DAILY SUMMARY OF JAPANESE PRESS 01/08/09

UNCLAS SECTION 01 OF 09 TOKYO 000048

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 01/08/09

INDEX:


(1) Obama administration plans to name Joseph Nye new ambassador to
Japan, giving importance to relations with Japan (Asahi)

(2) Government to ban retired senior bureaucrats from watari or
switching from one organization to another, Prime Minister Aso to
announce as early as today (Tokyo Shimbun)

(3) Bid-rigging, cartels: FTC to resubmit amendment to Anti-Monopoly
Law featuring proposal for court trial for companies complaining
about administrative penalties; Advance judgment system for dumping
(Nikkei)

(4) Government starts drafting bill for MSDF support of anti-piracy
efforts off Somalia, but New Komeito remains cautious, DPJ opposed
(Asahi)

(5) Relations between Japan, U.S., China changing (Yomiuri)

(6) ODA - Japan's option: Revival of "profitable assistance"? (Tokyo
Shimbun)

(7) TOP HEADLINES

(8) EDITORIALS

(9) Prime Minister's schedule, January 7 (Nikkei)

ARTICLES:

(1) Obama administration plans to name Joseph Nye new ambassador to
Japan, giving importance to relations with Japan

ASAHI (Top play) (Excerpts)
Evening, January 8, 2009

Yoichi Kato, Washington

The incoming Barack Obama administration has decided to appoint
former Assistant Secretary of Defense and Harvard University Prof.
Joseph Nye as the new ambassador to Japan. This was revealed on Jan.

7. With the selection of high-ranking officers responsible for East
Asian affairs at the White House, State Department, Defense
Department now over, the administration's lineup of major players on
its Asia policy team is complete.

It is unprecedented for the incoming ambassador to Japan to be
determined before the establishment of the new administration. The
step is seen as reflecting the Obama administration's attachment of
importance to relations with Japan. According to a relevant source,
Nye has been informed of the administration's decision and he is
expected to accept the offer.

He will be formally named ambassador to Japan following the
President's nomination and the Senate's approval. Incumbent
Ambassador Schieffer is scheduled to leave Japan ahead of the
presidential inauguration on Jan. 20.

Nye, who served as assistant secretary of defense in the Clinton
administration, was responsible for the so-called 1996 redefinition

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of the Japan-U.S. security system. He has been involved deeply in
Japan-U.S. relations, as seen in the fact that he formulated the
Armitage-Nye Report twice jointly with former Deputy Secretary of
State Richard Armitage: in 2000 shortly before the establishment of
the Bush administration and in 2007 ahead of the last Presidential
election. The Report is a comprehensive strategic text on U.S.
policy toward Japan as its ally.

He is also known as an advocate of "smart power" that calls for the
use of soft power, such as values and cultures, as a diplomatic
means, without placing a disproportionate emphasis on hard power,
such as military might.

In June 2008, amidst the presidential race, Nye, along with former
Secretary of Navy Danzig, contributed to the Asahi Shimbun an Obama
camp Japan policy essay, reading: "The U.S.-Japan alliance remains
the cornerstone of American policy in the Asia-Pacific region." He
has been playing a pivotal role in policy. His appointment as
ambassador to Japan seems to be based on the positive assessment of
such achievements.

(2) Government to ban retired senior bureaucrats from watari or
switching from one organization to another, Prime Minister Aso to
announce as early as today

TOKYO SHIMBUN (Top play) (Full)
January 8, 2009

The government decided yesterday to immediately prohibit the
practice of ministries or agencies arranging watari for retired
bureaucrats or the practice of switching from one cushy job to
another at government-affiliated organizations and private-sector
companies over which the former officials had had oversight
responsibilities. Prime Minister Taro Aso is expected to announce
this policy change as early as today at a House of Representatives
Budget Committee session.

