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Cablegate: Daily Summary of Japanese Press 08/03/07-1

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RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
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RUEHNH/AMCONSUL NAHA 4781
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RUEHNAG/AMCONSUL NAGOYA 1397
RUEHKSO/AMCONSUL SAPPORO 3128
RUEHBJ/AMEMBASSY BEIJING 8161
RUEHUL/AMEMBASSY SEOUL 4227
RUCNDT/USMISSION USUN NEW YORK 5246

UNCLAS SECTION 01 OF 07 TOKYO 003538

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 08/03/07-1


Index:

(1) US State Department deputy spokesman urges Japan to extend
antiterrorism law, seeks to check DPJ

(2) Inward-looking trend growing in FTA talks: Coordinating views on
agricultural liberalization becoming difficult

(3) Interview with Shuntaro Torigoe, journalist: Akagi made a
scapegoat

(4) Opposition camp might use censure motions to force the prime
minister into dissolving the Lower House

ARTICLES:

(1) US State Department deputy spokesman urges Japan to extend
antiterrorism law, seeks to check DPJ

MAINICHI (Page 1) (Full)
August 2, 2007

Masaya Oikawa, Washington

At a press conference on Aug. 1, US State Department Deputy
Spokesman Tom Casey strongly urged Japan to extend its Antiterrorism
Special Measures Law, which will expire in November. He stated:

"It is clear that cooperation with the Japanese government has been
well in fighting terrorism. We hope the law will be revised so that
Japan and the US will be able to continue carrying out various
antiterrorism measures."

Ichiro Ozawa, president of Minshuto (Democratic Party of Japan),
which became the largest force in the House of Councillor, has
expressed opposition to the extension of the law. Therefore, Casey's
comment was aimed at seeking to constrain the DPJ's moves.

Casey said:

"What to do with individual bills is an issue the Japanese people
decide. The Japanese government understands well that Japan may
sustain damage from terrorism and that it was exposed to the threat
of terrorist attacks and even attacked by terrorists. We have no
doubts that the Japanese government and the United States will
cooperate on the terrorist problem."

(2) Inward-looking trend growing in FTA talks: Coordinating views on
agricultural liberalization becoming difficult

NIKKEI (Page 5) (Slightly abridged)
August 2, 2007

Faced with globalization and a declining birthrate at home, Japan is
finding its trade and agricultural strategies - specifically,
accelerating trade talks and strengthening the competitiveness of
domestic agriculture -- have begun faltering due to the crushing
defeat of the ruling parties in the recent Upper House election. The
election result could usher in stronger domestic calls for further
protection of agriculture, which could stall trade talks.
Agriculture Minister Norihiko Akagi was scheduled to meet with
United States Trade Representative Schwab during his visit to the US

TOKYO 00003538 002 OF 007


starting on August 2, but the day before, he resigned his post.
Japan's trade and agricultural strategies, now becoming increasingly
inward-looking, reflect the beginnings of a Japan adrift.

When the defeat of the ruling parties became certain, business
leaders unanimously voiced their concern over ongoing trade talks
stagnating, with Fujio Mitarai, chairman of the Japan Business
Federation (Nippon Keidanren), noting, "Trade talks will require
talks between the ruling and opposition parties"; and Masamitsu
Sakurai, representative director of the Japan Association of
Corporate Executives (Keizai Doyukai), saying, "I am concerned to
what extent the election result will have an impact on the talks."
Behind their remarks is the perception that a growing trend of
protectionism toward domestic farmers will hinder the government's
efforts to sign economic partnership agreements (EPA) with other
countries, as one senior Nippon Keidanren officer put it.

Spreading view seeking agricultural protection

The LDP advocated in the Upper House election campaign the
strengthening of competitiveness through nurturing large-scale
farming, while the Democratic Party of Japan (DPJ) proposed
establishing an income compensation system targeting all farm
households. The DPJ grabbed seats in single-seat constituencies,
where it had done badly in previous elections. Unless coordination
between the ruling and opposition camps goes smoothly, Japan would
not be able to make concessions in this sector, causing stagnation
in the FTA talks.

