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Cablegate: Japanese Morning Press Highlights 04/24/08

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
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RUEHUL/AMEMBASSY SEOUL 8994
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UNCLAS SECTION 01 OF 12 TOKYO 001124

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 04/24/08


Index:

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

Beef trade issue:
4) Special risk material - spinal column - found in shipment of U.S.
beef exported to Japan; Issue likely to have effect on U.S. talks
with Japan to expand imports (Asahi)
5) USDA on beef shipment with risk material: "Happens from time to
time" (Tokyo Shimbun)
6) USDA: U.S. beef found with spinal column not intended for Japan
(Mainichi)
7) Daiei supermarkets to halt imports of U.S. beef from factory that
shipped banned material (Tokyo Shimbun)
8) Yoshinoya, which found the banned beef in its shipment, will
continue to put U.S. beef into its beef-bowl menu (Mainichi)
9) Health ministry to toughen quarantine measures after latest U.S.
beef incident (Mainichi)
10) Though experts downplay impact of latest U.S. beef incident,
consumers may start worrying again about safety of U.S. beef
(Asahi)

Defense affairs:
11) JCP fretting about Iwakuni Air Show featuring B-52 strategic
bomber (Akahata)
12) 22 U.S military shells, possibly for chemical warfare, found in
Okinawa; May be WWII relics (Asahi)

13) Government and ruling parties decide to postpone submission to
Diet session a bill establishing a permanent law for overseas SDF
dispatches (Yomiuri)
14) Nonpartisan parliamentarian league on security affairs meets for
the firs time in three years (Mainichi)

North Korea problem:
15) Senior MOFA officials complains about Six-Party Talks
negotiations being "soft" (Yomiuri)
16) ROK ambassador to Japan: Japan expected to supply heavy fuel oil
to North Korea (Asahi)
17) LDP's Taku Yamasaki hints at persuading Prime Minister Fukuda to
visit Pyongyang (Sankei)

18) Citing need for balance in bilateral relations, Japan pushes for
coordination of dispute over gas-field dispute (Yomiuri)

Diet affairs:
19) Ruling and opposition camps unable to find common ground in
talks over road-tax issue (Yomiuri)
20) DPJ to likely delay censure motion against the Prime Minister
until after May 12 (Sankei)
21) LDP's Yamasaki faction seeks revision of controversial medical
payment system for the elderly (Sankei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Tokyo Shimbun, and Akahata:
Risk material found in U.S. beef at Yoshinoya factory; First case
after imports resumed

TOKYO 00001124 002 OF 012

Yomiuri:
More education ministry officials suspected of involvement in
bribery over scandal educational facilities

Nikkei:
Domestic demand-related Japan firms expanding business overseas

Sankei:
Former PCI chairman, others arrested for providing kickbacks to win
ODA-funded projects

2) EDITORIALS

Asahi:
(1) Provisional road-related tax rates: Is revote convincing?
(2) Yodo River dam project unnecessary

Mainichi:
(1) PCI executives arrested over China arms disposal project
(2) U.S. presidential primary: Change versus experience

Yomiuri:
(1) Transparency essential for arms disposal project
(2) Policy debates should take center stage in U.S. presidential
race

Nikkei:
(1) Consumer agency needs substance
(2) Japan-EU relations important

Sankei:
(1) Costly arms disposal project requires inspection
(2) Rocket attack against Japanese tanker revealed need to improve
law

Tokyo Shimbun:
(1) Arms disposal project preyed upon
(2) Nomura management also to blame for insider trading

Akahata:
(1) Terminating analog broadcasting in three years reckless

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 23

NIKKEI (Page 2) (Full)
April 24, 2008

08:59
Attended at Kantei meeting of the Consumer Administration Promotion
Council.

10:02
Met with Slovenian Prime Minister Janez Jansa. Afterwards, took
ceremonial photo with Jansa and European Commission President Jose
Manuel Barroso.

11:45
Hosted party for Jansa and Barroso.


TOKYO 00001124 003 OF 012


13:33
Held joint press conference with Jansa and Barroso.

14:32
Met with Chief Cabinet Secretary Machimura.

16:08
Met with Special Advisor Ito, followed by Deputy Chief Cabinet
Secretary Futahashi.

