Cablegate: Daily Summary of Japanese Press 11/21/07

DE RUEHKO #5320/01 3250822
P 210822Z NOV 07





E.O. 12958: N/A



(1) US needs to see progress in nuclear, abduction issues for N.
Korea delisting: Bush (Sankei)

(2) Fukuda diplomacy takes first step toward "synergy": Premier Wen
reacts favorably (Asahi)

(3) Leaders of Japan, China, South Korea play up friendly mood,
laying aside pending issues (Nikkei)

(4) Nukaga treated by Mitsubishi (Akahata)

(5) Editorial: Do we want to entrust the compilation of the state
budget to Finance Minister Nukaga? (Asahi)

(6) Ruling, opposition parties to find way to reach agreement on
bills (Asahi)

(7) US N-flattop unsettles local host communities (Tokyo Shimbun)

(8) US system of screening visitors: mistakes, contradictions found
in 38 PERCENT of those cited on monitoring list (Asahi)

(9) Policy watch: Face up to the economy slipping (Sankei)



(1) US needs to see progress in nuclear, abduction issues for N.
Korea delisting: Bush

SANKEI (Top play) (Abridged)
November 21, 2007

On Nov. 16, Japan and the United States held a summit meeting of
their leaders. On that occasion, US President Bush cited
requirements for the issue of striking out North Korea's name on its
terror list, sources familiar with Japan-US relations revealed
yesterday. In this regard, Bush told Prime Minister Yasuo Fukuda
that the United States, before delisting North Korea, would need to
see progress in three areas: 1) North Korea's nuclear disablement;
2) nuclear nonproliferation; and 3) abductions. In the summit
meeting, Fukuda did not set forth a strong stance against delisting
North Korea. That is presumably because Fukuda, based on such
remarks from Bush, judged that the United States would not delist
North Korea for the time being.

So far, the government has not revealed details about what was
discussed at the Japan-US summit. When it comes to the abductions
issue in particular, the fact that Bush told Fukuda that the United
States "will never (sic) forget" the abductions issue was revealed.
However, the government has remained equivocal about the possibility
of the United States delisting North Korea as a terror sponsor while
there is still no progress in the abductions issue. For this reason,
abductees' kin voiced dissatisfaction with Fukuda who did not
strongly oppose delisting North Korea. According to the sources
familiar with Japan-US relations, however, Bush actually cited the
need to see "progress" in the abductions issue as a requirement for
North Korea to be delisted.

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Gov't optimistic with "no delisting for the time being"

President Bush, in his meeting with Prime Minister Yasuo Fukuda,
revealed three preconditions for the United States to strike out
North Korea's name on its list of terror sponsors. For this reason,
there are optimistic views arising from within the government. "The
North has yet to satisfy the three requirements," a senior official
of the Foreign Ministry said. "So," the official added, "there will
be no delisting for the time being." However, one who has
experienced the post of chief cabinet secretary surmises that US
Assistant Secretary of State Hill, who is the chief US chief
delegate to the six-party talks, might have already promised North
Korea the UA would cross out its name from the terror list. Only
Japan could be left out of the loop while taking an optimistic view
of things. As it stands, there is no predicting how things will turn

In the meeting, Bush declined to say the United States would not
delist North Korea. Nevertheless, the government's sense of crisis
remains weak. That is primarily because North Korea is now suspected
of backing up the construction of nuclear-related facilities in
Syria, which, according to a diplomatic source, is "a country that
holds the key to the Middle East situation." This is clearly against
Bush's requirement of North Korea's nuclear nonproliferation.

"The United States is focusing its tenfold attention to the Middle
East over North Korea," a Foreign Ministry source said. The source
also said, "The United States is now concerned about the issue of
North Korea's nuclear proliferation to Syria, so the United States
cannot take action to delist North Korea at this time." As a matter
of fact, Hill and his supervisor, Secretary of State Rice, are now
turning reconciliatory toward North Korea. "But," the source said,
"the US government and Congress are not in such a situation."

(2) Fukuda diplomacy takes first step toward "synergy": Premier Wen
reacts favorably

ASAHI (Page 2) (Slightly abridged)
November 21, 2007

Winding up the Japan-US summit in Washington, Prime Minister Yasuo
Fukuda on Nov. 20 started full-fledged Asia diplomacy in Singapore.
His talks with the Chinese and South Korean leaders were enveloped
by a friendly atmosphere. However, no in-depth talks on individual
pending issues, such as exploration of gas fields in the East China
Sea, took place. It will likely take time for his pet theory of
diplomatic synergy of combining efforts to strengthen the Japan-US
alliance and pursuing Asia diplomacy to take on concrete form.
Chinese Premier Wen during the talks said, "I talked with Prime
Minister Fukuda right after he took office as prime minister."
Chinese leaders have thus far had telephone talks with US
presidents, but this is presumably the first time for any Chinese
leader to have a telephone dialogue with a Japanese prime minister
since ties between the two countries were normalized 35 years ago.
The two leaders also had a luncheon in Singapore, the first time for
any leaders of the two countries to have a luncheon in a country
other than their own.

