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RUCNDT/USMISSION USUN NEW YORK 9615

UNCLAS SECTION 01 OF 09 TOKYO 001786 
 
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 04//06 
 
 
INDEX: 
 
(1) Poll: Popularity of Fukuda gradually rising as LDP 
presidential candidate 
 
(2) Interview with Deputy USTR Bhatia: US presence will become 
more important in terms of trade and investment if economic 
integration is achieved in East Asia 
 
(3) US secretary of commerce calls for Japan-US cooperation on 
Chinese currency revaluation 
 
(4) US asks Japan to join Megaport Initiative; Eager to install 
nuclear detector at Nagoya port as counterterrorism measure 
 
(5) Seiron column by Satoshi Morimoto: Japan needs to construct a 
forward base in Guam to put the Japan-US alliance on an equal 
footing 
 
(6) US concerned about chilly Japan-China relations; Yasukuni 
Shrine issue undermining Japan's soft power 
 
ARTICLES: 
 
(1) Poll: Popularity of Fukuda gradually rising as LDP 
presidential candidate 
 
MAINICHI (Page 5) (Full) 
April 4, 2006 
 
The popularity of former Chief Cabinet Secretary Yasuo Fukuda, 
who has remained silent on whether he will run in the Liberal 
Democratic Party (LDP) presidential race, is now gradually 
ascending. According to the results of an opinion poll Mainichi 
Shimbun conducted April 1-2, 36% favored Chief Cabinet Secretary 
Shinzo Abe as a successor to Prime Minister Junichiro Koizumi, 
and 18% supported Fukuda, greatly reducing the gap. The survey 
showed that Abe was most popular among LDP supporters. Those who 
do not support the Koizumi cabinet due to its Asia diplomacy are 
strongly hoping that Fukuda will assume the LDP presidency. He 
seems likely to become an anti-Koizumi presidential candidate. 
 
The January poll found that 38% favored Abe and 10% backed 
Fukuda. Fukuda recently told his aides: "The prime minister did 
not think that China and South Korea would have opposed him this 
much. He was too optimistic." He has distanced himself from 
Koizumi over Asia policy. Last month in Seoul, he held talks with 
South Korean President Roh Moo Hyun. In the talks, he stressed 
the importance of repairing the strained bilateral relations. 
 
A senior Mori faction member commented on Fukuda's gaining 
popularity: 
 
"In addition to the resignation of Minshuto (Democratic Party of 
Japan) President Seiji Maehara, support from business circles has 
moved to Mr. Fukuda because relations with China and South Korea 
have deteriorated (under the Koizumi government)." 
 
In fact, 28% of those who do not support the Koizumi cabinet 
favored Fukuda, while 19% backed Abe. Another reason is probably 
because DPJ lawmakers, included in a list of choices in the 
previous poll, were excluded from a list of options for the 
latest survey. Among DPJ supporters, 33%, a sharp rise from the 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
previous 9%, supported Fukuda, while 29%, almost the same as the 
previous figures, backed Abe. 
 
However, 53% of supporters of the Koizumi cabinet and the LDP 
favored Abe. With the presidential election coming up in 
September, Abe has become a regular favorite. 
 
Meanwhile, Foreign Minister Taro Aso and Finance Minister 
Sadakazu Tanigaki came in a distant third and fourth with 3% and 
1%, respectively. Commenting on the narrowing gap between Abe and 
Fukuda despite Abe being regarded as the strongest post-Koizumi 
contender, a senior Niwa-Koga faction member said, "The election 
will likely be contested between Mr. Abe and Mr. Fukuda." This 
view is gaining ground in the LDP. Given the situation, 
supporters of Aso and Tanigaki have become increasingly alarmed. 
 
(2) Interview with Deputy USTR Bhatia: US presence will become 
more important in terms of trade and investment if economic 
integration is achieved in East Asia 
 
NIHON KEIZAI (Page 8) (Full) 
April 4, 2006 
 
The United States government has begun to take a different 
viewpoint toward the East Asia region, where moves are afoot for 
economic integration. The Nihon Keizai Shimbun interviewed Deputy 
US Trade Representative (USTR) Karan K. Bhatia, an official in 
charge of trade policy toward Asia, to ask his views about why 
Washington has begun to change its points of view. 
 
-- What was the main purpose of your visit to Asian countries in 
late March? 
 
