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UNCLAS SECTION 01 OF 09 TOKYO 003208 
 
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 06/09/06 
 
 
INDEX: 
 
(1) Government's panel finalizes action plan for 2006 to create a 
nation built on intellectual property 
 
(2) Post-Koizumi race: Researching Yasuo Fukuda (Part 3); Has 
personal networks in US and China 
 
(3) Post-Koizumi race: Researching Yasuo Fukuda (Part 4) 
 
(4) The challenges of a resources-poor country (Chapter 3)-Energy 
security (Part 7): Japan oil majors; 2 gov't affiliates' merger 
the key 
 
(5) Natural resources wars -- rise of nationalism: Central Asia 
now wooed by world powers; Japan's "selflessness" may be an 
advantage 
 
(6) Letters to the editor page: US' annual report of 
recommendations on deregulation intended to apply pressure on 
Japan for American firms' access 
 
ARTICLES: 
 
(1) Government's panel finalizes action plan for 2006 to create a 
nation built on intellectual property 
 
ASAHI (Page 4) (Full) 
June 9, 2006 
 
In a meeting at the Prime Minister's Office yesterday, the 
government's Strategic Council on Intellectual Property, headed 
by Prime Minister Koizumi, finalized its annual intellectual 
property action plan for 2006. The plan reiterates the need for 
corporations to submit only well-chosen patent applications. It 
also proposes reviewing the resale price maintenance system for 
CDs and revising the Copyright Law to lower the demarcation line 
between broadcasting and telecommunications. 
 
In the meeting, Prime Minister Koizumi indicated that the 
government would aim to implement the measures in the plan in 
cooperation with business and academic circles. 
 
The government has worked out an annual plan since 2003. The 
report for this year sets forth the goal of making Japan "a 
nation built on the world's most advanced intellectual property." 
 
The plan also suggests the need to change their stance of giving 
priority to filing patent applications. Even if the patent 
system, which is premised on disclosing information, is not used, 
confidential know-how will be legally protected under the Illegal 
 
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Competition Prevention Law, as long as it is kept strictly and 
secretly in-house. 
 
SIPDIS 
 
There are many cases in which a company files a patent 
application for its idea or invention but does not take 
procedures for registration. Many companies want to increase the 
number of applications as researchers' achievements, but if they 
ask for screening for registration, they will be charged about 
200,000 yen. New ideas or inventions will be not protected if 
they are unregistered. 
 
"Unintentional outflows of technology" cases have been reported 
 
TOKYO 00003208  002 OF 009 
 
 
recently, such as a case in which foreign firms have made use of 
information on patent applications available for general public 
perusal in order to make their own new products. The committee 
calls for "modulated protection measures," as said by committee 
director general Arai. 
 
The intellectual property action plan for 2006 calls for 
reviewing the resale price maintenance system for CDs, reading: 
"The way of operation and effectiveness of the system should be 
reviewed to enable users to select from among many price 
choices." But the CD industry will inevitably react negatively to 
this measure. 
 
The report also proposes revising the Copyright Law to 
disseminate IP multicast broadcasting. But this measure might 
have an impact on the operations of local TV commercial stations. 
 
Key points in the intellectual property action plan for 2006 
 
(Creation of intellectual property) 
    Strengthen the comprehensive system in universities, and set 
rules for business, academic and governmental cooperation 
 
(Protection of intellectual property) 
    Speed up the screening process, and expand the human 
foundation in the Patent Agency. 
    Improve the environment to prevent the outflow of technology 
and the flow of know-how to foreign countries through patent 
applications. 
    Strengthen measures to protect information on new varieties 
of plants and genetic resources for livestock in the agriculture, 
re, 
forestry and fisheries areas. 
    Enact a treaty at an early date to prevent the spread of 
counterfeits and pirated copies. 
    Prevent illegal transactions at the online auction 
 
(Creation of culture-creation state by utilizing contents) 
    Submit a bill amending the Copyright Law to the Diet as 
early as possible in fiscal 2006 to regard retransmitted 
terrestrial broadcasting based on the IP multicast formula as 
cable broadcast. 
    Review the operation and effectiveness of the resale price 
maintenance system for CDs. 
    Create a rich food culture, foster attractive regional 
brands, and improve competitiveness in the fashion business. 
 
