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UNCLAS SECTION 01 OF 10 TOKYO 003930 
 
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 07/14/06 
 
 
Index: 
1) Top headlines 
 
2) Editorials 
 
3) Prime Minister's daily schedule 
 
4) Government may revise its draft UNSC resolution on North Korea 
sanctions to remove mention of Chapter 7 of UN Charter 
 
5) Chief Cabinet Secretary Abe meets famous US scholar Robert 
Scalapino, who met Kim Jong Il recently in Pyongyang 
 
6) Minshuto's Ozawa: US has removed the ladder from Japan on the 
sanctions 
 
7) Prime Minister Koizumi in meeting with President Abbas pledges 
$30 million in aid for Palestinians 
 
8) Koizumi, planning independent diplomacy for his Middle East trip, 
miscalculates, arriving to find region at height of new tensions 
 
9) Prime Minister Koizumi, experiencing how difficult it is to 
promote peace, finds his Middle East 4-party initiative stalled 
before it launches 
 
10) Foreign Ministry establishes new South Asia desk to strengthen 
diplomacy toward India 
 
11) PAC-3 missiles to be deployed by US to Kadena as early as next 
month 
 
12) US, Japan agree to partial return of Kadena Air Base: ammunition 
dump 
 
13) LDP's Yamasaki in Okinawa calls for strengthening ties between 
US forces, Self-Defense Forces 
 
14) Finance Minister Tanigaki, prime ministerial contender, weighs 
in on strike capability debate with a cautious view 
 
15) Minshuto (Democratic Party of Japan) to look into unified party 
view of USFJ realignment agreement 
 
16) Tokyo court awards plaintiffs record 4 billion yen compensation 
for Atsugi base noise 
 
17) Japan, India agree to start FTA negotiations 
 
18) Japan-Malaysia FTA is now in effect 
 
19) Japan, Russia to agree to promote construction of E. Siberia gas 
pipeline 
 
-- There will be no Morning Highlights on July 17 - a Japanese 
holiday. 
 
Articles: 
1) TOP HEADLINES 
Asahi and Sankei: 
Government mulls modifying UNSC draft resolution on North Korea, 
eliminating reference to Chapter VII following counterproposal by 
 
TOKYO 00003930  002 OF 010 
 
 
China and Russia 
 
Mainichi: 
Suspect in murder of Akita boy tells police her daughter, earlier 
found dead in river, fell from bridge 
 
Yomiuri: 
Japan to accept removal of Chapter VII provisions in UNSC draft 
resolution on North Korea 
 
Nihon Keizai: 
Internal Affairs and Communications Ministry plans to allow up to 42 
channels to be added for satellite broadcasts 
 
Tokyo Shimbun: 
Bank of Japan to lift zero-interest-rate policy today 
 
2) EDITORIALS 
Asahi: 
(1)Time to adopt unified UNSC resolution against North Korea 
(2)Urgent need for drastic measures for base noise 
 
Mainichi: 
(1)China-Russia draft resolution against North Korea must be 
effective 
(2)World Cup: Verbal violence on the pitch detected through Zidane's 
head-butting (by Akitaka Nakajima, editorial committee member) 
 
Yomiuri: 
(1)China-Russia resolution too soft on North Korea 
(2)Recording of prosecutor questioning is first step for 
easy-to-understand trials 
 
Nihon Keizai: 
(1)Treats of nuclear weapons and missiles to test G-8 unity 
(2)Doubt about large amount of capital increase in JAL 
 
Sankei: 
(1)Japan should contribute to Middle East peace on its own way 
(2)Giving up on lawsuit is shortcut for relief of pneumoconiosis 
victims 
 
Tokyo Shimbun: 
(1)Russia's caliber to be tested in G-8 summit 
(2)Internet gaps should be narrowed in information society 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 12 
 
NIHON KEIZAI (Page 2)  (Full) 
July 14, 2006 
 
Evening: 
Stayed at David Citadel Hotel in Jerusalem 
 
Prime Minister's schedule, July 13 
 
Morning: 
-- Inspected the old town of Jerusalem. 
-- Arrived at Ramallah. 
-- Attended a welcome ceremony held at the Chairman's Office. 
 
TOKYO 00003930  003 OF 010 
 
 
-- Met with Chairman Abbas of the Palestinian Authority. 
-- Attended a ceremony to unveil the reconstructed Chairman's 
Office. 
-- Held a joint conference. 
Noon: 
Luncheon hosted by Chairman Abbas 
Afternoon: 
Left Israel by a government plane. 
Evening: 
Arrived at Aqaba, Jordan. 
 