Former Prime Minister Abe had in a way kept himself at arm's length
with China. However, touching on Abe's reviving reciprocal visits by
Japanese and Chinese leaders, a practice that had been suspended due

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to former Prime Minister Koizumi's repeated visits to Yasukuni
Shrine, Wen made a considerate remark, "Mr. Abe's visit to China
last fall turned out to be a journey to thaw the ice between the two
countries, and my visit to Japan this spring also thawed the ice. I
will never forget my old friend." He then expressed expectations for
progress on strategic and mutual-beneficial relations during the
Fukuda administration.

Since Prime Minister Fukuda expressed his intention not to visit
Yasukuni Shrine, China and South Korea are reacting favorably to
him. Wen during the talks said, "Prime Minister Fukuda is popular in
China." South Korean President Roh Moo Hyun praised Fukuda, noting,
"South Korean people have great expectations of Prime Minister
Fukuda." In particular, China has a favorable impression of Fukuda
because of his father Takeo Fukuda, former prime minister who signed
the Japan-US Peace and Friendship Treaty.

Some Japanese government officials have even tried to score points
for the Fukuda administration by proposing a new Fukuda doctrine
coinciding with Prime Minister Fukuda's debut in Asia diplomacy.

There are remnants of the Fukuda Doctrine, guidelines for Asia
diplomacy late former Prime Minister Takeo Fukuda advocated, in
Southeast Asia. The idea is to create heart-to-heart relations of
mutual trust on an equal footing with Asian countries, abandoning
the path of becoming a military power.

However, the idea was put on hold this time with some saying that
the prime minister's proposal would not draw attention at a forum
where many top leaders gather.

Instead, the prime minister at the Japan-China summit declared his
Asia diplomacy policy, saying, "Our country will promote
cooperation, based on self-support and coexistence, in order to
realize an affluent, stable and open East Asia."

The prime minister included "self-support and coexistence" in his
policy speech given right after taking office. He has now used that
policy ideal in the international arena. One senior Foreign Ministry
official explained that the prime minister has in his mind a concept
of acknowledging sustainable growth of Asian economies and

Concrete image has yet to come into sight; Pending issues left

Wen: "I hope to see both of our countries bravely tackle the issue
to realize joint development."

Fukuda: "I would like Premier Wen to display leadership for an early

Joint exploration of gas fields in the East China Sea between Japan
and China, the issue that has made little progress since Wen visited
Japan in April, was also on the agenda of the Japan-China summit.

Both leaders indicated a positive stance and played up their
readiness to cooperate. However, efforts to find a concrete
settlement measure have been put off until Fukuda visits China,
regarding which coordination is underway to set a visit for either
the end of the year or early next year.

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With gaps in views of the two countries on the issue remaining
unfilled even after 11 rounds of bureau-director-level talks, the
judgment was reached that making concessions is premature due to
Japan's unstable political situation and with the Taiwanese
presidential election close at hand next March, according to the
same source.

According to a senior Japanese government official, Fukuda during
the meeting with Wen sought cooperation from China in order to
realize the return of abduction victims. Wen expressed understanding
and sympathy and offered necessary cooperation. However, Foreign
Minister Koumura, who was present at the meeting, got the impression
that the talks went all right, but what cooperation China will
extend in concrete terms will depend on future talks."

Regarding ever-expanding China's military expenditures, Fukuda
reportedly did not seek transparency in concrete terms.

Concerning Burma, one key issue at the series of summits this time,
the Japanese side simply sat still and watched China and Burma try
to cancel a debriefing session by Special Advisor to the US
Secretary General Gambari slated to be held at the East Asia Summit

on the 21st. China overtly tried to defend Burma's military junta,
fearing that the situation in that nation would spill over and
affect its own humanitarian issues. However, Fukuda did not refer to
Burma at all during the meeting with Wen.

Former Prime Minister Abe stressed the importance of sharing values,
such as freedom and democracy. He advocated value-based diplomacy,
which was taken as a policy of encircling China while attaching
importance to India. Fukuda is trying to strengthen relations with
China, marking a clear departure from Abe's policy. However, the
whole image of his Asia diplomacy has yet to be fixed.