The Reemployment Oversight Committee approves the practice of
amakudari or placing retiring senior bureaucrats into
government-affiliated organizations and high-paying posts at private
firms in the industries they had overseen. However, the committee
members have not been chosen due to objections from the opposition
parties. The government decided as a result to give approval using
the authority of the prime minister, but it has judged that the
prime minister would come under public criticism if he directly
approved the practice of watari, through which retired bureaucrats
repeatedly receive lucrative retirement benefits.

A high government official last night said: "The practice of watari
should be immediately stopped. The prime minister will make a final
decision on the matter."

The placement of retired bureaucrats in outside positions was
unified under the government-private sector personnel exchange
center that was established last Dec. 31 The center does not provide
its good services, however, for watari or shifts from one position
to another. However, it has been decided that during a three-year
transition period, the center will be able to arrange positions for
retired bureaucrats more than once, as long as the special committee
approves.

However, it does not appear likely that Diet approval of the

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committee members will be obtained because of opposition camp's
blockage. The cabinet adopted late last year an ordinance that the
prime minister can exercise his authority if the posts of committee
members are vacant. If the prime minister does not approve, the
ministries and agencies will be no longer be able to give watari
positions to retiring bureaucrats.

(3) Bid-rigging, cartels: FTC to resubmit amendment to Anti-Monopoly
Law featuring proposal for court trial for companies complaining
about administrative penalties; Advance judgment system for dumping

NIKKEI (Page 1) (Full)
January 6, 2009

The Fair Trade Commission (FTC) has decided to take a second look at
its judgment system, under which it decides the propriety of
administrative penalties it has issued in cases violating the
Anti-Monopoly Law (AML). Many are skeptical about the impartiality
of the system with one saying that it is like a public prosecutor
doubling as a judge. The FTC has looked into a system that allows
cases involving bid-rigging and cartel practices to be directly
brought to the law courts. Regarding dumping, it intends to
introduce an advance judgment system, under which penalties are
handed down, based on allegations given by the corporate side.

Under the present system, a company challenging the administrative
penalties issued by the FTC applies for a judgment, which is
equivalent to the first instance in trials. In response to the
application filed by the company, the FTC decides the propriety of
the penalties it had earlier issued. If the company still complains
about the FTC's decision, it can apply to a high court for a trial.
However, the penalties issued by the FTC were revised just once
under the judgment system over the past decade. Business circles
have been critical of the judgment system, as a result.

According to the draft review proposals, the ex-post facto judgment
system will be scrapped. Instead, in cases involving bid-rigging and
cartels among cases of violation of the AML, companies will become
able to directly appeal to a court of law on unacceptable penalties.
The judgment is that such cases are suitable for court trials
because irregularities are clear. In the meantime, an advance
judgment system, under which the FTC decides the details of
penalties it issues, based on its investigation into companies'
allegations and evidence, will be adopted.

The FTC submitted to the regular Diet session last year a bill
amending the AML attached with an additional clause that
consideration should be given to revision of the system. The bill,
however, was killed, with talks between the ruling and opposition
parties encountering complications due to strong calls for the total
scrapping of the bill. This time, the FTC will resubmit the bill
incorporating concrete revisions with the aim of having it enacted
before the end of 2010. However, since business circles and the
Democratic Party of Japan are seeking the bill be scrapped, the FTC
could be pressed to make even more revisions to it.

(4) Government starts drafting bill for MSDF support of anti-piracy
efforts off Somalia, but New Komeito remains cautious, DPJ opposed

ASAHI (Page 2) (Full)
January 8, 2009


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The government and the ruling parties have started work on preparing
a new law to enable Maritime Self-Defense Force vessels to be
deployed to waters off Somalia in support of international
anti-piracy efforts. They will also study a two-stage formula under
which the government would temporarily resort to a provision in the
Self-Defense Forces Law to order a maritime police action by the
MSDF until the law comes into effect. Debate on this issue is likely
to heat up over rules on the use of weapons against pirates.

Prime Minister Aso told reporters yesterday: "Many countries have
dispatched naval ships, and China has also decided to dispatch
warships to the area. Under this situation, it is very important, in
view of protecting the property of the people, for Japan to consider
what actions it can take in the area,." Aso thus expressed his
eagerness about Japan's participation in countering piracy off
Somalia.

