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Cablegate: Daily Summary of Japanese Press 01/28/08

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0215/01 0280827
ZNR UUUUU ZZH
P 280827Z JAN 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 1276
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
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RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 8127
RUEHFK/AMCONSUL FUKUOKA 5731
RUEHOK/AMCONSUL OSAKA KOBE 9398
RUEHNAG/AMCONSUL NAGOYA 4380
RUEHKSO/AMCONSUL SAPPORO 6339
RUEHBJ/AMEMBASSY BEIJING 1329
RUEHUL/AMEMBASSY SEOUL 7398
RUCNDT/USMISSION USUN NEW YORK 8037

UNCLAS SECTION 01 OF 14 TOKYO 000215

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: DAILY SUMMARY OF JAPANESE PRESS 01/28/08

INDEX:

(1) "Japan's gasoline is not expensive," Prime Minister Fukuda says,
seeking to maintain provisional tax rate (Yomiuri)

(2) Ruling bloc to submit possibly on Jan. 29 stopgap bill aimed at
extending the deadline for provisional tax rate (Nikkei)

(3) FY2007 supplementary budget bill to clear Lower House on Jan. 29
(Nikkei)

(4) Lower House by-election to be held in April because of LDP
member throwing hat into Iwakuni mayoral race election; Fukuda
government to receive judgment of the people (Sankei)

(5) Local voices on security policy: Iwakuni mayoral election near
at hand over acceptance of carrier-borne air wing (Asahi)

(6) Chief cabinet secretary emphasizes no change in Futenma
relocation plan, without being affected by U.S. court's judgment on
effect on dugongs (Okinawa Times)

(7) U.S. military to remove PCB-laden materials next month (Okinawa
Times)

(8) Editorial: International cooperation essential for restoring
international trust (Sankei)

(9) Japan to work together with Southeast Asia on diplomatic and
security fronts, with ulterior motive of forestalling China's move
to increase its influence in region (Nikkei)

(10) Threat of "econ terrorist:" Radical anti-whaling group, backed
by Australia, New Zealand, targeting Japanese whaling ships
(Sankei)

(11) Japanese companies to employ large number of Asian engineers:
Nissan to hire 4,000, Toyo Engineering already hired 1,000 to make
up for labor shortage in Japan (Nikkei)

ARTICLES:

(1) "Japan's gasoline is not expensive," Prime Minister Fukuda says,
seeking to maintain provisional tax rate

YOMIURI ONLINE NEWS
January 28, 2008, 13:20 p.m.

At a session this morning of the Lower House Budget Committee, Prime
Minister Fukuda noted, "Our country's gasoline price ranks 25th
among the Organization for Economic Cooperation and Development
(OECD) member nations, and the price is very low. In Europe, the
gasoline tax has been hiked out of environmental considerations, but
Japan's gasoline price remains the same." "We must definitely
maintain that tax (provisional tax rate for gasoline). This tax
should be taken as a part of environment-related taxation in a broad
sense of the term," Fukuda added and sought understanding for
keeping that tax rate.

As for a bill revising the Special Taxation Measures Law, including
maintaining the provisional tax rate for gasoline, Fukuda stressed:
"It is a key source of revenue. If the bill is not approved (by the

TOKYO 00000215 002 OF 014


end of this fiscal year), there would be an immeasurable impact on
the public's livelihood. I earnestly hope the bill will be enacted
by the end of this fiscal year. I also have asked for cooperation
from the opposition parties."

When asked about his recent attendance at the annual meeting of the
World Economic Forum in Davos, Switzerland, Fukuda said: "I
demonstrated Japan's attitude of doing what we can (in dealing with
the environmental problems). I think this has been understood by
other countries."

When asked about how to address the reduction of greenhouse gas
emissions at the upcoming G8 summit in July, Fukuda declared, "I
will continue efforts to persuade other industrialized countries
while taking pragmatic measures step by step. I will ask for the
public's cooperation." Fukuda also emphasized the need for the
country as a whole to tackle climate change. Fukuda was replying to
questions posed by Hiroyuki Sonoda, a member of the ruling Liberal
Democratic Party (LDP), and by junior coalition partner New
Komeito's Secretary General Kitagawa.

(2) Ruling bloc to submit possibly on Jan. 29 stopgap bill aimed at
extending the deadline for provisional tax rate

NIKKEI ONLINE NEWS
January 28, 2008, 13:47 p.m.

