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Cablegate: Daily Summary of Japanese Press 12/5/07

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #5463/01 3390814
ZNR UUUUU ZZH
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FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
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RUEAWJA/USDOJ WASHDC PRIORITY
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RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
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RUEHBJ/AMEMBASSY BEIJING 0447
RUEHUL/AMEMBASSY SEOUL 6501
RUCNDT/USMISSION USUN NEW YORK 7252

UNCLAS SECTION 01 OF 11 TOKYO 005463

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 12/5/07


Index:

(1) Editorial: Energetic deliberations on new antiterror bill
expected in state of reversal of strengths between ruling,
opposition camps (Asahi)

(2) Editorial: Where is DPJ's counterproposal to new antiterrorism
legislation? (Mainichi)

(3) Finance Ministry's policy on fiscal 2008 budget: General account
budget to reach 83-84 trillion yen; Issuance of government bonds to
be kept at 25 trillion yen level (Mainichi)

(4) Administrative reform minister and agriculture minister fail to
reach agreement on reform of independent administrative corporations
over integration of six such corporations into one organization
(Yomiuri)

(5) Foreign Ministry in its ODA white paper draft sounds alarm
against declining ODA (Yomiuri)

(6) Move to cut air fares likely to accelerate with FTC deciding to
make international cartel subject to AML (Sankei)

(7) 12 discretionary contracts made at Kyuma's orders (Akahata)

(8) Japan's unilateralism indisputably problematical (Sankei)

(9) Hokkaido Toyako Summit: Niseko Higashiyama Prince Hotel a
leading candidate to accommodate U.S. delegation; Noboribetsu Grand
Hotel also a candidate (Hokkaido Shimbun)

ARTICLES:

(1) Editorial: Energetic deliberations on new antiterror bill
expected in state of reversal of strengths between ruling,
opposition camps

ASAHI (Page 3) (Full)
December 5, 2007

Deliberations on the new antiterrorism bill that would resume the
Maritime Self-Defense Force's (MSDF) refueling operation in the
Indian Ocean started at the House of Councillors yesterday. How will
this issue be settled under the present political situation, in
which the opposition camp controls the Upper House and the ruling
bloc holds a majority in the House of Representatives? The
tug-of-war over the bill between the ruling and opposition parties
has come to the most important stage.

Observers have begun to speculate whether the government and the
ruling camp would extend the current Diet session, which is
scheduled to end on Dec. 15, and whether the ruling camp would bring
the bill back into the Lower House for a revote.

The possibility of the Lower House dissolved for a snap election
cannot be dismissed. A budget for next fiscal year will be soon
compiled. Naturally, attention is being focused on moves by Prime
Minister Fukuda and the Democratic Party of Japan (DPJ).

This is just the beginning for the opposition bloc to prove its
worth by showing its real ability in the state of the reversal of

TOKYO 00005463 002 OF 011


strengths between the ruling and opposition camp. The opposition
camp should conduct a different type of debate from those at the
coalition-controlled Lower House, although we don't want to see the
opposition parties taking advantage of their larger number of
seats.

The government has constantly said that resuming the refueling
mission is indisputably a means for Japan to fulfill its
international responsibility. But discussion should be conducted
with the entire picture of the mission in mind. Otherwise, it will
be hard for the people to make a judgment on the propriety of the
continuation of the mission, as shown by the results of an opinion
poll by the Asahi Shimbun. In the survey, respondents were split
over the propriety of resumption of the MSDF refueling mission, both
at 44 PERCENT .

Even though six years have already passed since the Taliban
government collapsed, the situation in Afghanistan is worse than
before. In countries that have dispatched their troops, their
governments have seriously discussed whether the current situation
is acceptable as an increasing number of Afghan civilians and
soldiers have been killed.

The withdrawal of the MSDF from the Indian Ocean could deal a blow
to the governments of the countries willing to continue their
troops' mission in view of persuading public opinion. They might
have to take care of the refueling service that had been provided by
the MSDF. But it certainly is time to reconsider the purpose and
effect of the coalition's current assistance in Afghanistan.