SIPDIS

17:11
Attended meeting of the Central Disaster Prevention Council. Met
later with State Minister for Declining Birthrate Kawakami. Attended
a meeting of the Economic and Fiscal Policy Council.

19:10
Returned to his official residence.

4) SRM found in U.S. beef shipment destined for Yoshinoya Holdings

ASAHI (Top Play) (Excerpts)
April 24, 2008

The Ministry of Agriculture, Forestry and Fisheries (MAFF) and the
Ministry of Health, Labor and Welfare (MHLW) on April 23 announced
that spinal columns, one of materials designated as specified risk
materials (SRM), whose imports are banned in Japan because agents
causing BSE are believed to accumulate in those materials. It is the
first time that SRM has been found in a beef shipment from the U.S.
since Japan resumed U.S. beef imports in July 2006. The beef in
question had not been put on the market.

Incident could affect future Japan-U.S. talks

(Commentary) SRM has again been found in a shipment of U.S. beef,
which is supposedly determined to be safe. Prime Minister Fukuda
will likely be questioned over his stance toward the U.S. in terms
of food safety policy all the more because of his stand of
characterizing food safety and security as a pillar of his policy.

Japan first decided to place a total ban on imports of U.S. beef in
December 2003 as a measure to prevent BSE. In 2005, it resumed
imports from designated meat packers, on conditions that (1) meat be
obtained from cattle aged 20 months or younger; and (2) SRM, such as
brains and spinal cords, where agents causing BSE tend to
accumulate, be removed. However, a ban was placed again soon after
the resumption of imports, following the discovery of backbones, an
at-risk material. In 2006, the governments of Japan and the U.S.
agreed to resume imports, after confirming that designated meat
processors fully understand what parts of cattle are eligible for
exports to Japan.

Before long, the U.S. has started calling on Japan to ease its
import condition that limits beef eligible for exports to cattle
aged 20 months or younger. The U.S. is seeking Japan to completely
eliminate cattle age criterion. In response, the government has
offered a proposal for easing the age restriction to under 30
months. It had intended to ease the condition, after consulting with
the Food Safety Commission, once Japan and the U.S. reach a
consensus.

At the moment, it appears that the government has no intention of

TOKYO 00001124 004 OF 012


placing an immediate ban on U.S. beef imports. However, whether U.S.
meat processors are able to observe shipment rules on Japan-bound
products will be put to the test again. Chances are that bilateral
talks to discuss easing Japan's import condition might be affected.

5) USDA spokesman: "This kind of mistake happens sometimes"

TOKYO SHIMBUN (Page 1) (Full)
April 24, 2008

(Kyodo, Washington)

A specified risk material has been found in beef imported into Japan
from the United States by trading house Itochu Corp in violation of
a bilateral trade accord. On this problem, the U.S. Department of
Agriculture (USDA) issued a statement on the 23rd noting: "The beef
in question was not intended for Japan," indicating that the beef
was shipped to Japan by mistake.

USDA spokesperson Keith Williams told a Kyodo News Agency reporter:

A specified risk material has been found only in a box among some
700 boxes of beef. This kind of mistake happens sometimes."

The Agriculture Department disclosed that it has banned the plant in
California that shipped the beef in question from exporting beef to
Japan until the cause of the problem is clarified.

6) U.S. Agriculture Department: Beef shipment containing risk
material was not intended for Japan

MAINICHI (Page 1) (Full)
April 24, 2008

A high-risk material has been found in a beef shipment from the U.S.
A spokesman for the U.S. Department of Agriculture told a Mainichi
Shimbun reporter that the beef in question was not intended for
Japan and was mistakenly shipped to Japan. The spokesman also said
that the Agriculture Department has notified the plant that imported
the beef of a decision to prohibit its import to Japan until the
cause of the problem is uncovered.

7) Daiei suspends sales of U.S. beef from plant in question

TOKYO SHIMBUN (Page 1) (Full)
April 24, 2008

Major supermarket chain Daiei Inc. announced yesterday that it would
suspend sales of beef imported from U.S. meat processor National
Beef's processing factory in California, which imported beef with a
specified risk material, starting today.