(3) Leaders of Japan, China, South Korea play up friendly mood,
laying aside pending issues

NIKKEI (Page 2) (Full)
November 21, 2007

A series of summit talks between Japan, China and South Korea,
between Japan and China, and then between Japan and South Korea were
held on Nov. 20, in which expressions suggesting their willingness
to establish future-oriented relations were frequently used, such as
"cooperation" and "development." Both the leaders of China and South
Korea were eager to build personal ties with Prime Minister Yasuo
Fukuda, who is emphasizing a policy of placing importance on
relations with Asia, unlike when Japan's relations with these two
Asian countries became strained over former Prime Minister Koizumi's
annual visit to Yasukuni Shrine. The series of summits were held
outwardly in a friendly mood, but pending issues were laid aside.

In the summit of Japan, China and South Korea in the morning, the
three leaders agreed to hold another round of trilateral summit
separately from an international conference, which had so far been
postponed many times. The decision to hold one might be representing
the leaders' eagerness to improve trilateral relations.

In the Japan-China summit held in the afternoon, China also gave a
cordial reception to Fukuda. The two leaders had lunch together for
the first time since Fukuda assumed office, at the request of

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In the bilateral summit, Chinese Premier Wen Jiabao gave
consideration to Fukuda by mentioning the name of his father, former
Prime Minister Takeo Fukuda, who signed the Japan-China Peace and
Friendship Treaty, saying: "Chinese people know you very well." A
participant from Japan uttered, remembering the days of the Koizumi
administration: "I am moved that we've come this far."

But Premier Wen also said: "Japan-China relations are at an
important turning point. It is necessary to seize opportunities and
move relations forward." Wen's remarks are indisputably a message
that China will never make concessions on past accounts and
territorial issues, though maintaining favorable relations with
Japan is indispensable in order for China to continue economic

In the series of summits, Chinese Premier Wen and South Korean
President Roh Moo-Hyun did not refer to themes that could upset
Japan, such as the issue of whether the United States would delist
North Korea as a state sponsor of terrorism.

China and South Korea are keeping close watch on future changes in
the unstable power base of the Fukuda administration under the
situation of the opposition bloc having control of the House of
Councillors. China's cautious stance about a settlement of the
dispute over gas exploration rights in the East China Sea might
represent its willingness to cool-headedly explore the best timing
to find a point of contact in a way advantageous to it.

Key points in summits

Japan-China-South Korea summit
? Agreed to hold another trilateral summit separate from the ASEAN
? Confirmed the importance of North Korea steadily disabling its
nuclear facilities and declaring its nuclear development programs.
? Agreed to accelerate negotiations on concluding a trilateral
investment treaty.

Japan-China summit
? Agreed on a visit to China by Prime Minister Fukuda by the end of
this year or early next year.
? Fukuda asked Wen to demonstrate his leadership in resolving the
East China Sea gas dispute, and Wen expressed his determination to
make efforts to that end.

Japan-South Korea summit
? Agreed on the importance of developing future-oriented Japan-South
Korea relations.
? Roh quoted North Korean leader Kim Jong Il as saying: "I clearly
acknowledge the need for normalizing diplomatic ties between Japan
and North Korea."

(4) Nukaga treated by Mitsubishi

AKAHATA (Top play) (Full)
November 21, 2007

Finance Minister Fukushiro Nukaga, a former director general of the
Defense Agency, is now suspected of having been wined and dined by
the Mitsubishi group (that includes Mitsubishi Heavy Industries,
Ltd. and Mitsubishi Electric Corporation), with the group footing

TOKYO 00005320 006 OF 015

the bill. The Mitsubishi group annually received more than 30
PERCENT of all orders placed by the Defense Agency, now the Defense
Ministry. This suspicion was pursued by Mikishi Daimon, a House of
Councillors member of the Japanese Communist Party, in a House of
Councillors Audit Committee meeting yesterday.

Nukaga, sitting in on the Financial Affairs Committee on Oct. 30,
asserted that he had never been to Kantokaku, which is a
"guesthouse" of the Mitsubishi group. Daimon asked whether Nukaga
paid membership dues there. Nukaga stated, "There were cases where I
paid, and there were also cases where they paid." He also stated,
"There's no need to comment on each case." With this, Nukaga
admitted that he was entertained.

Daimon stated: "You did not pay membership dues there, did you? To
begin with, that is not a place to pay such money." With this,
Daimon asked Nukaga to recheck whether he paid membership dues.

