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Cablegate: Japanese Morning Press Highlights 08/03/07-2

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ZNR UUUUU ZZH
P 030123Z AUG 07
FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
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RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4802
RUEHFK/AMCONSUL FUKUOKA 2375
RUEHOK/AMCONSUL OSAKA KOBE 5973
RUEHNAG/AMCONSUL NAGOYA 1417
RUEHKSO/AMCONSUL SAPPORO 3148
RUEHBJ/AMEMBASSY BEIJING 8182
RUEHUL/AMEMBASSY SEOUL 4248
RUCNDT/USMISSION USUN NEW YORK 5267

UNCLAS SECTION 01 OF 08 TOKYO 003548

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 08/03/07-2


Index:

Alliance relations:

9) Japanese, US governments concerned over DPJ's opposition to
antiterrorism law's extension
10) Ambassador Schieffer trying to get on DPJ head Ozawa's calendar
for a meeting on anti-terror law
11) DPJ may be reconsidering its earlier rejection of
Ozawa-Schieffer meeting
12) Meeting of defense minister, Okinawa governor does little to
lift the cloud of uncertainty around the Futenma relocation project


DPJ in Upper House saddle:
13) DPJ to submit own pension bill in short Diet session in August

14) Abe government may compromise with DPJ on contents of civil
service reform bill in fall Diet session
15) DPJ has the power now to block key ruling camp appointments at
the Bank of Japan
16) With DPJ on top in the Upper House, it may not be that easy now
for the opposition parties to line up forces to fight the ruling
coalition

Ruling coalition in flux:
17) Ruling coalition already asks key cabinet posts, LDP factions
seek consideration
18) New Komeito, having tasted bitter defeat in election, may try to
distance self policy-wise from its coalition partner, the LDP
19) Prime Ministerial advisor Seko says that he no longer uses Abe's
"beautiful country" slogan

20) US, Japan restart talks to ease restrictions on US beef imports


Articles:

9) Japanese, US governments concerned over DPJ's opposition to
antiterrorism law's extension

YOMIURI (Page 2) (Abridged slightly)
August 3, 2007

The Japanese and US governments are increasingly concerned over the
Democratic Party of Japan's plan to oppose en extension of the
Antiterrorism Special Measures Law, slated to expire on November 1.
The law has been the legal basis for the Maritime Self-Defense
Force's refueling operation for vessels in the Indian Ocean of the
United States, Britain and other counties. The Foreign Ministry
fears that if the government failed to extend the law, MSDF
withdrawal would follow and that would harm international
cooperation on the war on terrorism and deal a serious blow to the
Japan-US alliance at the same time.

The antiterrorism law was established for supporting US and British
military activities in Afghanistan. The law has been extended three
times since its establishment in November 2001, and the DPJ has
opposed it every time. President Ichiro Ozawa of the DPJ, which has
become the largest party in the House of Councillors through the
July 29 poll, indicated on July 31 that his party would continue to
oppose the law's extension, saying: "We have always opposed it, and

TOKYO 00003548 002 OF 008


there is no reason to support it the next time around."

In reaction, US State Department spokesman Tom Casey expressed
strong hopes for the law's extension on August 1, saying: "We hope
for the law's revision so that the United States and Japan will be
able to continue to support the war on terrorism in every aspect."

Washington is nervous because Japan's trend might affect activities
in the Indian Ocean by the United States and other countries.

By July 6, the MSDF has supplied to vessels of 11 countries a total
of 480,000 kiloliters of fuel (on 763 occasions), 6,090 tons of
water, and 930 kiloliters of helicopter fuel. If Japan withdrew,
those countries would have to either procure fuel independently or
ask another country to take over Japan's place.

In particular, Pakistan relies heavily on fuel from the MSDF. "If
the MSDF withdrew, Pakistan might follow suit," a senior Defense
Ministry official said.

A US State Department source, too, voiced concern that the MSDF's
withdrawal might cast a pall on Japan-US relations. MSDF activities
in the Indian Ocean, along with the SDF mission in Iraq, have been a
symbol of the solid Japan-US alliance.