"Some persons have lashed out at the Bush administration 
allegedly for its lack of interest in economic policy toward East 
Asia. In a move to dispel such criticism and to demonstrate our 
positive engagement in the region, I visited there. Sub-cabinet- 
level officials from US government offices have held a weekly 
strategic meeting on economic policy toward Asia at the White 
House. There are no other regions but Asia on which the US has 
placed this great an economic emphasis. 
 
"We want to see the US economy deftly incorporated into the 
activities of the region, which has achieved remarkable economic 
growth. We will double our efforts to build a deeper and stronger 
relationship with Asia as our essential trade and investment 
partner." 
 
-- Specifically? 
 
"The US has agreed to launch negotiations on concluding a free 
trade agreement (FTA) with South Korea and will also soon start 
negotiations with Malaysia. We are also going to accelerate 
negotiations with Thailand. The US aims to conclude a 
comprehensive accord with the Association of Southeast Asian 
Nations (ASEAN). With countries other than FTA candidates, we 
will establish a new framework to promote policy dialogue." 
 
-- US Ambassador to Japan J. Thomas Schieffer referred to the 
possibility that the US and Japan would conclude an FTA. Is there 
any specific plan? 
 
"For now, the US government has yet to lay out any specific plan 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
on signing an FTA with Japan. Compared with the other countries 
with which FTA negotiations are underway or are being planned, 
Japan and the US have established far closer economic ties. FTAs 
are not designed to measure the depth of bilateral relations. In 
working out policy toward Japan, I think Washington should focus 
on policies in specific sectors." 
 
-- How about the roles to be played by Japan and the US in East 
Asia? 
 
"Economic partnership between Japan and the US serves as a 
cornerstone in the construction of a large edifice called the 
East Asian economic zone. In addition to economic considerations, 
Japan is a partner that shares such values as the rule of law, 
democracy, and the market economy." 
 
-- In our eyes, the US seems less interested in formulating 
economic policy toward Japan now that there are no major trade 
disputes between the two countries. 
 
"There are many tasks the two countries should tackle. By using 
the framework of Japan-US deregulation talks, we want to 
gradually present visible results. In the deregulation talks, we 
have continued low-profile but important work, as though we are 
stacking bricks. Promoting bilateral economic talks between 
mature countries like Japan and the US is more difficult than 
abolishing tariffs. In such talks, we have given priority to such 
sectors as insurance, financial services, transparency in import 
restrictions, pharmaceuticals, and telecommunications." 
 
-- Aren't you concerned about the possibility of the US being 
excluded from economic integration in East Asia? 
 
"The US welcomes economic integration in the region. We will 
continue to support regional integration as long as trade 
barriers are removed, an investment environment is created, and 
deregulation is steadily promoted. There is little possibility 
that the US will be excluded from the process of integration. 
Should a single market is formed in the region, the presence of 
American firms and the US market will become more important for 
Asia. Economic integration in East Asia will contribute to 
further strengthening US engagement in the region." 
 
(3) US secretary of commerce calls for Japan-US cooperation on 
Chinese currency revaluation 
 
NIHON KEIZAI (Page 9) (Full) 
March 31, 2006 
 
Visiting US Secretary of Commerce Carlos Gutierrez gave an 
interview to the Nihon Keizai Shimbun in Tokyo yesterday. During 
the interview, the commerce secretary expressed his intention to 
work with Tokyo to urge Beijing to raise the value of the yuan. 
He noted, "The yuan is a common matter of concern for the 
Japanese and US economies." He thus indicated a perception that 
the revaluation of the yuan is imperative for the correction of 
the US trade deficit. He also called on the Japanese government 
to reinstate the beef trade at an early date. 
 
Secretary Gutierrez pointed out, "It is true that there are 
 
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doubts about whether the value of the yuan is correctly 
assessed." He called for a further revaluation of the yuan, 
quoting the introduction of a bill by influential US senators 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
that would impose sanctions on China. 
 
Noting that the US trade deficit is closely connected with the 
exchange rate of the yuan, Gutierrez explained that the major 
cause of the US current-account deficit, which rose to a new 
high, is its deficit in trade with China. 
 
(4) US asks Japan to join Megaport Initiative; Eager to install 
nuclear detector at Nagoya port as counterterrorism measure 
 
CHUNICHI SHIMBUN  (Page 3) (Full) 
April 4, 2006 
 
Washington, Kyodo 
 
The Bush administration has sounded out the Japanese government 
on joining the Megaport Initiative to deploy radiation and 
nuclear material detectors at major international ports handling 
US-bound containers and cargo with the aim of blocking nuclear 
material that could be used in making nuclear weapons and dirty 
bombs from entering the United States, US Department of Energy 
and Japanese government officials revealed yesterday. Talks are 
underway behind the scenes between the two governments on a plan 
to conduct testing at Nagoya Port. 
 
