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Cablegate: Japanese Morning Press Highlights 11/21/08

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UNCLAS SECTION 01 OF 08 TOKYO 003211

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 11/21/08

Index:

1) Videoconference of American and Japanese students at U.S.
Embassy: U.S. hot on politics; Japan not (Asahi)

Defense and security affairs:
2) Suprapartisan group of lawmakers sponsoring special law to
dispatch MSDF to waters off Somalia to deal with pirate problem
(Yomiuri)
3) Special measures law to allow MSDF dispatch to cope with pirates
in waters off Somalia will allow relaxed use of weapons rules
(Sankei)
4) SDF failure to intercept missile in MD test analyzed (Nikkei)
5) Former Defense Minister Hayashi calls for redefinition of the
U.S.-Japan alliance (Mainichi)
6) Chief Cabinet Secretary Kawamura lax about possible territorial
violation on Tsushima Island: If something specific happens, will do
something about it (Sankei)

Political agenda:
7) Coordination has started to extend the current Diet session by 25
days (Asahi)
8) Liberal Democrat Party (LDP) junior and mid-level lawmakers
oppose Prime Minister Aso's position of not submitting second extra
budget to current session (Mainichi)
9) Aso apologizes again to Japan Medical Association for saying that
most Japanese doctors "lack common sense" (Mainichi)

10) Yohei Kono sets a record as longest running speaker of the Lower
House, logging 1,786 days so far (Asahi)
11) Democratic Party of Japan is at it again: Opposes government's
appointments of nine officials in three organizations, including
Fair Trade Commission (Yomiuri)

12) Government's tax commission proposes measure to make it easier
for companies overseas to repatriate profits (Nikkei)

13) Financial crisis prompts WTO to act (Asahi)

Articles:

1) Video conference held between Japanese and American college
students

ASAHI (Page 4) (Abridged slightly)
November 21, 2008

Hideo Matsushita

A video conference was held yesterday between college students of
Japan and the United States. The event clearly exposed the
difference between Japanese students, who have few hopes of
politics, and their American counterparts, who have strong
expectations for change. Some Japanese students reacted enviously to
U.S. participants who repeatedly said that with participation,
politics can be changed.

The U.S. Embassy in Tokyo hosted the event. Some 170 Japanese and
American students in Tokyo, Nagoya, Fukuoka, Naha, and Washington
discussed "youths and politics."

In reaction to a report that Japanese youths have little interest in

TOKYO 00003211 002 OF 008


politics and that they tend to regard lawmakers as "uncool," an
American student asked, "Why do you feel politicians are not cool?"

Included in the U.S. side were a number of students who worked as
volunteers in the U.S. presidential election. One Japanese
participant asked: "If a candidate who has no vision for the country
and is a poor speaker runs in the next presidential election, do you
still think you will participate in politics?" The question was
raised as if to ask, what would you do if you were placed in the
position of Japanese youths?

An American student said: "Many young people were moved by the
speeches of President-elect Obama and began to realize that we can
make change if we take part in politics. I think we will remain
engaged in politics to change the situation even if the next
candidate is not attractive."

2) Diet group eyes special law for MSDF antipiracy mission

YOMIURI (Page 2) (Abridged)
November 21, 2008

A nonpartisan parliamentary group of junior lawmakers, aiming to
refurbish Japan's security system for the new century, held an
executive meeting yesterday and decided to sponsor a special
measures law intended to send the Self-Defense Forces for antipiracy
operations in waters off the coast of Somalia in Africa. The Diet
group is co-represented by former Defense Agency Director General
Gen Nakatani from the ruling Liberal Democratic Party, Seiji
Maehara, deputy president of the leading opposition Democratic Party
of Japan (Minshuto), and Isamu Ueda, vice chairman of the New
Komeito, the LDP's coalition partner.