Senior Vice Foreign Minister Katsuhito Asano in a press conference
yesterday indicated that the government would seek the understanding
of the DPJ, saying: "The matter must be settled in a way not to
negatively affect the Japan-US alliance. We will explain that (MSDF
activities) are vital for the war on terrorism in a way easier to
understand than before."

10) US envoy proposes meeting with Ozawa

SANKEI (Page 5) (Full)
August 3, 2007

US Ambassador to Japan Schieffer has proposed meeting with Ichiro
Ozawa, president of the leading opposition Democratic Party of
Japan, sources said yesterday. In his letter of proposal to Ozawa,
Schieffer said he would like to discuss "important issues." Ozawa
has now already clarified his intention to oppose the idea of
extending the Antiterrorism Special Measures Law, which is to expire
Nov. 1. Schieffer's proposal to meet with Ozawa is apparently aimed
at urging Ozawa to think twice about his opposition. Ozawa is
considering whether to accept the proposal.

11) DPJ positive about Ozawa-Schieffer meeting

YOMIURI (Page 2) (Full)
August 3, 2007

The Democratic Party of Japan yesterday responded positively to a
request for talks between its president Ichiro Ozawa and US
Ambassador to Japan Thomas Schieffer. In the wake of the DPJ's
landslide victory in the July 29 House of Councillors election,
Schieffer had requested a meeting with Ozawa regarding the
Antiterrorism Special Measures Law, but Ozawa had declined it.

12) Futenma relocation growing uncertain

SANKEI (Page 5) (Abridged)

TOKYO 00003548 003 OF 008


August 3, 2007

Defense Minister Yuriko Koike met yesterday with Okinawa
Prefecture's Gov. Hirokazu Nakaima at the Defense Ministry over the
issue of relocating the US Marine Corps' Futenma Air Station in
Ginowan, Okinawa Prefecture, to a coastal area of Camp Schwab in the
island prefecture's northern coastal city of Nago. In the meeting,
however, Nakaima declined to say whether he will agree to resume a
consultative meeting with the government at an early date to discuss
Futenma relocation. There has been no consultative meeting between
the government and Okinawa over this issue for more than six months.
In addition, Nakaima also remained noncommittal about whether he
will consent to the government's proposal to conduct an
environmental assessment of the relocation site. The ruling Liberal
Democratic Party sustained a crushing defeat in the recent election
for the House of Councillors. Consequently, questions are now being
raised about the LDP-led government's capability of carrying out its
policies. As it stands, Futenma relocation is now becoming even more
uncertain.

In the meeting, Nakaima asked Koike to consider Okinawa. "You know
well about Okinawa," Nakaima said, "and people in Okinawa Prefecture
trust you on the issue of relocating Futenma airfield." Nakaima
added, "I'd like to ask you to understand the feelings of Okinawa."
Meanwhile, the government has held no consultative meeting with
Okinawa's prefectural and municipal governments over Futenma
relocation since this January. The government wants to resume it at
an early date. Nakaima, however, remained unclear about it. "We need
to coordinate well," he said.

In August last year, when Koike was minister of state for Okinawa,
she made efforts to continue the government's local development
projects with an annual outlay of 10 billion yen for Okinawa
Prefecture's northern districts. The government had once called off
the projects. The Okinawa prefectural government and base-hosting
municipalities therefore welcomed Koike as defense minister, viewing
her as a person of understanding for Okinawa.

In her July 31 press remarks, however, Koike hinted at freezing the
northern area development projects, for which the government makes
it a precondition to facilitate consultations on Futenma relocation.
Koike stated: "At this point, Okinawa has yet to accept the
government's proposal for an environmental assessment. We'd like to
facilitate consultations (with Okinawa's prefectural and municipal
governments)." Officials from Okinawa's prefectural and municipal
governments are now beginning to voice criticism. One local official
said, "The government is trying to press Okinawa to accept its
proposal of an environmental assessment while showing off its
intention to freeze the projects."

