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Cablegate: Japanese Morning Press Highlights 10/07/08

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ZNR UUUUU ZZH
P 070105Z OCT 08
FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
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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 2594
RUEHFK/AMCONSUL FUKUOKA 0238
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RUEHNAG/AMCONSUL NAGOYA 8318
RUEHKSO/AMCONSUL SAPPORO 0814
RUEHBJ/AMEMBASSY BEIJING 5703
RUEHUL/AMEMBASSY SEOUL 1698
RUCNDT/USMISSION USUN NEW YORK 1969

UNCLAS SECTION 01 OF 08 TOKYO 002785

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 10/07/08

Index:

Diplomatic scene:
1) A/S Hill's report to Secretary Rice indicates agreement on steps
to verify DPRK nuclear facilities; North Korea may be removed from
terror list (Sankei)
2) Summit meeting between Prime Minister Aso and Chinese President
Hu set for either Oct. 24 or 25 at ASEM conference'' (Mainichi)
3) Diplomatic schedule could throw Diet timetable off (Nikkei)
4) New anti-terrorism bill that would allow an extension of the MSDF
refueling mission to be deliberated on starting Oct. 9 (Sankei)
5) Environmental group under ASEM seek to release statement calling
for reduction by half of greenhouse gas emissions, but India is
balking (Asahi)

Political scene:
6) Democratic Party of Japan (DPJ) attacking the ruling parties in
the Diet with three issues: document disclosure, pension fiasco, and
golden parachute system (Nikkei)
7) Budget Committee: LDP clashes with DPJ on where that party would
find the 22 trillion yen in resources to fund their policy agenda
(Yomiuri)
8) Aso positive about a second supplementary budget due to the
worsening international financial crisis (Mainichi)
9) Supplementary budget expected to pass the Lower House on Oct. 8
(Mainichi)
10) Diet dissolution likely after the supplementary budget passes,
with Lower House election in mid to late November (Asahi)

Articles:

1) U.S. may delist N. Korea

SANKEI (Page 7) (Full)
October 7, 2008

Takashi Arimoto

WASHINGTON-Assistant Secretary of State for East Asian and Pacific
Affairs Hill, chief U.S. delegate to the six-party talks over North
Korea's nuclear weapons program, met Secretary of State Rice on Oct.
6 to report the results of his talks with North Korea early this
month. A source from the talks revealed that Hill has basically
agreed with his North Korean counterpart on such matters as how to
verify North Korea's nuclear facilities. The agreement, if approved
by Rice, will be conveyed to Japan and other six-party members.
Details have yet to be unveiled about the agreement. However, a U.S.
government official has indicated that the U.S. government would
delist North Korea as a state sponsor of terrorism for the time
being if North Korea submits its verification plan to China, which
presides over the six-party talks. Given this, the United States
will likely take action to remove North Korea from its terrorism
blacklist.

State Department Deputy Spokesman Wood, meeting the press on Oct. 6,
revealed that Hill had a brief conversation with Rice on the morning
of Oct. 6 (on the evening of Oct. 6 Japan time). At the same time,
Wood explained that Hill would report details on the afternoon of
Oct. 6 (early on Oct. 6 Japan time).

Sung Kim, special envoy for the six-party talks, is now staying in
Seoul, and he is expected to convey the agreement to Japan and South

TOKYO 00002785 002 OF 008


Korea. According to the deputy spokesman, the special envoy has no
plans to visit North Korea again.

Hill visited North Korea on Oct. 1 because North Korea had stopped
disabling its Yongbyon nuclear facility for resuming its operation.
In Pyongyang, Hill met with Foreign Minister Pak Ui Chun and Vice
Foreign Minister Kim Kye Gwan, chief delegate to the six-party
talks.

Hill returned to Seoul on Oct. 3 and met with the Japanese and South
Korea chief delegates. On Oct. 4, Hill flew to Beijing to convey the
results of his talks with North Korea to China and Russia. According
to a source from the talks, Hill told them that he has reached an
agreement with North Korea. However, he made no mention of details
about the agreement, saying he would detail it after obtaining
Rice's approval.