The DPJ, opposed to the government's new bill, should present its
counterproposal on what contributions Japan should offer.

Another major task in the last-stage current Diet session,
intertwined with deliberations on the new antiterror bill, is the
reform of defense regulations, reflecting on a series of scandals
involving the Defense Ministry, including the bribe case of former
Vice Defense Minister Takemasa Moriya.

The Tokyo district Public Prosecutors Office is investigating these
scandals as criminal cases. But there is the role that should be
played by the Diet. If it is probed true that politicians,
bureaucrats, and former self-defense officers have pocketed tax
money when procuring equipment or through bidding for contracts or
the amakudari practice (the practice of former government officials
finding employment in the private sector), the Diet should work to
reveal the real picture of such cases. It should form a mechanism to
prevent a recurrence. The chief player of civilian control is the
Diet, so we expect the Diet to play its role properly.

Public trust in defense governance is wavering. The government and
the ruling camp assert that the clarification of the defense
scandals and a resumption of the refueling service are separate
issues. But this view is not necessarily true. If the ruling camp
rams the bill through the Diet by resorting to its two-thirds
majority, SDF troops will be dispatched overseas while the issue of
public trust is being put on hold. We feel sorry for such troops.

The DPJ must not try to put off deliberations on the bill in an
attempt to have the government dissolve the Lower House. The main
opposition party should energetically promote deliberations in order
to respond to the expectation of voters as shown in the July Upper

TOKYO 00005463 003 OF 011


House election.

(2) Editorial: Where is DPJ's counterproposal to new antiterrorism
legislation?

MAINICHI (Page 5) (Full)
December 5, 2007

The House of Councillors Foreign Affairs and Defense Committee has
finally begun discussing a new antiterrorism special measures bill
to return the Maritime Self-Defense Force's supply ship to the
Indian Ocean. It has been three weeks since the bill passed the
House of Representatives. During that period, a variety of events
occurred, such as the prime minister's foreign trips. Still, the
legislative branch lacks a sense of speed.

Given the opposition camp's control of the Upper House, the focus is
on the response of the major opposition Democratic Party of Japan
(DPJ or Minshuto). As far as yesterday's debates are concerned, the
basic posture toward the bill was the same, though there were minor
differences in the standpoints of those who took the floor.

Keep opposing the new legislation is fine. But why is it that the
DPJ has not submitted its own counterproposal to the Diet, while
insisting that Japan should contribute to Afghanistan in a different
form? As the largest party in the Upper House that has the power to
approve or kill bills, it must become aware that opposing a matter
without producing a counterproposal is unconvincing.

How should Japan become involved in the international effort of the
war on terror? The debate to find the answer to this question -- the
crux of the new antiterrorism legislation -- has not deepened
because the DPJ has been slow to come up with its counterproposal to
the refueling operation.

The DPJ has not given up on producing a counterproposal. Following
President Ichiro Ozawa's proposal to allow Self-Defense Force troops
join the International Security Assistance Force (ISAF), the DPJ
began studying its own counterproposal, and it presented to a party
foreign affairs and defense department meeting in mid-November a
draft summary corresponding to an outline of the Afghanistan
humanitarian reconstruction support special measures legislation for
prevention of terrorism.

The DPJ's outline is specifically designed to allow SDF personnel
and police officers to provide civilian assistance in areas where
ceasefire agreements have been reached or civilians will not suffer
damage, rather than to join the main body of ISAF that has suffered
many casualties. The DPJ's outline also proposes relaxing the
weapons use regulations.

But from within the DPJ, its outline drew such reactions as that
"Who will determine a ceasefire?" and "It is just an armchair
theory." Work to elevate it into a bill has been stalled.

If the DPJ presents a counterproposal, it would have to answer
questions in place of the government. The contents of the DPJ plan
would not be based on field surveys and would not be fine-tuned,
either. The ruling bloc is expected to attack shortfalls in the DPJ
proposal. That is supposedly why the DPJ is not trying to come up
with its own counterproposal.