The ruling bloc this morning launched an effort to submit a stopgap
bill aimed at extending the deadline for the provisional tax rate
for gasoline, which is to expire at the end of March, for another
two months until the end of May. The stopgap bill will be created in
the form of legislation sponsored by lawmakers. The purpose of the
bill is to avoid any confusion stemming from the expiration of the
existing law. The ruling parties intend to get the bill clear the
Lower House by Jan. 31. Meanwhile, the opposition bloc, which
insists on scrapping the provisional tax rate, is gearing up to
unanimously oppose the submission of the bill. This matter will be
discussed at a session this afternoon of secretaries general from
both the ruling and opposition parties, but negotiations are likely
to face hard going.

The ruling bloc already submitted to the Diet a bill revising the
Special Taxation Measures Law. The bill contains a package of
actions to extend the duration of various tax system-related
measures, including the provisional tax rate for gasoline. If this
revision bill fails to be adopted by the end of March because of
intransigence from the Democratic Party of Japan (DPJ) and other
opposition parties, the gasoline price would drastically fluctuate
with the expiration of the provisional tax rate for gasoline, and
ending the preferential taxation system for firms would throw the
daily lives of people into confusion, the ruling bloc insists. The
stopgap bill the ruling parties plan to submit to the Diet is to
avoid such confusion.

The ruling bloc's executives this morning gathered at a Tokyo hotel
and discussed how to deal with the opposition bloc. They agreed that
they will persuade the opposition parties to cooperate to get the
revision bill enacted before the end of this fiscal year, but that
if negotiations with the opposition bloc broke down, they would
submit the stopgap bill.

(3) FY2007 supplementary budget bill to clear Lower House on Jan.

TOKYO 00000215 003 OF 014


29

NIKKEI (Page 2) (Full)
January 25, 2008

In a House of Representatives Budget Committee session, Finance
Minister Fukushiro Nukaga will explain today the reason for the
government submitting a bill on the supplementary budget for fiscal
2007, which features measures for disaster relief. The expectation
is that the bill will be passed by the House of Representatives on
Jan. 29 and it will then clear the House of Councillors by Feb. 1.
The possibility is that passage by the Lower House of a bill
revising the Special Taxation Measures Law, which includes an
extension of the provisional gasoline tax, will be then delayed to
February.

Azuma Koshiishi, chairman of the Democratic Party of Japan (DPJ or
Minshuto) caucus in the Upper House, revealed yesterday that his
party was considering an option of approving a bill revising the Tax
Allocation to Local Government Law to cover deficits of local
governments, one of the bills related to the FY 2007 supplementary
budget. He stated in a press conference: "The problem will not be
resolved by just attacking the government's responsibility. We are
now mulling as to whether we should approve of some parts of the
whole."

Another senior member took the view that it would be difficult to
oppose the supplementary budget-related bills. He noted: "It is
extremely difficult to show voters the problematical points during a
short debate. There will be left the impression that the DPJ is
being rough on rural areas."

The DPJ had initially determined to oppose the bills. But prior to
the "gasoline battle," regional organizations rebutted the party's
policy of abolishing the provisional gasoline tax. Diet Affairs
Committee Chairman Kenji Yamaoka is taking a flexible response,
saying: "I will have the party look into specific measures giving
priority to rural areas and the public."

The DPJ has, however, stressed is opposition toward the ruling
camp's bill revising the Special Taxation Measures Law. The party
issued on Jan. 23 a notice to its regional chapters across, calling
for refraining from taking part in gatherings opposing the party's
policy.

The ruling camp, too, has yet to get its act together. Meeting
yesterday in his office with Upper House LDP Caucus Chairman
Hidehisa Otsuji, Prime Minister Yasuo Fukuda asked him to enact the
special taxation revision bill before the end of this fiscal year
(March), but he did not give any specific instructions. The
expectation is that a Lower House committee will start deliberations
on the revision bill on Jan. 24 or later after the supplementary
budget bill is enacted, and it will be passed by the Lower House in
mid-February at the earliest. Otsuji expressed dissatisfaction,
telling his aides: "I don't understand at all the strategy of Prime
Minister's Official Residence." One idea in the LDP is to draft a
bill extending the provisional tax rates, which expire on March 31,
until July. In the meeting with Otsuji, Fukuda did not deny the
possibility of extending the law, telling Otsuji: "As to legislation
by house members, the cabinet can't say anything." But many in the
ruling coalition are cautious about such an idea.


TOKYO 00000215 004 OF 014


LDP Diet Affairs Committee Chairman Tadamori Oshima yesterday
proposed to the DPJ that a meeting of Diet committee chiefs from the
ruling and opposition parties be held to discuss the handling of the
special taxation law revision bill. The DPJ's Yamaoka, however,
rejected the proposal, arguing: "It is too early to do so." The
Machimura faction in the LDP, to which Fukuda used to belong,
compiled yesterday a set of proposals for reviewing the rules for
managing Diet affairs. However, chances are slim that it will lead
to breaking the impasse.