Daiei will continue to suspend until it is confirmed that there is
no safety hazard. Regarding the already sold beef, its spokesman
said: "Its safety has been confirmed, based on our own safety
criteria."

Food supermarket chain Maruetsu has also decided to suspend sales of
U.S. beef from the factory in question starting today until its
safety is ensured.

Another major supermarket chain Ito Yokado will not suspend sales of

TOKYO 00001124 005 OF 012


U.S. beef from the plant in question, with an executive remarking:
"We have not imported beef from that plant." Meanwhile, Aeon has not
sold U.S. beef.

8) Yoshinoya to continue serving beef bowls

MAINICHI (Page 1) (Full)
April 24, 2008

Based on the judgment that there are no problems with its safety
control system, Yoshinoya Holdings Co., the operator of restaurants
serving beef bowls, will continue serving beef bowls on a 24-hour
basis. But major supermarket chain Daiei Inc. has decided to suspend
starting today the sale of beef imported from the U.S. meat
processor in question, National Beef.

9) Health Ministry to tighten inspection system

MAINICHI (Page 1) (Full)
April 24, 2008

In response to the discovery of a high-risk material in beef shipped
from the United States, the Ministry of Health, Labor, and Welfare
will tighten its inspection system by increasing the number of
sampling inspections in quarantine and by taking other measures.
This case, though, is considered to have been caused by a simple
mistake, so the Ministry of Agriculture, Forestry, and Fisheries has
decided to ban only beef imports from the plant in question, with a
senior ministry official remarking: "This was not caused by a
serious systemic problem."

10) Another case of consumer concerns about U.S. beef? "Negative
impact would be limited," experts say

ASAHI (Page 39) (Full)
April 24, 2008

Specified risk materials (SRM), which should have been removed, have
been found in U.S. beef shipments to Yoshinoya Holdings, the largest
beef-bowl restaurant chain in Japan. It has been two years since
imports of U.S. beef, which had been suspended due to the discovery
of a BSE-infected cow in the U.S., were resumed. Consumers remain
concerned about food safety, but some experts take the view that the
effect of the incident would be limited because of a change in the
distribution map.

Yoshinoya in Yurakucho close to JR Yurakucho Station in Tokyo was
crowded with customers, mainly company workers around 9:00 p.m. The
Ministry of Agriculture, Forestry and Fisheries (MAFF) released an
announcement about the incident at 7:00 p.m. One clerk was perplexed
at the press release, noting, "That's news to me."

Customers mainly order beef-bowl meals at Yoshinoya. One male civil
servant (53) said: "It was a good job that the material in question
was found before being served to customers. I hope the farm ministry
will properly have talks with the U.S. on the matter." A male
company employee (61) said, "I have been refraining from eating
beef-bowls since the BSE scare. However, I ate one today, as I was
so starved that I could not resist."

Matsuya Foods, another beef-bowl chain restaurant, said that as a
beef-bowl restaurant, they are concerned about a possible spillover

TOKYO 00001124 006 OF 012


effect of a harmful rumor. Zensho, which runs the Sukiya restaurant
chain, has long been refraining from using U.S. beef, said that a
similar incident could have occurred to them, if they had used U.S.
beef.

U.S. beef is familiar to Japanese, as it is used widely for
beef-bowls. However, the share has significantly dropped in recent
years.

Imports in fiscal 2002 stood at approximately 240,000 tons. However,
the share has plummeted since the embargo in late 2003. Australian
beef has instead increased a share from about 260,000 tons in fiscal
2002 to about 410,000 tons in fiscal 2006.

Seiyu started selling U.S. beef in March last year. Ito-Yodado and
Daiei have also begun selling U.S. beef. However, Australian beef
still has the lead. Imports of U.S. beef in January this year stood
at approximately 2,500 tons, while those of Australian beef at
approximately 21,300 tons.

According to MAFF, National Beef, a U.S. meat processor that shipped
the meat in question, has a 36 PERCENT share in U.S. beef exported
to Japan. An official of the MAFF Animal Health Division said: "It
is not that the meat found this time is infected. The blunder has
been detected before the products were put on the market, even
though a blanket box inspection has been abolished."

