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UNCLAS SECTION 01 OF 12 TOKYO 001224 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST 
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS 
OFFICE; SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY 
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/08/06 
 
 
Index: 
 
1)   Top headlines 
2)   Editorials 
3)   Prime Minister's daily schedule 
 
4)   LDP freshmen "83", US Embassy Eagles to play friendly 
  baseball game at Tokyo Dome, March 15 
 
Defense and security issues: 
5)   Talks between central government and Okinawa on Futenma base 
  relocation remain at impasse 
6)   Foreign Minister Aso insists that government's priority is 
to obtain local understanding for Futenma relocation in Okinawa 
7)   Prime Minister Koizumi wants Iwakuni City to bear fair share 
of the base burden by accepting Atsugi jets 
8)   Atsugi noise pollution hearing turns into ruckus as locals 
prevented from entering building 
9)   Minshuto head Maehara criticizes way that government has 
been handling USFJ realignment issues 
 
Political agenda: 
10)  Minshuto draws to a close its Diet strategy of attacking LDP 
  on set of four issues, including US beef 
11)  Minshuto head Maehara becoming more and more marginalized as 
veteran panel shelves his China-as-threat argument 
12)  Last half of current Diet session may lack luster, with LDP 
way behind in readying important bills 
13)  10,000 rally, including group of lawmakers, against changing 
Imperial Household Law to allow female on the throne 
 
China connection: 
14)  China's foreign minister says Yasukuni Shrine visits are 
  like going to worship the Nazis 
15)  China's foreign minister cites Class A war criminals being 
worshiped at Yasukuni as the cause of trouble between Japan, 
China 
16)  Japan-China gas talks run out of steam 
17)  China suggests joint development of gas near Senkakus 
 
18)  Government plans to speed up FTA negotiations with new 
  formula 
 
19)  Farm ministry's insistence that US beef incident was not 
  "unique" case, as US insists, but "systemic" problem is the crux 
  of the current feud 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Livedoor's Horie approved money laundering beforehand 
 
Mainichi: 
LDP panel approves easing regulations on election campaigning on 
Internet 
 
Yomiuri: 
Labor Ministry to abolish skill development seminar program via 
satellite 
 
 
TOKYO 00001224  002 OF 012 
 
 
Nihon Keizai: 
Firms doubling dividends on strong earnings for FY2005 
 
Sankei: 
Government to reject China's proposal for joint gas development 
in waters off Senkaku Islands 
 
Tokyo Shimbun: 
Six loan sharks arrested over driving three to suicide 
 
2) EDITORIALS 
 
Asahi: 
(1)  Take advantage of momentum for talks with China 
(2)  Enjoying other countries' cultures 
 
Mainichi: 
(1)  Diplomatic efforts necessary to have contributions to UN set 
fairly 
(2)  New rules needed on lost property 
 
Yomiuri: 
(1)  Conciliatory stance will not move gas-development talks 
forward 
(2)  Japan should extend full cooperation to complete 
construction of International Space Station 
 
Nihon Keizai: 
(1)  Priority should be given to both speed and quality in FTA 
negotiations 
(2)  GM is no longer dependable 
 
Sankei: 
(1)  Japan must be cautious about China's strategy in gas 
development talks 
(2)  Imperial couple visit Miyakejima to encourage people 
 
Tokyo Shimbun: 
(1)  New Iraqi government urged to strengthen unity 
(2)  Enthusiasts must abide by new rules on air guns 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 7 
 
NIHON KEIZAI (Page 2)  (Full) 
March 8, 2006 
 
08:00 
Met Deputy Chief Cabinet Secretary Suzuki at Kantei. 
 
08:31 
Attended a cabinet meeting in Diet. 
 
09:00 
Attended the Upper House Budget Committee meeting. 
 
11:59 
Arrived at Kantei. 
 
13:00 
Attended the Upper House Budget Committee meeting. 
 
TOKYO 00001224  003 OF 012 
 
 
 
17:34 
Attended a meeting of the Council on Economic and Fiscal Policy 
held at Kantei. 
 