Fukuda, as if to say to himself, told Seiken Sugiura, who brought
the set of proposals to him: "Even the DPJ will understand that we
should not hinder the daily lives of people."

(4) Lower House by-election to be held in April because of LDP
member throwing hat into Iwakuni mayoral race election; Fukuda
government to receive judgment of the people

SANKEI (Page 5) (Full)
January 28, 2008

Along with yesterday's Osaka gubernatorial election, the Feb. 10
mayoral race in Iwakuni City in Yamaguchi Prefecture is likely
becoming another cause for concern for the government of Prime
Minister Yasuo Fukuda. The official campaign period for the Iwakuni
mayoralty starts Feb. 3. The main campaign issue is likely to be the
city's response to the central government's plan to transfer
carrier-borne aircraft to the U.S. Marine Corps Air Station Iwakuni
from the U.S. Naval Air Facility Atsugi, one of the main features of
the realignment of U.S. based in Japan. Since a House of
Representatives member belonging to the ruling Liberal Democratic
Party (LDP) has filed as a candidate in the race, a by-election for
the Yamaguchi No. 2 district to fill the vacated Lower House seat
will be held in April, becoming the first national election the
Fukuda government will experience. All the more because the outcome
of the Iwakuni mayoral race will affect the Lower House by-election,
all eyes are focused on the local election.

With the popular Korean drama "Winter Sonata" in mind, former Mayor
Katsusuke Ihara, 57, appeared in a gathering on Jan. 24, wearing a
yellow scarf, which has become his campaign trademark. Middle-aged
women are enthusiastically supporting Ihara, who quit the mayoral
post late last year over his opposition to the transfer of the U.S.
aircraft to a base in the city.

In the gathering, Ihara criticized Yoshihiko Fukuda, former Lower
House member of the LDP, his rival candidate, saying:

"The primary issue for the upcoming election is how to deal with the
U.S. base issue. The other candidate is trying to shift the campaign
issue by fueling fears of the city's financial collapse and of tax
hikes."

The other candidate, Fukuda (37), who resigned his Diet seat on Jan.
22, has not brought the base issue into his campaign. Although he
favors the transfer of carrier-borne aircraft to Iwakuni, he is
calling for the need for putting an end to the city's financial
difficulties created by Ihara during his 9-year tenure as mayor,
rather than bringing up the base issue.

Ihara also has mixed feelings. At a press conference on Jan. 4
announcing his candidacy, Ihara categorically stated: "The campaign

TOKYO 00000215 005 OF 014


issues do not just mean the realignment of U.S. bases in Japan."
Both candidates are well aware of the city's circumstances.

At a wholesale market in the early morning of Jan. 24, one worker
gave words of encouragement to Fukuda: "The carrier-borne aircraft
is not the only issue. Since you are young, you should make even
more efforts." Many residents in Iwakuni have expressed concern
about Ihara, who has taken an even stronger adversarial stance
toward the central government, set off by the carrier-born aircraft
transfer issue.

Those supporting Fukuda, who announced his candidacy on Jan. 5, are
conservative city assembly members and business leaders who are
concerned about the present municipal administration. Many shops in
the downtown streets have closed. Even U.S. military personnel go to
the downtown areas of Hiroshima and other cities.

Anti-Ihara movements escalated in the city assembly and local
business circles in March 2006 when Ihara held a referendum on the
carrier-born aircraft transfer issue. Backed by nearly 90 PERCENT
of the public who voted against the transfer, he did not accept the
government's plan and the government then suspended subsidies
totaling 3.5 billion yen for the construction of a new city hall.
The municipal assembly, many members of which favor the government's
transfer plan, last year rejected four times a budget bill submitted
by then Mayor Ihara bill to cover the 3.5 billion yen by other
fiscal resources. The city assembly finally approved the bill in
return for Ihara's resignation last December.

Supporters for the candidate Fukuda are alarmed that the municipal
administration led by Ihara, who has adamantly refused to accept the
government's plan, has created an economic standstill. Ihara,
however, said:

"I neither call for the removal of the base nor do I reject
discussions. The problem is the government's arrogant way of
unilaterally pushing ahead with its plan by resorting to a
carrot-and-stick policy."

A senior member of Fukuda's election task force predicts that if
Ihara is elected, he will take a tougher stance, backed by the
public will.

The Lower House by-election (on April 27) for the Yamaguchi No. 2
district to fill Yoshihiko Fukuda's seat will be the first national
election for the Fukuda government. Since the election will be
conducted after a fierce battle between the ruling and opposition
camps over the provisional gasoline tax rate ends, the by-election
will likely have the air of a judgment by the people.