The group's proposal of special legislation is expected to feature
such measures as sending Maritime Self-Defense Force destroyers and
P-3C patrol aircraft to offshore areas near the Somalia coast to
escort (Japanese) tankers and foreign merchant ships. In addition,
the group's legislative proposal is expected stipulate that the MSDF
will watch out for pirate ships and chase and halt them as needed.
It would also allow the MSDF to use weapons if and when commercial
ships come under attack.

3) Weapons use eyed for self-defense against pirates

SANKEI (Page 5) (Full)
November 21, 2008

The government yesterday drew up a bill for antipiracy special
measures to send Maritime Self-Defense Force destroyers to waters
off the coast of Somalia in Africa. The bill allows the MSDF to use
weapons if and when the MSDF needs to do so in legitimate
self-defense or if and when pirates use weapons. The MSDF is also
expected to escort foreign ships.

The government plans to present the bill to the Diet at its ordinary
session next year.

The draft bill is intended to secure tankers and other commercial
ships. It is based on a resolution adopted by the United Nations in
June this year for antipiracy counteractions.

The bill stipulates that the MSDF will operate in Japan's

TOKYO 00003211 003 OF 008


territorial waters and in waters off the coast of Somalia. For
example, the MSDF will watch and escort ships there and will halt
and inspect pirate ships. If and when there is a battle nearby, the
MSDF will discontinue its operations there and evacuate.

4) Missile test failure: Accuracy improvement a major challenge

NIKKEI (Page 2) (Abridged)
November 21, 2008

The Defense Ministry announced yesterday that the Maritime
Self-Defense Force conducted a second test in waters off Hawaii of
its sea-based Standard Missile 3 (SM-3) system, which is designed to
shoot down ballistic missiles flying to Japan. However, the SM-3
failed to intercept a mock ballistic missile, ministry officials
said. The MSDF lost sight of the target missile several seconds
before intercept. The ministry is now working together with the U.S.
military to probe the cause of the failure.

The missile test was intended to check the MSDF Aegis destroyer
Chokai's performance, and its cost was 6.2 billion yen. The U.S.
military launched a mock missile as a target from Kauai, Hawaii. The
Chokai was to detect the target missile several hundred kilometers
away and launch an SM-3 missile to shoot it down.

In a previous test that was carried out in December last year, the
MSDF successfully shot down a mock missile with an interceptor
launched from its Aegis destroyer Kongo. Unlike that test, the test
this time was conducted with a scenario that was even more like an
actual war with no information given in advance about what time the
mock missile would be launched.

Japan and the United States will probe the cause of the test's
failure and would like to release findings from their analyses. The
SM-3 is designed to catch a source of heat with an infrared sensor
in its warhead. There is a view that there was something wrong with
the SM-3 missile's warhead.

"We went well with detecting, tracking, and launching," Takashi
Saito, chief of the Self-Defense Forces' Joint Staff Office, told a
press conference yesterday. He added: "The system was normal. We
failed in the important phase. But we got a passing mark." Vice
Defense Minister Kohei Masuda also stressed, "It will not affect the
scheduled networking of missile defense systems."

Japan and the United States have so far conducted a total of 16 SM-3
tests and have been successful in 13. A senior Defense Ministry
official also admits, "We cannot say we will never miss the target."
However, it is a categorical imperative to improve the accuracy of
interception. The failure this time has left a major challenge.

5) Former defense minister calls for redefinition of Japan-U.S.
alliance

MAINICHI (Page 5) (Full)
November 21, 2008

Appearing on a BS11 digital television broadcast, former Defense
Minister Yoshimasa Hayashi of the Liberal Democratic Party commented
on the challenges for Japan-U.S. relations after the inauguration of
President-elect Obama. He stressed: "Mutual frustration is mounting
on the security front, which is the foundation of the relationship.

TOKYO 00003211 004 OF 008


The international situation also has changed. The time has come for
a redefinition of our security ties from a mid to long-term
perspective."