19:09 
Met Secretary General Takebe, Election Bureau chief Endo, and 
other members of the LDP executive liaison meeting at Hotel 
Okura. 
 
20:51 
Arrived at residence. 
 
4) New LDP lawmakers -- the freshmen "83" -- US embassy to play 
friendly baseball game on March 15 at Tokyo Dome 
 
MAINICHI (Page 2) (Full) 
March 8, 2006 
 
The Association of Hachi-san, which is made up of 83 Liberal 
Democratic Party (LDP) lawmakers elected for the first time to 
the Diet in last year's House of Representatives election, will 
play a baseball game with the US embassy staff in Tokyo on March 
¶15. Ambassador Thomas Schieffer, who loves baseball, will take 
part in the game as manager of the embassy team. 
 
According to the embassy, it is extremely rare for it to hold 
this kind of event. Some lawmakers view that the US side has 
admitted the so-called "Koizumi children's" superiority. 
 
Ambassador Schieffer as an investor was a partner with President 
George W. Bush in owning the Major League baseball club Texas 
Rangers. He is wild about baseball. The game will start at 7:00 
p.m. No admission fee is required. The two sides will split the 
fee for Dome usage of about 800,000 yen. 
 
5) Okinawa officials, vice defense minister differ on Futenma 
relocation 
 
YOMIURI (Page 4) (Full) 
March 8, 2006 
 
Okinawa prefectural government officials, including Lt. Gov. 
Hirotaka Makino, visited Defense Agency Administrative Deputy 
Director General Moriya at the Defense Agency yesterday to file a 
protest against the planned relocation of the US Marine Corps' 
Futenma Air Station in the city of Ginowan, Okinawa Prefecture, 
to a coastal area of Camp Schwab in the city of Nago. "It's 
unconvincing to the local communities from the perspective of 
noise and danger," Makino told Moriya. Meanwhile, Okinawa Gov. 
Keiichi Inamine will meet with Defense Agency Director General 
Nukaga tomorrow to oppose the coastal plan again. 
 
6) Foreign Minister Aso underlines sincerity for obtaining local 
understanding about Futenma relocation plan 
 
ASAHI (Page 3) (Full) 
Evening, March 7, 2006 
 
Touching on local coordination for the planned relocation of the 
US Marine Corps' Futenma Air Station in Ginowan, Okinawa 
Prefecture, foreign Minister Taro Aso in a press conference 
 
TOKYO 00001224  004 OF 012 
 
 
earlier today pointed to the need to obtain understanding of 
Okinawa Gov. Keiichi Inamine, Nago Mayor Yoshikazu Shimabukuro 
and others who are opposed to relocating the airfield to Cape 
Henoko in Nago. Aso said: "It is necessary to show an attitude 
not to reach a consultation easily and deal with the issue 
earnestly, giving it time." 
 
Defense Agency Director General Fukushiro Nukaga also told a 
press conference today, "It is important to offer thorough 
explanations and to continue working hard to obtain 
understanding." 
 
In contrast, Chief Cabinet Secretary Shinzo Abe in a press 
conference today reiterated the view that in the event the 
government failed to obtain local understanding, it would have to 
prioritize the agreement with the US. He said: "Although we have 
been conducting talks with the US while keeping local voices in 
mind, decisions will be made through bilateral talks in 
principle. In making decisions, we will offer explanations to 
local areas." 
 
7) Koizumi admits Iwakuni's base-hosting burden 
 
TOKYO SHIMBUN (Page 2) (Abridged) 
March 8, 2006 
 
The House of Councillors Budget Committee held a question-and- 
answer session yesterday with Prime Minister Junichiro Koizumi 
and all his cabinet ministers attending. 
 
In the session, Koizumi, asked about the planned realignment of 
US forces in Japan, referred to the planned redeployment of US 
carrier-borne fighter jets from the US Navy's Atsugi base in 
Kanagawa Prefecture to the US Marine Corps' Iwakuni base in the 
city of Iwakuni, Yamaguchi Prefecture. In his reply, Koizumi 
stated that the burden of some base-hosting localities, including 
Iwakuni, might be lessened. At the same time, however, he also 
said the redeployment of US carrier-borne fighters to Iwakuni 
would be an additional burden on the city. "All (in Japan) will 
have to think about alleviating the burden while maintaining 
deterrence," he added. With this, the premier indicated that it 
would be unavoidable for some local communities to sustain the 
burden of hosting US military bases. 
 