(2) Post-Koizumi race: Researching Yasuo Fukuda (Part 3); Has 
personal networks in US and China 
 
NIHON KEIZAI (Page 2) (Full) 
June 8, 2006 
 
Unusual red-carpet treatment in US 
 
The scene was the state of Tennessee on May 12. A car pulled up 
in front of a mansion in the middle of a rich forest, and a small 
mall 
dog wagging its tail came out to greet former Chief Cabinet 
Secretary Yasuo Fukuda. The dog's name was Taishi (ambassador), 
 
SIPDIS 
and his owner is former US Ambassador to Japan Howard Baker, who 
was driving the car with Fukuda from the airport. Fukuda and 
Baker in the past have held more than 100 discussions. That day, 
 
TOKYO 00003208  003 OF 009 
 
 
they talked about such issues as Japan's relations the US and 
with China, and between the US and China until midnight, while 
sipping wine. 
 
Ambassador Baker is an influential Republican who has close ties 
with President George W. Bush. He worked hard to set up meetings 
for Fukuda with key US government officials, including Vice 
President Richard Cheney. Many observers in political circles 
think that the Bush administration gave especially warm treatment 
to a Japanese lawmaker with no current government position 
because Fukuda is a potential candidate to succeed Koizumi as 
premier and because he has communication channels to China. 
 
In August 2003, Fukuda joined a delegation that visited China to 
commemorate the 25th anniversary of the conclusion of the Japan- 
China Friendship Treaty, which was signed by his father, Prime 
Minister Takeo Fukuda. The delegation, which also included former 
Prime Minister Ryutaro Hashimoto met President Hu Jintao. In the 
meeting, Fukuda said: "My father laid the track, and I will run 
trains on it." He met alone with Prime Minister Wen Jiabao. 
 
It was extremely unusual for a chief cabinet secretary, who 
usually handles cabinet matters, to go abroad. One reason was his 
long acquaintance with Chinese diplomats since he was a private 
secretary to his father. At that time, he often visited the 
 
SIPDIS 
Chinese embassy in Tokyo. 
 
Wu Dawei, then Chinese Ambassador to Japan and currently vice 
foreign minister, arranged Fukuda's China visit, though it took 
six months. Vice Minister Wang Yi (incumbent ambassador to Japan) 
was the person with whom Fukuda secretly met in Beijing. In the 
meeting, Fukuda implored earnestly: "It is not good that all 
exchanges are suspended." Fukuda and the two Chinese diplomats 
have known each other for 20 years. 
 
Japanese business circles have high hopes for Fukuda's personal 
channels to China. Fukuda has known Jiro Ushio, president of 
Ushio Inc., and Hiroshi Okuda, former chairman of the Japan 
Business Federation, since his father was prime minister. He 
plays golf once in a while with Momofuku Ando, the founder of 
Nisshin Foods. He often exchanges views with former Vice Finance 
Minister Hiroshi Hota, secretary to then Prime Minister Takeo 
Fukuda, and former MITI Vice Minister Yuji Tanahashi. 
 
As a private secretary to his father, Fukuda hosted regular 
luncheon meetings with Takeo Shiina, senior advisor of IBM Japan, 
and other business leaders, to exchange views on political, 
economic and cultural matters. 
 
Fukuda attends meetings of the "Maryu Association" comprising 
graduates of Azabu High School. He is the oldest of the Diet 
members who belong to this association. Kaoru Yosano, Takeo 
Hiranuma, Yuya Niwa, and Sadakazu Tanigaki are his juniors. He 
surprisingly has connections with Taku Yamasaki, Koichi Kato, and 
Junichiro Koizumi. He and Koizumi used to be called each other by 
nicknames: "Jun-chan" and "Yasuo-san." Fukuda, along with Kato 
and Yamasaki, established last year a parliamentary group to 
consider creating a national war memorial to replace Yasukuni 
Shrine. In concert with Fukuda, Kato and Yamasaki have called for 
a review of Japan's Asia policy, as a main campaign issue for the 
upcoming presidential election of the Liberal Democratic Party 
(LDP). 
 