4) Government considering revising sanctions resolution against 
North Korea; May remove mention of UN Charter Chapter 7 
 
ASAHI (Top play) (Full) 
July 14, 2006 
 
In response to China and Russia's presentation of their own 
resolution condemning North Korea's missile launches, the Japanese 
government has begun considering modifying the sanctions resolution 
jointly presented to the UN Security Council with the United States, 
Britain, France, and other countries. One plan being mentioned would 
be to excise from the text the parts pertaining to Chapter 7 of the 
UN Charter, in compliance with the strong opposition to such text 
from China and Russia. Although the government still firmly intends 
to ensure the effectiveness of the sanctions, Tokyo will look for 
ways to move closer to the stance of China and Russia by giving 
priority to the Council's adoption of the resolution. 
 
Some in the Japanese government gave a positive assessment to the 
fact that China, which had insisted before on an unbinding 
presidential statement, has presented the resolution in cooperation 
with Russia. A senior Foreign Ministry official commented yesterday, 
"Negotiations over wording effectively start today." 
 
In considering modifying the text, the focus will be on the fact 
that the Japan-led sanctions resolution: (1) recognizes the 
launching of missiles as a threat to international peace and 
security; (2) mentions Chapter 7 of the UN Charter that calls for 
enforcement measures, including economic sanctions and the use of 
force; and (3) mandates the UN members to take specific sanctions 
measures. 
 
Chapter 7 of the UN Charter stipulates enforcement measures, 
including economic sanctions and the use of force. With the UNSC's 
recognition as "a threat to peace, the destruction of peace, or an 
act of aggression," the chapter allows not only economic sanctions 
but also future military action. 
 
In accordance with Chapter 7, the sanctions resolution mandates the 
UN member countries to prohibit shipments of goods, including 
intermediate materials, technologies, and funds that would 
contribute to North Korea's programs for producing missiles and 
weapons of mass destruction, and its procuring of missiles and 
missile-related materials and technology. In contrast, the joint 
China-Russia resolution "seeks" measures instead of mandating the 
member countries to comply and makes no mention of Chapter 7. 
 
Reversing its stand, the Japanese government has decided to search 
for ways to secure the efficacy of sanctions by eliminating the 
parts pertaining to Chapter 7. A Foreign Ministry official noted 
yesterday: "We don't have to stick to Chapter 7. We just want to 
 
TOKYO 00003930  004 OF 010 
 
 
make sure that the contents of the sanctions will be realized." 
 
At the same time, defining missile launches as a "threat" to 
international peace and security is still a top priority for Tokyo. 
The government does not intend to change that part because 
identifying an act subject to the resolution as a "threat" is a 
prerequisite for invoking enforcement measures. 
 
5) Chief Cabinet Secretary Abe meets with US professor, who visited 
Pyongyang 
 
ASAHI (Page 4) (Full) 
July 14, 2006 
 
Chief Cabinet Secretary Shinzo Abe met yesterday with Robert A. 
Scalapino, professor emeritus at the University of California, 
Berkeley, who visited Pyongyang last month. In the meeting, Abe 
said: "It is a question whether North Korea knows well that China 
thinks the North must not collapse." 
 
Scalapino replied: "China does not want to see North Korea's 
collapse. It is important to change Pyongyang's policy while 
preventing it from collapsing." 
 
Abe said: "If North Korea takes action based on the thinking that it 
will always be able to get support no matter what it does, the 
issues will not be resolved." 
 
6) Ozawa: The US has removed the ladder from Japan 
 
MAINICHI (Page 2) (Full) 
July 13, 2006 
 
Appearing on a TV-Asahi program on July 12, Minshuto (Democratic 
Party of Japan) President Ichiro Ozawa said this regarding the 
Japan-drafted sanctions resolution against North Korea, that has 
encountered difficulty: 
 
"From the beginning, I had a feeling that such would happen. The 
United States has no intention of seriously locking horns with North 
Korea and China. The ladder (for Japan) seems to have been removed. 
As far as Japan-US relations are concerned, the essential part has 
not been talked over. Prime Minister (Junichiro) Koizumi thinks 
currying favor with the United States helps build relations of 
trust, but his thinking is wrong." 
 
