DAILY SUMMARY OF JAPANESE PRESS 07/15/09

UNCLAS SECTION 01 OF 09 TOKYO 001614 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 07/15/09 INDEX: (1) Japan becomes second G-8 country to ratify cluster bomb ban treaty; Total abolition of munitions a tough challenge; Information disclosure required (Mainichi) (2) Emperor, Empress arrive in Hawaii: Governor meets them at airport (Mainichi) (3) Chief cabinet secretary criticizes DPJ for its response to cargo inspection legislation (Nikkei) (4) Lower House election in aftermath of shock of Tokyo election (Part 2): "Dissolution under Aso" upsets LDP members; governing system now collapsed (Nikkei) (5) Forecast of Lower House election (Part 2 - conclusion): It is up to junior DPJ politicians to pick up the task of reform (Tokyo Shimbun) (6) M&As decrease by half due to fading desire to invest (Mainichi) (7) ConGen Maher says in interview: U.S. bases' relocation outside Okinawa impossible since no acceptable sites on Japanese mainland could be found (Okinawa Times) ARTICLES: (1) Japan becomes second G-8 country to ratify cluster bomb ban treaty; Total abolition of munitions a tough challenge; Information disclosure required MAINICHI (Page 2) (Abridged) July 15, 2009 Ken Uzuka, Yoshihiko Saito, Takayasu Ogura (New York) The Japanese government deposited its instrument of ratification of the Convention on Cluster Munitions (Oslo Treaty) at UN headquarters yesterday. With this, Japan has become the 14th country in the world and the second country in the Group of Eight major nations to ratify the treaty. Japan was initially reluctant to ratify the pact during the examination phase, but it has succeeded in impressing the world with its swift ratification. Japan now intends to lead international opinion on support for victims. The relationship with the armed forces of the United States, which has yet to accede to the treaty, remains unclear, however. There still remain many challenges, such as information disclosure and ensuring transparency. Ambassador to the UN Yukio Takasu handed the instrument of ratification of the treaty to the UN Division for Treaties Affairs deputy director at UN headquarters yesterday, saying, "This is a key treaty to protect blameless civilians." The ambassador also said: "We are going to work on countries that have yet to ratify the treaty so that the convention will take effect at the earliest possible time. A trend to ban cluster bombs will emerge in the world." The Foreign Ministry was aiming for early ratification of the Oslo treaty because there were talks about lower House dissolution for a snap general election and some LDP lawmakers had doubts about the TOKYO 00001614 002 OF 009 pact. The Oslo Treaty stipulates that the cooperation of non-signatories, such as the United States, is essential. During Diet deliberations on the ratification plan, criticism was mostly directed toward the point that the Self-Defense Forces (SDF) are allowed to transport cluster bombs in compliance with a request from U.S. forces in Japan. According to a Foreign Ministry source, in the process of studying the Landmine Ban Treaty, the possibility of cooperation with U.S. forces regarding landmines was eliminated under the initiative of then Foreign Minister Keizo Obuchi. Because this point drew criticism, leaving leeway for cooperation with the United States was a prerequisite for discussion on the Oslo Treaty, the source said. London is reportedly considering asking the United States to remove its cluster bombs from UK territory. The total elimination of cluster munitions is a tough challenge for Japan as well. Ensuring transparency is also a problem. Although the government was repeatedly asked to reveal the number of cluster bombs Japan possesses, it refused to do so. Germany has begun disposing of its cluster bombs after disclosing their number. This sharply contrasts with the Japanese Defense Ministry's explanation that disclosing information before the treaty goes into force might cause some security problems. Japan's quick ratification of the cluster bomb ban treaty, which the United States has been reluctant to support, might become a chance to achieve new developments in the "peace diplomacy" of Japan, which has been criticized as blindly following in the footsteps of the United States. Japan did not initially clarify where it stood in the process of formulating the treaty which was pushed forward by the "Oslo Process" led by Norway and other like-minded countries excluding the United States, Russia, China and other countries, and nongovernmental organizations. For this reason, Japan was criticized as "backward looking." Japan decided to support the treaty after it included a clause proposed by Japan and other countries to allow signatories to conduct joint operations in which non-signatories, such as the United States, use cluster bombs. It can be said that Japan tried to curry favor with the United States. It is the United States, not Japan, that is likely to find it difficult to use cluster