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Cablegate: Japanese Morning Press Highlights 05/08/07

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UNCLAS SECTION 01 OF 12 TOKYO 002033

SIPDIS

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: JAPANESE MORNING PRESS HIGHLIGHTS 05/08/07


1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Historical issues:
4) Prime Minister Abe secretly visited Yasukuni Shrine during April
spring festival, offered gift paid from own pocket money
5) Association of bereaved families of the war dead enshrined at
Yasukuni being shaken by internal calls for separate enshrinement of
Class-A war criminals
6) WWII prime minister Hideki Tojo's granddaughter may run for a
seat in the upcoming Upper House election
7) Congressman Mike Honda does not consider Prime Minister Abe's
comfort women remarks in Washington as an "apology"

Defense issues:
8) Government to establish new organization, CI Center, next April
to prevent leaks of classified information
9) Defense Minister Kyuma determined to reconsider three
weapons-export principles but Chief Cabinet Secretary Shiozaki balks

10) Elephant Cage antenna field in Okinawa's Yomitan-son being
dismantled as part of planned reversion of land
11) Lower House expected to pass the two-year extension of the Iraq
special measures law on May 15
12) Government depicting 2-year extension of ASDF dispatch as
"Iraq's request," despite Prime Minister Maliki's assurance troops
soon no longer needed

13) Liberal Democratic Party lawmakers sent letters to US Congress
seeking to block North Korea from being taken off terrorist list

14) Prime Minister Abe thinks election of Zarkozy as new French
president will have good impact on Japan's relations with France

Politics:
15) LDP accepts political funds bill revision that would require
receipts for office expenses
16) Minshuto (Democratic Party of Japan) head Ozawa finally agrees
to oft-postponed debate Abe in Diet session

17) US, Japan to start joint study of EPA

Articles:

1) TOP HEADLINES

Asahi:
MLIT plans to adopt stricter regular inspection system, following
roller coaster accident; Local governments oversee lax inspections

Mainichi:
Seibu Lions demote president over secret payoffs: Goto named new
owner of team

Yomiuri:
Social Insurance Agency treats 690,000 persons as having no
registered address in collecting pension premiums: Aim was to
increase premium payment ratio?

Nihon Keizai:
Market testing: Government to mandate multiple-year contracts for

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promotion of privatization; Personnel expenses of government
agencies to be disclosed

Sankei:
Pregnancy after divorce: Birth registration attached with doctor's
certificate to be accepted; Justice Ministry to take relief measures
against 300-day rule

Tokyo Shimbun:
Roller coaster accidents reach18 in four years throughout nation:
MLIT fails to fully use information

Akahata: JCP to carry out emergency petition drive to stop hike in
local tax next week

2) EDITORIALS

Asahi:
(1) French presidential election: French voters opt to work more
(2) Accounting scandal by Nikko Cordial Securities not settled yet

Mainichi:
(1) French presidential election: Voters opt for free competition
(2) Roller coaster accident: Strengthen inspection standards and
thorough implementation

Yomiuri:
(1) French presidential election: Voters sought breakthrough in
impasse
(2) Coaster accident: Amusement parks' major selling point should be
safety

Nihon Keizai:
(1) Challenges for Sarkozy administration, which places importance
on competition
(2) Slighting safety causes disaster at amusement park

Sankei:
(1) Sarkozy elected: How he steers foreign relations noteworthy of
attention
(2) Stabilization of Asian currencies: Realize Asian Monetary Fund
at the initiative of Japan

Tokyo Shimbun:
(1) French presidential election: Hopes pinned on administration in
creating new Europe
(2) Coaster accident: Make sure safety inspections are carried out
thoroughly

Akahata:
(1) Studies on possible lifting of ban on arms exports: It is
outrageous to aim at becoming death merchant

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 6 & 7, 2007

NIHON KEIZAI (Page 2) (Full)
May 8, 2007

May 6


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Morning
Spent the morning at his villa in Narusawa Village, Yamanashi
Prefecture.

16:04
Left JR Otsuki Station

17:07
Arrived at JR Shinjuku Station.

17:17
Dined with his wife, mother, and others at a Japanese restaurant in
the Park Hyatt Tokyo.

29:59
Returned to his official residence.

May 7

09:35
Met at the Kantei with Economic and Fiscal Policy Minister Ota,
joined by Cabinet Office Senior Vice Minister Omura, Special Advisor
Nemoto, Assistant Deputy Chief Cabinet Secretary Saka, and others.

10:37
Met Social Insurance Agency Director General Murase.