The ordeal is soon to come. The government will hold EPA talks with
Australia starting on August 6. In the talks, Australia, an
agricultural power, is expected to ask Japan to scrap tariffs on
agricultural products, including beef and dairy products, on which
Japan levies high tariffs. Japan was supposed to set the date to
open the talks for August in order to avoid their impact on the
Upper House election, according to a government source. "Now that
things have come to this pass, Japan must face the talks with its
basic stance remaining shaky," the same source said. Economy, Trade
and Industry (METI) Minister Akira Amari warned, "I want the
opposition parties to refrain from opposing for the sake of
opposing." However, EPAs require ratification by the Lower and Upper
Houses. Since the opposition camp has a majority in the Upper House,
it is virtually tantamount to a ruling camp. METI officials and
officials of the Ministry of Agriculture, Forestry and Fisheries
have started preparations to give briefings to the DPJ, saying, "We
need to obtain understanding from the opposition parties."

Views calling for expansion of agricultural protection are growing
in the LDP as well. LDP lawmaker Toshio Yamada, former senior
managing director of the Central Union of Agricultural Cooperatives
(Zenchu), who was for the first time elected in the Upper House
election this time, emphatically said, "In order to win in the next
election, it is necessary to establish a subsidy system that gives
consideration to the lives of small-scale farmers."

Passive damages immense

What impact will a possible stagnation of EPA talks with Australia
and the Association of Southeast Asian Nations (ASEAN) have on the
Japanese economy? The Mitsubishi Research Center has estimated that
passive damage Japan would incur from a one-year delay in the
enactment of an EPA with those nations would reach approximately 1

TOKYO 00003538 003 OF 007


trillion yen, depriving 250,000 people of job opportunities.

According to the World Trade Organization statistics, the number of
FTAs signed across the world reached 141 as of March. The number has
doubled over about six years since 2000. How far will the ruling and
opposition parties be able to promote free trade and agricultural
reform? If they mismanage the EPA policy, the tab they have to pick
up in the future would be enormous.

(3) Interview with Shuntaro Torigoe, journalist: Akagi made a
scapegoat

MAINICHI (Page 2) (Full)
August 2, 2008

-- How do you evaluate the resignation of former Agriculture,
Forestry and Fisheries Minister Norihiko Akagi to take
responsibility for the ruling coalition's crushing defeat in the
July 29 House of Councillors election?

Members in the LDP and the media have criticized him (over his
office expense scandals) as the main cause for the election defeat.
Mr. Akagi, unable to resist such a trend, must have judged it
necessary to take responsibility.

-- Why did his resignation come after the election?

It is probably because the election result was more devastating than
the LDP may have expected. An atmosphere of laying the blame on
someone swept across the party after the election. Mr. Akagi was
made a kind of scapegoat. It is strange to place the entire
responsibility on Mr. Akagi. Prime Minister Shinzo Abe must be held
responsible for having appointed him, but he apparently does not
care about it.

-- Politics-and-money scandals have cropped up in succession.

This is attributable to there having been no change of government.
If there is a change of government, it should be possible for the
new government to expose the corruption that the former
administration had festered inside the organization and drive it
out. Central government agencies also should have a keener sense of
tension. In order to disclose information, a change of government is
an essential means.

-- How do you view the historic defeat of the Liberal Democratic
Party?

The July 29 election was an opportunity for the voters to judge the
Abe administration. The election outcome must not be dismissed only
with the removal of Mr. Akagi. Mr. Abe asked the voters to "choose
Abe or (Democratic Party of Japan (DPJ) President Ichiro) Ozawa."
So, it should be considered better from a common-sense stand that
for the prime minister to step down to take responsibility. He is
thus irresponsible as a leader. In addition, Mr. Abe's proposal for
amending the Constitutional has a hazardous nature, and he has
stressed only a growth-oriented economic policy without giving
consideration to the people's lives. These three points can be
listed as the main reasons for the LDP's defeat in the election.

-- What impression did you have of the election campaign?


TOKYO 00003538 004 OF 007


Mr. Abe frequently dodged subjects in replying to my questions. He
did so when I asked in a special election program, "Do you think the
voters selected Mr. Ozawa?" He often gives incoherent replies
because he is unable to flexibly reply to unexpected questions. He
probably has yet to fully develop his skills as a politician. I also
recall Mr. Abe crying out that "we must win!" This remark must have
been based on the premise they would lose the election. I thought at
that time that the LDP would be defeated.

