NGOs were all excited by President Obama's message on
strengthening the NPT regime. The committee was even able to decide
on an agenda, something it failed to do last time (in 2005) under
the Bush administration. One diplomat who participated in the
meeting observes that, "North Korea's nuclear test has poured cold
water on this effort." North Korea has announced its withdrawal from
the NPT and conducted nuclear tests repeatedly. This diplomat
expresses the sentiment of many others: "Countries abiding by their
obligations under the NPT feel that it's all in vain." The Obama
administration is facing a critical moment in which it has to decide
whether to apply stronger pressure or to persist with the "dialogue
policy."

(5) "In My Opinion: column: Take one step toward "world without
nuclear arms"; President Obama's speech may change history

MAINICHI (Page 10) (Full)
May 28, 2009


TOKYO 00001204 006 OF 013


Takakazu Kuriyama, president of Asian Affairs Research Council,
former deputy minister of foreign affairs and ambassador to the
U.S.

The speech delivered by U.S. President Barack Obama in Prague, the
Czech Republic on April 5 may be remembered as a major speech that
will change the history of the world in the 21st Century
significantly. This author hopes that this will be the case.

The Obama speech was unusual on two counts. First, he clearly
declared the achievement of a world without nuclear weapons as a
policy goal of the United States. Second, he also indicated that
U.S. action toward this end will be based on its "moral
responsibility as the only nuclear power to have used a nuclear
weapon." No other U.S. president has ever made such a public
statement before.

The postwar world has had to coexist in anxiety with weapons that
should never be used again. This fragile peace has been maintained
with great difficulty based on two rules - one is the rule of mutual
deterrence or the so-called "balance of terror," and the other is
the nuclear nonproliferation regime under the Nuclear
Nonproliferation Treaty (NPT).

Serious rifts have emerged in the international order for the
management of nuclear arms based on these two rules toward the end
of the 20th Century. There has been an increase in the number of de
facto nuclear powers, though such is not allowed under the NPT
regime. In addition, there is now a real possibility of nuclear
weapons proliferating to stateless groups unaffiliated with any
government, such as terrorist organizations. It is now recognized
that enhancing existing rules on deterrence and nonproliferation
will not be sufficient to deal with this situation, and a new
international order negating the very existence of nuclear arms is
necessary. Recent articles by powerful U.S., British, and German
politicians calling for the complete abolition of nuclear weapons
are also an indication of the popularity of this view. President
Obama's speech, likewise, was a result of this sense of crisis.

However, even with President Obama's eloquence, it is impossible to
move the world with one speech. The President himself admits that
this will be a long and tortuous path. A concrete road map and
engaging in joint efforts by mobilizing the international community
is indispensable for achieving the ideal of a nuclear-free world.
The first steps in this road map that the President needs to take
action on are negotiations with Russia on the reduction of nuclear
arms and the ratification of the Comprehensive Test Ban Treaty. Both
represent formidable hurdles, but there can be no future and no
abandonment of nuclear arms by North Korea without overcoming them.

The second distinguishing feature of the Obama speech - declaring
that the United States has the moral responsibility to take the lead
in abolishing all nuclear weapons - touches the heart of the
Japanese people, and above that, raises the important question of
how Japan ought to deal with the President's posture. My answer to
this question is to have a Japanese prime minister visit Pearl
Harbor (USS Arizona Memorial) and then for President Obama to come
to Hiroshima.

The success of such an exchange of visits would depend on whether
public opinion in both countries understands correctly its purpose
and significance. The visits would not be made as a gesture of

TOKYO 00001204 007 OF 013


apology or atonement. If such a negative meaning is attached to
them, the visits will undoubtedly fail and leave behind lasting
wounds in Japan-U.S. relations. The trip by the Japanese and U.S.
leaders to Pearl Harbor and Hiroshima, respectively, should be for
the purpose of offering prayers for the repose of the soul and for
peace and making a pledge for Japan and the United States to walk
side by side on the long road toward a world without nuclear
weapons.

If the people of both countries understand the exchange of visits as
such, the final reconciliation between Japan and the United States,
which is yet to be accomplished after World War II, will be
achieved. A true partnership based on mutual trust will then be
born.

(6) Lawmaker Inoue questions GOJ payment of 600 million yen as
sympathy money in lieu of compensation for crimes by off-duty U.S.
soldiers

AKAHATA (Page 1) (Full)
May 27, 2009

It has been found that the U.S. government did not pay compensation
to victims of crimes and accidents involving off-duty U.S. Forces
Japan (USFJ) personnel, and the Japanese government paid "sympathy
money" as a "relief measure" on its behalf in 24 cases in Okinawa,
amounting to some 233 million yen, and in 27 cases in mainland
Japan, amounting to 149 million yen, from FY1972 to FY2008.

