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UNCLAS SECTION 01 OF 06 TOKYO 000957 
 
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 02/23/06 
 
 
INDEX: 
 
(1) Minshuto member Nagata to resign from Diet to take 
responsibility over Horie e-mail; Party leaders trying to 
dissuade him 
 
(2) Resignation of lawmaker Nagata a serious blow for Minshuto; 
Leaders see inevitable loss of internal cohesion 
 
(3) Japan's new initiative to gain permanent seat on UNSC: US 
remains cold; No solution in sight; Visiting German Foreign 
Minister urges Japan to come back to G-3 framework; Difficult to 
secure seat by Sept. 
 
(4) Joint command of three self-defense forces to be set up; 
Japan-US joint exercise to start today 
 
(5) US force realignment: Defense Agency to devise new subsidy 
program to convince local areas 
 
(6) FTA: Government to switch strategy from quality to speed: 
Talks with Chile will be focused on key areas, aimed at catching 
up with other countries 
 
ARTICLES: 
 
(1) Minshuto member Nagata to resign from Diet to take 
responsibility over Horie e-mail; Party leaders trying to 
dissuade him 
 
ASAHI (Top Play) (Lead paragraph) 
February 23, 2006 
 
Democratic Party of Japan (Minshuto) member Hisayasu Nagata, 36, 
a House of Representatives member elected in the Minami-Kanto 
proportional representation bloc, has decided to resign as a Diet 
legislator. He has already expressed his intention to the party 
executive. In a Lower House Budget Committee meeting, Nagata 
alleged that former Livedoor President Takafumi Horie had 
instructed one of his employees to wire 30 million yen to the 
second son of Liberal Democratic Party Secretary General Tsutomu 
Takebe, claiming that he had a copy of the e-mail in question. 
Unable to present evidence to prove that the e-mail is credible, 
however, the opposition party has come under fire. Nagata has 
thus deemed it necessary to take responsibility for the frenzy. 
DPJ President Seiji Maehara and other party leaders urgently met 
and decided to leave the issue to the discretion of DPJ Secretary 
General Yukio Hatoyama. They are attempting to dissuade Nagata 
from resigning. 
 
Takebe's son denies allegations 
 
LDP Secretary General Takebe's son issued a comment to media 
organizations today, noting: 
 
"I and my company (1) have not received any money from Horie or 
Livedoor; and (2) have not opened a bank account overseas." 
 
(2) Resignation of lawmaker Nagata a serious blow for Minshuto; 
Leaders see inevitable loss of internal cohesion 
 
YOMIURI (Page 2) (Excerpts) 
Evening, February 23, 2006 
 
TOKYO 00000957  002 OF 006 
 
 
 
Minshuto (Democratic Party of Japan) Lower House lawmaker 
Hisayasu Nagata has indicated his intention to resign his Diet 
seat over the controversy of an e-mail money transaction (from 
Livedoor to the Liberal Democratic Party (LDP)) whose 
authenticity cannot be proved.  This has become a serious blow to 
Minshuto, which was pursuing the money links as part of a set of 
four scandalous accusations against the LDP.  Minshuto is in a 
situation now that if Nagata does resign, the responsibility of 
Diet Affairs Committee Chairman Yoshihiko Noda and party head 
Seiji Maehara will be called into question (i.e., pressured to 
resign), but if Nagata is kept on in the party, the cohesiveness 
of the party under the current leadership will come apart. 
 
 The situation has drastically changed since a week ago when 
Nagata on Feb. 16 brought up the e-mail charge in the Lower House 
Budget Committee accusing LDP Secretary General Takebe of 
"selling your soul for money." When Nagata suddenly disappeared 
from public, Minshuto explained that he was searching for new 
evidence, but the truth was that if he appeared on television and 
made further remarks, the party feared he would only make things 
worse, according to a senior party member. He apparently was 
being kept under wraps. 
 