The prime minister, who used to be a company president, is
interested in pragmatism in foreign policy. Given this, he is eager
to ensure the safety of sea lanes by taking anti-piracy measures. In
Diet deliberations on a bill amending the refueling-assistance
special measures law last October, Akihisa Nagashima of the
Democratic Party of Japan urged the government to dispatch MSDF
warships to battle Somalia pirates. Aso promptly replied: "We would
like to consider this idea." Just after China announced in December
a plan to deploy warships, Aso instructed Defense Minister Hamada to
work out specific measures.

In response to Aso's eagerness, the Liberal Democratic Party and the
New Komeito decided yesterday to set up a project team tasked with
drawing up anti-piracy measures. The panel will look into the two
options of ordering a maritime policing action by the MSDF and of
enacting a new law. The panel envisions dispatching not Japan Coast
Guard (JCG) members but MSDF troops.

Under new legislation, troops would be allowed to take action to
protect foreign vessels, but a senior government official commented:
"Whether a new law is enacted hinges on a decision by the New
Komeito." A senior New Komeito member recognized the need for new
legislation but also insisted that strict rules were necessary,
saying: "There are constitutional restrictions, so in dispatching
troops overseas, restrictions must be imposed by legislation."

Debate is expected to heat up particularly on standards for troops
to be allowed to use weapons in cracking down on pirates. In the
government's document presented to the ruling side, "matters related
to authority over the use of weapons necessary in performing the
mission" were specified as those up for consideration. The issue of
weapon-use standards was not taken in discussing the anti-terrorism
special measures law or the Iraq special measures law.

Even if agreement is reached in the government and the ruling camp,
the DPJ is unlikely to easily approve the plan. President Ozawa has
insisted on the need for a basic law on SDF overseas missions and
has been negative about introducing a special measures law,
remarking: "(Dealing with the issue with special legislation) is
undesirable, because it could leave the issue of interpretation of
the Constitution ambiguous." DPJ Policy Research Committee Chairman
Masayuki Naoshima, while acknowledging the need for Japan's
cooperation in combating pirates, said in a press conference
yesterday: "I cannot say whether the party will support new
legislation before the government reveals its specific contents."

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Even if the government submits a new law, deliberations will
unlikely not start before the fiscal 2009 budget bill and related
bills are enacted into law. If the opposition camp, which has now
control of the House of Councillors, puts up all-out resistance, the
ruling camp will have the option of resorting to the override vote
tactic in the House of Representatives. In this case, too, the
battle in the Diet will inevitably be prolonged. Since a Tokyo
Metropolitan Assembly election, on which the New Komeito has placed
great importance, will take place this summer, it is still
unpredictable whether the new legislation can clear the Diet.

Some government officials have put forth the idea of ordering a
maritime policing action as a stopgap measure, but the Defense
Ministry remains cautious about the plan, citing such reasons as
unclear weapon-use standards. The New Komeito's assertion is that
the Japan Coast Guard primarily should be responsible for the
anti-piracy mission. Defense Minister Hamada reportedly told a
senior New Komeito member when they met last evening: "It is not
true to think that troops are allowed to take any actions under the
provision pertaining to an order for maritime patrol action. I take
a view that is similar to the New Komeito's."

(5) Relations between Japan, U.S., China changing

YOMIURI (Page 4) (Excerpts)
January 7, 2009

How will relations between Japan, the United States and China shift
this year, which falls between the 30th anniversary of the
conclusion of the Japan-China Peace and Amity Treaty and the 50th
anniversary of the conclusion of the U.S.-Japan Security Treaty?

In a lecture in January 2008, James Steinberg, who has been named
President-elect Obama's deputy secretary of state nominee, made this
statement:

"It is best for strong U.S.-China relations to complement strong
U.S.-Japan relations. Japan will be able to build good relations
with China without concern about possible conflict with the United
States or being overwhelmed by China's momentum."