 
TOKYO 00003208  004 OF 009 
 
 
Cut and dried way of speaking 
 
Fukuda has few close friends in the Mori faction to which he 
belongs. He is one of the senior members who coordinates 
activities in the faction. One senior member commented on him: 
"He is snappish. When he happens to meet young members, he 
reportedly ignores them." 
 
Seishiro Eto, one of those who have openly expressed their 
support for Fukuda, hosted a party for Fukuda, who there stated 
as if he didn't know: "Mr. Eto is well versed in reading the 
political future. I don't think I should be forced by him to 
run." He told his aides: "Factions are like cotton candy. It is 
difficult for a faction to unite." Some lawmakers think that 
Fukuda is like Koizumi, who is blunt and dislikes hanging out 
with other politicians. 
 
Major personal networks 
 
Political circles: 
Parliamentary group to consider building a national war memorial: 
Taku Yamasaki; Koichi Kato 
 
Mori faction: 
Yoshiro Mori; Seishiro Eto 
 
Azabu Junior and Senior High Schools: 
Ryutaro Hashimoto; Kaoru Yosano; and Sadakazu Tanigaki 
 
Economic circles: 
Hiroshi Okuda; Jiro Ushio 
 
Overseas: 
Former US Ambassador to Japan Howard Baker; China's Vice Foreign 
Minister Wu Dawei 
 
(3) Post-Koizumi race: Researching Yasuo Fukuda (Part 4) 
 
NIHON KEIZAI (Page 2) (Abridged) 
June 9, 2006 
 
Yasuo Fukuda believes that Japan must improve its relations with 
China and South, but is also cautious about revising the 
Constitution, as are many people. Such a sense was nurtured 
through his 17 years of service at an oil firm. "It is 
diplomacy's responsibility to create the right environment where 
corporations can engage in negotiations and do business 
comfortably," Fukuda said crisply. 
 
Japan must not intimidate Asian neighbors 
 
Fukuda once criticized Prime Minister Koizumi's visits to 
Yasukuni Shrine: "Now is the time for Japan to assist China as 
much as possible to facilitate its growth." 
 
In order for Japan to survive as a main international player, it 
is essential not only to maintain good economic relations with 
China but also to guide that country to deal appropriately with 
the environment, energy, and other issues. It is not wise, 
therefore, to create a situation where Japan cannot fully exert 
its influence. Such is Fukuda's logic. 
 
Fukuda is a member of the Group of Lawmakers Who Pay Their 
 
TOKYO 00003208  005 OF 009 
 
 
Respects at Yasukuni Shrine. But he did not visit the shrine 
during his tenure as chief cabinet secretary apparently to avoid 
creating a political issue. His advisory panel also produced a 
report calling for a secular national memorial facility. As a 
member of a nonpartisan parliamentary league, he is still calling 
for a nondenominational facility. He is also supportive of the 
idea of removing Class-A war criminals from Yasukuni. 
 
He is opposed to Japan rushing to amend its constitution, since 
such might set off alarms across Asia, not to mention China and 
South Korea. 
 
He believes it is the government's top priority to drive home 
that Japan will not intimidate other countries and that it will 
maintain peaceful relations through talks. 
 
His views are based on the so-called Fukuda Doctrine, announced 
by his father Takeo Fukuda 30 years ago as a basic policy toward 
Southeast Asia. 
 
The doctrine advocates such principles as not turning Japan into 
a major military power and forging relations of trust with Asian 
neighbors. In following those principles, Fukuda believes Japan's 
prosperity hinges on Asia's stability. He has even suggested 
innovating the Fukuda Doctrine to produce his own Asia policy. 
 
At the May 3 Jordan summit of former presidents and prime 
ministers, Fukuda declared: "All issues must be dealt with 
centering on universal values, such as human dignity, 
nonviolence, justice, tolerance, and respect." His father 
established this forum with the aim of setting universal ethical 
standards. 
 