Wood had expressed the U.S. government's "strong concern" about
North Korea's move to resume its nuclear facilities' suspended
operation, and Hill visited North Korea at Rice's instruction.
President Bush's term of office is to end in January next year.
Meanwhile, North Korea's nuclear facilities can now hardly be
disabled. A pundit on North Korea said, "The United States seems to
be impatient." The U.S. government therefore considered taking a
flexible stance, such as tentatively delisting North Korea as a
state sponsor of terrorism, when North Korea presented its
verification plan to China.

Concerned about the visit of Hill to North Korea, one U.S. expert
said it was an "overreaction" to North Korea's brinkmanship. "If he
had exchanged an agreement in written form at the request of North
Korea," the expert added, "we should take it that he has made
concessions like delisting that country as a state sponsor of
terrorism."

2) Japan-China summit to be held on sidelines of Oct. 24-25 ASEM

MAINICHI (Page 2) (Abridged)
October 7, 2008

By Takashi Suto

Prime Minister Taro Aso has begun coordination to attend the
Asia-Europe Meeting (ASEM) to be held in Beijing on Oct. 24-25 and
there hold his first summit meetings with President Hu Jintao and
Premier Wen Jiabao on the sidelines. The prime minister intends to
play up his diplomatic policy that gives priority to Asia by
attending the meeting following the UN General Assembly.

ASEM consists of 45 Asian and European countries and organizations.
The 1998 ASEM summit meeting released a statement on the Asian
currency crisis. This time around, the U.S.-originated financial
crisis has emerged as a major agenda item.

In his UNGA speech, the prime minister played up Japan's role in
overcoming the financial crisis. He seems eager to demonstrate
Japan's leadership in the upcoming ASEM summit, as well.

A U.S. newspaper described Aso as a person who had soured relations
with China and South Korea. Some are concerned about his Asia
diplomacy. Aware of such concerns, Aso aims to showcase his
Asia-oriented foreign policy by visiting China at an early date.

TOKYO 00002785 003 OF 008

In the upcoming Japan-China summit talks, Aso intends to present a
plan to strengthen the strategically and mutually beneficial
relations between the two countries by following the former Fukuda
administration's policy course. Aso is also scheduled to attend a
ceremony commemorating the 30th anniversary of the signing of the
Japan-China Peace and Friendship Treaty.

3) Uncertain Lower House election casts shadow over diplomatic
timetable

NIKKEI (Page 2) (Abridged slightly)
October 7, 2008

The fluid timetable for the next Lower House election has begun
casting a pall over foreign affairs. The diplomatic timetable is
packed with events toward the end of the year. Chief Cabinet
Secretary Takeo Kawamura indicated in a press briefing yesterday
that the prime minister must attend the events that must be attended
by the prime minister as Japan's representative. But the current
situation makes it difficult for the prime minister to determine his
responses.

At the top of the prime minister's diplomatic timetable is the
Asia-Europe Meeting (ASEM) summit to be held on Oct. 24-25 in
Beijing. China has also invited him to an event commemorating the
30th anniversary of the signing of the Japan-China Peace and
Friendship Treaty. This year's Asia-Pacific Economic Cooperation
(APEC) summit meeting is also scheduled to take place in the
Peruvian capital of Lima on Nov. 22-23. "If the Lower House election
were to be held on Nov. 23, we would be able to convey the prime
minister's good performance (to the APEC forum)," a senior LDP
lawmaker said. But in reality, it is unthinkable for the prime
minister to be absent on the election day.

In December, the East Asia Summit and Association of Southeast Asian
Nations (ASEAN) Plus Three (Japan, China, South Korea) summit are
scheduled to take place. Coordination is also underway to hold a
Japan-China-South Korea summit before the end of the year. It is
time to nail down the diplomatic timetable.