Furthermore, even in cases where the U.S. government paid
compensation, the payment was short of the amount ordered by the
court, and the Japanese government paid the difference to the
victims as sympathy money in five cases in Okinawa, amounting to
approximately 182 million yen, and in two cases in mainland Japan,
involving some 68 million yen, since 1996. The total amount of the
sympathy money was 632 million yen.

The above was disclosed by Director General Genzo Inoue of the
Ministry of Defense (MOD) Bureau of Local Cooperation at the House
of Councillors Committee on Foreign Affairs and Defense on May 26 in
response to a question from Japanese Communist Party (JCP) member
Satoshi Inoue.

The Japan-US Status of Forces Agreement (SOFA) on the legal status
of the USFJ stipulates that the U.S. government will pay
compensation to the victims of crimes and accidents involving
off-duty U.S. soldiers in cases where the culprits fail to do so.
However, if the U.S. side also fails to do so, SOFA stipulates that
the Japanese government will assume the payment in the form of
sympathy money.

Furthermore, there have been cases where the compensation paid was
short of the amount ordered by the court. The final report of the
Japan-U.S. Special Action Committee on Okinawa (SACO) in 1996
provides for the Japanese government's payment of the difference.

Satoshi Inoue admitted that, "The important thing is that the
victims receive an amount close to the compensation they are
entitled to in the end," but he stressed that, "Such payment should
be made by the U.S. soldiers, and failing that, the United States
should assume the payment." He asserted that the Japanese government
should demand the reimbursement of the sympathy money it has paid on

TOKYO 00001204 008 OF 013


behalf of the U.S. side.

(7) Kadena roaring intensifies

AKAHATA (Page 1) (Full)
May 28, 2009

The U.S. military has been conducting Okinawa-based fighter jets'
flight training missions at Air Self-Defense Force bases in the
process of realigning U.S. forces in Japan. This relocation of U.S.
military jets from Okinawa to ASDF bases in Japan's mainland
prefectures for bilateral joint training exercises, however, has not
mitigated the island prefecture's burden of hosting the U.S. Kadena
Air Base, the Akahata Shimbun learned yesterday. This was clarified
by the government in its reply to the memorandum on questions from
Seiken Akamine, a House of Representatives member of the Japanese
Communist Party. The government has reiterated that it would
alleviate Okinawa's base-hosting burden, but this government
explanation has now been upset by its own noise monitoring readouts.
The government will inevitably face local reactions.

In the past, the ASDF's Nyutabaru base in Miyazaki Prefecture has
conducted four bilateral joint training exercises with U.S. military
jets, broken down into three training exercises with those from
Kadena Air Base for a total of 10 days and one with those from
Iwakuni Marine Air Station from Yamaguchi Prefecture for a total of
four days.

According to the government's reply, noise occurred 109 times on
average per day around the Kadena base in fiscal 2006 when
Kadena-based fighter jets' flight training missions were yet to be
relocated.

The joint training exercises at Nyutabaru were carried out for 10
days. On seven days during that 10-day period, however, the
frequency of noise did not decrease at Kadena. On the contrary, it
increased there and doubled on some days. At Iwakuni, it increased
on all four days.

The government, in its reply, takes the position that "it is
difficult to say anything that is certain." At the same time, the
government's reply also notes that some of Kadena-based fighter
jets' training missions have been moved to ASDF bases. "So," the
government says, "we believe that the impact on local residents of
noise accompanying flight training has been reduced."

Akamine says: "The government explained that the realignment of U.S.
forces in Japan is intended to lessen Okinawa's burden. But that was
totally an excuse. This was shown by the government's own data. The
real purpose of realigning U.S. forces in Japan is to integrate the
Self-Defense Forces and U.S. forces."

Noise frequency at Kadena Air Base and Iwakuni Marine Air Station
during U.S. military aircraft's flight training relocated to ASDF
Nyutabaru Air Base

Kadena Air Base (109)
Sept. 3, 2007 35
Sept. 4, 2007 179
Sept. 2, 2008 135
Sept. 3, 2008 144
Sept. 4, 2008 211

TOKYO 00001204 009 OF 013


Feb. 23, 2009 108
Feb. 24, 2009 121
Feb. 25, 2009 168
Feb. 26, 2009 165
Feb. 27, 2009 72

Iwakuni Marine Air Station (75)
Feb. 12, 2008 168
Feb. 13, 2008 97
Feb. 14, 2008 132
Feb. 15, 2008 105

Figures in parentheses denote FY2006's average per day before
training relocation.

(8) "Kyoto Protocol is a failure"; Business leaders make requests
one after another

SANKEI (Page 19) (Full)
May 23, 2009

Business leaders on May 22 made requests to the government one after
another concerning international conferences to discuss the
post-Kyoto Protocol framework aimed at cutting greenhouse gas
emissions. Nippon Steel Corporation Chairman Akio Mimura in a speech
pointed out, "The Kyoto Protocol was a diplomatic failure." He
called for a cool-headed decision from the government when it sets a
mid-term goal to be achieved by 2020 before the end of June.