Furthermore, in the recent House of Councillors election, a unified
candidate running from the opposition camp swamped an LDP candidate
up for reelection. This is also a matter of concern to the Defense
Ministry. The opposition parties are expected to demonstrate
Okinawa's public opinion to Nakaima as shown in the election. As it
stands, the opposition camp is highly likely to call for the
governor to assume a strong attitude in his negotiations with the
government.

The government has a bitter experience. In 2004, after the crash of
a Futenma-based US military helicopter in Okinawa, Gov. Keiichi
Inamine at the time was under pressure from the opposition parties.

TOKYO 00003548 004 OF 008


Inamine squared off with the government. A Defense Ministry source
voiced concern, saying: "The upper house is now controlled by the
opposition parties, so the Kantei (prime minister's office) will be
driven to deal with the Diet. I wonder if the Kantei can afford to
turn its eyes to the realignment of US forces in Japan."

13) DPJ to submit pension-related bill to Upper House

YOMIURI (Page 4) (Full)
August 3, 2007

Naoto Kan, acting president of Minshuto (Democratic Party of Japan),
revealed yesterday in a press conference that his party would submit
a bill banning the use of pension premiums for other purposes than
pension benefits to the House of Councillors in the upcoming
extraordinary Diet session planned to convene on Aug. 7. He stated:
"Our party is discussing whether we can submit the bill to the Upper
House."

Kan also said:

"Presenting an important bill related to the pension record
mismanagement issue, which was the major campaign issue in the Upper
House race, will become a significant message to the public as our
effort to implement our pledges in the election."

The DPJ apparently aims to play up its presence in the Upper House,
which the opposition now controls.

DPJ President Ichiro Ozawa told those who had contracted hepatitis-C
through tainted blood that his party would start discussion on the
drafting of a bill to deal with hepatitis-B and C caused by
contaminated blood products. The party will begin discussion on the
issue on Aug. 8 in order to submit the bill to the extraordinary
Diet session in the fall. Besides assistance for medical fees, the
party reportedly is considering forcing the government to admit its
responsibility for the matter so that the lawsuits will be
resolved.

14) Government mulling major concession to DPJ on amakudari
regulations

TOKYO SHIMBUN (Top Play) (Excerpts)
August 3, 2007

The government started yesterday considering the possibility of
calling on the Democratic Party of Japan (DPJ) to hold talks and
then to make a major concession on the DPJ bill designed to root out
the practice of government officials finding employment in the
private sector after retirement (amakudari). The DPJ plans to submit
the bill to the House of Councillors in the extraordinary Diet
session in the fall. Now that the opposition camp has control of the
Upper House, the government and the ruling camp will be inevitably
placed in a difficult situation in steering Diet affairs, but they
plan to compromise to the DPJ where they can. This new approach on
amakudari restrictions is likely to draw attention as a model case
of the government making a significant concession.

In the last ordinary Diet session, the government passed a bill
amending the Civil Service Law to totally ban government agencies
from helping their officials find reemployment. The law also
proposes an exchange center for public and private personnel: a

TOKYO 00003548 005 OF 008


human-resource bank. An experts' panel has discussed how the
envisioned center should be operated.

Meanwhile, the DPJ intends to submit the bill that was rejected in
the last ordinary Diet session. The bill includes severe
restrictions on amakudari. The government and the Liberal Democratic
Party now judges it possible to make concessions on these measures:
(1) Prohibit government agencies from encouraging their staff to
retire early; (2) abolish the concept of a new human-resource bank;
and (3) apply the amakudari regulations to independent
administrative agencies' staff.

15) Personnel vacancies, including next BOJ governor, could remain
if DPJ rejects nominees; Appointments at 35 bodies require approval
of both Diet chambers

YOMIURI (Top Play) (Excerpts)
August 3, 2007

The future course of key personnel appointments that require Diet
approval, such the Bank of Japan (BOJ) governor and auditors of the
Board of Audit (BOA), has become unclear due to the opposition
takeover of the Upper House. Appointments of key officials require
approval of both the Lower and Upper Houses. However, there is no
second-decision rule for personnel management unlike the case with
bills. As such, if personnel selections are voted down in the Upper
House, the proposals will be rendered null and void. Since the DPJ
has been opposing some personnel selections involving former
bureaucrats, government agencies, which are now in the process of
personnel transfers, are in great fear.