Yamaguchi Prefecture is known for having such conservative lawmakers
as former Prime Minister Shinzo Abe (representing the No. 4
district) and Foreign Minister Masahiko Koumura (No. 1 district).
The No. 2 district, however, is an exception. Yoshihiko Fukuda won
by a narrow margin in the 2005 Lower House election by taking
advantage of the Koizumi boom. In the two previous elections, Hideo
Hiraoka of the main opposition Democratic Party of Japan (DPJ or
Minshuto) won the No. 2 district seat, defeating Shinji Sato, son of
former Prime Minister Eisaku Sato.

On hearing the announcement of the Lower House by-election, Hiraoka
on Jan. 5 expressed his intention to run in the race. He said: "The

TOKYO 00000215 006 OF 014


outcome of the mayoral election will affect the Lower House
by-election more or less." He predicts that if Ihara wins the
mayoral election, the wind will blow favorably for him in the Lower
House by-election. It is said in the LDP that Upper House member
Yoshimasa Hayashi has strong interest in the Lower House
by-election. However, Hayashi will likely make a decision after
seeing the result of the mayoral election.

(5) Local voices on security policy: Iwakuni mayoral election near
at hand over acceptance of carrier-borne air wing

ASAHI (Page 3) (Excerpts)
January 26, 2008

The official campaign for the mayoral race of Iwakuni, Yamaguchi
Prefecture, will kick off on February 3 for the election on February
10. At issue is the relocation of a carrier-based air wing to the
Iwakuni base as part of U.S. force realignment. The Ministry of
Defense (MOD) has frozen subsidies to the city led by former mayor
Katsutoshi Ihara who had been elected on the back of a referendum in
which nearly 90 PERCENT of the citizens opposed the plan to
relocate U.S. fighter jets. Is a municipality allowed to say 'no' to
foreign and defense policies under the jurisdiction of the central
government?

Nago -- Futenma relocation

The Okinawa prefectural government has been at odds over the last 10
years with the Nago municipal government over the planned relocation
of the U.S. Marine Corps' Futenma Air Station that sits in densely
populated residential areas.

Waters off Henoko Cape in Nago came to the fore in 1997 as a
relocation site for Futenma Air Station. The city held a referendum,
in which a majority opposed the relocation. Despite that, then Nago
Mayor Tetsuya Higa announced that the city would accept the
relocation, and he stepped down.

What is distinct from Iwakuni is that Tateo Kishimoto, who was
backed by pro-relocation groups, won the mayoral race after the
referendum, in which the majority said 'no' to the relocation.

After many twists and turns, the government and affected
municipalities reached an accord on the offshore plan, but it did
not materialize due to stiff resistance from local residents. In
2006, MOD reached an agreement with Kishimoto's successor, Yoshikazu
Shimabukuro, to build a V-shaped pair of runways so that the
envisioned flight path would not pass over residential areas. But
then Governor Keiichi Inamine reacted negatively to the V-shape
plan, saying it was worked out behind the back of the prefectural
government. Shimabukuro subsequently presented a plan to move the
V-shaped runways further offshore, but Tokyo balked at it. With
Governor Hirokazu Nakaima, who replaced Inamine, siding with Nago,
relocation talks remain stalled.

Why can the central government not steamroller the relocation plan
irrespective of Okinawa's wishes? The reason is because the governor
has the power to authorize landfill work for building the facility.
The government plans to begin an environmental assessment in
February to complete it by the summer of 2009. "(The governor) might
say 'no' thereafter," Vice Governor Zenki Nakazato noted.


TOKYO 00000215 007 OF 014


Iwakuni cannot expect Yamaguchi Governor Sekinari Nii to exercise
such power, for he is tolerant of the relocation.

The government once studied ways to shift the power to authorize the
use of the surface of public waters from prefectural governors to
the central government.

In 1995, then Okinawa Governor Masahide Ota refused to sign
documents as a proxy for the antiwar landlords who were unwilling to
renew their leases with the U.S. military. The government eventually
revised the law and shifted such authority to the central
government.

Zushi -- Ikego housing project

In 1982, a plan emerged to build U.S. military housing in a wooded
area in Ikego in the city of Zushi, Kanagawa Prefecture, which was
previously used as an ammunition dept. Then Mayor Torayoshi Mishima
announced to accept the housing plan, saying it was beyond a local
government's authority. In reaction, anti-housing residents demanded
Mishima's recall and he was eventually ousted. The city installed
Kiichiro Tomino as its new mayor.

The anti-housing group also won the following three mayoral races.
As is Iwakuni's case, the mayor was at odds with the city assembly
that was controlled by members tolerant of the housing project, who
voted down the supplementary budget. The mayor eventually dissolved
the assembly. The anti-housing group won a majority four years
later.