TOKYO 00005463 004 OF 011


In yesterday's question-and-answer session, there was an instance
when the government was surprised by a DPJ member's comment: "Our
counterproposal is to stop the refueling operation in the Indian
Ocean." Another member strongly implied that if Diet approval was
added to the government plan, he could support it. Views in the DPJ
on the new antiterrorism legislation are not uniform.

The current extraordinary Diet session closes on Dec. 15. The
committee which meets twice a week has only three days left to
discuss the new legislation. The Diet session is expected to be
re-extended. Is the DPJ going to continue opposing the legislation
without producing its own counterproposal? Such an attitude is not
appropriate for a party aiming to take over the reins of
government.

(3) Finance Ministry's policy on fiscal 2008 budget: General account
budget to reach 83-84 trillion yen; Issuance of government bonds to
be kept at 25 trillion yen level

MAINICHI (Page 2) (Full)
December 5, 2007

The Finance Ministry yesterday underwent coordination with the
intention to set the total amount of the general account in the
fiscal 2008 budget at the 83-84 trillion yen level, up about 1-2
trillion yen from the initial budget for fiscal 2007. The size of
the general account will increase for the second consecutive year.
Tax revenues are estimated to reach 53 trillion yen, the level
similar to the initial budget for fiscal 2007. The ministry intends
to constrain the issuance of government bonds at the 25 trillion yen
level, similar to the level in the fiscal 2007 initial budget.

However, chances are that if pressure from the ruling parties from
the ruling parties for an increase in expenditures builds up with
the next Lower House election close at hand, the issuance of new
government bonds could increase.

Regarding general expenditures, policy-related portion of the
budget, such as social security spending, the Finance Ministry aims
at achieving the budget guidelines set at 47.3 trillion yen, up 30
billion yen from the fiscal 2007 initial budget. It intends to
pursue maximum spending cuts.

However, general expenditures could increase by 100-200 billion yen
due to a growing call from the ruling camp for frontloading portions
of an increase in state contributions to the basic pension following
its devastating defeat in the July Upper House election.

Though appropriations for government bonds to be used for the
payment of principals and interest of government bonds will exceed
the amount earmarked in the fiscal 2007 budget, the amount will be
smaller by more than several hundred-billion yen from the 22.2
trillion yen as of the filing of budget requests due to a revision
to the estimated interest rate. Tax allocation grants will likely
increase, compared with the fiscal 2007 budget, due to sluggish
growth in local tax revenues, but the scope of the increase will be
constrained as much as possible.

As a result, the Finance Ministry wants to cut the total amount of
the general account from the estimate budget requests of 85.69
trillion yen made by government agencies and constrain the issuance
of government bonds to a level similar to the previous year.

TOKYO 00005463 005 OF 011

General account tax revenues for fiscal 2008 are estimated to come
to the 53 trillion yen level, which is almost the same level as the
amount in the fiscal 2007 budget due to slow growth in corporate tax
revenues.

500 billion yen for supplementary budget

The Finance Ministry yesterday decided to appropriate about 500
billion yen for the fiscal 2007 supplementary budget. In the initial
budget, tax revenues were estimated to come to 53.5 trillion yen,
but the amount has to be lowered by about 1 trillion yen due to a
sluggish increase in corporate tax revenues. The fiscal 2007
supplementary budget will, therefore, be smaller, compare with the
fiscal 2006 supplementary budget (3.77 trillion yen). Amid growing
pressure for spending, the Finance Ministry will clarify its stance
of slashing expenditures, by making the issuance of new government
bonds at zero.

(4) Administrative reform minister and agriculture minister fail to
reach agreement on reform of independent administrative corporations
over integration of six such corporations into one organization

YOMIURI (Page 4) (Full)
December 5, 2007

State Minister in Charge of Administrative Reform Watanabe yesterday
met with Agriculture Minister Wakabayashi to discuss the reform of
independent administrative corporations. Watanabe asked Wakabayashi
to consolidate into one organization six research institutes under
the control of the Agriculture Ministry, including the National
Institute of Agrobiological Resources and the Forest and Forest
Products Research Institute, but Wakabayashi did not agree to do so.
Wakabayashi also rejected Watanabe's call for integrating the
Fisheries Research Agency and the National Fisheries University.