Junichi Koiwa, representative of the Safety Standards for Food and
Livelihood, a consumer organization, noted, "SRMs are not unsafe
unless they are from infected cattle. Consumers do not need to feel
anxious. However, the government should make efforts to reject the
U.S. request to ease its import condition." On the other hand,
Sawako Hiyori, former chief of the secretariat of the Consumers
Japan, requested: "Why on earth were spinal parts found in a
shipment? This is a serious problem that could betray consumers'
confidence completely. I want the government to shed light on the
cause of the incident."

11) U.S. forces in flight plan for air show at Iwakuni to include
B-52 nuclear-capable strategic bomber; Lawmaker Kasai presses for
halt to the plan

AKAHATA (Page 1) (Abridged)
April 24, 2008

In the air show that will take place on May 5th at the U.S. forces'
Iwakuni Air Station (Yamaguchi Prefecture), a B-52 strategic bomber
will participate. This issue was taken up yesterday by Japanese
Communist Party lawmaker Toru Kasai in the Lower House Foreign
Affairs Committee. He criticized: "A strategic bomber capable of
nuclear strikes will come near Hiroshima, an atomic-bombed area. For
those who were atomic bombed, this will be unbearable."

The B-52 during the Vietnam War scattered defoliation chemicals and
napalm. During the Iraq and Afghan wars, the aircraft repeatedly
killed local residents. It still participates in front-line combat.
Last August, it was revealed that the aircraft had flown over 2,000
kilometers of U.S. airspace loaded with nuclear warheads. The
incident became a major issue.

Kasai asked if it had been confirmed that the aircraft (for the air
show) was nuclear armed. Foreign Minister Koumura said, "Since there

TOKYO 00001124 007 OF 012


was no prior consultation, it is not carrying such weaponry." He
admitted that there had been no confirmation of such.

B-52s were stationed in Okinawa when it was under U.S. military
occupation. In 1965, a crash-landing incident occurred. Although the
squadron withdrew in 1970, the aircraft from time to time has flown
into that prefecture. In 1972, owing to the public's sentiment, then
Foreign Minister Masayoshi Ohira requested the U.S. ambassador to
Japan to limit the cases of landing only to unavoidable
circumstances, such as to avoid typhoons. The U.S. promised to
strictly limit the fly-ins.

Kasai asked that the participation of the aircraft this time be
halted, speaking from the (previous) stance of the government.
Foreign Minister Koumura said, "I would like to ask the local
community what it thinks." But he did not clearly state that he
would seek a halt to the aircraft's participation.

12) Duds found in Okinawa, possibly chemical bombs used by U.S.
forces during WWII

ASAHI (Page 1) (Full)
April 24, 2008

A Ground Self-Defense Force squad discovered 22 unexploded shells,
which could be chemical bombs, when its crew was recovering U.S.
military mortar shells in Urasoe, Okinawa, in the middle of this
month, the Defense Ministry announced yesterday. The discovered duds
are believed to be those used in the Battle of Okinawa during World
War II. The GSDF has yet to remove the duds from where they were
found. Meanwhile, the Defense Ministry has inquired of U.S. forces
and others concerned to identify them.

If the duds in question are found to be chemical weapons, U.S.
forces might have brought in those bombs at the time of the Battle
of Okinawa. No abandoned U.S. chemical weapons have ever been
discovered in Japan, according to the Defense Ministry.

The duds were found at a private land in the city of Urasoe,
according to the Defense Ministry. Okinawa prefectural police asked
the GSDF on Apr. 7 to dispose of unexploded bombs. The GSDF bomb
squad began to recover those unexploded bombs on Apr. 11, when its
crew found 76 U.S. military mortar shells. The GSDF has now
recovered 54 shells but halted recovering the remaining 22 duds
because they were found to have contained something that looked like
a liquid.

The 22 duds are M-57 mortar shells. The M-57 has two types. One is a
liquid smoke projectile as a conventional bomb, and the other type
is a chemical bomb containing highly fatal agents. The GSDF will
shortly carry and store the 22 duds in highly airtight containers to
avoid risk. The duds are corroded but are not in danger of leaking
out the inner liquids, according to the Defense Ministry. The city
of Urasoe, neighboring the city of Naha, is situated in a highly
populated area in the middle of Okinawa's main island.