munitions due to the treaty. As a result (of ratifying the treaty),Japan raised an objection to the former Bush administration that approved the use of cluster bombs. This carries great significance. The inhumane nature of cluster bombs is clear. After swaying between ensuring security and humanity, Japan has eventually decided to shift its focus toward humanity. Japan has opted for eliminating its cluster munitions that might inflict damage on civilians rather than keeping what an NGO expert calls "outdated weapons" envisaging invasions by foreign forces. Government to extend full-fledged support for victims in Cambodia and Laos Following the ratification of the Oslo Treaty, the government TOKYO 00001614 003 OF 009 intends to begin offering earnest support for victims of cluster bombs especially in Cambodia and Laos in Southeast Asia. Specifically, the government plans to provide area-wide support beyond medical and educational assistance centering on agrarian and mountainous areas. According to the Foreign Ministry, Japan has since 1998 implemented 35 billion yen worth of measures to deal with unexploded bombs in 38 countries in Asia, the Middle East, and other regions. As this year marks the 10th anniversary of the Landmine Ban Treaty, Japan has reviewed its measures against unexploded bombs. In collaboration with the Japan Campaign to Ban Landmines (JCBL),the Foreign Ministry conducted fact-finding surveys in Laos and Cambodia from late June through early July. Many unexploded landmines and cluster bombs have been left behind in those countries since civil conflicts and battles with neighboring countries. Support for the handicapped, including victims of unexploded bombs, in those countries is reportedly lagging behind Thailand and Vietnam, which also have many victims. The government plans to help victims get back into society with an emphasis on medical/rehabilitation and vocational training facilities for victims. At the same time, there seems to be no end to farming in areas infested with unexploded bombs and collecting and dismantling such munitions in the knowledge of risks associated with them. A senior Foreign Ministry official noted, "The question of unexploded bombs and the issue of poverty are two sides of the same coin." Concluding that extending area-wide support is essential, the government is considering improving infrastructure, such as hospitals and roads, not only to help victims but also to prevent new victims. (2) Emperor, Empress arrive in Hawaii: Governor meets them at airport MAINICH ON-LINE 11:00 a.m., July 15, 2009 Photo shows the arrival of the Emperor and the Empress at Hickam Air Force Base on Oahu Island, Hawaii at 3:13 p.m. on July 14, 2009. The Emperor and the Empress on the 14th attended a reception in Vancouver co-hosted by the Japanese ambassador to Canada and the consul general and talked with Japanese and Canadian guests. They both walked several hundred meters from their hotel to the reception hall, while being welcomed by Rising-sun and Canadian flag-waving well-wishers. The Emperor and the Empress then left Vancouver by government plane and arrived at Hickam Air Force Base on Oahu Island, Hawaii, U.S.A. They, wearing leis, were greeted by Hawaii Governor Lingle and several others at the foot of the plane ramp. They then visited Kapiolani Park, which is close to the reception hall, and were greeted by Japanese-American citizens. (3) Chief cabinet secretary criticizes DPJ for its response to cargo inspection legislation NIKKEI- ONLINE (Full) 13:12, July 15, 2009 TOKYO 00001614 004 OF 009 Chief Cabinet Secretary Takeo Kawamura, at a press conference this morning, made the following comment about a special measures bill to make it easier to inspect ships to and from North Korea: "It is an important bill that must be pushed forward in the context of international cooperation. The Democratic Party of Japan (DPJ), which plays up its ability to run the government, should consider it straight on." Kawamura urged the DPJ to respond to calls for deliberations on the bill at the House of Councillors. At the same time, Kawamura rejected the idea of the heads of the Liberal Democratic Party (DPP) and the DPJ holding talks to make adjustments that would allow enactment of the bill, saying, "Such will not happen." In connection with a secret pact reportedly concluded when the U.S.