Since 9/11, the US has expanded its domestic-port-centered 
defense line to include foreign ports for preventing nuclear 
terrorism in the country. Four countries, including the 
Netherlands, have joined the Megaport Initiative. Envisioning a 
full-fledged implementation of the initiative in Japan, an 
essential cargo base connecting Asia and North America, the US 
intends to deploy nuclear detectors at Nagoya, Tokyo, Yokohama, 
Kobe, and other major ports in Japan. 
 
The Bush administration apparently also hopes to block North 
Korea, which has been operating a covert nuclear weapons program, 
from shipping nuclear-related materials to a third country. 
 
Nagoya Port has surfaced as a candidate site for testing because 
it handles North America-bound cargo that is mostly connected 
with automobiles that have only a few uncertainties (such as the 
detector to cause malfunction), according to Japanese and US 
officials. 
 
The US intends to deploy detectors developed by a US nuclear 
research institute at major ports to screen US-bound containers 
and cargo to block nuclear smuggling. Once a decision is made to 
install a detector, US government experts are expected to visit 
Japan to provide technical training along with US customs 
officers who have been working at major Japanese ports. 
 
Because the detector is highly sensitive, malfunctions could 
occur occasionally. For this reason, technical talks are underway 
between Japan and the US. 
 
Nagoya Port Administration Management Union refers to "global 
trend" 
 
A senior Nagoya Port Administration Management Union official 
commented on the US request to test the Megaport Initiative at 
Nagoya Port, saying, "We have not heard anything from the central 
government." Given the fact that a number of countries including 
China, a major cargo handler, have basically agreed to the 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
deployment of detectors, another senior union official described 
the requested testing as part of a global trend. 
 
Japan's largest container terminal is under construction at 
Nagoya Port, which has handled the largest volume of cargo in the 
nation the past four years. General Affairs Manager Yoshiyuki 
Kumazawa said: "How the use of a detector for screening cargo 
could affect stevedoring work and other port services remains 
unknown. We will work hard to collect information." 
 
(5) Seiron column by Satoshi Morimoto: Japan needs to construct a 
forward base in Guam to put the Japan-US alliance on an equal 
footing 
 
SANKEI (Page 11) (Slightly abridged) 
March 31, 2006 
 
By Satoshi Morimoto, professor at Takushoku University 
 
The primary aim is to pursue closer cooperation 
 
The United States is transforming its military in order to 
respond swiftly and flexibly to threats from Islamic terrorists, 
as well as China's rise, by restructuring its forces on a global 
scale. 
 
The Asia-Pacific region ranging from the Middle East and the Gulf 
to South and East Asia is one that the United States has a strong 
interest in. The region is also important in terms of America's 
national interests. Since the beginning of this century, the US 
has perceived the region to be critically important for the 
stability and prosperity of the international community. 
 
The US is reinforcing its forward deployment centering on naval 
power in the region and turning bases in Japan and Guam into 
important strategic points of military action. While utilizing 
the vital force of its ally (Japan), the US is pursuing plans for 
the realignment of its forces and bases in the region. 
 
The US plans to transfer an Army headquarters from the West Coast 
to Japan to link joint operations capabilities of Japan and the 
US and to strengthen the forward base functions of the carrier- 
borne task force based at Hawaii. The US also plans to link its 
Air Force's command and operational functions, as well as to move 
the functions of command and logistic support of the US Marines 
to the forward base in Guam. 
 
This realignment will help make the Japan-US alliance even 
closer. This is vitally important for the security of Japan as 
well. In the ongoing US military transformation, the most 
important challenge facing Japan is to make a decision on the 
divisions of the roles, missions, and capabilities of Japan and 
the US. The roles, missions, and capabilities involve a broad 
range of areas, including missile defense (MD), which Japan has 
not handled in the past, measures against international 
terrorism, international peace cooperation including humanitarian 
reconstruction aid, maritime stability, search and rescue, and 
also logistical support. Following the division of roles, Japan 
will have to set a detailed procedure for bilateral cooperation 
and implement it. 
 
In addition, Japan needs to smoothly pursue the procedures for 
the planned transfer of troops and bases of US forces in Japan 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
(USFJ), commonly called realignment. The plans have been laid out 
as part of the ongoing global US military transformation. Public 
attention in Japan tends to be focused on USFJ realignment, but 
the US military transformation has far greater significance in 
terms of the nature of cooperation under the Japan-US alliance. 
 