As for the National Agriculture and Food Research Organization,
Watanabe indicated a plan to split this organization into two and
consolidate them into independent administrative corporations, which
are respectively under the control of the Ministry of Finance and
the Ministry of Health, Labor and Welfare. Wakabayashi came up with
a positive stance about the plan. The meeting between Watanabe and
Wakabayashi was held as part of ministerial-level negotiations aimed
at creating a plan to streamline the independent administrative
corporations by the end of the year. The two ministers will meet
again, but their negotiations are likely to face hard going.

(5) Foreign Ministry in its ODA white paper draft sounds alarm
against declining ODA

YOMIURI (Page 4) (Full)
December 5, 2007

The Ministry of Foreign Affairs (MOFA) yesterday drafted an official
development assistance (ODA) white paper for 2007 and submitted a
draft to the ruling Liberal Democratic Party (LDP).

Japan sank to the third place in terms of ODA amounts in 2006,
surpassed by Britain. From the viewpoint that the current level of
ODA amounts harms national interests, the draft carries many
instances illustrating the role of ODA, which bolsters the
foundation of Japanese diplomacy.

TOKYO 00005463 006 OF 011

The draft also emphasizes the need for ODA to make up for Japan's
shortage of human contributions, explaining that Japan has sent only
52 officials to United Nations peacekeeping operations.

(6) Move to cut air fares likely to accelerate with FTC deciding to
make international cartel subject to AML

SANKEI (Top Play) (Full)
December 3, 2007

Price competition for international flights landing at and taking
off from Japanese airports will now likely become even fiercer due
to the Fair Trade Commission's decision to call on the Transport
Ministry this week to scrap a system exempting a price cartel for
air fares set by the International Air Transport Association (IATA),
an industry organization for airline companies, from the application
of the Antimonopoly Law (AML). If the Transport Ministry abolishes
the system, revising the Aviation Law, discount tickets for
first-class seats or reduced fares for business-class and
economy-class seats will likely appear on the market.

IATA fares are set, based on a kind of a price cartel. However, this
practice has been exempt from the application of the AML throughout
the world, as it has been considered necessary for passengers to
connect to other flights or change the airlines they use. IATA fares
are applied to all first-class tickets and 90 PERCENT of
business-class tickets for flights landing at and leaving Japanese
airports.

However, since no inconveniences have occurred regarding
economy-class tickets, to which IATA fares have hardly been applied,
the FTC has judged that the AML application exemption system would
be unnecessary. It has also judged that the unified fuel surcharges
should be subject to the AML.

If the Transport Ministry revises the Aviation Law to scrap the AML
exemption system , it would become impossible to adopt IATA fares to
first-class and business-class seats for flights landing at and
leaving Japanese airports, inevitably giving rise to price-cutting
competition. It would also become impossible for airliners to refer
to reduced IATA fares that place restrictions on changes of
airliners by customers.

Airline companies independently set economy-class fares. However,
they in fact appear to be referring to discount IATA fares when
setting their own prices. For instance, the prices of economy-class
seats for flights between Tokyo and Los Angeles offered by Japan
Airlines and All Nippon Airways are generally linked to reduced IATA
fares. For this reason, a revision to the Aviation Law is believed
to lead to fiercer competition.

Many countries have an AML exemption system. However, the European
Union abolished it in October this year, the first time for a
leading economy to do so. This move is beginning to become a global
trend. However, the Transport Ministry could oppose the idea of
abolishing the system, because its stance is that the exemption
system benefits customers and there is no immediate problem about
the present system.

(7) 12 discretionary contracts made at Kyuma's orders


TOKYO 00005463 007 OF 011


AKAHATA (Top play) (Abridged)
November 30, 2007

"Politicians have more powers."

Former Administrative Vice Defense Minister Takemasa Moriya, 63,
voiced dissatisfaction to a senior Defense Ministry official close
to him. Shortly thereafter, Moriya was arrested on bribery charges.