-- Why do you think Prime Minister Abe decided to stay in power
despite criticism voiced even within the LDP?

Mr. Abe believes that he was defeated because of the pension problem
and a series of scandals involving cabinet ministers. He never takes
the view that voters rejected the task of constitutional revision he
took up in the first stage of the election campaign. That is why he
still says: "I will do what I want to do."

-- What is your prediction about the future of the political world?

Mr. Abe is eager to make arrangements to push ahead with the task of
reforming the Constitution. To that end, he will reorganize the
political world, with a focus on Article 9 of the Constitution. Even
in the DPJ, there are members in favor of constitutional revision.
Meanwhile, there are anti-Abe forces in the LDP. The New Komeito,
the LDP's coalition partner, has taken the stance of protecting
Article 9. It is now in the stage of shuffling in the preparation
for a reorganization of the political world. A real political battle
will start from now.

(Torigoe was unofficially asked to run in the Tokyo gubernatorial
election this April to face off with Shintaro Ishihara. After some
thought, he decided to decline the offer for reasons of health, but
he has continued to take a harsh look at politics.)

(4) Opposition camp might use censure motions to force the prime
minister into dissolving the Lower House

TOKYO SHIMBUN (Pages 24, 25) (Abridged)
August 2, 2007

Attention is focused on Ichiro Ozawa who heads the major opposition
Democratic Party of Japan, which achieved a landslide victory in the
July 29 House of Councillors election. In the wake of Agriculture
Minister Norihiko Akagi's dismissal yesterday, the option of
submitting a censure motion against Prime Minister Shinzo Abe has
surfaced as an effective means to force the Abe cabinet into
resignation en masse and dissolving the House of Representatives.
How effective is a censure motion?

"I got a telephone call from Mr. Ozawa around noon today. He
referred to Prime Minister Abe's decision to stay on as pure
nonsense. He also said that Mr. Abe is in a state of shock and that
his mind is in a panic."

This comment came from former Upper House lawmaker Sadao Hirano, who
is long known as an adviser to Ozawa. Hirano also explained Ozawa's
mind this way:

"During his campaign, Prime Minister Abe asked people, 'Which do you
choose, Mr. Ozawa or myself?' His party suffered a crushing defeat
as a result, but he will not quit as prime minister. Mr. Ozawa, in

TOKYO 00003538 005 OF 007


my view, wanted to say that the prime minister has not taken
responsibility as a lawmaker."

The LDP is exhibiting terminal symptoms, as seen in Abe's dismissal
yesterday of Agriculture Minister Akagi over his poor handling of
offices expenses, which allegedly contributed to the party's serious
setback in the election. "Mr. Ozawa should force the prime minister
into Lower House dissolution for a snap general election at the
earliest possible date in order to bring about a change of
government," Hirano said.

Hirano also cited two points as prerequisites to that end:

"In the election, the DPJ vowed to improve people's livelihoods by
citing such areas as pension, disparity, tax, employment,
agriculture, employment that won public support. Now the question is
how the party fleshes them out. The DPJ must seedily come up with
specific polities that can win public support."

Hirano added:

"The day after the Upper House poll, Mr. Ozawa sent a fervent
message to all those planning to run in the next Lower House
election on the DPJ ticket. The party needs to determine some 100
official single-seat candidates. Making preparations for the
election is a top priority."

How will the DPJ move next in the Upper House, which is likely to
serve as the main battlefield in the upcoming extraordinary Diet
session, while solidifying its electoral power base? Is there any
chance to file and approve a censure motion against Prime Minister
Abe in the Upper House?

Although Ozawa indicated in a post-election press conference that he
was not thinking of presenting a censure motion for the time being,
Hirano took this view:

"There is a possibility that the opposition camp will present a
motion. Chances are that it will do so in the extraordinary Diet
session in the fall when deliberations on the Antiterrorism Special
Measures Law, scheduled to expire on November 1, climax. If the
prime minister tries to bulldoze bills through the Lower House, the
opposition camp would file a motion even if it is rejected in the
Upper House."

An additional scandal involving a cabinet minister following Akagi
or the government's failure to deal sufficiently with the pension
issue is also likely to prompt the opposition camp to file a censure
motion.