Minshuto avoided arguments over the authenticity of the e-mail, 
and used a tactic of prioritizing trying to find the trail of 
money to the son of Takebe. However, Maehara in the party-heads 
debate on Feb. 22, devoted only the last nine minutes to pursuing 
the e-mail issue, and left the impression that the Minshuto had 
reached a cul-de-sac and was trying to cut and run. A sense of 
disappointment with Maehara spread rapidly. 
 
Within the party, there was a sense that the party's image was 
being damaged, and some members called for Nakata's resignation 
as the only way to get out of the lurch. But others said that if 
he quit, it would be an admission that the e-mail was a fake, and 
that this would lead to the resignations of both Maehara and 
Noda. 
 
One senior member expressed concern about the impact on Diet 
deliberations now: "Although it is difficult to prove the 
authenticity of the e-mail, as long as we do not clearly resolve 
this issue, we cannot move ahead. We will leave the impression 
that all of the scandals our party is pursuing are bogus." 
 
(3) Japan's new initiative to gain permanent seat on UNSC: US 
remains cold; No solution in sight; Visiting German Foreign 
Minister urges Japan to come back to G-3 framework; Difficult to 
secure seat by Sept. 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 22, 2006 
 
In a bid to secure UN Security Council (UNSC) membership, the 
Japanese government has moved its campaign into full gear to 
obtain understanding of its new initiative featuring an increase 
by six in all the number of permanent and semi-permanent member 
nations. However, the road ahead will be bumpy with the US, 
Japan's only hope, as well as Germany, Brazil and India (G-3), 
reacting coldly. 
 
Japan's new plan features: (1) a nation that obtained support 
from more than two-thirds of the UN member nations should be 
 
TOKYO 00000957  003 OF 006 
 
 
eligible for permanent UNSC membership; and (2) a nation that 
failed to obtain support such should be eligible for semi- 
permanent membership with renewable tenure longer than that of 
nonpermanent members (two years, not renewable). 
 
Japan and the G-3 at first submitted a resolution calling for 
increasing the number of permanent seats by 6 and that of 
nonpermanent members by 4. However, it had to give up the effort 
because there was no prospect for the resolution to be able to 
obtain endorsement from two-thirds of the UN members, which is 
necessary for adoption. The resolution was killed, as the 59th 
General Assembly adjourned last September. 
 
Judging that the primary reason for the defeat was that it was 
unable to obtain support from the US, Japan has switched to a 
policy of searching for ways to work in concert with the US. The 
new initiative gives consideration to the US, which is against 
the idea of expanding the UNSC framework, with the expansion of 
seats reduced by 4. The new initiative proposes a rule of leaving 
nations that have failed to obtain endorsement from two thirds of 
the UN members in a semi-permanent post, leaving room for 
allowing the US, which does not like the idea of Germany and some 
other countries becoming permanent members, to work on other 
countries to support Japan's bid. 
 
However, the US response was cold. Ambassador to the UN Bolton 
expressed a negative view on Japan's new proposal, "Japan has yet 
to come up with a proposal that can obtain broad-based support." 
He thus indicated the US stance of continuing talks on specific 
measures, though it supported Japan's entry into the UNSC as a 
permanent member. 
 
In the meantime, the G-3 resubmitted the once-killed resolution 
this January. Visiting German Foreign Minister Steinmeier during 
a press conference held at the Japan National Press Club on Feb. 
21 urged Japan to come back to the G-3 framework, expressing 
doubts about the feasibility of Japan's new initiative. He noted, 
"I am confident that the G-3 initiative is a proposal that is 
most likely to be adopted." 
 
Japan intends to seek understanding of the US and the G-3 toward 
its new initiative, by involving the African Union, which had 
submitted its own resolution. 
 
However, it is difficult for Japan to gain UNSC membership during 
the 60th General Assembly as it hopes. 
 