Moriya was talking about the power of influence on the Defense
Ministry's procurement of weaponry and equipment totaling
approximately 2 trillion yen a year. In the Defense Ministry's
procurement, discretionary contracts (contracts that are not
subjected to competitive open bidding) account for an extremely high
percentage, making them a hotbed for bribery and vested interests.

In the former Defense Agency's procurement, orders from its director
general (state minister) were influential. The Defense Agency
director general took part in the process of screening and selecting
military aircraft models and other weapons. In connection with
selected models, the Defense Agency director general was authorized
to order discretionary contracts with specific companies or
brokers.

Why did the former Defense Agency conclude discretionary contracts
(instead of competitive open bidding)? As one of the reasons for
this, the Defense Ministry cited "orders from the Defense Agency
director general." In the breakdown of the Defense Agency's
contracts concluded during the period of five fiscal years from 2001
to 2005, 247 contracts-totaling 582,663,472,659 yen-were at the
orders of Defense Agency directors general.

For instance, on Jan. 14, 1997, when Fumio Kyuma was the Defense
Agency director general, the Defense Agency decided to procure a new
intermediate-range ground-to-air guided missile at his orders. In
FY2001, the Defense Agency entered into two optional contracts with
Mitsubishi Electric Co. The two contracts totaled 3,266 million
yen.

The Defense Agency entered into huge contracts with major defense
industry contractors at its director general's orders. This is
extremely unnatural.

Motonobu Miyazaki, 69, a former managing director of Yamada
Corporation, a trading company dealing in munitions, is alleged to
have lavishly wined and dined Moriya at a restaurant, at which Kyuma
is also said to have been one of the participants. The Defense
Agency procured equipment at the orders of Kyuma and the incumbent
defense minister, Shigeru Ishiba, when each were at the helm of the
Defense Agency. This fact was revealed by the Defense Ministry in
its Diet reply to a question asked by Hidekatsu Yoshii, a House of
Representatives member of the Japanese Communist Party, in a meeting
of the House of Representatives Cabinet Committee on Nov. 28.

The Defense Ministry, in its document presented to the committee,
lists 12 equipment items that the Defense Agency procured when Kyuma
was its director general under the Hashimoto cabinet. Those items
included a new intermediate-range ground-to-air guided missile.

Those 12 equipment items on the list included a destroyer, a
submarine, a minesweeper, a transport ship, a patrol helicopter, and
an observation helicopter. They are all expensive.

TOKYO 00005463 008 OF 011

Among those optional contracts at the Defense Agency director
general's orders, nine contracts were over 10 billion yen each.

For example, the Defense Agency contracted Mitsubishi Heavy
Industries, Ltd. for "F-2A/B fighter support planes" at the total
price of 90,665,800,000 yen. Another optional contract was with
Kawasaki Heavy Industries, Ltd. for the "follow-on fixed-wing patrol
aircraft" and "follow-on cargo aircraft" at 78,508,500,000 yen.

Shigegu Ishiba, who is the incumbent defense minister, also picked a
contractor for the Maritime Self-Defense Force to procure the
"follow-on rotary-winged aircraft (for minesweeping, airlifting, and
antarctic airlifting support)" on July 30, 2003, when he was Defense
Agency director general under the reshuffled Koizumi cabinet.

"Orders from the director general" are no longer used. However, the
defense minister's powers are still overwhelming. "The Defense
Ministry's head is not the administrative vice minister but is the
defense minister," a former senior official of the Defense Ministry
said. This former official added: "The defense minister does not
give any straightforward orders. Even so, the defense minister will
let us become aware of something in his mind, and we can see what
the defense minister wants. It's only natural to consider that."

(8) Japan's unilateralism indisputably problematical

SANKEI (Page 13) (Slightly abridged)
December 4, 2007

By Naoyuki Agawa, professor at Keio University

Will the prime minister's resolution be carried out?