Japan needs to shift its previous thinking 
 
The focus of attention in Japan is centered on the planned 
construction of an alternate facility for the US military's 
Futenma Air Station and the planned transfer of US Marines to 
Guam. It is advisable for the Japanese government to come up with 
a flexible response to the Futenma issue, or the stable use of US 
bases in Japan would become impossible. Washington expects Tokyo 
to display strong leadership in dealing with the Futenma issue. 
This issue is a domestic political task Japan must accomplish. 
 
On the other hand, the US has a much stronger interest in the 
cost-sharing concerning the transfer of Marines from Okinawa to 
Guam. Based on its estimate of the relocation cost at 10 billion 
dollars, the US has asked Japan to pay 75%, but this estimate and 
Japan's share need to be closely scrutinized in the coming days. 
 
However, it is only natural for Japan to pay a portion of this 
cost from the perspective of reducing the burden on Okinawa as 
well as facilitating the process of the US military 
transformation. From a strategic point of view, cost sharing is a 
tool to make Japan's alliance with the US much closer, so 
splitting the cost fifty-fifty seems to be a persuasive approach. 
 
In addition to this, it is advisable for Japan to establish a new 
Self-Defense Forces (SDF) facility in Guam as a base for the 
forward headquarters of the Joint Staff Office (JSO) and an SDF 
unit to be stationed there so that the SDF can conduct joint 
drills with the US forces, as well as independently carry out 
training at its own facility. 
 
The Ground Self-Defense Force (GSDF) and the Air Self-Defense 
Force (ASDF) carry out joint drills at the (US) base in Guam, but 
if Japan can use Guam as a permanent training and operations base 
of its own, it is reasonable for Japan to increase its share of 
the cost for the construction of facilities necessary for that 
purpose. 
 
Significance of having a Japanese base in US territory 
 
If this were realized, Japan would be able to use Guam as its own 
operational base or distribution hub for disaster relief like at 
the time of the Sumatra earthquake and the subsequent Indian 
Ocean tsunami, as well as for peacekeeping operations and 
humanitarian reconstruction assistance and other relief efforts. 
If the base were equipped with port functions enabling transport 
planes or ships to be stationed, SDF troops would be able to 
engage in activities more effectively. In this regard, it would 
be necessary for Japan to conclude a new status of forces 
agreement with the US so that SDF troops can be stationed in 
Guam. 
 
The Japan-US alliance must be one on an equal footing. Given the 
current US military presence in Japan, it is little wonder that 
Japanese troops will be stationed in the US. This idea would help 
resolve the imbalance and inequality of the current Japan-US 
alliance. 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
 
What is more important for Japan is to translate into action the 
idea of setting up in US territory a new strategic base enabling 
Japan to engage in activities that will contribute to the peace 
and stability of the Asia-Pacific region. Japan needs to consider 
using the US military transformation to benefit its own national 
security, even though the transformation serves US national 
interests. This sort of thinking is important from the 
perspective of Japan's international contributions and security. 
 
(6) US concerned about chilly Japan-China relations; Yasukuni 
Shrine issue undermining Japan's soft power 
 
NIHON KEIZAI (Page 5) (Full) 
April 3, 2006 
 
By Editor-in-Chief Naoaki Okabe 
 
Relations between Japan and China remain cold despite their 
continuing efforts to search for ways to repair their strained 
ties. A gap in their views of wartime history has cooled their 
relations, and it is true that the major cause of the current 
friction has been Prime Minister Junichiro Koizumi's visits to 
Yasukuni Shrine. 
 
US experts have been focusing on the rise of China, but they are 
now beginning to view the prolonged cooling of US-China relations 
with apprehension. The US cannot accept the idea of being 
excluded from the East Asian Community initiative. It will be 
troublesome if the standoff between Japan and China destabilize 
Asias, a growth area. US experts are now focusing on such issues 
as how Japan's diplomacy will change during a post-Koizumi 
administration, which will determine the future of Asia, too. 
 