Still, the government pushed ahead with the housing plan, saying
opposition was not overwhelming. Tomino's successor, Mitsuyo Sawa,
accepted the plan in the end, but she also extracted a promise from
the government to preserve the remaining woods.

A new U.S. military housing project is underway in the woods on the
Yokohama side. "If it were not for the preservation movement, there
wouldn't have any trees left there," Sawa recalled.

Iwakuni's Ihara is eying a victory under the banner of "new popular
will."

Ihara also envisages dissolving the city assembly that is now
controlled by proponents of the relocation plan.

When Tomino became Zushi mayor, the city's rate of independent
revenue sources stood at 80 PERCENT . "The city did not have to rely
on government subsidies," Tomino recalled. Meanwhile, Iwakuni's
independent revenue rate in fiscal 2006 was only 40 PERCENT . It is
not easy for Iwakuni to continue enduring the government's financial
squeeze.

The government's carrot-and-stick policy breaks solidarity among
local governments

In order to counter the central government, local governments must
remain united. But ever since the central government adopted last
year a U.S. force realignment subsidy system that can be used as a
carrot or stick, schisms have appeared among local governments.

In 2006, Yoshiro Iriyama was elected mayor of the city of Otake,
Hiroshima Prefecture, pledging to oppose the carrier-borne air

TOKYO 00000215 008 OF 014


wing's relocation to the Iwakuni base. Six months later, he reversed
his position and announced to support the plan, saying cooperating
with the central government would serve the interests of the
citizens. Subsidies reportedly total 4 billion yen are appealing.
The city of Otake, which hosts no base, was irritated that it had no
tool to fight back.

At one point, municipalities, including Otake, that sit in the
western part of Hiroshima adjacent to Iwakuni, joined efforts in
seeking anti-relocation resolutions of the Hiroshima and Yamaguchi
prefectural assemblies. Those days are over.

Comment by Yamaguchi University Professor Atsushi Koketsu: A shift
is occurring from centralization to decentralization. It is natural
for local heads to make requests to the central government on behalf
of local residents. At the same time, there is a need to produce a
level playing field for both the anti- and pro-relocation groups by
presenting a mid-range vision, including ways to make local
economies independent of bases and subsidies. As long as
municipalities are swayed between accepting and rejecting relocation
plans, neither the central government nor local governments will
lend an ear to them.

(6) Chief cabinet secretary emphasizes no change in Futenma
relocation plan, without being affected by U.S. court's judgment on
effect on dugongs

OKINAWA TIMES (Page 2) (Full)
January 26, 2008

(Tokyo)

The U.S. District Court in San Francisco handed down a judgment that
ordered the Department of Defense to give consideration so that the
planned construction of a new facility to take over the functions of
the U.S. Marine Corps' Futenma Air Station will have no impact on
the dugongs. Following this announcement, Chief Cabinet Secretary
Nobutaka Machimura emphasized in a press conference yesterday that
the government will not change the Futenma relocation plan agreed on
between Japan and the U.S.

Machimura indicated that the planned construction of a V-shaped pair
of runways will have only a light influence on the environment,
remarking: "Both side worked out the plan as a result of giving
consideration to minimize the impact on coral, seagrasses, and
dugongs." Machimura added:

"(The government) is assessing what impact the construction plan
will have on the environment. Japan's main policy is that while
fully giving consideration to natural conservation, the government
will push ahead with the construction work as soon as possible, in
order to reduce its burden and maintain its deterrence capability."

Keeping in mind a request in the U.S. District Court's ruling for a
report on the environmental impact assessment to be submitted within
90 days to the court, Machimura stated: "The issue is still under
dispute. A judgment on the propriety of the construction plan has
yet to be made and remains on hold."

The Defense Ministry, which has jurisdiction over the relocation
work, has taken the U.S. court's judgment coolly. Spokesman Katashi
Toyota commented in a regular press conference yesterday: "We will

TOKYO 00000215 009 OF 014


continue to closely watch the course of the trial." Adding: "We will
proceed with the work without making a fuss," he indicated that the
ministry will take a wait-and-see attitude.

(7) U.S. military to remove PCB-laden materials next month

OKINAWA TIMES (Page 1) (Full)
January 26, 2008

TOKYO-U.S. Forces Japan has told the Japanese government that the
U.S. military would ship its base storage of Japanese-made materials
containing polychlorinated biphenyl (PCB) to the U.S. mainland from
Honshu late this month and from Okinawa in February, sources said
yesterday.

The U.S. military will ship approximately 50 tons of PCB-laden
materials from Honshu, according to the Foreign Ministry. When it
comes to Okinawa, however, USFJ has not revealed anything in detail
about how much and when to ship. The U.S. military does not comment
on any specifics for security and other reasons, Foreign Ministry
sources say.