Relations between Japan and the U.S. have been brought back on track
in the aftermath of Prime Minister Fukuda's recent visit to
Washington. According to media reports, Fukuda and President Bush in
their summit meeting reaffirmed the importance of the bilateral
alliance and the necessity to strengthen it. Fukuda declared that he
would make utmost efforts to swiftly enact a new antiterrorism bill
that would resume the Maritime Self-Defense Force's (MSDF) refueling
mission in the Indian Ocean. Meanwhile, Bush said that the US would
not easily delist North Korea as a state sponsoring terrorism and
would not let the issue of Japanese nationals abducted by North
Korea be forgotten. The two leaders also agreed on the need to
expand bilateral intellectual exchanges.

Our nation's security policy has been constrained, as seen by the
suspension of the MSDF refueling mission, following the Democratic
Party of Japan's overwhelming victory in the July House of
Councillors election, as well as by the series of scandals involving
the Defense Ministry.

With only less than a year left until the U.S. presidential
election, the foreign policy of the Bush administration, which has
poured its energy into the Iraq war, has lost its luster, unlike in
the past. Regarding its policy toward North Korea, too, the Bush
administration remains unable to unify views.

It was significant, under such an ambiguous situation, that the
leaders of Japan and the U.S. met and sent a message that they would
never allow the foundation of the alliance to be shaken by changes

TOKYO 00005463 009 OF 011


in the domestic political situation. It is questionable, though,
whether Japan will be able to live up to its resolution.

Savings may dry up

It is necessary to thoroughly consider whether the new antiterrorism
bill, once rejected in the Upper House, should be brought back to
the House of Representatives for a revote. The government also might
have to trim its host nation budget for the US forces in Japan (the
so-called "sympathy budget"), reflecting the current tight fiscal
situation. Even the planned relocations of the US Marine Corps'
Futenma Air Station within Okinawa Prefecture and of the Marine
Headquarters to Guam, it will inevitably take more time and money.
"I want you to understand this point" (Fukuda told Bush).

The abduction is a serious abuse of human rights, so the U.S. should
not drop North Korea from the terror-sponsoring list. But on the
issue of human-rights oppression in Burma, it is undesirable to
drive that government into a corner by imposing stricter sanctions
on it. I would like this difference understood.

It also is difficult for Japan to completely remove its conditions
for the importing of American beef in view of ensuring food safety
for the Japanese people. This, too, should be fully understood.

In general discussion, the two leaders pledged to strengthen the
alliance, but on specific issues, (the prime minister) just asked
for the other side's understanding and stopped short of promising
any specific action. But the President made no unreasonable demands,
because of the capital Japan has accrued from its concerted action
with the U.S. in the war on terror.

But that capital can be easily drawn down. Japan's accumulated
capital will soon dry up if Americans, who for many years have had
to foot the bill for the enormous war expenses and sacrifice the
lives of soldiers dispatched to the Middle East, begin to think of
Japan as not shouldering the cost need to ensure its national
security and as trying to cut its host-nation support
responsibility, not to mention its banning U.S. beef imports.

Be more sensitive about measures for survival

Some critics complain that Japan's places too much emphasis on
relations with the US. The Bush administration launched a strike on
Iraq at its own discretion and without a United Nations resolution.
Many Iraqi citizens were killed in the war, plunging the Middle East
deeper into chaos. The situation in Afghanistan is the same. US
bases in Okinawa and other areas in Japan have also been pressed
with an excessive burden due to such wars. Some might raise the
question how long will Japan continue to blindly follow the U.S., a
unilateralist country that has refused to sign the Kyoto Protocol.

But in the eyes of the U.S. and many other countries, Japan may
appear to be the unilateralist instead. Although the U.S. may seem
terribly selfish in some situations, Japan, too, sometimes takes
uncompromising stances. The two countries are certainly
unilateralist, but there is one difference. Although the U.S. is
able to survive with its unilateralism, Japan cannot.

In the prewar period, Japan tried to maintain a unilateralism, but
this attempt ended in failure. This experience prompted Japan to
decide to form an alliance with the U.S. to protect its national

TOKYO 00005463 010 OF 011


security. In order for Japan to survive in East Asia under the
current situation in which China is a rising military power and
Japan's population is on the decline, it is absolutely necessary for
Japan to maintain and strengthen the alliance with the U.S. It is
certainly important to keep friendships with its neighbors strong,
but neither the neighbors nor the United Nations will protect Japan
from harm.

