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Cablegate: Daily Summary of Japanese Press 03/14/07

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P 140826Z MAR 07
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UNCLAS SECTION 01 OF 08 TOKYO 001113

SIPDIS

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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 03/14/07


INDEX:

(1) Japan-Australia summit: EPA talks to start next month;
Liberalization of agricultural products the touchstone, but talks
could bog down

(2) JCP member calls for canceling talks on Japan-Australia EPA,
citing possible serious damage to Japanese farmers

(3) Editorial: Iraq stabilization-Japan's diplomatic capability to
be tested, as well

(4) Abe's protective stance toward Matsuoka stands out in budget
committee session; Opposition camp scrutinizes utilities issue for
only nine minutes

(5) Hot battle among regions to host G-8 summit next summer; How
will Prime Minister Abe make the decision? Obuchi cabinet's
popularity boosted after picking Okinawa as venue for 2000 summit

(6) Interviewing former Defense Agency Director General Yoshinori
Ono: Japan should take resolute stance against North Korea, while
cooperating with US

ARTICLES:

(1) Japan-Australia summit: EPA talks to start next month;
Liberalization of agricultural products the touchstone, but talks
could bog down

NIHON KEIZAI (Page 3) (Almost Full)
March 14, 2007

Prime Minister Shinzo Abe yesterday met with Australian Prime
Minister John Howard at the Prime Minister's Official Residence.
Both agreed for the governments to enter into talks to sign an
economic partnership agreement (EPA) in April. This will be the
first EPA talks with a major agricultural country for Japan,
offering a key test of the government's stance toward liberalization
of agricultural products, since it has yet to deal with the issue
head-on in talks with other countries.

Prime Minister Abe during a press conference after the summit
meeting said that an EPA with Australia would considerably benefit
Japan. However, apparently having in mind the need to protect
agricultural products, he stressed loudly, "We will not set a time
limit on the talks." Howard also said, "The talks will be
long-term."

Negotiations that are expected to be long-term from the beginning
are bound to be a slow process. One Liberal Democratic Party (LDP)
lawmaker during a meeting of the Upper House Budget Committee
yesterday expressed concern that the signing of an EPA with
Australia might devastate Japan's agricultural sector. Foreign
Minister Taro Aso responded, "We will be on the offensive or on the
defensive on a case-by-case basis." Agriculture Minister Toshikatsu
Matsuoka underscored, "In our relations with Australia, the basis
will be erecting solid defensive measures."

The first round of the talks has been set to start on April 23, the
day after the second half of the unified local elections. This is
the result of giving consideration to the possibility of the
agricultural talks having an adverse effect on the elections.

TOKYO 00001113 002 OF 008

Japan has so far signed EPA agreements with four countries,
including Singapore. Since most are with industrialized countries,
opposition from domestic farmers was relatively weak. In talks with
Australia, Japan will call for exempting from the scrapping of
tariffs wheat and dairy products, items with tariffs of more than
200% and beef with a 50% tariff.

An EPA with Australia is advantageous to Japan, though. Most of
Japan's exports to that nation are manufactured goods. Removal of
tariffs on all tradable goods is expected to raise Japan's gross
domestic product due to the expected increase in exports. Japan
relies on Australia for a large portion of the natural resources it
uses, as can be seen in the fact that it imports 60% of its iron ore
and coal from that country. It intends to work on Australia to
incorporate an article committing the stable supply of natural
resources in an agreement.

Japan is looking into the possibility of EPAs with China and the US
- both agricultural producers. Talks with Australia will be an
important step that will determine Japan's future EPA strategy, as a
senior official of the Ministry of Economy, Trade and Industry put
it.

(2) JCP member calls for canceling talks on Japan-Australia EPA,
citing possible serious damage to Japanese farmers

AKAHATA (Top Play) (Full)
March 14, 2007

Japanese Communist Party (JCP) member Tomoko Kami questioned Prime
Minister Shinzo Abe in a House of Councillors' Budget Committee
meeting yesterday about what impact an economic partnership
agreement (EPA) between Japan and Australia, if concluded, would
have on Japanese agriculture.