Nukaga also is on the board of directors for a public-interest
corporation called the Center for Japan-U.S. Peace and Cultural
Exchange. Daimon took up the fact that this entity was subsidized
from the state coffers when Nukaga and several other lawmakers
visited Washington to attend a Japan-US security strategy conference
held there.

Daimon further noted that it takes each person at least one million
plus several hundred thousand yen to cover travel expenses and to
stay at a gorgeous hotel. In this regard, Daimon quoted Naoki
Akiyama, a permanent director of the center, as explaining that each
lawmaker only received 200,000 yen. Daimon revealed that more than
one million yen was covered by subsidies from the government and
donations from the munitions industry.

Nukaga is a member of a public-interest entity's board of directors,
and he made as many as three foreign trips subsidized by the
government through that body. Raising a question about such junkets,
Daimon pursued Nukaga's responsibility not only as a minister of
state but also as a member of the Diet. Nukaga stated, "I paid money
to join and worked for the public good." In this way, Nukaga sounded
as if to say "so what?" Daimon bitterly criticized Nukaga, saying,
"You should pay your way when you go."

(5) Editorial: Do we want to entrust the compilation of the state
budget to Finance Minister Nukaga? (Asahi)

ASAHI (Page 3) (Full)
November 21, 2007

Everything so far has been unconvincing. We are talking about the
explanation of Finance Ministry Nukaga about his relationship with
Yamada Yoko Corp., the trading firm specializing in defense
procurement, and its former executive manager.

The trigger was the sworn testimony of former Administrative Vice
Defense Minister Takemasa Moriya, who served under Nukaga during the
two times he was defense chief. He also said that he had attended
the same dinner as a former Japan desk director at the Pentagon and
the former executive director.

In replying, Nukaga said that he had no recollection or record of
such a dinner, making the two sets of testimony completely opposite.
There is a possibility that one or the other told a lie, but if what

TOKYO 00005320 007 OF 015

Moriya said was untrue, it is serious for he, as a sworn witness
before the Diet, committed perjury. We also cannot give the nod to
Nukaga's explanation that he had neither recollection nor record of
such a matter.

Regarding the relationship of Nukaga to Yamada Yoko Corp., little by
little it is become clearer that he had close ties, as seen in the
following information. A total of 2.2 million yen in party tickets
were purchased from Nukaga by Yamada Yoko. He also received as
carfare 200,000 yen from the former executive director when he
attended the wedding of that person's daughter. His wife, who
attended as a proxy, returned it as a congratulatory gift. He also
played golf with the former executive director and attended a
luncheon study group.

Nukaga has denied it, but there also was testimony in connection
with a construction order put out by the Sendai Defense Facilities
Administration Bureau that Nukaga put in a good word for the

Politicians always meet many people. It is probably inevitable that
mixed among them may be some dishonest types. Nukaga probably wanted
to say something like that. However, his relationship with Yamada
Yoko went over the boundary line, no matter how you think about it.
There is still another problem, for Nukaga's relations with a
company that lacked common sense did not stop with Yamada Yoko.

Nukaga, during his two times as defense chief between 2005 and 2006,
held parties four times in the form of breakfast study groups, and
reportedly, the ticket purchases that included the portion bought
Yamada Yoko totaled 57.1 million yen. Politicians in important
government positions such as a cabinet post are supposed to practice
self-constraint in holding large-scale political fund-raising
parties. That is because if they receive favors from certain firms
in the form of political contributions, it will lead to suspicions
about their administrative fairness.

Despite that, why did he repeatedly hold such parties? Nukaga has
explained that they were small scale of about 100 persons and not
large scale. But is selling party tickets for one occasion to the
tune of 10 million yen plus "small scale"? It only strains our

Nukaga, when he was defense director general in 1998 for the first
time, had to resign to take responsibility for an excessive payment
of charges for equipment. Prior to his resignation, Nukaga tackled
the task of reforming the equipment procurement system by
strengthening the checking function. The same Nukaga has had a
strong inclination to having what might be called collusive ties
with a company that has had over five years 17.4 billion yen in
transactions with the Defense Agency and later the Defense Ministry.
What a terrible state of affairs.

The compilation of next year's national budget is almost here. In
case Nukaga as the finance minister is the one tackling the budget
compilation, which includes the defense budget, can he obtain the
understanding of the public? The situation has become that severe.