8) Gov't briefing on Atsugi base soundproofing called off with 
residents crowding 
 
TOKYO SHIMBUN (Page 31) (Full) 
March 8, 2006 
 
The Tokyo bureau of the Defense Facilities Administration Agency 
held a briefing of local residents yesterday evening in the city 
of Machida, Tokyo, on its plan to cover more areas for 
soundproofing subsidization against aircraft noise around the US 
Navy's Atsugi base. The briefing, however, was called off because 
the hall became crowded with too many residents. 
 
The briefing was held at Machida Civic Forum Hall with a seating 
capacity of 180. However, there were nearly 1,000 people 
overflowing the hall. 
 
The DFAA Tokyo bureau will postpone other local briefings 
 
TOKYO 00001224  005 OF 012 
 
 
originally scheduled for March 8 and 13. The bureau will 
reschedule the briefings. 
 
Judging from the number of households to be considered for 
soundproofing subsidization, the municipal government of Machida 
City had told the DFAA Tokyo bureau that it would be difficult to 
brief local residents at the hall as planned, local authorities 
said. "The hall was too small to let them all in," a bureau 
official said. "We miscalculated," the official added. 
 
The DFAA Tokyo bureau monitored aircraft noise levels in fiscal 
2003 and 2004 to review areas for soundproofing subsidization. 
The monitoring survey found an increase in the frequency of 
roaring fighter jet takeoffs and landings. As it stands, an 
increasing number of local residents have been affected by jet 
noise in other areas situated north and south of the base. In the 
city, about 80 households were subsidized for anti-noise 
soundproofing. However, the municipal government estimates the 
number of affected households at about 47,000. 
 
9) DPJ's Maehara raps Abe over USFJ realignment 
 
YOMIURI (Page 4) (Full) 
March 8, 2006 
 
Democratic Party of Japan (Minshuto) President Maehara criticized 
Chief Cabinet Secretary Abe for indicating that the Japanese and 
US governments would release a final report on the realignment of 
US forces in Japan even without local consent. "He put the cart 
before the horse," Maehara told a news conference yesterday. He 
added: "If the government pushes its way through, the government 
will encounter strong backlash from local communities. Such an 
approach could seriously impair the foundation of Japan's 
security alliance with the United States." 
 
10) Katayama set stage for putting end to four issues ahead of 
Minshuto 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 8, 2006 
 
In the Upper House Budget Committee session yesterday, Liberal 
Democratic Party Upper House Secretary-General Toranosuke 
Katayama took up the set of four issues, including the Livedoor 
scandal. In the committee session the day before, Minshuto 
(Democratic Party of Japan), still unable to recover from the e- 
mail fiasco, hardly touched on them. In stark contrast, Katayama 
broached the issues head on. 
 
Touching on the Livedoor issue, Katayama said: "The scandal 
sounded a loud alarm against a money worshiping mentality. People 
treated (former Livedoor Co. President Takafumi Horie) like a 
hero." Although Katayama stopped short of referring to Internal 
Affairs and Communications Minister Heizo Takenaka and others by 
name who had supported Horie in the Lower House election last 
year, Takenaka turned pale at Katayama's statement. 
 
As a persistent critic of Livedoor's management style, Katayama 
unleashed his discontent yesterday. 
 
But as a member of the ruling bloc, his purpose was not to pursue 
the government's responsibility but to underscore the importance 
 
TOKYO 00001224  006 OF 012 
 
 
of preventive measures. In connection with the bid rigging 
scandal involving the Defense Facilities Administration Agency, 
Katayama also elicited a pledge from Defense Agency Director 
General Fukushiro Nukaga to uncover all problems. Katayama seems 
to have successfully set the stage for putting an end to the four 
issues, outmaneuvering Minshuto. 
 