Harvard University Professor Joseph Nye (former US assistant 
secretary of state) categorically said, "The prime minister's 
 
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visits to Yasukuni Shrine will mar Japan's soft power." He 
continued: "His Yasukuni visits will not hurt the US people's 
feelings, but such visits remind Chinese and South Korean people 
of the hard times they experienced in the 1930s. Young people are 
fond of Japan because of its pop culture, but their feelings 
toward Japan will become just the same as those of the 1930s. The 
prime minister's determination to visit Yasukuni Shrine in view 
of the domestic political situation will mar Japan's soft power." 
When Professor Nye came up with the idea of soft power in 1990, 
he had the US in mind.  At the time, its power was showing signs 
of waning. The US has another power that is invisible, neither 
military power nor economic clout. It attracts people not 
forcibly but naturally. The professor said that Japan now has 
that power source. 
 
Such power includes traditional culture and the pop culture that 
makes up the "gross national cool" that attracts young people in 
the world. For Japan, this also includes its non-military 
cooperative stance. 
 
If Japan's soft power is undermined due to the prime minister's 
repeated visits to Yasukuni Shrine, it will be a grave situation. 
 
Nye warned: "Both Chinese and Japanese leaders might be trying to 
obtain some kind of nationalistic support by criticizing the 
other party. It is dangerous if such an attempt goes beyond the 
scope hypothesized by the leaders of the two countries and 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
becomes uncontrollable. The US does not want to see relations 
between Japan and China become hostile." The strained Japan-China 
relations are giving a headache to the US. 
 
Wall Street has expectations for China's growing economic 
strength, but it also has complicated feelings. Goldman Sachs 
International Vice Chairman Robert Hormats defines China's 
economic growth "as the third wave, following the recovery of 
Europe and Japan's economic development, in the postwar period." 
He also takes this view: "It will become necessary for China to 
set aside funds to meet domestic demand. Given the fact that 
China has historically not pursued expansionism, I do not think 
it will become a military threat." 
 
Hormats also turns his attention to the current strained 
relations between Japan and China. He said: 
 
"The energy sector is a matter of concern. Japan and China both 
desire energy resources, and abundant sources lie beneath the 
East China Sea. The key is whether Japan and China will be able 
to cooperate on this issue. There is a potential for tension 
between the two countries over the issue." 
 
Some experts have doubts about the future of China. Columbia 
University professor Jagdish Bhagwati takes this view: 
 
"There are two uncertain factors (for the future of China). First 
is the vulnerability of China's banking sector. That is why there 
is a lot of waste in its economic system. Second is its 
totalitarian political system. Should those in the middle class 
gain more influence, they will begin to call for political 
freedom. In such a case, China will become unstable." 
 
Bhagwati expects changes in the dynamics in Asia, adding India as 
a growing power. Bhagwati, who was born in India, makes the 
following analysis on what effects a cool relationship between 
Japan and China will have in Asia: 
 
"If I were a Japanese businessman, I would diversify my 
investments in different countries if the Chinese government 
became hostile to Japan. China is not the only low-wage country 
in the world. Once wages in China increase as a result of its 
rapid economic growth, global attention will turn to India for 
its plentiful workforce. It has two advantages in that its people 
speak English and it is a democratic country. Prudent investors 
will diversify their portfolios in different countries." 
 
If chilly Japan-China relations continue due to historical 
issues, this might also affect Japan's relations with other 
countries. Should the prime minister continue to visit Yasukuni 
Shrine, which enshrines Class-A war criminals, it is possible 
that Japan-US relations could also deteriorate. 
 
Beef imports and US force realignment issues are now pending 
between Japan and the US. The US and Europe are taking a united 
front in dealing with Iran over its nuclear programs. Japan, 
however, is taking a slightly different stance. Even the moderate 
professor Nye commented: 
 
"Japan is worried about the impact of the Iranian nuclear issue 
on its crude oil imports, but Japan can purchase crude oil in the 
international market. Should the Middle East fall into crisis 
over Iran, the world's crude oil market as a whole will 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04//06 
 
inevitably be affected. The most serious crisis for Japan would 
be a crisis in the entire Middle East." 
 
As long as Japan-China relations remain strained, it will be 
impossible to realize the East Asia Community concept, Professor 
Bhagwati argued, saying: 
 
"Leaders in Europe made efforts to eliminate war after the end of 
World War II. They had a lofty initiative. The Japanese people 
have bad memories about their experiences during the last war, 
while the Chinese have no deep insights. Asia must learn 
statesmanship from Europe." 
 
Who will become Koizumi successor will affect future options for 
Japan's policy course. Professor Nye said: "The key point is who 
will be able to skillfully manage Japan's relations with 
neighboring countries. . . . Another key is how Japan will change 
its actions." As long as Japan-China summits cannot be held, 
stability in Asia will be impossible. Herein lies Japan's 
international responsibility. 
 
DONOVAN