7) Prime Minister Koizumi declares an offer of 30 million dollars in 
aid to Palestinian Authority during summit meeting 
 
NIHON KEIZAI (Page 2) (Full) 
July 14, 2006 
 
Masanobu Yamaguchi, Ramallah (West Bank) 
 
Prime Minister Junchiro Koizumi, now on his tour of the Middle East, 
yesterday morning (yesterday afternoon, Japan time) met with 
Palestinian Authority President Abbas at his residence and declared 
that Japan would provide the Palestinian Authority with a total of 
30 million dollars (some 3.4 billion yen) in emergency aid to be 
used for such purposes as improving Palestinians' living environment 
and job creation. Referring to the armed conflict with Israel, 
Koizumi urged Abbas "to deal with the situation with a sense of 
 
TOKYO 00003930  005 OF 010 
 
 
discipline and reason." 
 
At a joint press conference after the meeting, Koizumi stressed: 
"Japan does not have a strong influence in the region like European 
nations and the United States, but we'd like to support the 
Palestinian Authority and Israel seek coexistence and coprosperity." 
Abbas responded: "We appreciate Japan's initiative and are pleased 
with it." 
 
Specific steps for emergency aid indicated by Koizumi include (1) 
improvement in water supply; (2) provision of medical equipment; and 
(3) reconstruction of the presidential residence. As medium- and 
long-term projects, Koizumi came up with an idea of creating a 
"corridor for peace and prosperity" to comprehensively develop the 
area around the Jordan Valley. Abbas expressed approval of the 
idea. 
 
Referring to a four-party framework for Israel, Jordan, the 
Palestinian Authority, and Japan to discuss how to bring peace to 
the region, Koizumi stated that in order to put the idea into 
practice, "I'd like to establish four-party talks at the senior 
working level at an appropriate time." 
 
8) Unexpected miscalculation in Koizumi diplomacy toward Middle 
East 
 
NIHON KEIZAI (Page 2) (Full) 
July 14, 2006 
 
Masanori Yamaguchi, Ramallah (West Bank) 
 
Following the Japan-Israel summit meeting on the previous day, Prime 
Minister Junichiro Koizumi indicated that he would be actively 
engaged in peace talks on the Middle East during the meeting with 
Palestinian Authority President Abbas. But tensions in the Middle 
East began rising after Koizumi's tour of the region started. His 
strategy to attend the upcoming Group of Eight (G8) summit in St. 
Petersburg bearing the fruit of his diplomacy has been dampened. 
 
Koizumi urged both Israel and the Palestinian Authority to exercise 
self-restraint regarding the use of force and pledged to provide aid 
to them from a medium- to long-term perspective on the condition 
that dialogue between them resumes. The leaders of the two sides 
voiced appreciation for Japan's role, but Israel has intensified its 
attacks on Lebanon in retaliation for the abduction of Israeli 
soldiers, and there are no prospects in sight for a solution to the 
Palestinian issue. 
 
Koizumi maintains a good relationship with Israel, backed by his 
close ties with the Bush administration. Meanwhile, Japan has 
continued reconstruction assistance to the Palestinians. Perhaps for 
this, most of the Palestinian Authority's buildings flew the 
Hinomaru. His Middle East tour was supposed to give him a good 
opportunity to highlight the difference in Japan's assistance from 
that of Europe and the US, according to Koizumi, because Japan has 
few interests in the region. If he demonstrated his presence in 
peace efforts on the Middle East during the upcoming St. Petersburg 
Summit starting tomorrow, Japan might have had "a strong voice in 
dealing North Korea's recent missile launches," a senior Foreign 
Ministry official said. 
 
While the fate of the Japan-sponsored resolution on North Korea 
 
TOKYO 00003930  006 OF 010 
 
 
submitted to the United Nations Security Council remains unknown, 
the worsening of the Middle East situation represented an unexpected 
miscalculation by Koizumi. 
 
9) Prime Minister Koizumi's Middle East tour highlights difficulties 
in bringing peace to the region; Coordination over establishment of 
four-party talks may run into trouble amid intensifying disputes 
 
YOMIURI (Page 2) (Excerpts) 
July 14, 2006 
 
Takayuki Tanaka, Jerusalem; Mina Mitsui of the Jerusalem Bureau 
 
Prime Minister Koizumi wound up his tour of Israel and the 
Palestinian region where disputes are still continuing. His tour of 
the Middle East may be described as boldly setting foot into a 
minefield, given that other countries' leaders tend to keep away 
from diplomatic activities toward the region. But even while he was 
visiting the region, hostilities were intensified, making him 
realize anew how deep the confrontation is and how difficult it is 
to contribute to bringing peace to the Middle East. 
 