The U.S. Toxic Substances Control Act restricts the United States
from importing foreign-made PCB-containing materials. However, the
U.S. Environmental Protection Agency has established an exceptional
period to allow such imports from Jan. 7 this year through Jan. 9
next year, according to the Foreign Ministry's Status of U.S. Forces
Agreement Division.

In Japan, facilities that are capable of processing PCB-containing
materials are limited. The U.S. military will therefore send them to
the United States within this period. The period lasts until next
year, so the U.S. military will likely ship PCB-containing materials
in and after February.

USFJ has told the Japanese government that the U.S. military would
take appropriate environmental measures when storing and shipping
PCB-containing materials. The Foreign Ministry's Status of U.S.
Forces Agreement Division repeatedly requested USFJ to consider
safety. After that, the Foreign Ministry informed Okinawa Prefecture
and other local governments yesterday evening of the U.S. military's
report.

In the past, the U.S. military shipped PCB-containing materials
twice from Okinawa Prefecture. The first shipping was on Aug. 15,
2003 and the second shipping on July 10, 2004, according to the
Foreign Ministry.

(8) Editorial: International cooperation essential for restoring
international trust

SANKEI (Page 2) (Full)
January 25, 2008

The Maritime Self-Defense Force destroyer Murasame left the Yokosuka
base yesterday in order to rejoin the international antiterrorism
operation in the Indian Ocean. The supply ship Oumi will leave the
Sasebo base today to join the Murasame in order to resume the
refueling operation in mid-February.

Japan dropped out of the international operation last November. In
his send-off speech, Defense Minister Shigeru Ishiba said: "I want

TOKYO 00000215 010 OF 014


each of you to accomplish a perfect mission with high morale." In
order to restore international trust in Japan, we would like to see
the MSDF troops devote themselves to refueling vessels of the
U.S.-led coalition forces.

Multinational naval activities include more than the maritime
interdiction operations to block the shipping of drugs and weapons
by Al Qaeda members. They are ensuring the security of sea lanes
that are vital for Japan, which depends on the Middle East for more
than 90 PERCENT of its crude oil imports. A chemical tanker owned
by a Tokyo shipping firm was seajacked by pirates last October.
However, multinational naval forces chased the pirates and rescued
the tanker.

The MSDF withdrawal has significantly reduced the activity time of
the multinational forces. The MSDF's dropout for domestic reasons
has generated the impression that Japan will not work together with
other countries.

Such a situation must not be repeated. The new Antiterrorism Special
Measures Law, which provides the legal basis for the refueling
operation, expires next January.

The focus is, after all, on the enactment of permanent legislation
governing the overseas dispatch of the SDF. In his policy speech,
Prime Minister Yasuo Fukuda indicated that he would study a general
law with the aim of conducting international peace cooperation
activities swiftly and effectively.

In the previous extra Diet session, the major opposition Democratic
Party of Japan (DPJ or Minshuto) submitted Afghanistan special
measures legislation specifying the need for a permanent law.
Although the legislation has been carried over to the current
session, it could serve as the basis for a permanent law.

What deserves attention is a draft plan for international peace
cooperation legislation, compiled by Ishiba when he was chair of the
LDP defense policy subcommittee. This Ishiba plan preconditions the
SDF's overseas dispatch on a UN resolution. In addition, it also
says Japan will send SDF troops to a foreign country at that
country's request or if the government recognizes the need to do
so.

In contrast, DPJ President Ichiro Ozawa's argument on SDF dispatch
is based only on a UN resolution. It might end up leaving Japan's
sovereignty to China and Russia that have veto power at the UN
Security Council and eventually damaging Japan's national
interests.

Seiji Saeki, commander of MSDF Escort Division 1 who commands the
two MSDF vessels bound for the Indian Ocean, said at the send-off
ceremony: "Although some said we are violating the Constitution, we
have pride and dignity." This shows that Japan needs to send the
MSDF troops.

(9) Japan to work together with Southeast Asia on diplomatic and
security fronts, with ulterior motive of forestalling China's move
to increase its influence in region

NIKKEI (Page 2) (Full)
January 28, 2008


TOKYO 00000215 011 OF 014


The government has launched an effort to strengthen ties with
Southeast Asian countries in the areas of foreign and security
affairs. Japan wants to obtain cooperation from those countries to
deal with such diplomatic challenges as the North Korea issue and
the reform of the United Nations. Japan also wants to keep its
shipping lanes secure from a long-term perspective. In addition,
Japan seems to have been motivated by a desire to forestall China,
which is rapidly expanding its influence in Southeast Asia. Against
this background, the heated rivalry between the two countries is
likely to pick up momentum down the road.