Japan imports 60% of the food it consumes (on a calorie basis) from
the United States and other countries. Kami cited a report of the
Agriculture, Forestry and Fisheries Ministry's (MAFF) research
institute noting that a 0.5-degree rise in the temperature would
significantly reduce the production of coarse grain such as American
kaoliang and corn used as feed for animals. Taking up a report of
the Environment Ministry saying that the output of wheat would
greatly plummet, she stressed, "Considering recent abnormal weather
conditions, the (world's) food situation might become serious. Since
Japan is highly dependent on imports, it will unavoidably receive a
serious blow in such a case."

Prime Minister Abe said, "The state of food self-sufficiency in the
world might become difficult."

Kami added, "At such a time, Japan will soon start talks on
concluding an EPA with Australia. If Japan signs a deal, the
nation's food self-sufficiency rate would be lowered, and Japanese
farmers in Hokkaido and other areas across the nation would receive
a serious blow." She also introduced a MAFF report estimating that
if tariffs on key farm products were scrapped, the wheat, sugar,
dairy products, and beef industries would suffer a loss of 790
billion yen in total. Regarding the impact of an EPA on the economy
in Hokkaido, Kami cited a loss of 1,371.6 billion yen in the
industries involved in the accord, as estimated by the Hokkaido
government, remarking, "They will unavoidably receive a destructive
blow." She then called for planned Japan-Australia EPA negotiations

TOKYO 00001113 003 OF 008


to be cancelled.

But Prime Minister Abe turned down her demand, saying, "Japan will
benefit if it deepens relations and strengthens cooperation with
Australia," adding, "We must study the situation, while focusing on
the effect on agriculture in Hokkaido."

Members of the Council on Economic and Fiscal Policy, including
Keidanren Chairman Fujio Mitarai, are calling on the government to
accelerate EPA talks. Kami lashed out at such a clamor. She
reiterated, "The government should immediately cancel the planned
Japan-Australia EPA talks that could risk Japanese agriculture and
food safety for the Japanese people."

(3) Editorial: Iraq stabilization-Japan's diplomatic capability to
be tested, as well

SANKEI (Page 2) (Full)
March 10, 2007

At the request of Iraqi Prime Minister Maliki, an international
conference to stabilize Iraq will be held today in Baghdad with the
participation of Iraq's neighbors and the United Nations Security
Council's five permanent members: the United States, Britain,
France, Russia, and China.

Iran and Syria, which have been criticized by the United States as
terrorist sponsors, will also attend the conference with the United
States. The United States until now has refused to hold direct talks
with those two countries. This time around, however, the United
States hinted at his readiness to be contact Iran and Syria. This
draws attention to the possible policy changeover of the US to
dialogue.

In December last year, a US bipartisan group to study Iraq policy
options came up with its set of policy proposals. The group in its
report incorporated a proposal to launch a group to assist Iraq that
would include Iraq's neighbors and major countries in the world,
including Japan. In addition, the report also suggested the need for
the United States to hold direct talks with Iran and Syria.

The conference's agenda includes "Iraq's security restoration,
economic rehabilitation, and national reconciliation," according to
US State Department spokesman McCormack. However, its participants
are in substantially different positions. There is no predicting
whether the conference will be a success.

Even so, the international community, including Iraq's neighbors for
different reasons, desires restoration of civil order in Iraq. Not
only Iraqis but also people all over the world are now fed up with
the turmoil in that country. We hope that the conference will become
a breakthrough for the stabilization of Iraq.

Iran is a country of Islamic Shiites, and Saudi Arabia a country of
the Sunni. On March 3, Iranian President Ahmadinejad and Saudi
Arabian King Abdullah met in Riyadh. In the meeting, the two agreed
to prevent confrontation between the two Islamic groups. This is
also a good tailwind.