6) Tsushima in danger: Kawamura indicates that government will
consider countermeasures when something happens

SANKEI (Page 3) (Abridged slightly)
November 21, 2008

South Korean capital has been purchasing real estate in Tsushima
City (a set of islands), Nagasaki Prefecture. Commenting on this
issue, Chief Cabinet Secretary Takeo Kawamura told the House of
Councillors Cabinet Committee yesterday: "We will consider
(countermeasures) when something specific happens." This comment can
be taken to mean that the matter would be left unaddressed until
national defense is in danger. Kawamura was responding to a question
from Upper House member Eriko Yamatani of the Liberal Democratic
Party. The statement is likely to draw criticism as an imprudent
observation lacking a national interest perspective on security and
territorial issues and slighting the safety of the islanders.

Yamatani asked about the Tsushima issue at the start of the meeting.
In a press conference on Oct. 21, Kawamura suggested the possibility
of reviewing security problems, saying, "Naturally, there is a need
for the state to consider the matter from a perspective of the
security of Japan." Referring to this statement, Yamatani asked: "Is
the government going to conduct a fact-finding survey in the
future?"

In response, Kawamura, backing off from his initial position,
indicated that there was no such plan, saying: "The Self-Defense
Forces, including the security of their bases, have been managed
properly."

Yamatani again asked the true intention of Kawamura's statement made
in the Oct. 21 press conference. Kawamura replied: "We must consider
(countermeasures) when concrete action affecting out country's
security is taken." This can be taken to mean that the government
would leave the situation unaddressed until harm comes to the SDF or
islanders. Hearing this, a lawmaker said: "There have been concrete
moves (such as buying plots of land around the Maritime Self-Defense
Force base). The government should conduct a survey."

Yamatani added: "I am asking you questions because if there is
something concrete, it might be too late to do anything about it."
Yamatani also called for a fact-finding survey, including hearings
from islanders and SDF personnel. Citing such countries as South
Korea and Mexico where foreigners are restricted from purchasing
lands near the borders under their constitutions or law, Yamatani
underscored the need to establish a similar law or a system
restricting the purchase of plots of land necessary in light of
security.

In the series of replies, Kawamura said, "There is no need to
restrict (the purchase of land) at this point in time," while
indicating, "We must keep in mind the importance of the Tsushima
islands."

7) Coordination on 25-day Diet extension underway

ASAHI (Page 1) (Full)

TOKYO 00003211 005 OF 008


November 21, 2008

The ruling parties yesterday began coordination on a plan to extend
the current extraordinary Diet session by about 25 days until around
Dec. 25. The ongoing session is expected to end on Nov. 30.

This is because even if the main opposition Democratic Party of
Japan (DPJ) delays a vote on a bill amending the new Antiterrorism
Special Measures Law, which has already been sent to the House of
Councillors after the House of Representatives approved it, it will
be possible for the Lower House to hold a second vote on the bill
based on the constitutional rule that if the Upper House does not
take a vote on a bill within 60 days after it receives the bill, it
is regarded that the upper chamber voted down the bill. Given the
number of weekends and national holidays, the current Diet session
is most likely to be extended until about Dec. 25.

The ruling coalition is also considering extending again the ongoing
Diet session because it will be possible for a bill revising the
Financial Functions Strengthening Law, another priority issue, to be
put to a second vote in the Lower House after Jan. 5.

It is allowed to extend an extraordinary session twice. However,
since there is a view in the ruling coalition that the current
session should be extended by early January, a final decision will
be made after Prime Minister Taro Aso and senior ruling coalition
officials discuss the matter early next week.

8) Junior, mid-level LDP lawmakers to urge government to submit
second extra budget to Diet

MAINICHI (Page 2) (Full)
November 21, 2008

About 20 junior and mid-level Liberal Democratic Party lawmakers,
including former State Minister for Financial Affairs Toshimitsu
Motegi, former State Minister for Administrative Reform Yoshimi
Watanabe and former Chief Cabinet Secretary Yasuhisa Shiozaki, held
a meeting yesterday in the Diet building, and agreed to submit soon
to the government a letter calling for the submission of a fiscal
2008 second supplementary budget for additional economic measures to
the Diet in the current session.