(6) Ruling, opposition parties to find way to reach agreement on

ASAHI (Page 4) (Excerpts)

TOKYO 00005320 008 OF 015

November 21, 2007

It has been two months since the main opposition Democratic Party of
Japan (DPJ or Minshuto) became the largest party in the House of
Councillors, while the ruling Liberal Democratic Party (LDP) is the
largest in the House of Representatives. The LDP and DPJ are
continuing their efforts to find a way to create rules to reach
agreement on bills. The ruling camp is trying to listen to proposals
by the opposition camp. If the largest ruling and opposition parties
make compromises behind closed doors, many bills will smoothly clear
the Diet. Whether they can find a third path -- neither
confrontation nor a grand coalition -- depends on their efforts.

"If the present Diet situation continues, we have to discuss what
rules are needed," Chief Cabinet Secretary Nobutaka Machimura said
in a press conference yesterday. He indicated that this topic would
be discussed in one-on-one meetings between Prime Minister Yasuo
Fukuda and other party leaders.

The ruling and opposition parties have begun looking for a way to
create Diet rules for consensus-building.

Hideaki Omura of the LDP said: "We can't consult (kyogi-suru) on a
bill after deliberating (shingi-suru) it."

Kazunori Yamanoi of the DPJ stated: "We will accept deliberations
(shingi) but not consultations (kyogi).

In a meeting on Nov. 16 of the Lower House Committee on Health,
Labor and Welfare, Omura and Yamanoi, who are in charge of managing
the panel, had the above exchanges over anti-hepatic measures. The
DPJ has submitted to the Upper House an anti-hepatitis measures
bill, while the LDP has submitted its own hepatic bill to the Lower
House. The committee members had different views on how to find
common ground on the hepatitis issue.

The LDP's Omura proposed holding consultations (kyogi) of
working-level officials (committee members) from the ruling camp and
the DPJ, not in the committee. The DPJ's Yamanoi, however, insisted
on the need for deliberations (shingi) at the Diet. One committee
member stressed: "It is important to hold an open debate on good and
bad points of the two views. Otherwise, the Diet will lose

If placing importance on an easy way to reach a consensus, a
consensus will be built behind closed doors. If open discussions are
held, it will be difficult to build a consensus. Although they share
the view that they should compromise, they have separate views on
how to make a compromise.

The revised law to support disaster victims' livelihoods enacted on
Nov. 9 is an example that was made speedily. With the Diet divided,
the opposition party-proposed bill finally saw the light of day,
after their previous bills had been scrapped.

Genichiro Sata of the LDP, who chairs the Special Committee on
Disaster Victims, proudly said on Nov. 6: "Since doing things for
the sake of the people is the basis for politics, the ruling and
opposition parties talked about various matters."

The DPJ submitted its own bill to support disaster victims to the
Upper House, while the ruling LDP-New Komeito coalition presented

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its own bill to the Lower House. After launching deliberations on
the bill at the special committee on Nov. 2, they immediately began
consultations behind closed doors. Kazuyoshi Akaba of New Komeito,
who has long been involved in the issue, and Takeaki Matsumoto of
the DPJ took the initiative in revising the law, and Sata managed
the consultations and deliberations.

The DPJ proposed supporting the costs of disaster victims'
reconstruction of their houses. The government had opposed to this
idea, citing that tax money should not be used for personal assets.
The main opposition party also asserted that the revised law should
be applied also to four disaster cases occurred this year, including
the Chuetsu Offshore Earthquake. Although conflict points affected
the basis of law and fiscal system argument, the ruling and
opposition parties searched for a way to make a compromise.

As a result, the revised law was not applied to the four disaster
cases, but the LDP and DPJ compromised to make the four cases as an
exception. The diversion of gift money for use to rebuild housing
was tacitly allowed. After holding six sessions in five days, the
two sides came up with a revised bill.

There was no question-and-answer session on Nov. 8 and 9 of the
Upper and Lower House committees, to which the revised bill was
submitted. The bill was put to a vote after each party expressed its
approval of it, and it cleared the Diet immediately.

LDP Diet Affairs Committee Chairman Tadamori Oshima proudly told the
press: "It was a symbolic policy decision. It was a result of our
humble discussion, overcoming narrow party interests."

(7) US N-flattop unsettles local host communities

TOKYO (Page 3) (Full)
November 14, 2007

Hirohito Saito, Yokosuka bureau

In August next year, the USS George Washington, a US naval
nuclear-powered aircraft carrier, will arrive for deployment at the
US Navy's Yokosuka base in the city of Yokosuka, Kanagawa
Prefecture. Late last month, the nuclear flattop was opened to the
press for the first time when she was on a training voyage in
Atlantic Ocean waters off the US East Coast. However, her nuclear
reactors and relevant facilities were barriered off as military
secrets. Local citizens, saddled with the base, have been calling

for dispelling their anxieties about nuclear disasters. However,
there is still nothing better for their concerns. Again, the deep
gulf became clear over safety.