There is no hard evidence to show that U.S. forces brought in or
used chemical weapons in the Battle of Okinawa. Before the 1972
reversion of Okinawa to Japan, the U.S. military used to store
chemical weapons at its Kadena ammunition depot and other bases in
the middle and northern parts of Okinawa's main island to use them
in the Vietnam War.

TOKYO 00001124 008 OF 012

The Geneva Protocol of 1925 banned using chemical and biological
(germ) weapons during wartime but did not prohibit developing or
possessing such biochemical weaponry.

13) SDF legislation to be forgone

YOMIURI (Page 2) (Full)
April 24, 2008

The government and the ruling coalition decided yesterday to forgo
permanent legislation allowing Japan to send the Self-Defense Forces
for overseas mission as needed. The government had initially planned
to present a bill to the Diet during its current session. In the
wake of the collision of a Maritime Self-Defense Force Aegis
destroyer with a fishing boat, New Komeito, the ruling Liberal
Democratic Party's coalition partner, is cautious about the
legislation. The LDP also inclined to save its judgment.

In this connection, former LDP Vice President Taku Yamasaki
delivered a speech in Tokyo yesterday, in which he suggested the
need to outline the legislation before the current Diet session
ends. "We will have to create a bill during this summer and
legislate it in this fall's extraordinary session of the Diet,"
Yamasaki said.

14) Nonpartisan security group meets for first time in three years;
Permanent legislation to be discussed

MAINICHI (Page 5) (Excerpts)
April 24, 2008

The Young Parliamentarians' League to Establish a Security System
for a New Century, a nonpartisan group, held yesterday a general
meeting in the Diet building for the first time in about three
years. The meeting selected Liberal Democratic Party member and
former Defense Agency Director-General Gen Nakatani, former Liberal
Democratic Party of Japan President Seiji Maehara, and New Komeito
Public Relations Committee Chairman Isamu Ueda as the group's new
representatives. In his inaugural speech, Nakatani said: "I want to
build a foundation that can carry things out under any
administration." Maehara noted: "Whichever takes power, the
foundation for foreign and security policies must be one."

The meeting brought together some 30 of the group's 110 members.
With the Antiterrorism Special Measures Law, the legal basis for the
Maritime Self-Defense Force's mission in the Indian Ocean, scheduled
to expire next January, the members agreed to deepen discussions on
the questions of establishing a permanent law specifying conditions
for the overseas dispatch of the SDF and of exercising the right to
collective self-defense.

The question of a permanent law was one of the main topics discussed
last fall between Prime Minister Yasuo Fukuda and DPJ President
Ichiro Ozawa in their failed talks on a grand coalition. The LDP
seems to want to use the subject as the lead to talks between the
ruling and opposition blocs. A senior DPJ member criticized the move
of Maehara and others, saying, "The subject must be discussed in the
party."

15) Senior MOFA official criticizes six-party talks as "being soft
on DPRK"

TOKYO 00001124 009 OF 012

YOMIURI (Page 4) (Full)
April 24, 2008

A senior official of the Ministry of Foreign Affairs (MOFA)
yesterday met the press, and referring to the question of ambiguity
of North Korea's promise to come out with a complete and accurate
declaration of its nuclear programs because it is unclear whether
the declaration will include nuclear weapons, noted: "I don't think
nuclear weapons will be declared, given their confidentiality."

The official continued, "It is Japan that will be most exposed to
the threat of nuclear weapons. Because of a soft attitude in
negotiations (amai koushou) with (North Korea), (the six-party
talks) have been stalled. The stalemate in the talks is in a way a
penalty for that stance."

This official's remarks are taken as expressing discontent with the
way the six-party talks have been progressing. At the six-party
session in last October, a joint document showing that the
declaration would come out by the end of the year was released, but
the document did not make clear whether nuclear weapons would be
included in the declaration.