Koizumi yesterday met with Palestinian Authority President Abbas and 
emphasized to him about why he had decided to visit the region at 
this point: "I wanted to come here before the Group of Eight (G8) 
St. Petersburg Summit deals with the Middle East issue. I'd like to 
convey directly my intention to 'support President Abbas.'" 
 
Opposition parties in Japan are criticizing the prime minister's 
tour of the Middle East at this point. Naoto Kan, acting president 
of the Democratic Party of Japan (Minshuto), flung this barb at the 
prime minister: "At a time when (North Korea's missile launches) may 
burn his house, he is trying to help put out the fire in someone 
else's house." But Koizumi was reportedly adamant about making a 
tour of the Middle East. 
 
The showcase of his Middle East tour is his proposal for 
establishing four-party talks among Israel, the Palestinian 
Authority, Jordan, and Japan to discuss how to bring peace to the 
Middle East. This idea will be advanced under regional development 
in Japan's official development assistance (ODA) program. Both 
Israel and the Palestinian Authority have agreed with the idea, and 
the initiative will be put into practice. But amid the intensifying 
disputes in the region, the efforts to coordinate as to when to 
establish the four-party talks and how to promote them may run into 
difficulties. In addition, given that the leading players in peace 
talks on the Middle East so far have been the United States, the 
European Union, and the United Nations, coordination with those 
parties concerned over the four party talks proposed by Japan is 
also essential. 
 
10) Foreign Ministry to establish new South Asia desk to strengthen 
diplomacy toward India 
 
ASAHI (Page 2) (Full) 
July 14, 2006 
 
The Ministry of Foreign Affairs will establish on August 1 a South 
Asia Department (Nanbu-Ajia-bu) in order to strengthen its diplomacy 
toward the South Asia region that includes India and ASEAN 
countries. In addition, the Ministry also will establish on the same 
day an International Cooperation Bureau that will integrate various 
 
TOKYO 00003930  007 OF 010 
 
 
offices related to official development assistance (ODA) of the 
Economic Cooperation Bureau and the International Social Cooperation 
Department, the aim being to make the government's ODA program more 
effective. It also will install a councilor (shingikan) for global 
scale issues in order to tackle such policy issues as ODA and 
infectious diseases. The portion responsible for United Nations 
administrative and financial policy in the above department will be 
placed under the Foreign Policy Bureau, and the department itself 
will be abolished. 
 
The South Asia Department will cover India, Pakistan and other South 
Asian countries, as well as the ASEAN countries that include 
Thailand and Indonesia. The government especially wants to put more 
efforts into strengthening relations with India, which is 
experiencing outstanding economic growth. 
 
11) PAC-3 deployment to Kadena likely next month 
 
NIHON KEIZAI (Page 2) (Full) 
July 14, 2006 
 
Japan and the United States have entered into the final phase of 
intergovernmental coordination for US Forces Japan (USFJ) to deploy 
state-of-the-art Patriot Advanced Capability 3 (PAC-3) 
surface-to-air guided missiles to the US Air Force's Kadena base in 
Okinawa Prefecture in August, officials said yesterday. The PAC-3 
deployment is to constitute a missile defense system. USFJ has only 
said the PAC-3 would be deployed within the year. However, the US 
government has told the Japanese government that USFJ would move up 
the deployment schedule in response to North Korea's recent firing 
of missiles. 
 
The PAC-3 will be deployed in Japan for the first time. Meanwhile, 
the US Navy will also deploy an Aegis-equipped ship, to the Yokosuka 
base, with Standard Missile 3 (SM-3) missiles on board to intercept 
ballistic missiles at sea. The US military will expedite building up 
the land- and sea-based intercept systems. 
 
In May this year, the Japanese and US governments finalized a report 
on their talks over USFJ realignment. This final report refers to 
the US military's plan to deploy PAC-3 missiles in Japan, noting 
that the US military's PAC-3 capabilities will be deployed to its 
existing facilities and areas in Japan and will be operational as 
soon as possible. 
 