Vice Defense Minister Kohei Masuda visited Malaysia on Jan. 22-23
for talks with officials about how to step up defense exchanges with
members of the Association of Southeast Asian Nations (ASEAN).

In last November, Defense Minister Teo Chee Hean of Singapore, the
host country of ASEAN at the time, visited Japan. He and Defense
Minister Shigeru Ishiba agreed to strengthen ties between Japan and
ASEAN.

In the late 1990s, a full defense exchange began between Japan and
ASEAN countries. Japan established defense talks at the
bureau-director or vice-minister level, starting with Singapore in
1997, followed by Thailand, Indonesia, Malaysia, Vietnam, and the
Philippines in succession.

In most ASEAN countries, the military holds power as seen in
Indonesia and Vietnam. In order to build contacts with the central
authority in each country, "Japan will need to strengthen relations
with national defense authorities," a Ministry of Defense (MOD)
official said.

Japan's recent move is increasingly taking on an aspect of
countering the Chinese military, which have been continuing arms
buildup. In last September, Japan for the first time took part in
the joint multinational Malabar exercises with the United States,
Australia, India, and Singapore in the sea area near the Bay of
Bengal. This participation would help Japan to reinforce team
efforts with the U.S. and coastal countries along the Indian Ocean
and to contain the Chinese military's move toward advancing
southward.

A next step being discussed in MOD to strengthen cooperation with
ASEAN is to hold ministerial talks on a periodical basis. MOD
intends to go into action to realize Japan's participation in 2010
in ASEAN's Defense Ministers' Meeting (ADMM), a panel launched in
2006 by ASEAN. If this were realized, ADMM will be the first
ministerial framework for Japan and ASEAN.

ADMM held its first session in Kuala Lumpur in May 2006. What was
discussed there included marine security, for instance, the Strait
of Malacca, measures to deal with terrorism, and the Korean
Peninsula situation. The ASEAN region sits on an important part of
Japan's sea lanes as a senior MOD official noted: "Continuing
security dialogue and building confidence with ASEAN will serve
national interests."

On the diplomatic front, Japan hosted the first round of
Japan-Mekong Foreign Ministers' meeting in Tokyo on this past Jan.
16 with five Southeast Asian countries in the Mekong River area,
such as Vietnam and Laos. The objective is to try to enhance
contacts with countries in the area, to which China is intensifying

TOKYO 00000215 012 OF 014


its diplomatic offensive, by using economic assistance as a
diplomatic tool.

As the first step in this regard, Foreign Minister Masahiko Koumura
declared Japan will provide a total of 40 million dollars (or 4.3
billion yen) in grant aid as measures to deal with poverty. Koumura
also promised to accept 10,000 or so students and trainees from
countries in the region for five years starting in 2008. Many
Southeast Asian countries have established diplomatic ties with
North Korea, so the Ministry of Foreign Affairs expressed hopes that
building up a network of connections in each country is of great
help for Japan to resolve the abduction issue and advance the reform
of the U.N.

(10) Threat of "econ terrorist:" Radical anti-whaling group, backed
by Australia, New Zealand, targeting Japanese whaling ships

SANKEI (Top Play) (Excerpts)
January 28, 2008/01/28

Moves by a Japanese whaling ship, which is operating in the Southern
Ocean to research the ecology of whales, have been reported across
the world almost every day. Two environment-protection groups
chasing the Japanese ship have posted on the Internet videos showing
their activities aimed to obstruct the ship's operations, in an
effort to appeal their objections to whaling and Japan's whaling
culture. This development has negatively affected Japan's relations
with Australia and New Zealand, both of which are anti-whaling
countries. A new cause for anxiety is dogging security for the Lake
Toya Summit in Hokkaido this year.

On Jan. 15, two Sea Shepherd anti-whaling activities boarded the
Japanese whaling ship Yushin Maru No.2. The two threw a bottle of
smelly fluid on deck and attempted to tie a rope around the ship's
propeller.

When they were detained, the two even demanded for tempura, or
Japanese deep-fried food, and the crew responded to this. SS Captain
Paul Watson called the Japanese whaling vessel "a group of
terrorists who took hostage." Later, it was found that the captain
had aimed to keep the two on board the ship and to halt its whaling
operation.

He posted on the Internet his statement reading: "It is our goal to
escalate the collision. The Japanese were quite taken in. We were
able to underscore the illegality of Japan's whaling operations to
the international community."

Sea Shepherd has carried out radical activities across the world.
The U.S. Federal Bureau of Investigation labels it as "eco
terrorist."