"We cannot show you the reactor compartment. If we reveal its high
technologies, our strategic superiority will collapse. That's why.
The nuclear propulsion system (of US warships) is classified in the
US Navy, so we cannot show it."

On the flight deck were training carrier-borne fighter jets. They
were catapulted to take off and hooked up to halt. Their shock
sounds reverberated to the commanding officer's cabin on the bridge.
There, US Navy Cdr. Silkman, who is in charge of the USS George
Washington's nuclear reactors, stressed the reasons why the reactor
compartment is not open to the public.

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Silkman explained the USS George Washington's nuclear reactors,
saying each reactor's generating power is about one-sixth of a
commercial power plant's reactor. However, he refused to answer a
question about its size, reasoning that it would disclose reactor
data. This shows the US Navy's stance of giving top priority to
information security.

The USS George Washington is currently homeported at a naval base in
the city of Norfolk, Virginia. The city has a population of about
240,000. The base there is the largest of all naval bases in the
United States. Warships based there include five nuclear-powered
aircraft carriers, nuclear-powered submarines, and Aegis ships.

In the Norfolk area, there are relevant facilities, such as an air
station for carrier-borne aircraft and a shipyard that can build
flattops. The city has a large population of people in the US Navy
and their dependents. That is probably why people living in the city
do not seem to feel uneasy about nuclear reactor accidents.

"We've been living here for years, but I've never felt
nuclear-powered aircraft carriers and nuclear-powered submarines are
dangerous," said a 75-year-old man, who was on a walk with his wife
in a Norfolk park. "The nuclear reactor is the kind of propulsion,"
he went on, "and it's not a bomb." He added: "There's no need to
replace fuel for a long time. That's good." In his words, there was
nothing negative about nuclear power.

A 53-year-old Japanese woman, who is married to a US serviceman and
lives in Norfolk, having a US citizenship, said: "There are also
many complaints about noise around the air station, but many of the
citizens are not concerned about that. However, Japanese people feel
uneasy about nuclear power. I can understand their feelings well."

The United States released a "fact sheet" on its planned deployment
of a nuclear-powered aircraft carrier to Yokosuka. In this report,
the US government explains that the US Nuclear Regulatory Commission
and an advisory committee review each of the US Navy's nuclear
reactors. With this, the US government stresses that the US Navy's
nuclear reactors are authorized.

The USS George Washington's Captain Dykhoff also said proudly, "We
have been operating aircraft carriers and nuclear-powered submarines
in a safe way over the past 50 years."

Gov't hesitant about safety check

Meanwhile, at the US Navy's Yokosuka base, seabed dredging work is
now under way for a nuclear-powered aircraft carrier. "If a nuclear
reactor accident should take place, Tokyo and its metropolitan
environs will sustain immense damage that is irrecoverable." With
this, a group of about 1,000 local residents, including those from
the Tokyo metropolitan area, has instituted a class action lawsuit
against the government trying to get an injunction to stop the
dredging work in order to halt the deployment of a nuclear flattop
to Yokosuka.

The plaintiffs are concerned about a response shown by the
government, which should be in a position to protect public safety.
A review of nuclear reactors may ensure the American public's
safety. Even so, it does not include the Japanese public.

In its parliamentary reply, however, the government only says it has

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no right to review the reactors of US nuclear-powered warships.
Moreover, the government generally admits that the United States
does not provide Japan with information about the design and
operation of US nuclear-powered warships. The government is hesitant
to demand information from the United States, citing the US
military's secrecy as a reason.

"It's also possible to verify the nuclear reactors with their
technical data in private," Masahiko Gotoh, a lawyer for the
plaintiffs, noted. "But," Gotoh said, "the government will try not
to do anything." He added: "The government must verify safety. We're
going to pursue the government's accountability in court." So
saying, he was ready to square off with the government.

(8) US system of screening visitors: mistakes, contradictions found
in 38 PERCENT of those cited on monitoring list

ASAHI (Page 2) (Excerpts)
November 19, 2007

Arriving foreign visitors form a long line at the immigration
section at John F Kennedy Airport in New York to have their
fingerprints taken from the index finger of each hand. Visitors have
to wait for more than one hour when a number of flights arrive.

The US-visit system was introduced in 2004. The system is almost the
same as Japan's. Anna Hinken, an officer of the US Department of
Homeland Security, proudly said: "We have rejected the entry of more
than 2,000 persons who were considered a security risk since the
system was introduced."