Prime Minister Taro Aso has decided to forgo submitting a second
extra budget to the Diet in the ongoing session. In the meeting
yesterday, however, many participants said that it was necessary to
implement economic stimulus measures as quickly as possible.
However, some thought that the meeting was actually intended to form
a group critical of the prime minister, and not just to urge the
government to present the second extra budget to the Diet.

9) Aso apologizes to Japan Medical Association for remark critical
of doctors

MAINICHI (Page 2) (Full)
November 21, 2008

Prime Minister Taro Aso yesterday retracted his earlier remark that
"there are many doctors who lack common sense" and apologized to the
Japan Medical Association (JMA) Chairman Yoshihito Karasawa, who
visited the Prime Minister's Office to make a protest, saying, "I
used improper words."

TOKYO 00003211 006 OF 008

According to JMA Vice Chairman Yasuhiro Takeshima, who also met Aso
with Karasawa, the chairman read a letter of protest and handed it
to the prime minister. The letter read: "He pointed his finger at a
certain occupation and discriminated against it without any
foundation. I am furious (at his remark)." According to Takeshima,
Aso replied: "I improperly used the expression 'lack of common
sense' in stressing that doctors' values are different (from
ordinary people). I retract my words and make an apology."

In the JMA, a political group of the Ibaraki JMA, in reaction to the
health insurance system for people aged 75 or older, has decided to
support the candidate of the Democratic Party of Japan in the next
House of Representatives election. The controversial remark by the
prime minister reportedly has drawn a number of complaints by
e-mails from JMA members across the nation.

Asked in a press conference about the impact of the Aso remark on
the Lower House election, JMA executive director Toshio Nakagawa
said: "He made the remark that tramples down our feelings. I think
there will be a substantial impact."

10) Kono becomes longest-serving Lower House speaker

ASAHI (Page 4) (Abridged slightly)
November 21, 2008

Yohei Kono, 71, became the longest-serving speaker of the House of
Representatives yesterday since the Imperial Diet of the Meiji Era,
serving 1,786 days in office. Kono in a press conference in the Diet
building yesterday commented: "During this period, I have worried
that calls for a review of the postwar regime and for returning to
the prewar era might grow louder."

As a memorable event, Kono cited controversial visits to Yasukuni
Shrine by former Prime Minister Junichiro Koizumi. Assembling former
prime ministers to his official residence in June 2005, Kono managed
to come up the common view that the prime minister should think
twice before visiting Yasukuni Shrine. Armed with this view, Kono
pressed Koizumi for self-restraint. Looking back at those days, Kono
said: "Some criticized my conduct, saying I should not do such a
thing as the Lower House speaker. The matter was important for the
state, and I still don't think offering advice reflecting elders'
views is bad."

Peace and disarmament have been his lifework. Kono became Lower
House speaker in November 2003 and was reappointed in 2005. In
September this year, he announced that he would not run in the next
Lower House election and would retire from politics.

11) DPJ again disapproves of government's nominations

YOMIURI (Page 4) (Abridged slightly)
November 21, 2008

To fill positions in seven organizations, the government has
nominated 20 candidates. The main opposition Democratic Party of
Japan (DPJ), however, decided yesterday to disapprove of three
nominees to sit on the NHK (Japan Broadcasting Corporation)
Management Committee, another slated for membership on the Fair
Trade Commission, and four to become Reemployment Oversight
Commission members.

TOKYO 00003211 007 OF 008

Of the government's four nominees for NHK Management Committee
members, the DPJ decided to oppose the nomination of Mizuho
Financial Group President Terunobu Maeda, arguing that since Mizuho
is NHK's designated bank, the appointment would raise eyebrows. The
largest opposition party decided to disapprove also the
reappointment of two committee members. Diet Affairs Committee
Deputy Committee Chairman Jun Azumi said: "Those two have not come
up with ideas that would improve the quality of NHK."