Fukuda also thinks a consumption tax hike is inevitable in order 
to reduce the fiscal deficit, as there are limits to such 
makeshift approaches as selling state-owned assets. In a speech 
in May, he even said: "A 5% tax hike will generate 12 trillion 
yen of revenue; 120 trillion yen in 10 years." 
 
Facing up to history 
 
Alarmed by the declining population, Fukuda thinks Japan should 
open its door to foreign workers to some extent in order to 
remain vibrant as a major economic power. 
 
Pursuing structural reform and eliminating the social disparity 
are equally important to Fukuda who puts high priority on stable 
economic development. 
 
Fukuda also launched in the ruling coalition last year a 
parliamentary members' council to strengthen and promote the 
national archives office system. The council is aimed at shifting 
control over public documents by central and local governments to 
the National Archives of Japan from the viewpoint that they are 
public property. During his visit to the United States in May, 
Fukuda visited the US National Archives in Washington. 
 
Fukuda might think it is a lawmaker's responsibility to look 
ahead into the future from a broad perspective by facing up to 
history. 
 
(4) The challenges of a resources-poor country (Chapter 3)-Energy 
security (Part 7): Japan oil majors; 2 gov't affiliates' merger 
 
TOKYO 00003208  006 OF 009 
 
 
the key 
 
SANKEI (Page 3) (Full) 
June 7, 2006 
 
On Oct. 2 last year, Japanese corporations demonstrated their 
presence in Libya, an oil-producing country in Africa with the 
world's ninth largest amount of confirmed oil reserves. A large 
number of leading oil developers, including international oil 
majors headquartered in the United States or Europe, bid for 
mining rights to oil fields in Libya. In this bidding, five 
Japanese firms attained rights to six of 26 mining areas. 
 
The bidding was the second round after the United States decided 
in September 2004 to call off its economic embargo against Libya. 
The first round of bidding was held in January last year. 
However, all Japanese bidders were defeated by their rivals. So 
this time around, the second-time bidders from Japan had 
something in mind to expect. They minimized their shares and 
presented terms that were to Libya's advantage. The bidding was 
fully open with all participants' terms shown on the screen. When 
the screen showed Japanese-tendered conditions, the rivals were 
surprised to see Japan's tender that was too advantageous to 
Libya, according to one Japanese bidder. 
 
Even so, Libya is one of the few countries in the world with 
hopeful oil reserves remaining undeveloped. "Japan has 
established a bridgehead there," says Fumiaki Watari, president 
of the Petroleum Association of Japan (PAJ). This fact is very 
significant when it comes to Japan's energy strategy. 
 
Among the Japanese bidders, Mitsubishi Corporation grabbed the 
largest number of oil-mining areas. Its stake in each mining area 
is low, ranging from 10% to 20%. However, Mitsubishi Corp. also 
became a successful co-bidder of four mining districts in its 
tieups with Teikoku Oil Co., Ltd., Japan Petroleum Exploration 
Co., Ltd. (JAPEX), and Nippon Oil Corporation. 
 
The top five Japanese trading houses, including Mitsubishi Corp., 
have energy rights in the world, totaling about 350,000 barrels 
per day. This amount is equivalent to about 8% of Japan's crude 
oil imports. The Japanese trading companies are also behind-the- 
scenes energy businesses exploring potential mining districts 
with their worldwide webs of networks and securing oil-mining 
rights against the backdrop of their financial power. 
 
In many cases, however, an oil-developing company's plant- 
operating results or its business scale could affect its overseas 
acquisition of rights to energy resources. Japanese oil 
developers are no match for US and European oil majors as far as 
their scale and plant operation are concerned. Then, what is 
needed for Japan to win hopeful projects in the world? "Japan 
needs a core company to explore natural resources," said Masahisa 
Naito, chairman and CEO at the Institute of Energy Economics, 
Japan (IEEJ). 
 
"We were once rejected before we even made our bid," said 
Kunihiko Matsuo, chairman of INPEX Corporation. Matsuo revealed 
this when he announced INPEX Corp.'s business merger with Teikoku 
Oil in a press conference in November last year. In Japan, INPEX 
Corp. is a leading firm. However, it could not even participate 
in international bidding. This fact made the two companies merge 
their businesses. 
 