11) Growing isolation of Maehara in Minshuto 
 
YOMIURI (Page 4) (Excerpts) 
March 8, 2006 
 
Minshuto (Democratic Party of Japan) President Seiji Maehara 
seems to sense a growing isolation from the party due to the 
backlash of the e-mail fiasco caused by a party lawmaker and 
other matters. The main opposition party confirmed yesterday the 
implementation of the party's presidential election in September 
as planned. The party, however, put off ironing out differences 
of opinions in the party on Maehara's stock argument that China 
is a threat to Japan. Senior party members, including former 
party deputy head Ichiro Ozawa and former party head Naoto Kan, 
who have distanced themselves from Maehara, launched yesterday a 
study group on education issues. They are now taking action with 
an eye on the upcoming leadership race. Given these 
circumstances, Maehara finds himself in a tough position. 
 
At an executive board meeting yesterday, Minshuto confirmed a 
policy line of carrying out the presidential race in September, 
squashing the view calling for moving up the election. He then 
categorically said in a meeting of the standing secretaries 
general held later in the day, "I take your severe views in a 
serious manner, and I would like to make a fresh start to 
revitalize our party." 
 
With the decline of Maehara's grip on the party, internal forces 
critical of Maehara have gained strength. 
 
In a meeting yesterday morning of the party's foreign and defense 
affairs divisions, the leadership planned to get a consensus in 
the party on the argument that China is a threat to Japan, but 
views opposing to the executive's plan were raised one after 
another. A junior lawmaker said: "When we have to band together, 
it's not wise to bring up the issue on which views are divided in 
the party." 
 
Policy Research Council Chairman Takeaki Matsumoto, however, 
reacted strongly, saying, "If we want to arrive at a consensus on 
the issue in the presidential election, we don't need any 
division meeting." 
 
Keiichiro Asao, foreign minister of the "Next Cabinet," sought 
understanding from the participants, saying, "If we don't reach a 
consensus, the media will release reports critical of our party." 
However, a conclusion has been carried over to the next session 
or later. 
 
12) Where are the showcase issues for latter half of Diet 
session? Ruling parties slow in making coordination for important 
bills 
 
YOMIURI (Page 2) (Full) 
March 8, 2006 
 
TOKYO 00001224  007 OF 012 
 
 
 
The Liberal Democratic Party approved at its General Council 
meeting yesterday 19 bills and treaties, including an 
administrative reform promotion bill characterized as the summing 
up of the Koizumi reform drive. The council did not discuss a 
bill to upgrade the Defense Agency to ministry status, a bill 
amending the Basic Education Law, and a national referendum bill 
stipulating a set of procedures for constitutional revision. This 
means they cannot make a cabinet decision on March 10, the 
deadline for important bills. The ruling coalition, however, once 
aimed to submit all these priority bills to the Diet in the 
current session. The ruling bloc is also struggling to find 
showcase issues for the remaining Diet session after the passage 
of the fiscal 2006 budget. 
 
LDP Policy Research Council Chairman Nakagawa and his New Komeito 
counterpart Inoue confirmed yesterday to place high priority on: 
(1) a Hokkaido doshu system special zone bill; (2) Basic 
Education Law amendment; (3) medical reform; and (4) reform of 
the public servant system. They also agreed to make a decision on 
the question of raising the Defense Agency to ministry status 
after watching the course of the bid-rigging scandal involving 
the Defense Facilities Administration Agency. 
 
Given the fact that former Education Minister Tadamori Oshima, 
who also chairs the Lower House Budget Committee, is no longer 
bound by budget deliberations as the budget bill has cleared the 
Lower House, the ruling bloc intends to hurry internal party 
coordination for the Basic Education Law revision bill for 
discussions by the ruling party study panel chaired by Oshima. 
Chief Cabinet Secretary Abe, LDP Secretary General Takebe and 
others are also eager to settle those bills in the current Diet 
session. 
 
The LDP and New Komeito are also in accord to send the national 
referendum bill to the Upper House after the consecutive holidays 
in May. The Lower House Special Research Committee on the 
Constitution chaired by Taro Nakayama decided yesterday to let 
its directors examine contentious points starting next week. 
 