-Japan Security Treaty was revised in 1960, DPJ President Yukio Hatoyama has alluded to approving the idea of making port calls by warships carrying nuclear weapons and their passage through Japanese territorial waters exempt from prior consolations between and the U.S. Touching on this fact, Kawamura expressed a cautious stance, saying, "The three nonnuclear principles are a national policy." (4) Lower House election in aftermath of shock of Tokyo election (Part 2): "Dissolution under Aso" upsets LDP members; governing system now collapsed NIKKEI (Page 1) (Full) July 15, 2009 Preparations have started for the Aug. 30 House of Representatives election. But this decision made by the prime minister has upset Liberal Democratic Party (LDP) members. In a meeting of LDP lawmakers held yesterday afternoon in the presence of Prime Minister Taro Aso, former secretary general Hidenao Nakagawa indicated that he would continue to seek Aso's voluntary resignation as prime minister. He said: "I oppose Diet dissolution that only satisfies the Democratic Party of Japan (DPJ). It is necessary to drastically change the voters' sentiment." In meetings of factions held yesterday, a number of participants called for a party presidential election to be held before the upcoming general election. Even Minister of State for Economic and Fiscal Policy Kaoru Yosano, who has supported Aso, expressed dissatisfaction: "Although it is necessary to analyze why the party was defeated in the series of local elections, the government has done nothing." At a plenary meeting of the Lower House held afterward, the LDP voted down a no-confidence motion submitted by the opposition bloc against the Aso cabinet. Even so, complaints and anxiety about Diet dissolution under Prime Minister Aso are still smoldering. Absence of potential candidate to succeed Aso When a political party suffers a setback in an election, calls grow in the party for the leader to take the responsibility. Now that the Aso cabinet is struggling with dismal public support ratings, it is quite natural that such calls grow louder. But "a replacement for Aso" has not been found. That is because the prime minister has changed every year since Junichiro Koizumi stepped down. TOKYO 00001614 005 OF 009 Shinzo Abe, Yasuo Fukuda, and Taro Aso assumed the premiership in succession, garnering 66%, 63% and 67% of the vote, respectively. Veteran lawmakers are negative about replacing Aso, stemming from such a negative idea as that if the prime minister is replaced now, the party will come under heavy fire. Another major reason for no replacement is that there is no potential candidate to succeed Aso. Postwar Japan has produced 22 prime ministers in "pseudo changes of government," with the mainstream force and the non-mainstream force having their respective candidates for the premiership. The factional system played a key role in producing leaders. But this system has become less influential and has not worked properly since the single-seat election system was introduced. Whether the candidate can be the "face of the LDP" in election campaigning seems to be the sole benchmark for appointing a prime minister. Former chief cabinet secretary Nobutaka Machimura said: "A lack of unity is a major cause for declining public support ratings of the LDP." Senior members of factions and others have reiterated the need for the party to be united, but party members are increasingly concerned about the upcoming Lower House election, the outcome of which tends to be greatly affected by the party leaders' capabilities. Given this, the ruling parties had Aso set the period of up to 40 days until the voting date in exchange for allowing Aso to exercise the right to dissolve the Lower House. Policy debate laid aside Election Strategy Council Deputy President Yoshihide Suga said: "LDP lawmakers find it difficult to go back to their electoral districts. It would be better to take as long time as possible to spell out our policies." Council Chairman Makoto Koga abruptly submitted a letter of resignation, saying that he must take responsibility for the party's defeats in the recent local elections. Regarding Koga's true motives, a party member said that he might want to have time for making stumping tours. A DPJ member commented: "During this period, the LDP might be aiming to conduct door-to-door election campaigning, counting on industrial organizations, regional social groups, their relatives, and acquaintances, while grilling President Yukio Hatoyama for his false donation statements." LDP executive members plan to outline a policy manifesto on July 17 for the upcoming Lower House election. But only five, including Suga, have been involved in the work. Showdown over structural reforms supported by Nakagawa and the Koizumi children must have been at the root of the moves to oust Aso, but there are no signs of probing discussion conducted on this issue. Prime Minister Aso has reiterated: "A change of government is not a purpose but a means." If that is so, what growth strategy is he envisioning for Japan's survival? How is he going to reconstruct a sustainable social security system as the nation turns into aging society with a declining birthrate? The LDP should present such visions. If the party set the period of 40 days to present its visions, the unprecedentedly long period will be meaningful. (5) Forecast of Lower House election (Part 2 - conclusion): It is up to junior DPJ politicians to pick up the task of reform TOKYO 00001614 006 OF 009 TOKYO SHIMBUN (Page 29) (Excerpts) July 14, 2009 Following the outcome of the Tokyo Metropolitan Assembly election, in which the "brand name" of the Democratic