Democratic Party of Japan (DPJ) President Ozawa claims that Japan is
not constitutionally allowed to dispatch Self-Defense Force troops
overseas without a UN resolution. Citing constraints under Article 9
of the Constitution and under the pretext of multilateralism, Ozawa
is indisputably taking a unilateralist stance in effect. Will the US
seriously protect a nation that will make a decision based on the
will of the UN whenever a UN resolution conflicts with the view of
the U.S.? This view may open cracks in the bilateral alliance.

Japanese people have harshly criticized U.S. unilateralism, but they
should be more sensitive about the negative impact of our own
country's brand of unilateralism, as well.

(9) Hokkaido Toyako Summit: Niseko Higashiyama Prince Hotel a
leading candidate to accommodate U.S. delegation; Noboribetsu Grand
Hotel also a candidate

HOKKAIDO SHIMBUN (Page 1) (Full)
December 5, 2007

The Niseko Higashiyama Prince Hotel (200 rooms in main building, 500
rooms in new annex) in the town of Niseko in Shiribeshi has surfaced
as a likely candidate to accommodate the United States delegation
comprising some 800 personnel, the largest scale among the
participating countries, during the G8 Hokkaido Toyako Summit on
(July 7-9) next year, sources concerned said by yesterday. The
Ministry of Foreign Affairs (MOFA) has also indicated that the hotel
is one of the candidates. The United States, however, is also
checking the Noboribetsu Grand Hotel (261 rooms) in the Noboribetsu
hot-spring resort area as a candidate. MOFA plans to make final
coordination with the U.S. government and the hotel.

According to accounts by the sources concerned, after a decision was
made in April on the Toyako Summit, the Japanese government sounded
out the U.S. side on using a major hot-spring hotel in the town of
Toyako in Iburi, home to The Windsor Hotel Toya, the main summit
venue.

In response, the U.S. side expressed concern that in the case of the
Toyako hot-spring area hotel, they might have to use it jointly with
other participating countries. The U.S. indecently examined hotels,
and as a result, the two hotels have suddenly surfaced.

The Higashiyama Price Hotel has 700 rooms. If nearby hotels are
included, it may be able to meet the U.S. "one-person-one-room"
principle putting high priority on privacy. The probability of
turning parking lots and golf courses into heliports seems to have
received high recognition as well.

The distance between the hotel and the main summit venue is
approximately 46 kilometers via roads and National Highway 230.
Visiting there frequently, U.S. government officials have been
checking the hotel based on a plan to reserve all of its rooms.


TOKYO 00005463 011 OF 011


The Seibu Group opened the Niseko Higashiyama Prince Hotel along
with the sky resort in 1982. But the group decided to sell it due to
its financial crisis. The hotel was purchased by Citigroup, a major
U.S. banking institution, in March this year. It later concluded a
management contract with the global hotel chain Hilton Hotels Corp.

The hotel is scheduled to operate under the new name of Hilton
Niseko Village in July 2007. If the U.S. delegation is to stay
there, the U.S. government would indirectly support the American
hotel immediately after its opening.

The Noboribetsu Grand, on the other hand, is a hotel that can offer
Western style services, which is rare in hot-spring resort areas,
with nearly 90 Western style rooms, which is far less than that of
the Higashiyama Prince Hotel, however. The hotel is scheduled to
complete its grand renovation by the consecutive holidays in May
2007, its 70th anniversary. The hotel is about 69 kilometers away
from the main summit venue via the Hokkaido Expressway.

The hotel is earnestly selling itself by playing up such historical
events as that the late Emperor Showa (Hirohito) stayed there twice
and that it was requisitioned by the Allied Forces General
Headquarters (GHQ) after WWII. U.S. government officials also seem
to be checking the communications environment, security, and other
factors.

Reportedly, the two hotels are being challenged to improve their
communications environments and their funding.

There is information that Britain has already secured a hotel on
Lake Toya for the summit.

SCHIEFFER

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