But it is still uncertain if the two bills can make the Diet in 
the current session, as there are different views in the ruling 
parties. Some fear that if the current Diet session is not 
extended beyond June 18, the LDP presidential race planned for 
September might overheat early. 
 
The public servant system reform bill has recently surfaced as a 
possible showcase issue. 
 
There is a fissure between the government and labor unions over 
the question of giving public servants basic labor rights. If 
Minshuto (Democratic Party of Japan), backed by labor unions, 
digs in its heels deeper against the LDP, it might "turn into a 
good excuse to extend the Diet session," according to a senior 
LDP member. LDP Upper House Secretary General Katayama advised 
Nakagawa on March 2 to submit the bill to the Diet. In response, 
Nakagawa revealed his intention to seriously discuss the public 
servant reform bill once a prospect is obtained for the 
administrative reform promotion bill. 
 
13) Rally of 10,000 people opposing Imperial House Law revision 
takes place in Tokyo 
 
TOKYO 00001224  008 OF 012 
 
 
 
YOMIURI (Page 4) (Full) 
March 8, 2006 
 
A private organization opposing a revision of the Imperial House 
Law yesterday a rally of 10,000 people wishing to preserve the 
tradition of the Imperial family. A total of 86 Diet members from 
the ruling and opposition parties took part in the rally held in 
Nippon Budokan Hall. The 86 lawmakers are made up of 54 Liberal 
Democratic Party members, 21 members from Minshuto (Democratic 
Party of Japan) and nine independent lawmakers. According to the 
organizer, 10,300 persons participated in the rally. 
 
The rally adopted a resolution calling for forming a 
suprapartisan parliamentary group in a bid to oppose a revision 
of the Imperial House Law. 
 
14) Chinese foreign minister equates shrine visits with Nazi 
worship, saying, "Germany, too, criticizes Yasukuni Shrine 
visits" 
 
YOMIURI (Page 1) (Full) 
March 8, 2006 
 
By Yujiro Toyoda, Beijing 
 
At a press briefing yesterday, Chinese Foreign Minister Li 
Zhaoxing again mentioned Prime Minister Koizumi's repeated visits 
to Yasukuni Shrine and lashed out: "(German people) also see them 
as something absurd and unethical." Equating shrine visits with 
worship of Hitler or Nazism, Li repeated his assertion that the 
Japanese leader's attitude holds the key to mending the chilly 
relations between Japan and China. 
 
While noting that the ordinary citizens of the two nations hope 
for friendly ties, the Chinese foreign minister stated that a 
high-level German official is also critical of the shrine visits. 
He also insisted that the United States and his American and 
Malaysian friends have told him that they remember the acts 
committed by the Japanese military during World War II, including 
the attack on Pearl Harbor. He added: "Not only the Chinese but 
also citizens of many countries cannot accept shrine visits. 
There are too many examples of this sort to mention." 
 
On the other hand, Li said that the basic policy for Japan-China 
relations remains the same. He referred to the five items 
President Hu Jintao declared during the Japan-China summit 
meeting last April, for example, observing the three joint papers 
between Japan and China, including the Japan-China Joint 
Statement, Japan's handling of the historical issue in a sober 
fashion, and Japan's refusal to endorse Taiwan's independence. 
 
15) The origin of the strained Japan-China relations rests in 
Japanese leaders paying respects before Class-A war criminals at 
Yasukuni Shrine, Chinese foreign minister says 
 
YOMIURI (Page 2) (Full) 
March 8, 2006 
 
Commenting on Japan-China relations, Chinese Foreign Minister Li 
Zhaoxing during a press conference held at the People's Great 
Hall in Beijing said, "The cause of the setback facing China and 
 
TOKYO 00001224  009 OF 012 
 
 
Japan is to be found in the fact that some Japanese leaders still 
continue to pay their respects before Class-A war criminals." He 
thus strongly criticized Prime Minister Koizumi's visits to 
Yasukuni Shrine. 
 