Among the sets of relations -- Japan and the U.S., the U.S. and
China, and Japan and China -- Japan-U.S. relations stand out as
having the most pressing destabilizing factors.

For instance, U.S. Marines are scheduled to be relocated from
Okinawa to Guam and Futenma Air Station is to be moved from Ginowan
by 2014 as part of the realignment of U.S. forces in Japan. The
United States is becoming increasingly frustrated with the Futenma
relocation plan being sidetracked by local objections.

Although the Aso cabinet is said to lack a "control tower," Prime
Minister Taro Aso has been involved in (the Guam relocation plan).
The U.S. Department of Defense (DOD),which was hard-lined at the
time, initially requested that Japan bear 75 PERCENT of the Guam
relocation cost. But it was Aso who presented a plan that persuaded
the DOD to change its mind at an early stage in the process and
lower Japan's share to 59 PERCENT , including loans. Aso was serving
as foreign minister at the time.

Aso played golf in Tokyo with U.S. Ambassador to Japan J. Thomas

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Schieffer in the spring of 2006. While on the green, Aso wrote "1/3"
on the sand bunker with his club. The ambassador then asked, "The
United States and Japan would bear one-third each. What about the
rest?" Aso replied: "Loans. Interest rates in Japan are now low. If
you present the difference in interest rates between Japan and the
United States, the Congress would accept it." The ambassador
reportedly nodded, saying, "I get the picture." It is well known
that the ambassador subsequently did the spadework on the U.S.
side.

With such an experience, the prime minister must have a strong
desire to break the deadlock in the current situation. But with many
government and ruling party members turning their backs on Aso, it
is not easy for him to demonstrate strong leadership at the moment.

In addition, there are many outstanding issues that are vital from a
viewpoint of the Japan-U.S. alliance, such as measures against
piracy in waters off Somalia, Africa, and expanded reconstruction
assistance to Afghanistan. Even if the Democratic Party of Japan
(DPJ) is in charge of the government, these issues will not go away.
If they are postponed, they would become more difficult to handle.
Even so, there is no momentum for talks. There is a sense of alarm
in the United States toward the DPJ, with some taking the party's
call for Japan-U.S. relations to be placed on equal footing and for
moving Futenma Air Station out of Okinawa, as is specified in its
Okinawa Vision, as an indication of the party's turning away from
the United States.

Many observers think that compared to Japan and the United States,
the U.S. and China will move closer to each other. Not only in trade
and the economy but also in the war on terror, there are strong
calls in the United States for attaching more importance to China, a
nuclear power that has its own trouble with Muslim extremists. The
United States has also high regards for China as the chair of the
six-party talks on North Korea.

There have been new developments in relations between Japan and
China, as seen in the first independent Japan-China-South Korea
summit in December 2008. Although there is no lack of seeds of
discord, such as the undeveloped gas fields in the East China Sea
and intrusions into Japanese waters near the Senkaku Islands, China
no longer reacts fiercely to Japan, as it did during the Koizumi
administration. Some observers think that in view of China's
hospitality toward DPJ President Ichiro Ozawa in the past, Japan and
China will develop closer relations under a DPJ administration.

(6) ODA - Japan's option: Revival of "profitable assistance"?

TOKYO SHIMBUN (Page 1) (Full)
January 8, 2009

The Japanese government plans to extend yen loans worth 25 billion
yen as official development assistance (ODA) to expand facilities at
Port Toamasina, Madagascar, with the intention to use them jointly
with that country. Sumitomo Corporation is now engaged in exploring
for rare metals, such as nickel, in Madagascar. It will ship those
metals from that port. It will be a massive project that will cost
about 10 PERCENT of that country's tax revenues, once completed.
Research and preparations are under way at a very fast speed.
Transport Minister Botozaza wants the project to be completed by
fiscal 2012.


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In the 1960s and the 1970s, Japan extended ODA as a joint effort of
government and private sector or in the form of tied aid in order
for Japanese companies to receive project contracts. The
international community criticized Japan as carrying out "commercial
ODA."