4) Antiterror bill to enter into deliberations on Oct. 9

SANKEI (Page 5) (Full)
October 7, 2008

The ruling coalition of the Liberal Democratic Party and the New
Komeito decided yesterday to deliberate in the Diet on a
government-introduced bill amending the new Antiterrorism Special
Measures Law to extend the Maritime Self-Defense Force's refueling
activities in the Indian Ocean for another year, following an
explanation of the proposed legislation in a plenary sitting of the
House of Representatives on Oct. 9. The ruling parties will propose
the deliberation schedule to the opposition parties in a meeting
today of directors on the House of Representatives Rules and
Administration Committee.

Prime Minister Taro Aso is willing to start deliberations on the
legislation before dissolving the House of Representatives. LDP Diet
Affairs Committee Chairman Tadamori Oshima also said in a TV program
on Oct. 5, "We should make clear the point at issue in the election
for the House of Representatives, and we'll also need to handle the

TOKYO 00002785 004 OF 008


new antiterror legislation after passing the supplementary budget."
Meanwhile, Democratic Party of Japan (Minshuto) Diet Affairs
Committee Chairman Kenji Yamaoka said, "A full-fledged
administration should handle all the issues but the extra budget."
With this, Yamaoka called for dissolving the Diet at an early date
before entering into deliberations on the antiterror bill.

The ruling parties are aiming to explore timing for dissolving the
House of Representatives by highlighting a point of contention
between the ruling and opposition parties after starting
deliberations on the antiterror bill, to which the DPJ and other
opposition parties are opposed.

5) East Asia Summit's environment ministerial: Draft statement
includes target of halving greenhouse gas emissions, but India
expressing opposition

ASAHI (Page 6) (Full)
October 7, 2008

In the first East Asia Summit's environment ministerial meeting to
be held in Hanoi on Oct. 9, a joint statement will be adopted. The
revealed draft of the statement specifies that participants confirm
the need to adopt a long-term target of reducing global greenhouse
gas emissions at least by half by 2050. But India and other emerging
countries will inevitably raise objections. Under the current
situation, it may be difficult to reach an agreement in the
meeting.

Japan took the lead in drawing up the draft. It expresses concern
about the negative effects of global warming from short- and
long-term perspectives. The draft then emphasizes the need to
construct an impartial and effective post-Kyoto Protocol framework.
The draft also positively evaluates a sector-specific approach on
reducing gas emissions as "effective in promoting emission cuts from
developing countries," but it is uncertain whether developing
countries will show understanding on this approach.

Japan is going to stress the necessity to set reduction targets,
based on an agreement reached in the July Hokkaido Toyako Summit for
each country to share common long-term goals. But India and other
countries reportedly have already expressed opposition to the idea
of including mandatory reduction targets in the joint statement.

Given that such environmental problems as air pollution, water
shortages, and traffic congestion are becoming serious as a result
of rapid urbanization in major cities in Asia, the draft statement
proposes that urban problems should be tackled on a priority basis,
noting: "Cooperation will be advanced to create environmentally
sustainable urban areas." Specifically, the draft reveals plans to
take effective measures to reduce greenhouse gas emissions, such as
promoting regional cooperation in waste management, effective use of
water resources, and urban afforestation, as well as countering air
and water pollution and introducing public transport facilities.

The meeting will bring together 16 countries, including Japan,
China, India, Australia, and Association of Southeast Asian Nations
(ASEAN) members. Vietnam proposed holding an environmental
ministerial, with the aim of translating into action the measures in
the Singapore Declaration that was adopted in the East Asia Summit
last November and took up the global warming issue for the first
time. The ministerial is likely to be made an annual meeting.

TOKYO 00002785 005 OF 008

6) DPJ grills government over set of three issues -- data prior
consultations, falsified pension benefits, and amakudari

NIKKEI (Page 2) (Abridged slightly)
October 7, 2008

In yesterday's Lower House Budget Committee session, Democratic
Party of Japan Policy Research Committee Vice Chairman Akira
Nagatsuma took the floor as the first questioner. Nagatsuma grilled
the government over a set of three issues: the LDP's order to all
government offices for prior consultations about opposition parties'
requests for data; government agencies' mediation to help retiring
officials find reemployment (amakudari); and falsified pension
records by the Social Insurance Agency.