Li went on to say, "No German leaders have ever expressed their 
respects for Hitler or Nazis after the end of World War II." He 
also said, "The peoples of not only China but also many other 
countries cannot accept Japanese leaders worshipping Class-A war 
criminals." 
 
Prime Minister Koizumi rejected Li's criticism, noting, "I visit 
Yasukuni to offer prayers to all the war dead." 
 
16) Japan, China still wide apart on gas field development; Japan 
to reject China's proposal for joint development in two oceanic 
areas 
 
NIHON KEIZAI (Page 3) (Excerpts) 
March 8, 2006 
 
By Yuri Momoi, Beijing 
 
The fourth round of senior working-level talks in Beijing, hosted 
by the Chinese government, wound up a two-day schedule yesterday. 
In the talks, Chinese negotiators proposed conducting joint 
development in two oceanic areas: 1) one slightly closer to the 
Chinese territory from the equidistant line in the north of the 
East China Sea and 2) one near the Taiwanese territory in the 
south of the East China Sea. Both governments refrained from 
disclosing details of China's new proposal in order to avoid any 
possible impact on bilateral talks. 
 
Minister of Economy, Trade and Industry Toshihiro Nikai yesterday 
indicated that given the present circumstances, it would be 
difficult to accept the new proposal. The Japanese government as 
early as today will decide to reject China's new proposal. 
 
A total of seven and a half hours were devoted to discussions 
during the two-day session this time. The Japanese team called on 
China to halt its development of the Shirakaba (or Chunxiao in 
Chinese) gas field and provide relevant information on the 
development to Japan. But Chinese negotiators refused to do so. 
They did not respond to Japan's proposal made in the third round 
of the talks last year on joint development of four gas fields, 
including Shirakaba. 
 
The Japanese negotiators stated that they would take home China's 
new proposal for discussion. Both Japan and China agreed on a 
plan to hold the next round in Tokyo at an early date. The two 
nations have shared the perceptions on joint gas field 
development, for instance, that even if both sides strike a deal 
on joint development, the deal is a provisional arrangement, so 
it would not affect negotiations over the national boundary; and 
that such a deal would be reciprocal. 
 
According to a government source, the Japanese negotiators made 
it clear that China's new proposal is far from what Japan has 
asserted. 
 
Chief Cabinet Secretary Shinzo Abe told reporters yesterday 
evening: "We'll continue negotiations in order to turn the East 
 
TOKYO 00001224  010 OF 012 
 
 
China Sea into the sea of cooperation while firmly securing our 
sovereignty." Meeting the press, Prime Minister Junichiro Koizumi 
said: "Our team will bring it home for discussion." 
 
17) Gas field development talks; China proposes joint development 
near Senkaku Islands; Government to decline 
 
SANKEI (Top Play) (Excerpts) 
March 8, 2006 
 
The fourth round of talks between the Japanese and Chinese 
governments to discuss the development of gas fields in the East 
China Sea ended yesterday. According to a Japanese Foreign 
Ministry source, the Chinese side came up with a new proposal for 
jointly developing gas fields off the Senkaku Islands, which 
belong to Japan, and the continental shelf belonging to Japan and 
South Korea. China declined Japan's call to stop the development 
of the Shirakaba gas field, known as the Chunxiao gas field in 
China. 
 
A Foreign Ministry source noted that it has long been believed 
that there are gas reserves near the Senkaku Islands and the 
Japan-South Korea continental shelf, but since there is no test- 
drilling data, the existence of reserves is unclear. 
 
The Chinese proposal is thus seen as an attempt to rattle the 
Japanese government by including the Senkakus, Japanese 
territory, in its proposal for joint development. 
 
Emerging from the meeting, Foreign Ministry Asia-Oceanian Affairs 
Bureau Director General Kenichiro Sasae, who represented Japan, 
indicated that it would be difficult to accept the Chinese 
proposal. He noted: "I believe the Chinese side is willing to 
move ahead through cooperation, but whether that was reflected in 
the actual contents of its proposal is another matter." The next 
round of the talks will be held in Tokyo. 
 