Did Ozawa, who has a long history of wielding influence from behind
the scenes by assisting heads of other parties, pour his heart and
soul into the July 29 poll?

Hirano said:

"Mr. Ozawa is dead serious about wresting power from the LDP.
Realizing that he can no longer run away, I think Mr. Ozawa has
taken voters' wishes to his heart through this election."

What is a censure motion in the Upper House?


TOKYO 00003538 006 OF 007


The Upper House's censure motion corresponds to the Lower House's
no-confidence motion against the cabinet. To date, a total of 27
censure motions have been filed against the prime minister and all
have been voted down.

Against cabinet ministers, 72 motions have been submitted. In
October 1998, the DPJ, New Komeito, and Liberal Party submitted a
motion against then Defense Agency Director-General Fukushiro Nukaga
over a breach-of-trust scandal involving agency officials. The Upper
House approved it for the first time under the current Constitution,
and Nukaga stepped down as a result.

Unlike a no-confidence motion against the cabinet, a censure motion
is not legally binding.

In an earlier Upper House full session, a censure motion against
Prime Minister Abe was voted down by a margin of 18 votes. If a
motion was filed again in the upcoming Diet session, it is certain
to clear the Upper House.

If approved, how would a censure motion against the prime minister
affect him?

Journalist Takao Toshikawa explained:

"That would mean another vote of no confidence in Abe following the
one in the latest election. Running Diet business and compiling
budges would become extremely difficult."

Political analyst Kichiya Kobayashi holds this view:

"It would deal a serious blow to the Abe administration, causing him
to lose his momentum in the party and decreasing his support rate.
In the Diet, DPJ by using its numerical superiority would intensify
its offensive against the LDP overt the antiterrorism law, which has
been the legal basis for the SDF's logistical support for US
vessels, and other legislation. LDP lawmakers would simply watch the
fragile cabinet, and it would soon show cracks and sink."

Atsuo Ito, a political analyst and a former DPJ chief of the
secretariat, also predicted:

SIPDIS

"The Upper House would send bill after bill to the Lower House, such
as legislation prohibiting pension funds being used for other
purposes and a bill tightening the Political Funds Control Law, to
please the public. The DPJ would pressure the prime minister for
dissolving the Lower House."

What is the most effective timing for submitting a censure motion?

Toshikawa's answer is, linking it to a revision of the antiterrorism
law which is to expire in November. Although the government eyes
enacting a bill for extending the law by one year, there is a high
likelihood that it will be rejected in the Upper House and be
re-discussed in the Lower House as a result.

Toshikawa added:

"The DPJ has consistently opposed the antiterrorism law. Ozawa might
present an amendment first. He would employ both soft and hard
approaches to demonstrate that his party is capable of assuming
political reins in addition to just saying 'no' to the ruling camp.

TOKYO 00003538 007 OF 007


The opposition bloc would submit a censure motion either when the
Diet is in turmoil over the terrorism law's revision or soon after
the Diet opens."

Kobayashi pointed to the outset of the next Diet session to apply
pressure on the ruling camp. He said:

"The New Komeito is reluctant to extend the terrorism law, and
re-discussing the law's extension back in the Lower House might be
difficult. Depending on how things turn out, the Abe cabinet might
be pressed either to resign en masse before the end of the year or
to dissolve the Lower House to ask for a public vote of
confidence."

The DPJ still must clear many hurdles before taking the reins of
government. Is there any chance for an Ozawa administration?

Ito does not think the opposition bloc can switch place with the
ruling camp in the next general election. He thinks a reversal of
places takes three steps: the DPJ's landslide victory in the Upper
House election as the first step, followed by a close race in the
next general election as the second step, and then political
realignment or a change of government as a result of a fissure
between the LDP and New Komeito or schisms in the LDP as the third
step.

Political commentator Minoru Morita takes a severe view on Ozawa,
who declared in the campaign that he might retire from politics:

"The next election is about winning or losing, period. Prime
Minister Abe is clinging to power despite his party's crushing
defeat. That's not politics by a mature person. His administration
is corrupt and too childish. The same is true with the head of the
largest opposition party. I believe he won't mention retiring from
politics anymore. Ozawa's first and foremost top priority is to
force the prime minister into dissolving the Lower House."

SCHIEFFER

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