As reasons for the failure of the pact, Mimura cited that the U.S.
and Canada did not join it and that global emissions increased as
much as 40 PERCENT . Underscoring that 1990 was a year when "the
results of the energy-conserving efforts made by Japan since the oil
crises were seen," he called on the government to duly evaluate the
energy-saving efforts made thus far in setting a mid-term goal.

Japan Iron and Steel Federation on the 22nd presented its view with
Nippon Steel Corporation Vice President Shindo noting, "National
interests should be taken into consideration." Federation of
Electric Power Companies of Japan Chairman Shosuke Mori, President
of Kansai Electric Power, during a press conference held the same
day said, "I want the government to proudly say that (a 4 PERCENT
increase) is the result of Japan's hard-working efforts to tackle
the global environment issue."

(9) Harmful particulate matter in atmosphere; Environment ministry
to set environmental standards for PM2.5 emissions

ASAHI (Page 1) (Full)
May 28, 2009

Concerning "PM2.5" particulate matter, which is suspended in the
atmosphere and can cause lung cancer or cardiovascular disorders if
inhaled, the Environment Ministry has firmed up a plan to set up
environmental standards on the same level as those of the U.S.,
which is advanced in regulating particulates. Since PM2.5 is smaller
than previously regulated substances, it is believed to be linked to
serious health hazards. The ministry will present the plan at a
meeting of the expert committee to be held on May 28. The envisaged
guidelines will be formally set as early as this fall.

There are already environmental standards for suspended particulated

TOKYO 00001204 010 OF 013


matters (SPM) with diameters of less than 10 micrometers. SPM
emissions are regulated under the Air Pollution Control Law and the
Automobile NOx -PM Law in large urban areas.

PM2.5, which is included in SPM, represents any particulate matter
with a diameter less than 2.5 micrometers. It is mainly contained in
diesel fumes and smoke from factory chimney stacks. Since
particulate matter is miniscule, it has been difficult to identify.
It enters deep into the lungs and tends to remain there. It is
believed to be the cause of not only respiratory disorders, which
the SMP regulation mainly envisions, but also the cause of lung
cancer and cardiovascular disorders. As such, the environment
ministry has been discussing the issue over the past two years to
set guidelines mainly on PM2.5.

The emissions standards to be proposed are an annual average of 15
micrograms per 1 cubic meter and a daily average of 35 micrograms
per cubic meter, which are the same level as set by the U.S. They
are more lenient than the World Health Organization's (WHO)
guidelines but stricter than the European Union's. The environment
ministry says that PM2.5 emissions of those levels are unlikely to
cause health hazards.

Emissions in most cities in Japan are believed to top those levels.
It is necessary to promote emissions regulations on automobiles and
factories. Next on the agenda will be to determine what amount of
PM2.5 is emitted from what sources and to what extent such emissions
should be regulated. Asthma patients who filed a law suit over air
pollution in Tokyo, which reached a settlement in August 2007, had
strongly sought the setting of such guidelines. As a result, the
formal note of settlement incorporated a proposition that the state
consider setting environmental guidelines.

(10) METI report expresses concern about reduction in global trade,
reflecting Japanese firms' wariness

YOMIURI (Page 9) (Full)
May 28, 2009

The unfair trade report for 2009, released yesterday by the Ministry
of Economy, Trade and Industry (METI),expresses strong apprehension
about spreading protectionist moves across the nation and subsequent
possible reduction in global trade. Regarding China's plan to force
foreign manufacturers to disclose key information about their
information technology (IT) security products, concerns are growing
among Japanese manufacturers. It is imperative for Japan, which has
long enjoyed benefits through free trade, to take the lead in
strengthening international cooperation to prevent protectionist
moves from spreading further.

Calls on China to drop disclosure rule

The Chinese government plans to force foreign firms to disclose
source codes for 13 items under the China Compulsory Certification
program. The report strongly urges China to scrap its planned IT
disclosure rule. Starting in May 2010, countries will become unable
to export the 13 items if there is no certification from the Chinese
government.

The disclosure of a source code means a technical data leak. An
executive of a major electric machinery maker grumbled: "Once the
system is introduced, we will not be able to export our

TOKYO 00001204 011 OF 013


state-of-the-art products. Since only general-purpose items will be
shipped, manufacturers in all countries, including China, will
surely go down together.

Unstable international cooperative system

The group of 20 (G-20) countries and region, including seven
industrialized countries and emerging countries, agreed in its
meeting in November 2008 and on other occasions to step up efforts
to prevent protectionism.

But an increasing number of countries have begun to make
protectionist moves aimed at protecting their domestic industries,
against the backdrop of the current serious economic climate.