TOKYO 00003208  007 OF 009 
 
 
 
In April, INPEX Holdings Inc. made its debut as a holding company 
of the two oil developers. Its daily output of crude oil and 
natural gas is over 370,000 barrels. The new company has now 
become an oil developer of middle standing in the world. Even so, 
it is still far behind international oil majors whose production 
of crude oil alone is over 2 million barrels. 
 
The top shareholder in INPEX Holdings is the government. In 
Japan, however, there is one more government-affiliated oil 
developer. It is JAPEX, which is capitalized by the government at 
49.9%. These two companies, if they merge, will be a step closer 
to becoming an international oil major of Japan's own. However, 
the Ministry of Economy, Trade and Industry (METI) is hesitant to 
work on the two companies for their business merger. "It would be 
difficult if they don't feel like it," a senior METI official 
said. 
 
JAPEX has been making good showings with the recent high price of 
crude oil. Its president, Yuji Tanahashi, is therefore negative 
about business merger with INPEX Holdings. The two companies' 
presidents are both from the Ministry of International Trade and 
Industry (MITI), the predecessor of METI. The question is why 
METI would not work on the two companies to merge their business. 
"That's probably because," one oil industry source said, "They 
hesitate for fear of losing their post-retirement jobs." 
 
Against the backdrop of the skyrocketing prices of crude oil 
around the world, Japan-a country with few natural resources-is 
about to expand its oil exploration again. On the world market, 
however, competition for energy resources is intensifying with 
the rise of China and other factors. In order for Japan to ensure 
its stable procurement of energy resources, Japan will need to 
establish its own energy strategy beyond its stakes. 
 
This is the last of Chapter 3 in a seven-part series. 
 
(5) Natural resources wars -- rise of nationalism: Central Asia 
now wooed by world powers; Japan's "selflessness" may be an 
advantage 
 
NIHON KEIZAI (Page 7) (Full) 
June 9, 2006 
 
The Japanese government invited foreign ministers from countries 
of Central Asia (Central Asia Plus Japan) to a meeting on June 5. 
Central Asia is now the focus of international attention due to 
the oil and natural gas resources located under the Caspian Sea. 
The meeting, the first in two years, adopted an action program 
including energy cooperation. The Central Asian countries voiced 
their support for Japan's bid for a permanent seat on the United 
Nations Security Council (UNSC). Their positive attitude toward 
Japan drew international attention, notably China's. 
 
The Central Asian countries that attended the meeting are also 
the members of the Shanghai Cooperation Organization (SCO), in 
which China and Russia take part. The SCO in its summit 
conference last year adopted a declaration opposing Japan's bid 
for a permanent seat on the UN Security Council. Meeting the 
press on June 6, SCO Secretary General Zhang Deguang chided those 
countries that appeared to have changed their minds by noting: 
"The SCO's position (about UN reforms) remains the same." 
 
 
TOKYO 00003208  008 OF 009 
 
 
Central Asia, which lies in between China and Russia, is now the 
scene of a scramble for natural resources among world powers, 
including the United States. Because it is geographically close 
to the former Soviet bloc, the area is under the strong sway of 
Russia, but Kazakhstan recently has seen a surge in investment 
from China, which outstripped Russia's investment in 2003 and 
raised its investment amount to a double of Russia's in 2004. 
 
The southern city of Aqtau in Kazakhstan is undergoing a boom in 
port-facility building. The country is aiming to participate in 
the Baku-Tbilisi-Ceyhan (TBC) pipeline project, which would 
enable crude oil to be transported from Azerbaijan on the other 
side to Turkey without passing through Russia. Western firms, 
such as BP (formerly British Petroleum) and Unocal are taking the 
lead in this project. 
 