The conference this time is a working-level meeting of high-ranking
officials at the level of ambassadors. In April, the conference, if
it paves the way, will be raised to the level of foreign ministers
and will be expanded with the participation of the Group of Eight

TOKYO 00001113 004 OF 008


(G-8) summit members, including Japan. In that case, Japan will also
have its turn.

Prime Minister Shinzo Abe will visit the United States in late
April. In addition, the prime minister is now coordinating a plan to
visit the Middle East after his US trip. In July last year, his
predecessor, Junichiro Koizumi, visited the Middle East. Prime
Minister Abe is poised to take a proactive stance during his Middle
East trip.

Last week, Foreign Minister Taro Aso delivered a speech on his own
envisioned policy toward the Middle East. In his speech, the foreign
minister explained his concept for creating the "corridor for peace
and prosperity," which is to build an agricultural center on the
Jordan River's west bank for the Palestinians. He then voiced his
desire for Palestinian stability.

Japan has now promised to outlay a total of 5 billion dollars in aid
to Iraq's reconstruction. Japan is the second largest donor for
Iraq, ranking next to the United States. The Middle East has
favorable feelings toward Japan. Japan should have its own role. It
is time for the entire scope of Japan's diplomacy to be tested.

(4) Abe's protective stance toward Matsuoka stands out in budget
committee session; Opposition camp scrutinizes utilities issue for
only nine minutes

ASAHI (Page 4) (Abridged)
March 14, 2007

In anticipation of the opposition bloc's fierce attack on
Agriculture, Forestry, and Fisheries Minister Toshikatsu Matsuoka
over his massive utility expenses (for an office that is free), the
ruling coalition had regarded yesterday's Upper House Budget
Committee session as the "climax." But to its relief, the opposition
bloc hurled questions at Matsuoka for only nine minutes without
driving him to the wall. Aware of public opinion, the opposition
camp apparently intends to tighten the noose around Matsuoka
gradually for instance by demanding his Diet testimony as a sworn
witness. The ruling camp knows that the storm is far from over.
Prime Minister Abe's comments defending Matsuoka stood out in the
session.

Opposition parties

In yesterday's intensive deliberations, Minshuto (Democratic Party
of Japan) lawmakers Tadashi Hirono and Katsuya Ogawa were allowed to
take the floor for a total of 100 minutes. But the two devoted only
nine minutes to questioning Matsuoka about his utilities expenses.
In a Minshuto executive meeting held immediately before the
committee session, an Upper House executive had expressed eagerness
to relentlessly attack the farm minister. "Why don't they grill
Matsuoka?" grumbled a frustrated Minshuto Lower House Diet Affairs
Committee member.

"It's a clear violation of the Political Funds Control Law. Matsuoka
can't get away from this. We can easily force him to resign as farm
minister." Soon after the utilities scandal came to light, this
optimistic view swept across Minshuto.

But the matter is so simple that finding additional ammunition is
not easy.


TOKYO 00001113 005 OF 008


In response to the opposition camp's demand for detailed
explanations on March 7, Matsuoka said 23 times that he had reported
the expenses "appropriately."

He did not use this phrase in yesterday's televised committee
session, though. Instead, he indicated three times that once the
parties decided on the rules for disclosing expenses, he would
follow them. Matsuoka again did not offer a detailed account.

The opposition camp is apparently trying to damage Matsuoka steadily
and slowly by highlighting the Abe administration's excessively
protective nature, hoping to fuel public outrage. As part of such an
effort, a group of Minshuto lawmakers "raided" Matsuoka's office in
the Dietmembers' Office Building to confirm the presence of water
purifiers.

As the next step, the opposition bloc plans to demand Matsuoka's
Diet testimony as a sworn witness, which might result in perjury.