Why has Sea Shepherd resorted to violence? To this question,
Research Department Deputy Head Ishikawa of the Institute of
Cetacean Research, which has dispatched Japan's whaling research
ships, gave these replied: (1) On the high seas, there is no
possibility that its activists will be arrested by Japanese police;
(2) its activities have been supported by New Zealand and Australia,
both of which take tough anti-whaling policy measures; and (3) the
group has collected donations from people and companies in the two
countries.


TOKYO 00000215 013 OF 014


Special precautions for G-8 summit

The protest boats of Greenpeace and Sea Shepherd are expected to
soon leave the Yushin Maru No.2 because of running out of fuel, and
the two-week-long battle in the Southern Sea is now likely to calm
down.

For Japan, though, there is a new cause for apprehension, that is,
security for the upcoming G-8 Summit in Japan this year.

In recent summits, environment-protection groups calling for
anti-globalism collided with police units, carrying out violent
sabotage. Japan is a perfect place for those against whaling to
underscore their stance to the world. Given this, there is fear that
protest activities may intensified on the occasion of the G-8 Summit
here.

The National Police Agency reportedly is collecting information of
activists across the nation, in preparation for the Lake Toya
Summit. The Hyogo Prefectural Police Headquarters, which will engage
in guarding the venue for the environment ministerial conference in
Kobe in late May, has paid attention to the subversive activities
against the whaling research ship this time. A person responsible
for guarding commented: "We must keep guard against Sea Shepherd
from the comprehensive point of view - from land, sea and air - on
the alert for protest from the sea."

(11) Japanese companies to employ large number of Asian engineers:
Nissan to hire 4,000, Toyo Engineering already hired 1,000 to make
up for labor shortage in Japan

NIKKEI (Top Play) (Full)
January 28, 2008

Auto and machinery manufacturers plan to employ a large number of
engineers in newly emerging Asian countries. Nissan Motors plans to
hire 4,000 in India and Vietnam over the next three years, doubling
the ratio of foreign engineers to approximately 40 PERCENT . Toyo
Engineering has increased engineering designers by 1,000 in India.
Their aim is to cope with the domestic shortage of engineers caused
by the retirement of baby-boomers and the declining birthrate and to
utilize abundant human resources available in newly emerging
countries not only for the manufacturing sector but also for
brainwork.

Nissan at the moment employs about 20,000 engineers, of whom about
20 PERCENT are foreigners employed mainly in Europe and the U.S. It
plans to secure approximately 300 engineers in February in India and
launch its first development center in that nation. The center will
be responsible for developing auto bodies and parts used and sold
locally. Part of software development will also be transferred from
Japan. It wants to increase local hires to 2,000 to 3,000 by the
early 2010s.

In Vietnam, Nissan wants to increase engineers from the current 600
to 2,000 over three years. In Mexico, it plans to increase engineers
from the current 300 or so to around 1,000. Locally hired engineers
will be responsible for developing software and computer-assisted
design.

The IT sector, which has chronically suffered from a shortage of
software developers, has led the way in employing engineers in India

TOKYO 00000215 014 OF 014


and China. This trend has now begun spreading into the manufacturing
industry.

Toyo Engineering had about 800 plant design engineers at its Indian
plant, but it boosted the number to about 1,800 by the end of last
year. IHI has already established a ship design company in Vietnam
for the first time abroad. It will transfer part of its design
section for commercial ships to be build in Japan. Miyazu Global
Press Die Co., located in Oizumi Town, Gunma Prefecture, will
increase engineers at its Indian engineering design company to about
50, 2.5 times the present number, within five years. About 50
PERCENT of the company's design operations will be carried out at
its Indian company.

Those companies are rushing to secure engineers because baby
boomers, who have been out in the forefront of technical
development, began to hit retirement age last year. In addition, it
has become difficult to secure new graduates in Japan because
students are moving away from science and technology. They are
positive about employing locals in countries with a high education
level and where wages are less than 50 PERCENT thos of Japan's. They
are aiming at improving development of strategic products targeting
growing markets, centered on newly emerging countries. Their
Japanese plants will specialize in the development of core
technologies for the division of labor between domestic and overseas
plants.

According to a survey carried out by the Ministry of Economy, Trade
and Industry, Japanese manufacturers employed approximately 1.3
million personnel abroad at the end of 1996. They have hired more
than 3.2 million personnel abroad as of the end of 2007, of whom
those hired in Asia account for about 70 PERCENT . Foreign personnel
have thus far been hired mainly through local plants. Japanese
companies' Asian strategies will enter a new state, as they are now
beginning to employ foreign people for development, as well.

With leading U.S. and European companies also trying to employ
engineers in developing countries, the talent war will likely become
fierce. Chances are that Japanese companies might be unable to
secure personnel as planned or that the cost of employing locals and
training them may rise.

SCHIEFFER

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