Party of Japan (DPJ) outsold any other, even those candidates with high-profile images and strong records of achievements, Kazuhisa Kawakami (political psychology),vice president of Meiji Gakuin University, said: "Voters are indeed hoping for a change in government." He predicted (that in a general election for the House of Representatives),"If voter turnout is high and a favorable wind blows for the DPJ, the Liberal Democratic Party (LDP) will suffer a devastating defeat in the election, picking up only 169 seats, while the DPJ will secure a single-party majority, 249 seats. If the DPJ wins a landslide victory, the number of new Diet members will greatly increase. Kawakami said: "It will be difficult for LDP candidates to win the general election unless they have something that appeals to voters. The lineup of the DPJ's freshman lawmakers will be made up of all sorts of people. There would be some new Diet members who cannot be regarded as politicians but as a tally of votes." Referring to the fact that most electoral districts in the Tokyo race are multiple-seat constituencies, Michiko Yoshinaga, a writer, said: "It is said that priority should be placed on a political party rather than a candidate, but the daily lives of residents of Tokyo have become too severe for them to give priority attention to individual candidates. The Metropolitan government has reached an impasse. Therefore, the result of the election is the expression of anger by Tokyo residents, the message being that they had no other choice but to vote for the DPJ." Tetsu Yamazaki, a playwright, said: "Not only the economy but also the whole of Japan has grown stagnant for a long time. The people want to get out of such a situation, but there are no politicians who can come up with appropriate solutions." He sees the key as overcoming the growing sense of impasse. Yoshinaga reprimanded the DPJ, saying: "The DPJ is not trustworthy because there are money scandals involving President Yukio Hatoyama and former President Ichiro Ozawa." She added: "It was not that there was ardent support for the DPJ in the Tokyo race; it was more a factor of the LDP going down arbitrarily. So, the DPJ should not get too excited. Otherwise, there is a possibility that the people will distance themselves from it, as well." (6) M&As decrease by half due to fading desire to invest MAINICHI (Page 8) (Full) July 15, 2009 A survey conducted by Thomson Reuter Professional KK has found that mergers and acquisitions (M&As) involving Japanese companies in the TOKYO 00001614 007 OF 009 first half of 2009 (January - June) decreased by half from the second half of 2008 in monetary terms. Behind the fall is the fading desire to invest due to difficulty in procuring funds to finance corporate acquisitions. Meanwhile, M&As involving bankrupt companies are on the rise, reflecting sluggish corporate performance. This trend will likely continue. The number of M&As (including capital subscription) released in the first half of the year was 1,422, down 6.3 percent from the previous term, marking a sharp drop to 3.9354 trillion yen or a 51.2 percent decline in monetary terms. The financial crisis following the failure of Lehman Brothers, a leading U.S. securities house, in September 2008 has led to a decline in the real economy. It appears that companies' desire for M&As has weakened with financial institutions becoming cautious about financing M&As. Chief researcher Hiroshi Suzuki of the Daiwa Institute of Research Business Innovation pointed out, "Acquisitions of companies by investment funds have dropped drastically, because investors are increasingly cancelling contracts with those funds." There were a number of large M&As last year, such as capital subscription (roughly 900 billion yen) to Morgan Stanley, a leading U.S. financial service provider, by the Mitsubishi UFJ Financial Group and the acquisition of Sanyo Electric Co. by Panasonic. However, the largest acquisition (545 billion yen) in the January - June period is the acquisition of Nikko Cordial Securities by the Mitsui Sumitomo Financial Group. It was decided after a scramble among major banks that the Mitsui Sumitomo Financial Group should put the Nikko Cordial Securities under its wing. The case is part of the restructuring of the U.S. Citigroup, which faced management crisis due to the economic woes. Amid M&As leveling off in Japan, those in the Asia-Pacific region by food companies are brisk. Kirin Holdings acquired Lion Nathan, a major Australian brewery, for 230.9 billion yen. Asahi Brewery made capital contribution worth 59.2 billion yen to China's Tsingtao Brewery Company. A move by Kirin Holdings and Suntory Holdings to hold talks on a merger was motivated in search of new opportunities abroad. Related sources view that M&As abroad by Japanese companies will continue to increase, as an executive of a leading security house said. Increase in support to failed companies through M&As M&As involving companies that have filed for court protection or bankruptcy