Since then, Japan's ODA has changed. It has been giving more
consideration to criticism both from home and abroad. It has set
stricter environment standards. It has also constrained the total
value of ODA. Japan's ODA, which has become "too polite," as one
development consultant put it, has lost attractiveness to
companies.

As a result, Japan's ODA has been pushed into the background. China,
instead, has begun to carry out ODA as a joint government-private
sector effort, which once was Japan's monopoly. In Madagascar, you
see billboards in Chinese on both sides of the highway between the
airport and the capital.

This sense of alarm has brought about a move in Japan to take a
second look at the ODA program. The Government-Private Sector
Partnership, compiled last April at the initiative of the Foreign
Minister, reflects the government's desire to revive Japan as an ODA
power by rebuilding the cooperative relationship between the
government and the private sector. The project now being carried out
in Madagascar is a concrete example of such a desire. The Finance
Ministry expects a kill-three-birds-with-one-stone effect from the
project in Madagascar with one official noting, "This project will
be beneficial for Japan, companies, and Madagascar."

Nickel mines and access roads to them will certainly bring about
benefits to Africa. However, a question remains whether this is the
most needed assistance to the people of Africa, who are suffering
from poverty and famine. Minoru Omura, chief of the Citizens'
Society Forum of the Tokyo International Conference on African
Development, suggested that Japan should set up an assistance agency
so that it can extend assistance with focus on poverty and
humanitarian assistance. This is close to Japan International
Cooperation Agency (JICA) President Sadako Ogata's stance on human
security.

Should Japan follow the path toward "profitable ODA," now that it is
suffering from an economic recession? Should ODA be limited to
humanitarian areas? The issue extends beyond diplomacy; it is a
choice involving domestic affairs.

(7) TOP HEADLINES

Asahi:
Internal Affairs and Communications Ministry likely to lower cell
phone fees

Mainichi:
Russian gas supply to Europe via Ukraine stops completely

Yomiuri:
Japanese group suspected of helping to find accommodations for
illegal-stay foreigners

Nikkei:
Mitsubishi Motors to produce electric cars for Peugeot


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Sankei:
Japan Post's decision to hand over 70 facilities to ORIX a new
source of trouble

Tokyo Shimbun:
Government to ban retired senior bureaucrats from getting
high-paying posts at private sector; Prime Minister Aso to announce
today

Akahata:
Need for international pressure on Israel to bring about immediate
ceasefire

(8) EDITORIALS

Asahi:
(1) Don't leave tragedy of Gaza as is
(2) Depict future of sports with cooperation between regional
communities and corporations

Mainichi:
(1) Extension of efforts to achieve fiscal soundness: Government
should show new goal to put the public at ease
(2) Review of Public Office Election Law: Hurry to lift ban on
Internet election

Yomiuri:
(1) To secure IT systems, prepare for accidents
(2) Taxi drivers must act in self-defense

Nikkei:
(1) Government must come up with short- and medium-term measures to
protect workers

Sankei:
(1) Green New Deal: Bring together wisdom of Japan
(2) Dispatch of workers to manufacturers: Cautious argument on
tightening of regulations

Tokyo Shimbun:
(1) Fiscal reconstruction: Discipline on expenditures indispensable
(2) Review of reduced-rice-acreage policy: Don't end in mere talk

Akahata:
(1) Companies must not fire workers unscrupulously

(9) Prime Minister's schedule, January 7

NIKKEI (Page 2) (Full)
January 8, 2009

09:50
Shikinensai Imperial memorial ceremony marking the 20th anniversary
of Emperor Showa's death held in Hachioji City.

13:14
Deputy Chief Cabinet Secretary Konoike at the Kantei.

14:01
Upper House plenary session.

16:00

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Lower House Budget Committee meeting.

17:27
New Year's party hosted by Jiji Press, etc., at Imperial Hotel.

17:49
Acting Policy Research Council Chairman Sonoda at Bar Golden Lion in
the same hotel.

19:25
Met with Deputy Chief Cabinet Secretary Matsumoto.

20:44
Arrived at the private residence in Kamiyama-cho.

SCHIEFFER