The Central Asian countries are gauging world powers in light of 
the political implications. Uzbekistan hosted an international 
conference in May, where it offered favorable conditions for 
participation in joint development of oil and natural gas fields 
in the country, but those who attended the conference were 
executives from such companies as Russia's Gazprom and China's 
National Petroleum Corporation (CNPC). Except for Royal 
DutchShell, no other Western firms were invited to the 
conference. 
 
The Karimov government of Uzbekistan subdued by force an anti- 
government movement that emerged in the eastern part of the 
country in May 2005. The actions were later denounced by the US 
and Europe. Favoring China and Russia, the Karimov government 
made all US troops leave the country. The government also has 
made clear its position of having China and Russia as business 
partners in developing natural gas fields in the Aral Sea. The 
US, alarmed by the possibility of China and Russia gaining 
increasing influence on that country, has now begun looking for 
ways to improve relations with it. 
 
President Bush invited President Aliyef of Azerbaijan to the 
White House in April and praised Aliyef: "You have played an 
important role in (the energy area)." Although the Aliyef 
government has been assailed for its oppression of the opposition 
parties, it has a grip on crude oil from the Caspian Sea to be 
transported to Europe. The Bush administration is trying to 
expand its network of allies to include Central Asia. It does not 
mind being criticized for having a double standard, namely, 
advocating democracy but willing to overlook a country's lack of 
democracy if it can get access to natural resources. 
 
In the 19th century, Britain and Russia unfolded a Great Game 
over which country would gain hegemony over Central Asia. Now the 
conflict of national interests of various countries is seen in 
the same region. This situation may be called a reemergence of 
the Great Game. Any new entry into the Game may be an unwelcome 
thing not only for China but also for others. 
 
However, Japan's forte is that it has never had ambitions to 
expand its territory historically. In fact, as Foreign Minister 
Taro Aso stated: "For Central Asia to be at the mercy of other 
countries or be forced to submit to other countries is 
unacceptable." For countries that have been tossed about by 
territorial disputes, it would be easy to accept a strategy free 
from any hegemonism. Japan in this sense has a chance to gain an 
entry card into the Great Game. 
 
TOKYO 00003208  009 OF 009 
 
 
 
(6) Letters to the editor page: US' annual report of 
recommendations on deregulation intended to apply pressure on 
Japan for American firms' access 
 
TOKYO SHIMBUN (Page 5) (Full) 
June 9, 2006 
 
Question: What is the annual report of recommendations on 
deregulation submitted by the US every year since the Mizawa 
Cabinet? (60-year-old female from Saitama City) 
 
Answer: The report is officially called "Submission under the 
Japan-US Enhanced Initiative on Deregulation and Competition 
Policy." The Japanese and US governments have presented their 
respective reports of recommendations to the other side every 
year. 
 
Japan and the US formally started the exchange of reports based 
on an agreement reached between Prime Minister Junichiro Koizumi 
and US President Bush in June 2001. Deregulation dialogues under 
the Enhanced Initiative have continued since Prime Minister 
Kiichi Miyazawa and President Clinton launched the Japan-US 
Framework Economic Talks in July 1993. 
 
At that time, trade friction was escalating between Japan and the 
US. In the US government, there was strong dissatisfaction with 
the various regulations imposed by the Japanese government, 
deeming such regulations as blocking exports to Japan and 
contributing to the United States' huge trade deficit with Japan. 
 
Although both Japan and the US submit respective reports to each 
other, the initial purpose of the exchange arrangement is to 
facilitate the operations of American companies in Japan by the 
easing of regulations in the Japanese market. 
 
The Foreign Ministry conveys US requests to relevant government 
agencies and asks them to make replies to the US. 
 
Deregulatory measures taken in response to recommendations from 
the US include those to establish law schools, abolish the Large- 
Scale Retail Store Law, and strengthen the application of the 
Antimonopoly Act. 
 
Prime Minister Koizumi achieved his long-cherished plan to 
privatize three postal services. In connection with this, too, 
the 1995 US report called on Japan to scrap the postal insurance 
service. 
 
Though it is desirable to minimize regulations, the government 
should promote deregulation not for the benefit of American firms 
but from the viewpoint of the Japanese people. 
 
(Political desk: Yoichi Toyoda) 
 
SCHIEFFER