In the meantime, the Defense Agency is also going along with these 
US military deployment plans. The agency will introduce PAC-3 
missiles to the Air Self-Defense Force's Iruma base in Saitama 
Prefecture within the current fiscal year. The agency plans to 
deploy PAC-3s to four ASDF bases in Japan in four years. Defense 
Agency Director General Fukushiro Nukaga has ordered officials to 
look into the possibility of frontloading the ASDF's PAC-3 
deployment in response to North Korea's missile firing. 
 
12) US to return ammo depot in part 
 
NIHON KEIZAI (Page 2) (Full) 
July 14, 2006 
 
Japan and the United States held a meeting of their 
intergovernmental joint committee yesterday in Tokyo. In the 
meeting, the US government agreed with the Japanese government to 
 
TOKYO 00003930  008 OF 010 
 
 
return a plot covering about 584,000 square meters in US Forces 
Japan's Kadena Ammunition Storage Area in the city of Okinawa. The 
US military is expected to vacate and return the land this fall. 
 
According to the Defense Facilities Administration Agency, the site 
will be used as a roofed firing range and as a training area for the 
Self-Defense Forces. 
 
13) USFJ, SDF need to strengthen cooperation 
 
NIHON KEIZAI (Page 2) (Full) 
July 14, 2006 
 
The ruling Liberal Democratic Party yesterday evening held a party 
of its House of Representatives members in the city of Ginowan, 
Okinawa Prefecture. In the party, former LDP Vice President Taku 
Yamasaki stressed the need for US Forces Japan (USFJ) and Japan's 
Self-Defense Forces (SDF) to strengthen their cooperation in 
connection with North Korea's recent firing of missiles. Yamasaki 
likened Japan to a "shield" and USFJ to a "spearhead" in their 
bilateral relations. "It's very important to cooperate between Japan 
and the United States in the defense area to cope with the threat of 
North Korea," Yamasaki said. 
 
14) Finance Minister Tanigaki cautious about enemy strike argument 
 
ASAHI (Page 4) (Full) 
July 14, 2006 
 
Referring in a meeting of his faction to the enemy-base strike 
argument triggered by North Korea's missile launches, Finance 
Minister Sadakazu Tanigaki said yesterday in a strong tone: 
 
"I think it's legally possible, but we must seriously consider what 
roles Japan and the United States should play under the Japan-US 
Security Treaty. I think it is necessary for us to carefully discuss 
the matter, including how to build relationships of trust with 
neighboring countries, from a broad range of perspectives." 
 
Liberal Democratic Party (LDP) General Council chairman Fumio Kyuma 
told reporters yesterday: "It would be better for us not to discuss 
the matter when we are all angry. We should act prudently at such a 
time." 
 
Kyuma said: 
 
"It probably can be said that Article 9 of the Constitution does not 
deny us to attack another country when Japan learns clearly that it 
will be hit (by a missile). However, whether to do so or not is a 
delicate issue requiring a policy judgment." 
 
Regarding the Iraq war that the United States launched, citing as a 
reason that Iraq had weapons of mass destruction, Kyuma said, "I 
don't sense that the war was for the purpose of self-defense." 
 
15) Minshuto to produce party view on US force realignment 
 
YOMIURI (Page 4) (Full) 
July 14, 2006 
 
Minshuto (Democratic Party of Japan) decided yesterday to produce a 
unified party view on the realignment of US forces in Japan. Last 
 
TOKYO 00003930  009 OF 010 
 
 
August, the party released a new Okinawa vision to search for ways 
to remove the US Marine Corps' Futenma Air Station out of Okinawa. 
But given the new circumstances, as evidenced by a Japan-US 
agreement to relocate the airfield to the coast of Camp Schwab, the 
largest opposition party decided to come up with it its unified view 
on overall US force realignment. 
 
The party will begin studying its view after exchanging opinions 
with local experts in Naha City on July 15. 
 
16) Gov't ordered to pay 4 billion yen in damages for Atsugi base 
noise 
 
SANKEI (Page 2) (Abridged) 
July 14, 2006 
 
The Tokyo High Court yesterday handed down its ruling on an appeal 
from the state against a lower court ruling on a third class action 
suit, in which about 4,800 local residents living in Yamato and some 
other cities in Kanagawa Prefecture sued the government for damages 
over aircraft noise caused by the US Navy's Atsugi Base, which is in 
joint use with the Maritime Self-Defense Force. Presiding Judge 
Toshimi Ouchi supported the Yokohama District Court's ruling of 
first instance and rejected the state appeal, admitting: "Local 
residents have been suffering from intolerable damage (from aircraft 
noise), and the government's setup and management of the base are 
unlawful." 
 