11:32
Met Secretary General Nakagawa.

13:23
Met Association of Corporate Executives Chairman Sakurai, Deputy
Chairman Yasufumi Kanemaru, and others. Followed by Lower House
member Takuji Yanagimoto.

14:06
Met State Minister in Charge of Declining Birthrate Takaichi.
Followed by former Foreign Minister Machimura and former Foreign
Minister Komura. Later, met Special Advisor Nemoto.

16:32
Met Acting Secretary General Ishihara. Followed by Health, Labor and
Welfare Minister Yanagisawa.

17:02
Attended a party executive meeting in the Diet building.

17:23
Arrived at the Kantei.

19:02
Returned to his official residence.

4) Abe first prime minister to make offering to Yasukuni during
shrine's spring festival since Nakasone

ASAHI (Page 1) (Excerpts)
May 8, 2007

Prime Minister Shinzo Abe made an offering to Yasukuni Shrine using
his title as "prime minister" on the occasion of the shrine's spring
festival from April 21-23. Abe has become the first Japanese prime

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minister to make an offering to the shrine since Yasuhiro Nakasone
did so about 20 years ago. Abe has been elusive about visiting
Yasukuni Shrine, telling people, "I have no intention of saying
whether or not I will visit or have visited the shrine." Abe
apparently showed some consideration to the shrine by making an
offering instead of visiting.

According to a shrine source, Abe offered a potted masakaki plant 2
meters tall. The pot is now lined with other masakaki plants
alongside the wooden steps leading to the inner shrine. The pot
carries a wooden label that says "prime minister."

Such persons as the Lower House speaker and the chairmen of the
Japan War-Bereaved Association and the Association to Acknowledge
the Divine Spirits of the Dead have offered masakaki plants to the
shrine annually. But no prime minister has made an offering since
Nakasone. When former Prime Minister Junichiro Koizumi visited
Yasukuni, he offered flower wreaths.

The shrine sent a letter to Abe asking for his attendance at its
spring festival and an offering, and in response Abe paid 50,000 yen
for the plant.

Yasukuni Shrive invites guests to its April and October festivals,
which carry greater importance than the August 15 end-of-the-war
anniversary. The spring festival this year occurred just after
Chinese Premier Wen Jiabao's visit to Japan.

The shrine source welcomed Abe's offering, saying: "I think Mr. Abe,
who has been abstaining from visiting the shrine since becoming
prime minister, showed his feelings. We appreciate it."

5) Japan War-Bereaved Association shaken up by argument for separate
enshrinement

NIHON KEIZAI (Page 2) (Excerpts)
May 8, 2007

The Japan War-Bereaved Association will today hold its first study
session to discuss the way Yasukuni Shrine should serve. Makoto Koga
of the ruling Liberal Democratic Party (LDP), who heads the
association at present, seeks debates on such questions as whether
to separately enshrine Class-A war criminals now enshrined at
Yasukuni Shrine, but some senior association members are cautious
about debating the so-called Yasukuni issue, a controversial
question, out of concern that such a debate may cause a rift within
the association. The argument for separate enshrinement is shaking
up the association ahead of the July Upper House election.

Last November, the association decided to establish a study meeting.
But no such meeting has been held until recently partly because it
has given priority to preventing the organization from splitting
up.

The establishment of the study meeting was proposed by Koga, who has
favored separate enshrinement.

Prior to the LDP presidential election in last September, Koga came
up with a policy proposal that included a suggestion on separate
enshrinement and highlighted a clear difference from Koizumi
diplomacy, which had deteriorated relations with China and South
Korea as a result of Koizumi's repeated visits to Yasukuni Shrine.

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However, Prime Minister Shinzo Abe, who calls himself a successor of
Koizumi, has avoided making clear whether he will visit the shrine.
Perhaps for this reason or some other reasons, relations with China
and South Korea have been improving at present. The argument for
separate enshrinement is no longer an urgent political agenda.

Yet, Koga cannot drop his pet argument. When the National Diet
Library recently released a document showing that the former Health
and Welfare Ministry has been involved in the enshrinement of
(Class-A war criminals at Yasukuni Shrine), Koga emphasized: "The
question of separate enshrinement should be thoroughly discussed."
He also indicated to the Koga faction led by himself that a study
session would be set up.

Young association members tolerant of separate enshrinement

Even in the war-bereaved association, young members are reportedly
tolerant of separate enshrinement. Meanwhile, some are criticizing
Koga's move, arguing, "He seems to be using the association for
political reasons."