16) South Korean ambassador to Japan urges Japan "to take part in
oil aid to DPRK, noting, "Aid should be separated from abduction
issue"

ASAHI (Page 4) (Full)
April 24, 2008

Tetsuya Hakoda, Seoul

New South Korean Ambassador to Japan Kwon Chol Hyun (61) yesterday
met with the Japanese reporters in Seoul and declared his country's
support for the Japanese government's position on the abductions of
Japanese nationals by North Korea. However, the ambassador called on
Japan to handle the North Korean nuclear issue separately from the
abduction issue. Kwon noted that Japan should take part in heavy oil
aid that other members of the six-party talks are providing to North
Korea.

Kwon said, "The abduction and North Korean nuclear issues must be
both resolved," but he went on to say, "Should (Japan) link the
nuclear and abduction issues and insist that it calls for resolving
both together, Japan could be caught in its own trap."

At a Japan-South Korea summit talks on April 21, Ambassador Lee
Myung Bak highlighted the importance of rebuilding bilateral ties
into a future-oriented relationship. Kwon, however, speaking of the
president's remarks, noted: "In his remarks, the president said, 'We
will look at the future and do not demand apologies,' but this does
not mean we will forget everything. Wartime comfort women are still
alive and wailing. The implication of his remarks is, 'Let's keep
the past under our hat and look at the future.'"

Kwon arrived at his post on April 17 and after welcoming President
Lee and his party in Japan, he returned home temporarily.

17) LDP's Yamasaki: Aims to realize visit to North Korea by Prime
Minister Fukuda


TOKYO 00001124 010 OF 012


SANKEI (Page 5) (Full)
April 24, 2008

Taku Yamasaki, a former vice president of the Liberal Democratic
Party (LDP), who heads a LDP faction, said yesterday in his
faction's fund-raising party in Tokyo:

"I will begin nonpartisan diplomacy at a time when the second stage
measures (including North Korea's report on its nuclear programs)
are completed. I expect that Prime Minister Fukuda will visit
Pyongyang in the fall and diplomatic ties between Japan and North
Korea will be concluded."

Yamasaki stressed his view of aiming at realizing a visit to
Pyongyang by Fukuda. He then said: "To that end, I want to smooth
the way along with nonpartisan Diet members."

18) IIPS emphasizes importance of keeping a balance in Japan-China
relations, seeks to build consensus between the two countries

YOMIURI (Page 4) (Excerpts)
April 24, 2008

The Institute for International Policy Studies on web (IIPS), a
non-profit, independent research institute based in Tokyo
(http://www.iips.org/index.html), yesterday released a set of policy
proposals concerning Japan-China relations, in which the IIPS seeks
to shift the current relationship between the two countries to a
mature, friendly one. Behind this proposal is the IIPS's judgment
that in order to maintain peace and growth in the Asian region, a
stable relationship between Japan and China is essential.

Since the Fukuda administration came into being, Japan-China
relations in principle have been in good shape. President Hu Jintao
is to visit Japan on May 6 as the top leader of China for the first
time in 10 years. But the two countries are still facing old and new
issues to be resolved, such as the historical issue, joint
development of gas fields in the East China Sea, the poisonous
Chinese-made dumplings, and the Tibet issue. How to keep a balance
between friendship and contentions has now become important for the
two countries.

Chinese Foreign Minister Yang Jiechi visited Japan in early April,
and when he met with Foreign Minister Koumura, Koumura told Yang to
have a dialogue with the 14th Dalai Lama to deal with the Tibet
issue. But Yang expressed displeasure, noting, "Except for Japan,
which country in Asia is advising China to do this or that?" The
Tibet issue could become a thorn in bilateral ties when President Hu
visits Japan.

Meanwhile, given that the North Korean nuclear issue has yet to be
resolved, it is highly important for the Asian region that both
Japan and China will cultivate friendly ties and work in closer
cooperation to build a new regional order, the IIPS said in its
proposals. Both Japan and China need to continue dialogues and
coordination in an even more strenuous manner.

19) Road talks fail; Ruling camp's decision on revote draws fire
from opposition bloc

YOMIURI (Page 4) (Excerpts)
April 24, 2008

TOKYO 00001124 011 OF 012

The ruling and opposition blocs held their second meeting in the
Diet building yesterday to discuss a review of the system to earmark
road-related tax revenues solely for road construction, and
exchanged views on Prime Minister Yasuo Fukuda's plan to free up
road-related revenues for general spending from fiscal 2009. The
meeting, however, failed to enter into specific discussions, because
the opposition camp fiercely reacted to the government's and ruling
bloc's decision to hold a revote in the House of Representatives on
April 30 on tax-related bills to revive the provisional tax rates on
gasoline and other items.