Meanwhile, the DPJ decided to support the nomination of Izumi
Kuwano, president of the Japanese inn Tamo no Yu (Yufu City in Oita
Prefecture), for a NHK Management Committee member, although it had
decided to disapprove it in a meeting of the previous day. The
reason was that Kuwano had served in earnest as a member of the NHK
Council for Broadcast Programs.

The DPJ decided to disapprove the nomination of Hitotsubashi
University Prof. Akinori Uesugi to be a FTC member. Yoshito Sengoku,
chair of the party's subcommittee to look into appointments, said:
"He once contributed an essay to a monthly magazine under the name
of a fictional lawyer, even though he is not a lawyer." The main
opposition party also decided to reject the nominations for
Reemployment Oversight Commission memberships, citing that the
commission itself has yet to agree to them.

12) Tax panel to propose measure to encourage corporate profits
overseas to be brought back to Japan

NIKKEI (Page 1) (Full)
November 21, 2008

The government's Tax Commission, an advisory panel to the prime
minister, will propose creating a tax system to facilitate corporate
profits earned overseas to be brought back to Japan. The panel will
include this proposal in its package of recommendations for tax
system revisions for fiscal 2009, according to a draft package
unveiled yesterday. Regarding the consumption tax, the report
specifies the need to raise the tax rate to finance increasing
social security expenses, as was in the report of last year. The
package also positively evaluates the decision by the government and
the ruling camp to form a mid-term program on tax reform, including
the consumption tax.

Under the nation's current corporate tax system, companies are taxed
on their global income. When companies distribute profits from
overseas as dividends in Japan, the highest effective corporate tax
rate of about 40 PERCENT is imposed on the payouts. Due to this tax
system, Japanese companies' overseas units have near-record levels
of retained earnings. Given this, the panel proposes making such
dividends from overseas units to their parents in Japan tax-free.

Although the report recommends raising the consumption tax, there is
no reference to the timing and the margin of rise.

13) Financial crisis prompts WTO to act

ASAHI (Page 7) (Excerpts)
November 21, 2008

The new round of World Trade Organization (WTO) global trade talks
(Doha Round) has begun to get into motion. A declaration issued at

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the financial summit (G-20 summit) held in Washington pledged to
make efforts to reach a broad agreement by the end of this year. A
statement to be issued at the Asia-Pacific Economic Cooperation
(APEC) annual meeting in Peru is also expected to express support
for an agreement. Behind the moves to strike a WTO agreement is a
sense of alarm about a rise of protectionism when the global economy
is sinking deeper into recession.

Japan anxious about unexpected development

The development of WTO talks heading toward an agreement has
surprised Japanese government officials, who had thought until very
recently that it would be difficult to see significant progress
soon.

A senior Foreign Ministry official who accompanied Prime Minister
Aso on his visit to Washington for the financial summit said: "The
leaders of participant countries were so enthusiastic that moves to
push ahead with negotiations gained momentum."

In WTO ministerial talks, personal relations among the participants
greatly affect whether an agreement will be reached on key items. In
Japan, the agriculture, forestry and fisheries minister and the
economy, trade and industry minister were replaced after the
previous ministerial held in July. Given this, Japan has begun to
move in haste in order to make preparations for the next round of
negotiations.

Agriculture, Forestry and Fisheries Minister Ishiba is scheduled to
leave for Geneva on Nov. 23. Coordination is now underway for him to
meet WTO Director General Pascal Lamy and farm talks chairman
Crawford Falconer. Ishiba intends to renew Japan's call in possible
meetings for keeping the tariff on "sensitive agricultural products"
at 8 PERCENT . The Ministry of Economy, Trade and Industry will
dispatch the official participating in the APEC meeting to Geneva,
in which WTO headquarters is located, after the APEC meeting.

If negotiators move closer toward reaching a broad agreement, Japan
will likely be pressured to make concessions in the agricultural
area. The Central Union of Agricultural Cooperatives is planning to
hold a nationwide rally to call on the government to protect the
farm industry in the run-up to the next round of WTO talks.

SCHIEFFER

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