(4) Joint command of three self-defense forces to be set up; 
Japan-US joint exercise to start today 
 
SANKEI (Page 4) (Full) 
February 23, 2006 
 
The Self-Defense Forces (SDF) and US forces in Japan will today 
begin in Tokyo a training drill called Keen Edge, a Japan-US 
joint Command Post Exercise (CPX). A task force combining the 
Ground Self-Defense Force (GSDF), the Maritime Self-Defense Force 
(MSDF), and the Air Self-Defense Force (ASDF) late next month has 
been formed, characterizing the exercise as preparatory training 
for the transition to integrated operations of the three forces. 
The purpose of the exercise is to undertake high-level 
coordination on such issues as ballistic missile defense and to 
promote cooperation between Japan and the US. 
 
TOKYO 00000957  004 OF 006 
 
 
 
This is the 15th time Keen Edge will be held, and it will take 
place at the Defense Agency and Yokota Air Base through March 3. 
Approximately 1,350 personnel from the JSDF and about 3,240 from 
the US Army, Navy, Air Force, and Marine Corps are expected to 
take part in the exercise. In the CPX, the movements of Japanese 
and US troops are input into a computer to confirm the 
appropriateness of the operational plan and the flow of 
communications. 
 
Specifically, Japan and the US will conduct joint operations 
based on scenarios that involve the defense of Japan and 
emergencies in areas surrounding Japan. The point of the exercise 
this time is for the chief of the Joint Staff, a post to be newly 
created, to command the three forces. 
 
Training for the combined joint task force will also be carried 
out. The ASDF air defense commander will direct missile defense 
(MD) exercises. The MSDF Self-Defense Fleet commander-in-chief 
will take the lead in defending against enemy incursions on a 
remote island. They will also command other SDF units as the 
leaders of the combined joint task forces. 
 
(5) US force realignment: Defense Agency to devise new subsidy 
program to convince local areas 
 
SANKEI (Page 1) (Abridged) 
February 19, 2006 
 
In order to facilitate the planned realignment of US forces in 
Japan, the Defense Agency is studying a US force realignment 
grant system based on the government's program to provide 
subsidies to local governments which have accepted nuclear power 
generation facilities. With Japan and the US scheduled to reach a 
final agreement in March on US force realignment, the agency 
intends to use the envisaged system as a bargaining chip in 
persuading local areas. The Defense Agency plans to craft the new 
subsidy system in outline to make arrangements with relevant 
agencies in February with a view to presenting it to local areas 
in March. 
 
Measures to revitalize local economies have yet to take shape and 
local governments have not agreed to accept new base US 
facilities. 
 
Earlier this month, Administrative Vice Defense Minister Takemasa 
Moriya ordered Defense Agency and Defense Facilities 
Administration Agency officials to study new steps to revitalize 
local economies. He has also come up with a plan to make 
arrangements with the Finance Ministry and the ruling parties 
later this month. 
 
A system to provide subsidies is expected to be the main pillar 
in the government's new package for local areas. The government 
has been providing grants to base-hosting communities, which have 
not levied the property tax and other taxes on US bases and 
facilities. The grants for fiscal 2005 topped 25.1 billion yen. 
 
Apart from the existing system, the government is expected to 
apply the new program to such municipalities as Okinawa's Nago, 
the relocation site for the US Marine Corps' Futenma Air Station, 
Yamaguchi's Iwakuni, which is expected to accept carrier-borne 
jets from Kanagawa's Atsugi base, and Kanagawa's Sagamihara, 
 
TOKYO 00000957  005 OF 006 
 
 
where a new US Army headquarters known as a Unit of Employment X 
(UEx) will be established. 
 
The Defense Agency's plan is based on the government's system to 
provide subsidies to municipalities with nuclear or hydro power 
plants, such as Kashiwazaki in Niigata Prefecture. The grants for 
power plants for fiscal 2005 total 110 billion yen. 
 
Local governments are allowed to use power-plant grants for 
building public facilities and developing local industries to 
revitalize their economies once their plans are approved by the 
central government. The Defense Agency intends to use the 
envisaged program to soften up the stances of local areas. 
 