The court-ordered damages total approximately 4 billion yen, 
including about 1.3 billion to cover the period of legal action in 
the past. The amount of compensation is a record for an aircraft 
noise lawsuit. In November last year, the Tokyo High Court ordered 
the government to pay about 3.2 billion yen in damages for Yokota 
Airbase noise. 
 
The court turned down the plaintiff's claim for future damages. 
 
17) FTA talks; Japan, India agree to launch negotiations; Top-level 
meeting to be held on sidelines of St. Petersburg Summit 
 
YOMIURI (Page 9) (Excerpts) 
July 14, 2006 
 
It was learned yesterday that Prime Minister Koizumi and Indian 
Prime Minister Singh are expected to start free trade agreement 
(FTA) talks at a meeting to be held on the sidelines of the G-8 
Summit (St. Petersburg Summit). India is the first of the BRICs 
(Brazil, Russia, India, and China) with which Japan will enter into 
FTA talks. The plan is to start working-level talks as early as this 
year. 
 
The two countries will release at the summit a report on FTA 
research that their joint study group has conducted. The report is 
expected to encourage the two countries to enter into FTA 
negotiations with results underscoring that the economies of the two 
countries would complement each other. 
 
India's economy has continued to grow at 8 PERCENT -9 PERCENT  a 
year over the past several years with the information technology 
industry serving as a driving force. 
 
In trade with India, Japan imports jewelry, marine products, and 
 
TOKYO 00003930  010 OF 010 
 
 
iron ore and exports auto parts and other products. However, that 
nation stood twenty-sixth among importers of Japanese products in 
2005, and as an exporter, it was in the twenty-ninth place. 
 
18) FTA with Malaysia comes into force 
 
YOMIURI (Page 9) (Excerpts) 
July 14, 2006 
 
A ceremony to put into force an economic partnership agreement (EPA) 
with Malaysia featuring an FTA was held yesterday in Tokyo. Four 
Japanese ministers, including Economy, Trade, and Industry Minister 
Nikai, and Malaysian International Trade and Industry Minister 
Rafidah signed related documents. Malaysia is Japan's third FTA 
partner, following Singapore and Mexico. Trade (total export and 
import values) with that nation stood at approximately 3.23 trillion 
yen in 2005, topping the amounts with Singapore and Mexico. The 
government wants to use the FTA with Malaysia to accelerate FTA 
talks with the Association of Southeast Asian Nations (ASEAN), an 
area in which Japan is lagging behind China. 
 
With the enactment of the FTA with Malaysia, tariffs worth 
approximately 97 PERCENT  of the trade amount with that nation will 
be scrapped over the next decade. Japan is expected to increase 
exports of mined and manufactured products, such as autos and steel, 
and exports of agricultural products by Malaysia, such as mangoes, 
will likely expand. 
 
19) East Siberian oil pipeline: Japanese, Russian leaders to agree 
to go ahead with construction 
 
SANKEI (Page 1) (Excerpts) 
July 14, 2006 
 
St. Petersburg, Shogo Otsuka 
 
It was learned yesterday that Tokyo and Moscow will agree to launch 
a new energy project for Russia to supply crude oil to Japan via 
East Siberia. The initiative to construct a natural gas pipeline 
through Sakhalin is already underway between the two countries. 
Japan wants to reduce its dependence on the Middle East for crude 
oil, and Russia wants to find a new customer for its natural 
resources. The new plan is the outcome of their desires matching 
each other's needs. The project is also aimed at countering the 
energy policy of China, which is actively trying to secure natural 
resources throughout the world in order to meet a sharp rise in 
domestic demand. Japan also wants to pursue natural resources 
diplomacy with Russia. 
 
Prime Minister Koizumi and Russian Prime Minister Putin will meet 
ahead of a dinner meeting at the G-8 Summit, which is to start on 
July 15. The two leaders are expected to reach an agreement on the 
promotion of the construction of a pipeline. 
 
According to the plan, efforts to reach agreement will be focused on 
the construction of a new Pacific route to be connected with the 
first section of the pipeline for the supply of crude oil to the 
coastal area of the Pacific Ocean. Chances are that it will also 
include a plan to develop a new oil field in East Siberia. 
 
SCHIEFFER