Yasukuni Shrine has consistently maintained that "separate
enshrinement is impossible," and the association has insisted that
the question of separate enshrinement should be handled by the
shrine." One senior association member murmured: "A penetrating
debate on (separate enshrinement) could divide the association."

Future schedules for the study session, which will be held at a time
when a board meeting takes place, remain unclear. The first study
session set for today is expected to have a discussion based on
documentation related to the history of the shrine prepared by the
association's secretariat. "It's difficult to reach a conclusion in
one or two years of discussions," one senior member commented.

The study session will discuss a broad range of questions, including
separate enshrinement in order to prevent Koga from losing his face,
but it will try to avoid jolting the war-bereaved association
excessively. The association, which is said to be losing organizing
power owing to a decrease in the membership and aging, is put in a
difficult situation.

6) Granddaughter of former Prime Minister Tojo to run in the
summer's Upper House election

SANKEI (Page 5) (Full)
May 8, 2007

Yuko Tojo, a granddaughter of former Prime Minister Hideki Tojo,
announced yesterday her candidacy for this summer's House of
Councillors election. The 67-year-old Tojo heads a non-profit
organization. She intends to play up her opposition toward the idea
that the souls of Class-A war criminals, including her grandfather,
now enshrined at Yasukuni Shrine should be separated from it. She
will make a decision this week on whether she will run in the race
as an independent in the Tokyo constituency or if she will establish
a party to run as a candidate for the proportional representation
segment in the election.

Tojo told reporters yesterday: "Some in the Liberal Democratic Party
(LDP) have called for removing Class-A war criminals from Yasukuni
Shrine. I wonder if it is good to completely deny the past."

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Referring also to the discovery of former Imperial Household Agency
grand steward's diary, which wrote that the Emperor Showa expressed
unhappiness with the enshrinement of Class-A war criminals in
Yasukuni, she stated: "I feel something that is intentional and
political. The Emperor Showa is being used for the purpose of
removing them from Yasukuni."

7) Rep. Honda: Prime Minister Abe's recent "apologies" can't be
taken as apologies for former comfort women

ASAHI (Page 4) (Full)
May 8, 2007

Rep. Mike Honda (D-CA), who has introduced in the House of
Representatives a resolution calling on the Japanese government to
admit its historical responsibility and for the prime minister to
offer a formal apology for former wartime comfort women, met with
Japanese lawmaker Masaharu Nakagawa, a House of Representatives
member from the opposition Democratic Party of Japan (Minshuto or
DPJ), when Nakagawa was visiting the United States. Honda indicated
to Nakagawa that he would continue his efforts to get the resolution
adopted. Referring to Prime Minister Abe's recent apologies made in
his talks with President Bush, Honda said: "I don't think the issue
has been fully finalized. I can't take them as an official apology
in the true sense of the term." This was revealed by Nakagawa during
a press conference yesterday.

Nakagawa held a one-hour meeting with Honda. According to Nakagawa,
in the session, Honda explained that the US Congress legally
admitted its responsibility for violations of Japanese immigrants'
human rights at camps in wartime and compensated for them, adding:
"Japan's approach is that every time the prime minister is replaced,
a new prime minister will say whatever he likes. I wonder what is
with laws and Diet resolutions and how the Diet has been involved in
the issue."

8) Government to set up new organization to prevent leaks of
classified data

MAINICHI (Page 2) (Full)
May 8, 2007

The government decided yesterday to set up a new organization called
the "counterintelligence center" (tentative name) next April to
tighten measures to prevent the leaks of classified intelligence.
The CI center will be tasked with examining, based on a uniform
standard to be set by the government, whether each government agency
has properly introduced measures to protect classified information.
Following the United States government signing an agreement with
Japan to expand military intelligence to be shared between the two
countries, it has urged Japan to strengthen its information
management system.

Prime Minister Shinzo Abe reiterated in his policy speech in January
the importance of strengthening the Cabinet Office's
intelligence-related functions. Reflecting his desire, the
government's Counterintelligence Promotion Conference, chaired by
Deputy Chief Cabinet Secretary Junzo Matoba, will include the plan
to establish the CI center in its interim report due out in August.

If the center finds a leak of classified data, the government
intends to apply existing rules in the National Civil Service Law or

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the Self-Defense Force Law for the time being.

The governments of Japan and the US concluded a General Security of
Military Information Agreement (GSOMIA) at the Japan-US Security
Consultative Committee meeting (2+2) on May 1. Based on the accord,
the two countries will share more secret intelligence.