Prime Minister Taro Aso: "Under a parliamentary system, there is no
special problem to provide information in compliance with the ruling
camp's request."

Nagatsuma: "Obtaining data might become more difficult than
before."

The prior consultation issue was triggered by the Agriculture,
Forestry and Fisheries Ministry's internal document obtained by the
DPJ. The document was produced under the date of Sept. 12 in
compliance with an instruction by LDP Diet Affairs Committee Vice
Chairman Yoshitaka Murata. The document reads: "Government agencies
must refrain from presenting data at their own judgments in response
to requests from opposition parties." It also became clear that
Murata had ordered all government agencies for prior consultation
via the Cabinet Affairs Office.

LDP Diet Affairs Committee Chairman Tadamori Oshima explained: "We
did not tell (government agencies) not to present data. It was part
of an effort to make rules." The LDP also contended that given an
increase in administrative work resulting from growing requests for
data by opposition parties, prior consultations were necessary to
grasp the actual situation.

As of Oct. 5, MAFF expunged from its internal document the part
reading: "Data not allowed (by the LDP) for presentation shall be
revised into data allowed for presentation." But the ministry still
intends to continue prior consolations on data requested.

There was also a huge gap in views between Nagatsuma and the
government over the question of falsified standard monthly pension
benefits by the Health, Labor and Welfare Ministry. Nagatsuma
repeatedly demanded a sample survey on records that might have been
tampered with. MHLW Minister Yoichi Masuzoe rejected Nagatsuma's
demand, saying: "What we are doing is the correct way." Nagatsuma
also demanded the deadline for cross-checking pension records in
connection with unidentified pension accounts. In response, the
prime minister repeatedly said that no one could tell exactly when
that would end.

Nagatsuma also demanded the government agencies immediately stop
helping retiring government officials find reemployment. The prime
minister again stopped short of offering a clear answer. After the
budget committee session, Nagatsuma expressed his disappointment to
reporters.


TOKYO 00002785 006 OF 008


7) Diet debate kicks off on economic policies, focusing on fiscal
resources to fund policy pledges

YOMIURI (Page 9) (Full)
October 7, 2008

A full-scale debate over economic policies kicked off between the
ruling and opposition camps in a meeting of the House of
Representatives' Budget Committee yesterday. With an eye to the next
Lower House election for a snap election, both the Liberal
Democratic Party (LDP) and the Democratic Party of Japan (DPJ)
criticized as insufficient the other side's explanation about where
to find the resources to finance policy pledges.

Citing the DPJ's earlier announcement about a plan to raise
approximately 22 trillion yen by cutting 10 PERCENT the current
212-trillion-yen spending in the government's general account and
special accounts, LDP Policy Research Council Acting Chairman
Hiroyuki Sonoda said: "What the DPJ says is contradictory," pointing
out that the accounts contain many items where cuts would be
difficult. Finance Minister and State Minister in Charge of
Financial Services Nakagawa also commented in doubt: "If 22 trillion
yen is tapped out of the 30 trillion yen worked out by subtracting
expenditures for government bonds and social security outlays (from
the 212 trillion yen), the people's livelihood will be serious
affected."

In response, DPJ Policy Research Council Acting Chairman Akimasa
Nagatsuma retorted: "The DPJ outlined its policy manifesto. Will the
LDP come up with a manifesto that clarifies from where the fiscal
resources will come?"

But Prime Minister Aso stopped short of mentioning details about
fiscal resources, just saying: "A policy manifesto must explain as
much as possible from where the fiscal resources for policy pledges
will come."

Aso indicated a willingness to hammer out additional economic
measures to deal with the U.S. financial crisis and the nation's
economic slump. A senior Finance Ministry official, though, said:
"It is difficult to come up with extra measures without issuing
deficit-covering bonds when tax revenues have declined." On this
point, too, heated discussion is likely to continue.