But a US government agency poses questions about the system's
technology and credibility. This July, the US General Accounting
Office criticized the US-visit system as seriously fragile in view
of information control. He pointed out the possibility that personal
data, including fingerprint data, might be altered or copied by
someone from the outside due to insufficient security measures.

In September, an auditor of the Justice Department emphasized how
inaccurate US blacklists are. The auditor said that as a result of a
sampling check of the terrorism-affiliates included in a monitoring
list, mistakes or contradictions were found in 38 PERCENT of those
checked, with the names of some terror suspects left out of the list
or innocent persons appearing on it.

The monitoring list was compiled by integrating those of such
government agencies as the FBI and the Transportation Security
Administration, and the list is not open to the public. As of April
this year, the number of those listed was 700,000. The number
reportedly increases by 20,000 per month.

American Civil Liberties Union member Barry Steinhardt said: "There
should not be so many terrorists. The list is unreliable. In
addition, since the list is classified and not publicized, it is
impossible to check how effectively it has worked to prevent

The monitoring list has also affected civic life. There are cases in
which citizens unrelated to terrorism appeared on the list or in
which a person who has the same family and personal name as a
certain suspect was stopped at an airport security check.

TOKYO 00005320 012 OF 015

The US-visit system also tends to give travelers an unpleasant
impression about the nation.

A group formed with the aim of improving the image of the US
conducted a survey of travelers from foreign countries last year.
Asked about which they think is the most unfriendly country or
region in terms of immigration officers' response and necessary
immigration procedures, the largest number of respondents cited the
US. A member of this group commented: "Travelers have a feeling that
the US has not welcomed them and has set up barriers."

(9) Policy watch: Face up to the economy slipping

SANKEI (Page 1) (Full)
November 19, 2007

By Heizo Takenaka

It has become clear that the Japanese economy is slipping. A spot
report for the July-September quarter this year, released on Nov.
13, noted that gross domestic product (GDP) increased 2.8 PERCENT
(in annual terms) from the preceding quarter. Since the April-June
quarter marked a negative 1.2 PERCENT increase, there had been
expectations that GDP would achieve a clear recovery from that
level. Though the GDP in the July-September quarter resulted in a
positive figure, two-thirds of the growth was due to external
demand, confirming that the deflationary trend has yet to be
overcome. The Subprime loan issue of the US is grabbing headlines.
Stock prices have plunged in industrialized countries this year.
However, it is Japan that is experiencing the largest stock plunges,
despite the fact that it has not directly felt the impact of the
Subprime loan flap. The government needs to face up to this point.
While political circles have gotten into a mess, causing a possible
Lower House dissolution and snap election to dominate the agenda,
the deterioration of the economy caused by domestic factors has
begun to come within sight.

There are two factors that are attributable to the worsening of the
economy. One is that with market players having determined that
economic structural reforms having clearly become stagnant, the
expected rate of growth is in a slump. The other is that the impact
of mistaken financial policies has become obvious.

Let's examine the stagnant reform drive and the slump in the
expected rate of growth. The Japanese economy has recovered an
ordinary growth level of about 2 PERCENT since 2004, when the
amount of non-performing loans clearly dropped. As a result,
companies have reported all-time high earnings and profits. The
economic expansion outdoing the Izanagi economic boom (1965-1970)
has continued. However, no major organizational reforms have been
carried out since decisions were made to privatize postal services
and to consolidate government-affiliated financial institutions.

Rather, a stance of overtly going against the reform drive is
visible as can be seen in the recent proposal made by the Land,
Infrastructure and Transport Ministry for using up road-construction
revenues without reallocating them for other usage, and a request
filed by the Association of Prefectural Governors for an increase in
tax allocations. In the meantime, the Finance Ministry is taking the
lead in discussions of tax hikes. In other words, people are seeking
money from the state, and the state is seeking money from the
people. The economy cannot be stimulated under such a situation.

TOKYO 00005320 013 OF 015

Overseas investors have apparently lost interest in Japan. Foreign
funds have begun pulling out of Japan. The Japanese economy, which
has been maintained thanks to the aftereffects of the Koizumi reform
drive, is clearly beginning to undergo changes.