9) Defense minister wants to consider easing Three Principles on
Arms Exports: Chief cabinet secretary remains cautious

SANKEI (Page 5) (Full)
May 8, 2007

Defense Minister Fumio Kyuma during a meeting of the Lower House
Special Committee on Prevention of Terrorism and Assistance to Iraq
held yesterday once again expressed his intention to look into the
possibility of easing the Three Principles on Arms Exports. He said:
"The cost of R&D for equipment is considerably high. Is it all right
for Japan to do it on its own? Joint research with a foreign country
would reduce purchasing costs." To be precise, he exemplified the
making of protective clothing against bio-chemical weapons as the
subject of joint research.

The government has limited joint research and development with the
exception of part of such activities, including Japan-US joint
development and production of the missile defense system, since
exchanges of parts as a result of joint research infringe on the
Three Principles. However, Kyuma stated in the speech given during
his recent visit to the US, "It is the time to consider whether the
present situation is all right or not.

In response, Chief Cabinet Secretary Yasuhisa Shiozaki told a press
conference yesterday morning, "The government will continue to be
cautious in dealing with the control of arms exports in view of the
basic ideals of a pacifist nation Japan, including the Three
Principles on Arms Exports." He thus underscored that there would be
no change in the government's stance of firmly maintaining the three
principles.

10) "Elephant cage" being demolished

MAINICHI (Page 1) (Full)
May 8, 2007

The Sobe communications site in Yomitan Village, Okinawa Prefecture
(commonly called the elephant cage; 530,000 square meters) is being
demolished. Along with Futenma Air Station, the site has been a
symbol of the base issue in the prefecture since the 1995 schoolgirl
rape incident. Heavy machinery that entered the site in April has
been digging up the underground net-line antennas.

The Naha Defense Facilities Administration Bureau plans to remove
all components, including the 28-meter-tall cage-shape antennas,
from the site in June.

The US military started using the site during the 1945 Battle of
Okinawa. The military communications facility equipped with the
antennas lined up 200 meters in diameter was completed in 1953. An
agreement was reached in 1996 to return it to Japan in four years.
Due to a delay in its relocation to a new site in the prefecture,
the land was totally returned to Japan at the end of last December.


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11) Ruling camp expects bill extending Iraq Special Measures Law for
two years to pass Lower House on May 15

MAINICHI (Page 5) (Excerpts)
May 8, 2007

In the current Diet session, the final stage started yesterday. The
ruling camp has decided to have a bill to extend the Iraq
Reconstruction Special Measures Law for another two years adopted at
a House of Representatives Special Committee meeting on May 11 and
clear the Lower House on the 15th. But Minshuto (Democratic Party of
Japan) has presented a bill to scrap the said law. Both camps are
ready to engage in an all-out confrontation.

In a Liberal Democratic Party executive meeting yesterday, Prime
Minister Shinzo Abe instructed the participants to make utmost
efforts to have key bills enacted in the final stage of the current
Diet session. Abe said: "The Diet session has come to the final
phase, and the House of Councillors election is drawing closer. I
want the government and the ruling parties to work together as one
team. I expect you to make efforts to display the fundamental
strengths of the LDP."

In particular, it is an imminent task for the government to pass the
bill on the Iraq Reconstruction Special Measures Law, which is due
to expire at the end of July. The prime minister agreed with United
States President Bush in their recent meeting on the view that "the
Japan-US alliance is irreplaceable." Given this, Abe gives top
priority to enacting the bill in the current Diet session. Senior
ruling party members, including LDP Diet Affairs Committee Chairman
Toshihiro Nikai and New Komeito Diet Affairs Committee Chairman
Yoshio Urushibara, also affirmed the need to have the bill adopted
in the Special Committee meeting on the 11th and that a vote be
taken in a plenary session on the 15th.

12) Government: Extending SDF mission in Iraq for two years came
from Iraq

ASAHI (Page 4) (Abridged slightly)
May 8, 2007

Did Iraq ask Japan to extend the Self-Defense Force's mission in the
country for two years? The government and the opposition bloc locked
horns in a Lower House Iraq reconstruction special committee session
yesterday over the rationale for extending the SDF mission.