8) Prime Minister Aso positive about additional economic package

MAINICHI (Page 2) (Full)
October 7, 2008

Prime Minister Taro Aso, referring to the plunges in Tokyo stock
prices at a Lower House Budget Committee session yesterday, stated:
"Voters are really feeling that the situation is very serious."

Asked by New Komeito Secretary General Kazuo Kitagawa whether he was
considering forming an additional economic package, Aso said: "If
there is a judgment that appropriate measures are needed, I will
take action as a matter of course." He took a forward-looking stance
toward compiling an additional economic stimulus package.

In this regard, Aso said last night: "I think the stock prices would
have dropped further (if the United States did not pass a financial
stabilization law). I will keep close watch on effects on (Japan's)

TOKYO 00002785 007 OF 008


real economy."

9) Supplementary budget to clear Lower House as early as Oct. 8

MAINICHI (Page 2) (Full)
October 7, 2008

The main opposition Democratic Party of Japan (DPJ) decided
yesterday to accept a plan to take a vote on the fiscal 2008
supplementary budget bill on Oct. 8 at a plenary session of the
House of Representatives. A senior DPJ member last night said: "We
will accept the Oct. 8 voting plan." The largest opposition,
meanwhile, has demanded concentrated deliberations on such issues as
the pension-record mess at the Lower House Budget Committee. The
ruling camp intends to accept the DPJ's demand. A senior ruling
coalition member revealed the outlook, saying: "It is not sure
whether the bill will be put to a vote on the 8th but it is certain
to take a vote on the 9th." As it stands, the supplementary budget
bill is certain to clear the Lower House before the end of the week.


The government and ruling parties intend to enact the supplementary
budget after holding deliberations for three to four days from Oct.
14 in the House of Councillors, after it is passed by the Lower
House. With the DPJ's acceptance of the idea of passing the budget
bill through the Lower House in the week, the prevailing view in the
ruling camp is that deliberations in the opposition-controlled Upper
House will smoothly move forward.

However, the DPJ has put off a conclusion on whether to approve the
additional budget, since the party executives have entrusted
President Ichiro Ozawa with a final decision.

10) Growing possibility of Lower House being dissolved after passage
of supplementary budget; Government, ruling coalition envisage Lower
House election in mid-November or later

ASAHI (Page 1) (Slightly abridged)
October 7, 2008

The government and ruling parties yesterday launched deliberations
on the fiscal 2008 supplementary budget bill at the House of
Representatives Budget Committee. With an eye to dissolving the
Lower House and calling a general election, the government and
ruling coalition began coordination on the idea of formulating a
second economic stimulus package after the passage of the
supplementary budget. They are envisaging holding the snap election
in mid-November or later. However, they may put it off if the
cabinet support ratings drop. Prime Minister Taro Aso will make a
final decision after gauging the political and economic situations.

At the Lower House Budget Committee session yesterday, Aso indicated
that he would place priority on the passage of the supplementary
budget rather than on Lower House dissolution. He stated: "The
future of the economy is the main public concern. It is my top
priority to gain Diet approval of the supplementary budget after
deliberating on it."

The ruling Liberal Democratic Party had looked into the possibility
of dissolving the Lower House on Oct. 26 for a Nov. 2 general
election, taking advantage of the momentum gain through its
presidential race. However, several factors may have changed the

TOKYO 00002785 008 OF 008


LDP's position, among them the global financial crisis, the Aso
cabinet's starting approval rates were lower than those of the
Fukuda cabinet, and the embarrassing resignation of transport
minister Nariaki Nakayama to take responsibility for his careless
remarks. In addition, the results of the LDP's own pre-election
survey in late September were reportedly unfavorable, and even
hinted that the ruling coalition would fail to gain a majority in
the Lower House.

In a bid to achieve results that can be used for the campaign of a
general election, the LDP is now looking into the possibility of
formulating a second supplementary budget, which would include
concrete measures to stimulate domestic demand. The party plans to
announce it after the supplementary budget clears the Diet.

SCHIEFFER

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