According to the report and the results of a survey released
yesterday by METI, about 130 cases of trade restrictions imposed by
30 countries have been reported since last fall. These reports note
that, out of the 130 cases, 24 cases involving nine countries could
affect the Japanese economy or corporate operations, such as a Buy
American provision that requires the U.S. government to use only
U.S.-made products in public works projects and Russia's increased
tariffs on autos and other products.

The 2009 unfair trade report expresses strong apprehension about the
fact that the international mechanism of cooperation in preventing
protectionism has not properly functioned.

The foreign trade statistics for April - released yesterday by the
Finance Ministry - showed that the value of exports dropped 39.1
percent from the same period a year ago. As long as global trade
remains sluggish, Japan's exports will never boost again.

More countries to be subject to study

The report added two more countries - Argentine and Ukraine - to the
list of countries whose trade issues must be looked into, reflecting
a growing sense of alarm about the spread of protectionist moves.

Argentine introduced in November 2008 the import-licensing system
for such metal products as elevators. Many cases have been reported
in which cargos that arrived at ports in that nation have been left
on the ships as import permission has not been issued. Under such a
situation, some Japanese exporters reportedly have begun to give up
exports to Argentine.

Japan has also asked these countries to drop such protectionist
systems. The government intends to step up monitoring operations
from now.

Major protectionist trade measures following outbreak of financial
crisis

The U.S. Introduces a "Buy American" provision to require only
U.S.-made products to be used in public works projects.
Russia Raises tariffs on autos, agriculture machines and some steel
products.
China To introduce a compulsory certification program (but decides
to postpone the move by one year).
Ukraine Raises tariffs on autos and refrigerators.
India To impose its own standards for steel products (but decides to
postpone the move by one year).

TOKYO 00001204 012 OF 013


Argentine Introduces an import-permission system for metal products
such as elevators.
Indonesia Restricts imports in five areas, such as electric
appliances and food.

(11) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Tokyo Shimbun:
General Motors likely to apply for bankruptcy due to failure of debt
reduction talks

Nikkei:
Government panel calls for easier access to social security by
non-regular workers

Sankei:
Internet banking: Accounts at three major banks illegally
transferred to other accounts

Akahata:
Petition for free medical services for people aged 75 years or older
receives major response

(12) EDITORIALS

Asahi:
(1) We want to see party head talks every week, if specific points
at issue are discussed
(2) Number of suicide victims exceeds 30,000: Safety net should be
rebuilt

Mainichi:
(1) Party head talks: Why don't they hold such talks every week?
(2) Pension crisis: Do not delay in reforming system

Yomiuri:
(1) Party head talks lacked policy debate
(2) Personnel selection by Japan Post: Full account needed before
reappointing Nishikawa as president

Nikkei:
(1) Hold party head talks every week to compete over issues in
dispute concerning upcoming Lower House election
(2) Will reform drive in Mongolia make headway?


Sankei:
(1) Party head talks: Vie with each other with distinguished
options
(2) Encircling North Korea: Go ahead with financial sanctions and
ship inspections

Tokyo Shimbun:
(1) Party head talks: Key points cannot be understood through long
talks
(2) UNSC: Take united action for effective sanctions

Akahata:
(1) Nuclear-free world: Generate moves to scrap nuclear weapons from
grass-roots activities

(13) Prime Minister's schedule,

TOKYO 00001204 013 OF 013



NIKKEI (Page 2) (Full)


09:16 Met Deputy Chief Cabinet Secretary Asano at the Kantei.
10:01 Attended an Upper House plenary session.
11:11 Met Administrative Reform Promotion Headquarters Head Chuma
and former education minister Suzuki. Chuma stayed behind.
13:00 Met Lower House member Jiro Akama, with deputy chief cabinet
secretaries Matsumoto and Asano. Matsumoto and Asano stayed behind.
Asano stayed on.
14:49 Met Chief Cabinet Secretary Kawamura and Asano.
15:00 Attended a party head debate at the Diet.
16:18 Met U.S. General Electric Chairman and CEO Jeffrey Immelt.
16:56 Met UN FAO Director General Diouf, with former agriculture
minister Tanizu.
17:34 Met representatives of six local organizations, including
Fukuoka Governor Aso.
18:44 Met Qatar Crown Prince Tamim.
19:22 Hosted a dinner party.
20:34 Met METI Minister Nikai.
20:38 Met Foreign Ministry's Vice Minister Yabunaka, Foreign Policy
Bureau Director General Bessho, and Asian and Oceanian Affairs
Bureau Director General Saiki.
21:05 Videotaped a message for a regular general meeting of the
Japan Business Federation, with public relations officer Ogawa
present.
21:35 Called Brazilian President Lula.
22:03 Returned to his official residence.

ZUMWALT