Minshuto Acting President Naoto Kan told reporters yesterday: "We
are going to consider the option of testimony in both chambers of
the Diet, and even criminal prosecution, if necessary." This
reflects Minshuto's intention to expose the ruling camp's protection
of Matsuoka.

Ruling parties

In yesterday's committee session, Social Democratic Party head
Mizuho Fukushima asked: "Is it the LDP or the prime minister who is
defending Mr. Matsuoka?"

In response, Abe defended Matsuoka, saying, "Mr. Matsuoka explained
that he has reported the expenses properly under the law." After
returning to the Prime Minister's Official Office (Kantei), Chief
Cabinet Secretary Yasuhisa Shiozaki said to Koizumi, "The budget
committee session was rather quiet." Abe said in response, "Yes,
except for Ms. Fukushima. But that, too, was a pose."

Members in the ruling camp have not softened their gaze at Matsuoka,
however.

In yesterday's session, LDP lawmaker Akiko Santo offered candid
advice to Matsuoka: "I am fed up with recent media reports on the
farm minister. I don't like political stunts by some opposition
members. I also want to see the farm minister's improved attitude
and his undivided dedication to his duties." New Komeito legislator
Takao Watanabe also urged Prime Minister Abe to press Matsuoka to
fulfill his accountability to the public.

After an LDP executive meeting on March 12, Upper House LDP Caucus
Chairman Mikio Aoki told the remaining executives: "Tomorrow's
intensive deliberations will be crucial. The ruling parties must
band together in order to weather the session." Upper House Caucus
Secretary General Toranosuke Katayama also called for sufficient

SIPDIS
explanations, saying: "In the context of fulfilling his
accountability, the farm minister should spell out the content of
his 'appropriate' expenses."

Behind those comments lie the upcoming unified local elections and
the Upper House election. Some ruling Upper House members have even
voiced their desire for Matsuoka's resignation. "I don't have any
intention to uncover all the facts about Mr. Matsuoka's utility fees
or to defend him," a New Komeito lawmaker noted.

TOKYO 00001113 006 OF 008

When Health, Labor, and Welfare Minister Hakuo Yanagisawa committed
a gaffe, Aoki squelched calls for his resignation, saying that he
would follow the prime minister's wishes. How is Aoki going to act
if new allegations surface about Matsuoka? Forces critical of
Matsuoka in the ruling camp rather than the opposition camp, which
is at a loss on how to continue their offensive, may hold the key to
future developments.

(5) Hot battle among regions to host G-8 summit next summer; How
will Prime Minister Abe make the decision? Obuchi cabinet's
popularity boosted after picking Okinawa as venue for 2000 summit

TOKYO SHIMBUN (Page 2) (Full)
March 13, 2007

A battle to host next year's G-8 summit is heating up among local
regions. Hokkaido has now joined three other regions that had
announced their candidacies to host the event. During the
premiership of the late Keizo Obuchi, who was then suffering from
low popularity, Okinawa Prefecture was picked as the venue for the
2000 G-8 summit in Japan. Obuchi's choice of Okinawa to host the
summit boosted the popularity of his government. Will Prime Minister
Shinzo Abe's choice allow him a similar boost?

Hokkaido Gov. Harumi Takahashi aims to win the race to host the
summit in the area around Lake Toya, known as one of the most scenic
spots in Japan. The governor visited on March 12 the Prime
Minister's Official Residence (Kantei) to promote Lake Toya to Chief
Cabinet Secretary Yasuhisa Shiozaki and other Kantei officials,
briefing them on the significance of holding the summit at that
location.

Gov. Takahashi formally announced on March 7 her prefecture's
candidacy for the race to choose the venue for the 2008 G-8 summit,
and this is her first lobbying activity.

The cities of Yokohama and Niigata, which will celebrate next year
the 150th anniversary of opening their ports to the world, have been
lobbying for about two years to jointly host the G-8 summit, which
they naming it "Open Port Summit."