A questionnaire on corporate behaviors carried out by the Cabinet
Office indicates companies' expected rate of growth. According to
the outcome of the survey, an expected rate of growth in Japan
gradually rose from 1.0 PERCENT recorded three years ago to 1.8
PERCENT marked this fiscal year. However, the result indicates that
the expected growth rate would slightly decline in the future.
Personal consumption and capital investment will become active only
when an expected rate of growth rises. The US has absorbed money
from all over the world, because it has kept a high expected rate of

With the economy clearly deteriorating, the government must
positively deal with what the survey results have indicated. Of
course, it does not mean taking economy-spurring measures in fiscal
terms. The government must carry out drastic reform that can make
people believe that the Japanese economy would grow, that is to say,
it must reform frameworks matching postal privatization. However,
the new administration has yet to indicate a menu for such a

Economy has yet to emerge from deflationary phase

Another reason why Japan is experiencing the largest dip in stock
prices among advanced countries is that its fiscal policy is
inappropriate. The government has pledged to overcome deflation in
fiscal 2006, but it has failed to deliver on that commitment. It is
also hopeless for it to contain deflation in fiscal 2007, either.
While crude oil prices are soaring to this level and concern about
inflation felt by all over the world, Japan alone remains unable to
emerge from deflation. Government officials need to seriously
reflect on this fact. Their responsibility for the fiscal policy is

Biased discussions calling for a substantive consumption tax hike
have recently been taking place. This is the result of Japan having
accepted its failure to overcome deflation and an extremely low
nominal growth rate as a matter of fact. The average nominal growth
rate among members of the Organization for Economic Cooperation and
Development (OECD) was 5.2 PERCENT last year. However, Japan's rate
was only 1.2 PERCENT . Given the fact even Germany, which marked the
second lowest rate, achieved 3.2 PERCENT , Japan's blunder in the
management of the economy is outstanding.

Under such circumstances, the Bank of Japan (BOJ) has raised
interest rates for the past year. The BOJ's job is, however, to
fulfill its original responsibility of countering deflation first
through an increased money supply.

What is important is not who will head BOJ but what must be sought
from BOJ governor

In connection with the trading of places between the ruling and
opposition camps in the Upper House, how to obtain approval for the
appointment of the next BOJ governor has become a subject of
discussion. The media is always interested in personnel affairs.
What is important from the perspective of policy arguments is what

TOKYO 00005320 014 OF 015

should be expected of BOJ governor, instead of who will become its

The opposition camp reportedly plans to hold a hearing, inviting
candidates for the post to the Diet. In view of the fact that the
bureaucracy has thus far taken the lead in selecting personnel for
posts that require Diet approval, it is very meaningful for the Diet
to proactively examine personnel matters. On that occasion, the Diet
should make it clear what it will seek from a BOJ governor.

In a word, what they should be sought from a BOJ governor is that he
should prevent the economy from inflating or deflating. This is
indeed the goal the BOJ should attain. We should urge candidates for
a BOJ governor to raise prices by between 1 PERCENT and 2 PERCENT .
Taking into account that the prices of crude oil would continue
rising, bringing about a potential inflationary risk, this would be
extremely meaningful. If that happens, a nominal growth rate between
3 PERCENT -4 PERCENT can be hoped for, even if a real growth rate
remains at around 2 PERCENT as it is now. This would also help
correct the current Finance Ministry-led tax hike discussions that
are biased toward a tax hike.

The aftereffects of the structural reforms have already vanished. In
order to live up to the wary eyes of the international community,
too, a stance of seriously tackling the economic deterioration is
sought from politicians.


Government's tax panel recommends reducing income tax deductions

Mainichi, Yomiuri & Tokyo Shimbun:
Kyoto University team succeeds in producing iPS stem cells from
human skin

Government's tax panel proposes using income tax revenues to cover
social security expenses

US president in meeting with Fukuda presents progress on nuclear and
abduction issues as conditions for delisting North Korea

Nukaga gave favors to construction company, according to former
Sendai Defense Facilities Administration Bureau director


(1) Prime Minister Fukuda should utilize Japan-China-ROK resonance
(2) We cannot commission Finance Minister Nukaga to compile the
state budget

(1) Foreign policy toward China and ROK: Top leaders' mutual visits
should be continued
(2) Consumption tax hike: Government should be one that the public
can support


TOKYO 00005320 015 OF 015

(1) Japan-China summit: Japan-China relations at turning point
(2) Government tax council's recommendations: Ruling and opposition
parties should quickly find common ground

(1) Curb on growth and expenditures preconditions for a consumption
tax hike
(2) Japan should determine to set "post-Kyoto" target to cut
greenhouse gas emission

(1) Japan-China-ROK summit: Prime Minister Fukuda must maintain
Japan's basic stance of resolving pending issues
(2) IPCC report: No time for preventing global warming

Tokyo Shimbun:
(1) Government tax council's proposals: How will the government
secure public understanding?
(2) National Consumer Affairs Center: The center should be
strengthened rather than scaled down

(1) Government tax council's recommendations: Government, ruling
coalition should give up consumption tax hike


© Scoop Media

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