Personnel selections at 35 organizations involving about 230 posts
will require Diet approval. Such posts include the BOJ governor,
auditors of the Board of Audit, public interest members of the
Central Social Insurance Medical Council, personnel officers of the
National Personnel Authority, and members of the Nuclear Safety
Commission. Relevant laws stipulate that the cabinet appoints
officials to those posts based on the approval of both chambers of
the Diet. The BOJ Law stipulates the appointment of a BOJ governor,
and the BOA Law provides the appointment of BOA auditors.

One of the three BOA auditors will leave next February. The term of
the BOJ governor will expire next March. The term of some of
committee members of 11 bodies, including the Transport Council,
will also expire. The government plans to submit personnel
selections to replace those whose term expires within the year to
the extraordinary Diet session in the fall.

16) Opposition parties seeking own policy identities may erode joint
struggle as DPJ emerges as sole-winner in election

YOMIURI (Page 4) (Excerpts)
August 3, 2007

The chairmen of the Diet Policy Committees of three opposition
parties -- the Democratic Party of Japan (DPJ or Minshuto), the
Social Democratic Party (SDP) and the People's New Party (PNP) --
yesterday met for the first time since the Upper House Election.
With the DPJ having won an overwhelming victory in the election,
other opposition parties are now trying to display their own policy
identities. There may be cases in which the DPJ will be pressed to
make concessions to the others.

TOKYO 00003548 006 OF 008

SDP Diet Policy Committee Chairman Yasumasa Shigeno during the
meeting urged: "The DPJ has won the Upper House election and become
the largest party. However, it does not have a working majority. We
would like it to serve as the pivot of joint struggles by opposition
parties." Shigeno sought to constrain the DPJ from going off on its
own in the Diet.

DPJ Diet Policy Committee Chairman Yoshiaki Takagi stressed a stance
of giving consideration to a joint struggles, noting, "Doing it
while lending an ear to other opposition parties' stances will
produce overall strength." The DPJ is giving consideration to a
joint struggle because it wants to appeal to the public that it can
secure Upper House passage of DPJ-sponsored bills, instead of being
seen as just voting down bills introduced by the government and
ruling parties, as one senior official put it.

Takagi sought cooperation from Shigeno and others for the
introduction of a bill prohibiting the diversion of pension funds
for other purposes, such as the construction of welfare facilities.
The SDP and the PNP will likely agree basically.

However, there are gaps between the DPJ and other opposition parties
in their approaches to a number of other issues.

17) Ruling coalition already asks key cabinet posts, LDP factions
seek consideration

YOMIURI (Page 4) (Excerpts)
August 3, 2007

The Prime Minister's Official Residence (Kantei) and the ruling
Liberal Democratic Party (LDP) have already engaged in skirmishes
over the appointments of cabinet and LDP executive posts in the
expected shuffle of the cabinet and the party's leadership. In the
wake of the LDP's stunning defeat in Sunday's House of Councillors
election, Prime Minister Shinzo Abe intends to rebuild his political
footing by forming a unified party arrangement by shuffling the
cabinet and LDP executive posts. In this connection, requests and
views were raised in meetings yesterday of the LDP factions.

Taku Yamasaki, a former LDP vice president, indicated a stance of
cooperating with Abe in rebuilding the party, saying: "Since (Abe
has insisted the need for) all the party to be represented, we
(Yamasaki faction) want to play an important role."

Yamasaki, at the same time, urged Abe to appoint LDP members from
various factions, toting: "The reward-oriented appointment era is
over. He should immediately dissolve the 'cabinet made up of his
friends' and pick more capable persons from the party."

Masahiko Komura, a former foreign minister, said in a meeting of his
faction: "The prime minister should reflect on what he should
reflect and send a message about his policy to the public. To that
end, I want him to select appropriate persons in the cabinet and LDP
posts."