The agency, however, plans to grant subsidies only to those 
municipalities that have accepted the relocation of US bases. 
Since fiscal 2000, the government has invested over 40 billion 
yen in the northern part of Okinawa in the name of revitalizing 
the economy there. But the Futenma relocation plan has not 
realized. The bitter lessons from this case have taught the 
Defense Agency not to extend grants until after local communities 
agree to the planned US force realignment. 
 
Although affected municipalities in Okinawa and Kanagawa have 
rejected the realignment plan, some local governments have 
expressed an interest in the Defense Agency's new subsidy 
program. 
 
The agency intends to incorporate new promotional measures in a 
US force realignment bill, which the government is considering to 
submit to the Diet in the current session. The Finance Ministry 
is putting up strong resistance to implementing the new subsidy 
program, and the approach of settling the base issue with money 
has sparked strong skepticism. The envisaged system faces a rocky 
road ahead. 
 
(6) FTA: Government to switch strategy from quality to speed: 
Talks with Chile will be focused on key areas, aimed at catching 
up with other countries 
 
ASAHI (Page 12) (Full) 
February 23, 2006 
 
The government will switch its strategy for signing free trade 
agreements (FTAs) from quality to speed. It has thus far aimed 
for quality economic partnership agreements (EPA) that included 
not only the abolition of tariffs but also liberalization of 
investment and the opening of the labor market. However, amid the 
growing trend for the signing of FTAs throughout the world, it 
will promote talks with India, South America and Middle East 
nations with focus on key trade areas, as a certain senior 
Foreign Ministry (MOFA) official noted, "We will abandon 
perfectionism." 
 
The first round of FTA talks with Chile will start today. Chile 
takes a positive stance toward FTAs. It has already signed such 
an agreement with 36 nations, including the US, the EU, China and 
South Korea. A survey by the Japan Automobile Manufacturers 
Association (JAMA) found that South Korea's sales of autos to 
Chile extensively grew in 2005, up 40% from the preceding year, 
since it signed an FTA with that nation in April 2005. 
 
A JAMA official lamented, "Chile's imported car market is 
 
TOKYO 00000957  006 OF 006 
 
 
growing, but that nation imposes a tariff of 6% on Japanese cars, 
which is a competitive disadvantage." The Japanese government 
intends to speed up negotiations with Chile so as to quickly 
dissolve such a situation disadvantageous to Japanese companies. 
 
Japan has thus far aimed for the conclusion of quality FTAs in 
various fields, mainly with the Association of South-East Asian 
Nations (ASEAN), with which it has close economic ties. 
 
However, efforts to conclude quality agreements are time- 
consuming, as negotiation areas for such an agreement involve 
various government agencies. Talks with ASEAN as a whole, which 
kicked off last April, suffered a setback at the outset due to a 
clash of views between the two sides. Japan locked horns with 
South Korea, as well, over a reduction in tariffs on agricultural 
products. Overall talks have been suspended since Nov. 2004. 
 
As a result, in FTA talks with ASEAN, China and South Korea have 
gone ahead of Japan, by giving priority to a cut in tariffs on 
mined and manufactured goods. 
 
Business circles are concerned that Japan will be left behind the 
global trend, as a senior Japan Business Federation official 
noted. An increasing number of Liberal Democratic Party (LDP) 
members are calling for focusing on trade in resources. 
 
In response, the government has shifted an FTA strategy to giving 
priority to speed. It will aim to launch talks with India as 
early as this summer. It is also looking into the possibility of 
talks with the Gulf Cooperation Council (GCC), consisting of oil- 
producing countries in the Middle East, and South Africa. It has 
also begun considering Australia as an FTA negotiation partner. 
Talks with that nation will likely encounter complications over 
agricultural, forestry and fisheries products. 
 
Talks focused on priority areas, such as an investment 
environment, will likely increase. 
 
SCHIEFFER