Iraqi Prime Minister Maliki had indicated to some Japanese media
outlets that the presence of Japanese troops in his country would
become unnecessary later this year. Based on this statement by
Maliki, Kazunori Yamanoi of Minshuto (Democratic Party of Japan)
asked: "Prime Minister Maliki said that the presence of the SDF
would become unnecessary this year. Why must the SDF mission be
extended for two more years?" In response, Chief Cabinet Secretary
Shiozaki explained: "It will take time for the Iraqi government to
be able to run the country stably." Foreign Minister Aso also said:
"We have confirmed with the Iraqi government that its request for
the continued SDF mission is unchanged."

Seiken Akamine of the Japanese Communist Party also posed a similar
question. In response, Aso indicated that a request had come from UN
Secretary General Ban Ki Moon as well, in addition to Prime Minister

SIPDIS
Maliki.

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13) LDP group to send letters to US Senate and House urging them not
to remove North Korea from US list of state sponsors of terrorism

SANKEI (Page 3) (Abridged slightly)
May 8, 2007

A Liberal Democratic Party group to consider North Korea policy
decided yesterday to send letters to all US congressional members
urging them not to remove North Korea from the US list of state
sponsors of terrorism unless the abduction issue is settled. The
purpose is to give a boost to the pressure policy line that was
agreed upon between Prime Minister Shinzo Abe and President George
W. Bush in their talks on April 27. The group intends to encourage
opposition lawmakers to sign the letters to express their support
for the move.

The group includes such members as Internal Affairs and
Communications Minister Yoshihide Suga, Senior Vice Justice Minister
Kenichi Mizuno, and Upper House member Ichita Yamamoto. The group
took the initiative in legislating the Law Banning Specific Ships
from Entering Japanese Ports that allowed the government to ban
North Korean ships from entering Japan. The group will send letters
to the US Senate and House later this month urging them to keep
North Korea on the US terrorist-sponsor list.

In his talks with Abe on April 27, President Bush indicated that he
would keep the abduction issue in mind regarding a removal of North
Korea from the terrorist-sponsor list. He also said after the
summit: "I have strong feelings about the abduction issue and they
will not wane."

But the six-party joint statement specifies that the United States
would start work toward delisting North Korea from its
terrorism-sponsor list, and US-DPRK talks have already started.
President Bush finds it difficult to run the Congress due to the
Republicans' defeat in the midterm elections last November. Given
the situation, speculation is still rife in the LDP, including
junior members, that President Bush would lean toward "appeasement
policy" depending on moves in the Congress. Behind the
letter-sending plan lies the motive to increase Japan sympathizers
in the US Congress.

Some LDP members had planned a trip to the United States to lobby
against a US House of Representatives resolution condemning Japan
over the so-called comfort women issue. But they gave up the plan
for fear of adverse effects. Their attempt also exposed weak ties
between Japanese and US lawmakers.

Learning bitter lessons from this case, LDP members are also trying
to cultivate strong ties between the two political communities by
sending letters to be prepared against an unexpected event. Yamamoto
took this view: "Unless strong communication channels are
established between the Japanese and American lawmakers who are
moved by the abduction issue, parliamentary diplomacy in time of an
emergency is not possible."

14) Prime minister welcomes election of pro-US Sarkozy as president
in France, anticipating favorable effect on Japan-US alliance

TOKYO SHIMBUN (Page 2) (Full)
May 8, 2007

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Prime Minister Abe welcomes the victory of Nicolas Sarkozy, a pro-US
conservative, in the French presidential election, defeating
Socialist Segolene Royal. Given that relations between the United
States and France have been sour since incumbent President Jacques
Chirac reacted negatively to the Bush administration's decision on
the Iraq war, the prime minister anticipates that an improvement in
the US-France relations and an increase in International confidence
in the US would enhance the importance of the Japan-US alliance.

When he met visiting Prime Minister Abe this January, President
Chirac made a remark critical of President Bush, perplexing Abe and
accompanying Japanese officials.

During that visit, Abe met with Sarkozy and Royal, who were
preparing for the presidential election, for 30 minutes separately.

In the meeting with Abe, Sarkozy expressed his eagerness to improve
the strained relations with the US, saying: "I am aware of the
importance of close relations with the US in dealing with
international challenges." Abe praised Sarkozy's diplomatic stance,
saying: "European countries, including your country, which shares
basic values with Japan, are an important strategic partner to us."

Even so, as Foreign Vice Minister Shotaro Yachi said, "President
Chirac knows a lot more about Japanese culture than many Japanese,"
but in contrast, Sarkozy has been remotely related with Japan.

Abe and Sarkozy will hold their first summit on the sidelines of the
Heiligendamm Summit in early June. Although both sides are expected
to agree on a pro-US policy line, it remains to be seen if they can
establish a personal relationship of trust.