Last September when he formed his cabinet and the LDP executive
lineup soon after he won a landslide in the LDP presidential race,
he gave many key posts to lawmakers, who have close ties with him,
including Chief Cabinet Secretary Yasuhisa Shiozaki, giving no
consideration to factional intentions. As a result, many in the LDP

TOKYO 00003548 007 OF 008


expressed dissatisfaction. A senior Niwa-Koga faction member said
that Abe picked only those having close ties with him. Pressure on
Abe from within the LDP will likely strengthen due to the party's
crashing defeat in the Upper House poll as well as the dismissal of
Agriculture Minister Akagi.

18) New Komeito adjusting distance with the Abe administration,
having suffered deep scars from the election defeat

MAINICHI (Page 5) (Excerpt)
August 3, 2007

The New Komeito, having tasted defeat in the recent Upper House
election when it became caught up in the voter backlash against the
Liberal Democratic Party (LDP), began its own summation of the
election, starting with a meeting of central officers yesterday. The
results of the election in which the party could not hold on to its
13 seats but ended up with 9 seats, stunned the party and left it in
a stupor. There are scars from the failure of its cooperation with
the LDP to produce results. In addition, views are coming out now
from the party for the Komeito to distance itself from the Abe
administration by strengthening its own policy lines, such as on the
issue of amending the Constitution. For party head Ota, steering the
helm of the New Komeito will be a tough task.

19) Special Advisor Seko in charge of public relations: I no longer
say "a beautiful country"

YOMIURI (Page 4) (Full)
August 3, 2007

"I never talked about your policy of creating 'a beautiful country'
in my stumping speeches," Special Advisor on Public Relations
Hiroshige Seko told Prime Minister Shinzo Abe. Seko was reelected
from the Wakayama prefectural district in Sunday's House of
Councillors election. Seko, who is in charge of national movement to
promote Abe's policy of creating a beautiful country, appears to
have urged the prime minister to revise his policy after going
thorough an uphill battle in the campaign for the Upper House
election.

Abe often played up his "beautiful country" policy during his
campaign trial in local areas. However, his Liberal Democratic Party
(LDP) suffered a crushing defeat in the electoral districts where
one seat was up for reelection, winning only six seats of 29, and
losing 23. Although Seko won, he was unable to shout "banzai" and
smile due to the LDP's devastating setback.

Seko also told Abe: "I think we should come up with measures to
improve the livelihoods of people to keep a balance with
constitutional reform." The prime minister, who reportedly listened
to Seko in a serious manner, has continued to talk about his
"beautiful country" policy even after the Upper House election.

20) Japan-US talks on US beef to discuss easing import conditions
resumed

ASAHI (Page 10) (Full)
August 3, 2007

Japan-US talks on easing US beef import conditions resumed in Tokyo
yesterday. Responsible officials and experts from both countries

TOKYO 00003548 008 OF 008


will discuss BSE measures and the safety of US beef at a two-day
meeting.

The bilateral meeting started in late June. This is the second
round. Like the previous round, Japan is asking the US to provide
the latest information and explanations on its safety measures,
including a feed regulation to prevent BSE infection. The US has
reportedly prepared the latest data running to several hundreds
pages, including data on BSE inspection results.

Japan currently sets an import condition that limits beef eligible
for exports to cattle aged 20 months or younger, which are believed
to have a low BSE risk. It also requires the removal of specified
risk materials. The US has elaborated on the efficacy of the feed
regulation and the safety of US beef, based on latest data.

At the outset of the meeting, representing Japanese participants,
Koichi Mizushima, director of the Second North America Division of
the Foreign Ministry, said, "Our understanding of the present state
of the US risk control measures has deepened." If Japan judges that
the US has provided data with sufficient details, the current round
of the talks joined by experts will be the last.

The arrangement is that the talks will shift to the next step --
negotiations to revise concrete conditions, and if a settlement is
reached there, the Japanese government will consult the Cabinet
Offices' Food Safety Commission about the easing of the import
conditions.

SCHIEFFER

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