18) Government to adopt speed-oriented FTA strategy, reflecting 
deadlocked EPA negotiations 
 
NIHON KEIZAI (Page 1) (Full) 
Evening, March 7, 2006 
 
The government decided in its ministerial talks yesterday morning 
that it would adopt a new strategy to promote negotiations with 
various countries with the aim of concluding only a free trade 
agreement (FTA) or an investment accord, turning around from the 
conventional policy of focusing only on signing a comprehensive 
economic partnership agreement (EPA). Keeping the recent heating- 
up global FTA race in mind, the government has decided to adopt a 
speed-oriented FTA strategy, instead of the current quality- 
oriented one, under the lead of the Prime Minister's Office. The 
focus of future discussions will be on concluding an investment 
agreement with China on a top priority in response to strong 
requests from industrial circles. 
 
The FTA is designed to scrap tariffs and other trade barriers. 
Under an EPA, in addition to the deregulatory measures under an 
FTA, investment rules will be abolished, and dispute-settlement 
procedures will also be arranged. The government has so far 
focused on concluding high-quality EPAs. 
 
 
TOKYO 00001224  011 OF 012 
 
 
However, because it takes time to reach a quality-oriented 
accord, the government is now concerned that Japanese companies 
might be put at a disadvantage in exporting and other business 
areas. Japan started negotiations with the Association of 
Southeast Asian Nations last April, but the talks fell apart at 
the very beginning. China and South Korea have already signed 
FTAs with ASEAN. 
 
Attending the ministerial meeting yesterday were Foreign Minister 
Taro Aso, Economy, Trade and Industry Minister Toshihiro Nikai, 
Finance Minister Sadakazu Tanigaki, Agriculture, Forestry and 
Fisheries Minister Shoichi Nakagawa, Health, Labor and Welfare 
Minister Jiro Kawasaki, and Chief Cabinet Secretary Shinzo Abe. 
The cabinet ministers also confirmed the need to speed up the 
ongoing negotiations and sign EPAs at an early date. In a press 
conference after the meeting, Abe stated: "It is significant to 
speedily promote negotiations on FTAs, besides EPAs, with as many 
countries as possible." 
 
19) Inclusion of SRM in US beef shipment to Japan: Differences in 
perceptions of both countries noticeable, with Japan seeing it as 
a "structural" problem and the US claiming it as a "unique" case 
 
TOKYO SHIMBUN (Page 9) (Full) 
March 8, 2006 
 
Differences in the perceptions of Tokyo and Washington on the 
inclusion of specified risk materials (SRM) in a US beef shipment 
to Japan are becoming pronounced. In a report issued last month, 
the US government concluded that the problem was a unique case. 
On the other hand, the Japanese government has raised doubts 
about that comment, claiming that the matter is a structural 
problem concerning US safety control, with Agriculture Minister 
Nakagawa noting, "Characterizing the incident as a unique case 
must be avoided." 
 
The Japanese government on Mar. 6 submitted a written inquiry 
comprising 20 questions regarding the US report. It called on the 
US to determine whether the incident was a unique case and 
whether the authorization of other facilities handling products 
shipped to Japan and inspections there were appropriate. 
 
The government intends to examine the US reply and ask more 
questions, if necessary. Japan has also submitted written 
inquiries regarding the 2005 Japan Export Investigation Report, 
which noted inappropriate points found in the US beef inspection 
system. The US side is determined to speed up efforts to offer 
replies to both inquiries. 
 
Differences in the views of the two governments are attributable 
to the stance of their legislatures. Some members of US Congress 
are assuming a hard-line stance in pursuit of an early resumption 
of US beef exports to Japan, by hinting at the possible 
implementation of sanctions against Japan, while in the Japanese 
Diet, both the ruling and opposition parties are cautious about 
reinstating beef trade. 
 
The next focus of attention will be on US replies. Agriculture 
Minister Nakagawa will attend an informal ministerial meeting of 
the World Trade Organization (WTO) to be held in London from Mar. 
10 through 12 and will likely meet with US Secretary of 
Agriculture Johanns on the sidelines. 
 
TOKYO 00001224  012 OF 012 
 
 
 
SCHIEFFER