15) Revision of Political Funds Control Law: LDP agrees to require
attaching receipts to political funds reports; Revision bill to be
submitted to current Diet session

ASAHI (Page 1) (Excerpts)
May 8, 2007

The ruling Liberal Democratic Party (LDP) decided yesterday to
submit to the ongoing Diet session a bill revising the Political
Funds Control Law to require political fund management organizations
to attach to politicians' funds reports receipts for expenditures of
50,000 yen or more for their operating expenses. Many LDP lawmakers
had opposed the attachment of receipts. At the behest of Prime
Minister Shinzo Abe, who is positive about a law revision, however,
Nobuteru Ishihara, who heads the party's Reform Implementation
Headquarters, reported the party's decision to Abe yesterday. Abe
then gave his concurrence.

With the House of Councillors election coming up in July, the LDP
gave consideration to the New Komeito, which has called for the
clarification of political funds. There was a strong objection in
the LDP, but the dominant view in the party is that in line with the
prime minister's will, the bill should be passed through the Diet
during the current session. However, since the law would require
only political fund management organizations to attach receipts,
politicians' expenditures through other political organizations will
probably become loopholes. The main opposition party Minshuto
(Democratic Party of Japan) sees this as a problem.


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16) Minshuto President Ozawa finally agrees to hold debate with
Prime Minister Abe

SANKEI (Page 5) (Full)
May 8, 2007

Minshuto (Democratic Party of Japan) President Ichiro Ozawa held a
meeting with Acting President Naoto Kan and Secretary General Yukio
Hatoyama. In the meeting, he confirmed that he would hold a
one-on-one debate at the Diet with Prime Minister Shinzo Abe.

Up until now, no debate has occurred between the two during the
current session of the Diet since Ozawa has placed priority on his
stumping tour of local areas with this summer's House of Councillors
election in mind. Because of this, the ruling Liberal Democratic
Party (LDP) Diet Affairs Committee Chief Deputy Chairman Goji
Sakamoto criticized Ozawa for "thinking lightly of the Diet." Kozo
Watanabe, a supreme advisor to Minshuto, also expressed unhappiness
with Ozawa, saying, "It is a problem that he doesn't want to hold a
debate."

Ozawa appears to have decided to hold a debate based on his judgment
that since he was an advocator of the party-heads debate in the
Diet, it would not good for him to be criticized when thinking his
party's campaigning for the summer's Upper House election.

LDP's Sakamoto welcomed Ozawa's decision, saying, "I think he has no
choice but to respond to a debate. Otherwise, Minshuto won't be able
to fight in the Upper House election."

Minshuto intends to hold a debate on May 16. However since there is
a basic rule that no debate occurs during a week when the prime
minister attends a plenary session or committee meeting. Therefore,
whether a debate between Abe and Ozawa will be held on the 16 is
uncertain.

17) Private-sector members of CEFP to propose joint studies on
Japan-US EPA as well as agricultural reform

ASAHI (Page 11) (Excerpts)
May 8, 2007

The specifics of proposals for internationalization, which
private-sector members of the Council on Economic and Fiscal Policy
(CEFP) plan to offer at a council meeting tomorrow, have been
released. As a feature a set of proposals will call on the
government to expedite talks on economic partnership agreements with
countries and areas, including the US and the EU. Gross domestic
products (GDP) combining that of Japan and the US, the world's
second and first largest economies, account for approximately 40% of
that of the entire world. If Japan and the US start EPA talks, the
move is bound to have a major impact on the multilateral trade talks
(Doha Round) at the World Trade Organization (WTO).

A draft report compiled by an experts research council, which forms
the base of the planned proposals, highly evaluates Japan-US EPA
talks, noting that such a pact, if concluded, will activate trade
and investment between the two countries as well as to further
strengthen bilateral close ties. It characterized the signing of a
Japan-US EPA as a key agenda in the future, pointing out the
possibility of Japanese companies finding themselves in a
disadvantageous position on the US market, compared with South Korea

TOKYO 00002033 012 OF 012


companies, due to the recent agreement between the US and South
Korea to sign an EPA. The draft calls on Japanese and US industries,
government, and scholars to exchange information on the EPAs and
FTAs they have so far signed with other countries on a full scale.
The trade amount between Japan and the US accounts for approximately
20% of that of the entire world. Many in government circles and the
ruling camp are against the idea of the two countries signing an EPA
arguing that such an accord will not be compatible with WTO talks,
where liberalization of multilateral trade is being looked into.

DONOVAN

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