increased by three from the previous term to 38 due to the economic decline. The total value of the acquisitions increased to 120.6 billion yen, about four times the preceding term. In the first case of its kind in Japan as a Real Estate Investment Trust (REIT),the acquisition of failed New City Residence Investment Corporation by U.S. Investment fund Loan Star has contributed to pushing up the acquisition amount in the term to 108.6 billion yen. This is the largest acquisition case involving failed companies in the January-June period. Loan Star will assist the reconstruction of New City Residence Investment Corporation as a sponsor for its reconstruction program. It will aim to list the company within five years. The second largest acquisition was one in which Prudential, a leading U.S. life insurance company, made Daiwa Life Insurance its subsidiary for 6.9 billion yen. Some economic indicators show that the economy has bottomed out. TOKYO 00001614 008 OF 009 However, the number of bankruptcies is moving at a high level, marking about a 7 percent increase in June, compared with the same month a year ago. Director Nobuo Sayama of GCA Savvian Group, a leading M&A consulting firm, noted, "We are getting more customers for M&A consultation from various lines of business. They come to us for help in surviving their management crises or to seek financial assistance. (7) ConGen Maher says in interview: U.S. bases' relocation outside Okinawa impossible since no acceptable sites on Japanese mainland could be found OKINAWA TIMES (Page 2) (Full) July 15, 2009 Kevin Maher, U.S. consul general in Okinawa who will assume the post of director of the U.S. Department of State's Office of Japanese Affairs on August 4, gave an interview to Okinawa Times recently. He said that during the discussions on U.S. Forces Japan (USFJ) realignment in 2002-2006, the Japanese and U.S. governments studied the possibility of relocating U.S. military bases in Okinawa to the Japanese mainland, but they reached the conclusion that this was not a realistic option, since it would be impossible to find relocation sites. Maher was one of the working level officials in charge of the USFJ realignment talks. Q: Why is it not possible to distribute the burden equally, including on the Japanese mainland? Maher: It is difficult to construct new U.S. military bases. The Japanese government has judged that relocation outside of Okinawa would be difficult. The two governments' thinking on USFJ realignment was that existing facilities would have to be used for the relocation. Q: Didn't the two sides come up with specific sites on the mainland for consideration? Maher: Rather than formal proposals, various ideas came up. We considered locations in Hokkaido, Kyushu, and elsewhere, looked at the airfields and other facilities, and studied if relocation was possible, but realized at an early stage (in the realignment talks) that this was not possible. This is because ground and air units of the Marines using Futenma right now operate in an integrated way. It would be necessary to construct a facility on mainland Japan from scratch, which was not realistic. Q: The ships transporting the Marines are based in Sasebo in Nagasaki Prefecture. Certain senior marine officers say that as long as the Japanese side provides the facilities and training space, relocation to Kyushu would be possible. Maher: That is an abstract proposition. While military operation might be possible in Kyushu; in reality, to what location can the Marines be moved? To relocate the entire Marine facility would be an enormous undertaking and would take a long time. This would not solve Okinawa's problem. Q: No place is willing to accept (U.S. bases)? Maher: That's right. Opposition to military bases is not limited to Okinawa. The same is true for nuclear power plants, waste disposal TOKYO 00001614 009 OF 009 facilities, factories, and so forth. Q: The Democratic Party of Japan, which is aiming for a change of government, and the other opposition parties advocate the relocation of Futenma outside Okinawa. Maher: There was a change of administration in the U.S. in January, but the Guam agreement was signed in February. Security policy ought to be non-partisan. If Japan decides on relocation outside Okinawa, that would be the end of it. If the agreement is going to be revised, there will be the question of to what extent. Everything will fall apart. Q: The town of Kadena is complaining about the noise problem and demanding an agreement on facility use. Maher: This will affect the operations of the U.S. forces. The USFJ conducts exercises for the defense of Japan. On the other hand, Japan's only responsibility is to provide the military bases. While the NATO members (with which facility use agreements have been signed) fight alongside the U.S., Japan (due to Article 9 of the Constitution) is different. One needs to keep in mind that the Japan-U.S. alliance is asymmetrical. (Interviewer: Tomohiro Yara, commentary writer and editor) POST