Diet members representing Kyoto, Osaka, and Hyogo prefectures, which
aim to host jointly the summit, which they would call the "Kansai
Summit," presented a letter to Shiozaki last month.

Okayama and Kagawa prefectures have already advocated the holding of
the summit in their region of the Seto Inland Sea. The battle among
the three regions has reached the final stage.

Requirements for hosting the summit include: (1) the venue must
provide accommodation facilities for the thousands of members of the
press; (2) it must be able to provide security; and (3) it must have
the capability of sending out messages to the world. Of the four
summits that have so far taken place in Japan, three were hosted by
Tokyo since top priority was placed on safety and accommodation.

However, Obuchi picked Okinawa as the venue for the 2000 summit in
consideration of Okinawa's burden of hosting US military bases and
Okinawa's suffering during World War II. In a poll conducted soon
after he picked Okinawa as the summit location, Obuchi cabinet's
approval rate topped his disapproval rate for the first time,
jumping up from the 10% level.

TOKYO 00001113 007 OF 008

Looking at the candidate sites, Niigata City is largely connected
with the issue of North Korea's abductions of Japanese nationals.
Kyoto is the perfect site, in which the Koto Protocol was adopted,
in order for Japan to play up its efforts for the environment issue,
which is likely to be a key topic of discussion at the summit.

Some predict that the Lake Toya area is the most likely candidate
since the summits of recent years were held at resorts due to
security.

Prime Minister Abe must decide the venue for the summit by June. He
enthusiastically told reporters on March 12: "I will make a final
decision on the matter, after considering which site is best for the
venue for the summit in a comprehensive manner."

(6) Interviewing former Defense Agency Director General Yoshinori
Ono: Japan should take resolute stance against North Korea, while
cooperating with US

YOMIURI (Page 4) (Full)
March 14, 2005

Because of Prime Minister Shinzo Abe's efforts, Japan was able to
obtain two diplomatic achievements in the latest round of the
six-party talks on North Korea's nuclear weapons program. One
achievement was that the members all now share a common awareness of
the issue of North Korea's abductions of Japanese nationals, and the
other is that Japan has made its position clear that it will not
provide North Korea with heavy oil as assistance unless there is
progress on the abduction issue.

The 1994 Agreed Framework between the United States and North Korea
included the annual provision of 500,000 tons of heavy oil to the
North and construction of light-water reactors. Under the latest
agreement, Pyongyang will receive 50,000 tons of heavy fuel oil at
the initial phase, and eventually 1 million tons altogether. Despite
such a small compensation, North Korea accepted the deal. North
Korean leader Kim Jong Il must be suffering from the financial
sanctions.

Kim needs a certain amount of funds in order to maintain the support
of the military and his aides. The rumor is that Kim's own financial
assets were frozen by US financial sanctions. As a result, he is
unable to conduct internal maneuvering. With such a rumor in mind,
Japan, therefore, has to deal with the North Korea issue in a calm
manner.

Since Pyongyang's desire was to hold talks with Washington alone,
not with Tokyo, it was predictable that it would be difficult to see
any progress in the abduction issue at the recent working group
meeting on normalization of Japan-North Korea relations. US foreign
policy, including its policy toward Iraq, has not been going well,
but it is essential that Japan and the US show North Korea a
determined stance, while maintaining their close cooperation. The
United States will not leave Japan behind. Tokyo should be confident
for Washington needs Japan's continued support for Iraq's
reconstruction.

The US has supported Japan by urging during its talks with North
Korea that it needs to resolve the abduction issue. Unless North
Korea takes a positive stance toward resolving the abduction issue,
Japan should continue to call the North terrorist-sponsoring state

TOKYO 00001113 008 OF 008


and impose economic sanctions on it. Japan must patiently continue
its tough stance in negotiating with the North.

SCHIEFFER

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