In the meeting, People's New Party Deputy Representative Shozaburo
Jimi protested fiercely, saying: "Although I won't call it a farce,
we won't be able to attend future meetings if (the ruling camp) has
decided to bring the matter to a revote." In response, Liberal
Democratic Party Policy Research Council Chairman Sadakazu Tanigaki
said, "Handling bills and policy talks are two separate matters."
This did not help defuse the opposition bloc's backlash.

20) Censure motion against Prime Minister Fukuda likely to be
submitted to Upper House on May 12 or later after Lower House takes
override vote on road construction special law revision bill

SANKEI (Page 5) (Full)
April 24, 2008

The possibility has become strong that the main opposition
Democratic Party of Japan (DPJ) will present (to the House of
Councillors) a censure motion against Prime Minister after the House
of Representatives takes on May 12 an override vote on a bill
amending the Road Construction Revenues Special Exemption Law. If
this is the case, it means that the DPJ will forgo its initial plan
to submit the censure motion immediately after April 30 when the
ruling parties are expected to revote on annual revenue-connected
bills aimed at restoring the gasoline tax rate April 30.

DPJ Diet Affairs Committee Chairman Kenji Yamaoka said yesterday:
"The timing for a censure motion is not limited to April 30." The
reason is because dissatisfaction will grow in the public in May
when the gasoline rates are hiked. The largest opposition party also
is waiting to see the ruling coalition shaken by its charge that
taking an override vote on the bill amending the road construction
special law conflicts with Prime Minister Fukuda's policy of
shifting tax revenues earmarked for road construction and
maintenance to the general account (starting in 2009).

A senior DPJ member said yesterday:

"We well urge the ruling coalition to drop the medium-term road plan
by May 12 and integrate the special account from road-related taxes
into the general account budget. It is a simplistic idea that the
censure motion will be submitted on April 30."

However, there still remains a possibility that the DPJ will present
a censure motion soon after the Lower House takes an override vote
on April 30 in an attempt to avoid criticism of the party being
weak-kneed if its candidate is defeated in the Lower House
by-election for the Yamaguchi No. 2 constituency.

21) LDP's Yamasaki faction proposes review of the new medical system
for elderly, aim to shake up Prime Minister Fukuda for cabinet

TOKYO 00001124 012 OF 012


shuffle

SANKEI (Page 5) (Full)
April 24, 2008

A Liberal Democratic Party (LDP) faction headed by Taku Yamasaki
held a press conference yesterday in Tokyo, in which the Yamasaki
faction announced a set of proposals, including a review of the
newly introduced medical system for the elderly. Yamasaki said: "The
proposals will become a draft for the next House of Representative
election." But the faction also appears to be aiming to urge Prime
Minister Yasuo Fukuda to shuffle his cabinet as early as possible
since discontent has built up in the faction over its have been
given the cold shoulder in terms of key party and cabinet posts.

The set of policy proposals was compiled by Nobuteru Ishihara, a
former party policy chief, and other faction members. Advocating "a
nation based on moral principles" as vision of a new constitution,
the faction places priority on: 1) diplomacy of justice and harmony;
2) vital economy; 3) secure and safety society; 4) convivial society
in rich natural environment; and 5) education for the future.

The policy proposal emphasizes the important of direct dialogue with
North Korea in order to resolve the abduction issue, giving top
priority to bringing out results. It also stipulates the need for
early establishment of a permanent law that would enable the
overseas dispatch of the Self-Defense Forces as necessary, as well
as the establishment of an East Asian Community. It also calls for a
revision of the new medical system for the elderly. The Yamasaki
faction has actively criticized the Health, Labor and Welfare
Ministry on this policy. Yamasaki then urged the government to shift
its policy, saying: "With an eye on the next general election, the
new medical system should be corrected as there is dissatisfaction
among low-income earners over the increase in their burden."

SCHIEFFER

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