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UNCLAS SECTION 01 OF 10 TOKYO 004548 
 
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 08/11/06 
 
 
INDEX: 
 
(1) Futenma is not dangerous: US consul general 2 
(2) Main points from interview with US Consul General Maher 2 
(3) US consul general's remarks show "no feeling for local 
residents"; Civic, peace groups angered; Local communities to 
protest, call for his resignation 3 
(4) Interview with Taku Yamasaki, former LDP vice president: Prime 
minister's visit to Yasukuni Shrine on Aug. 15 would cause more 
trouble 4 
(5) As last resort LDP factions to back Abe in LDP presidential 
race, let members cast votes independently; Factions to lose 
substance unavoidably 5 
(6) Interview with University of Tokyo Professor Kiichi Fujiwara on 
foreign and security policies of Koizumi and successor 6 
(7) Japan to propose East Asia EPA initiative with eye on 
establishment of economic zone comparable to NAFTA, EU: Japan 
desperate to take initiative; China, South Korea ahead of Japan 9 
ARTICLES: 
 
(1) Futenma is not dangerous: US consul general 
 
RYUKYU SHIMPO (Page 1) (Full) 
August 11, 2006 
 
Two years ago on Aug. 13, a US military helicopter crashed on the 
campus of Okinawa International University. Ahead of the incident's 
second anniversary, Kevin Maher, the newly posted US consul general 
in Okinawa, responded with an interview yesterday. Asked about the 
US Marine Corps' Futenma Air Station located in a densely populated 
area, Maher said Futenma airfield is not special as compared with 
other airports in Japan. "I don't think Futenma is dangerous in 
particular," he added. Meanwhile, he stressed again that the 
airfield would have to be relocated at an early date in order to 
resolve local concerns and noise problems. 
 
Ginowan City, which hosts Futenma airfield, and Okinawa Prefecture 
have expressed concerns over the danger of Futenma airfield. The 
Japanese government has also underscored the necessity of relocating 
the airfield as early as possible. As it stands, Maher's remarks 
will likely create a stir. 
 
"When we think about functions, there's no need in particular to 
relocate Futenma airfield," Maher said in the interview. Maher also 
said, "The airfield's (deterrent) capabilities are enough with its 
current functions." With this, the consul general, when it comes to 
the planned relocation of Futenma airfield, indicated his view that 
there would be no problem about the airfield at present from the 
perspective of base operation. In addition, Maher also explained 
that the United States agreed to relocate Futenma airfield in 
consideration of local voices in Okinawa insisting that the airfield 
should be relocated. 
 
Referring to the status quo of Futenma airfield, Maher denied that 
the airfield is dangerous. However, he stressed that the United 
States would push ahead with the planned relocation of Futenma 
airfield in accordance with an agreement reached between the 
Japanese and US governments. "We understand that they (local 
residents) are worried about flying in the skies (over residential 
areas)," Maher said. "That's why," he added, "the best solution is 
to relocate Futenma airfield to Camp Schwab as soon as possible." 
 
In the wake of the helicopter crash, Japan and the United States 
 
TOKYO 00004548  002 OF 010 
 
 
have been holding consultations in their intergovernmental joint 
committee to reroute US military aircraft (to and from the Camp 
Schwab relocation site). Two years later, however, the Japanese and 
US governments have yet to reach a conclusion. Asked about this, 
Maher indicated that the two governments would release a report in 
several weeks. 
 
Maher also stressed that the US military had periodically carried 
out coordination on safe flight paths before the crash took place. 
"When it comes to whether the flight paths will change in the (joint 
committee's) report, I am not sure they will necessarily change." 
 
(2) Main points from interview with US Consul General Maher 
 
RYUKYU SHIMPO (Page 2) (Full) 
August 11, 2006 
 
The following is a gist of the Ryukyu Shimpo's interview yesterday 
with US Consul General Okinawa Kevin Maher: 
 
-- What steps has the United States taken since the US military 
helicopter crash at Okinawa International University? 
 
Maher: We're expecting a report in several weeks (on the 
coordination of flight paths). When it comes to whether the flight 
paths will change after the report is released, I don't necessarily 
know if the flight paths will change. We've periodically made 
coordination for the safest possible flight routes. 
 
-- Do you recognize Futenma airfield to be dangerous? 
 
Maher: When we take a look at other airports in Japan, even in the 
case of military airports and civilian airports, many of them are 
far more densely populated than in the case of Futenma. Futenma is 
not special when we look at statistical figures. But if we show such 
statistical figures, we can't persuade people living around Futenma. 
I know that. We don't think Futenma is a particularly dangerous 
airfield. But we know you are worried about flying over the 
airfield. So we also think it would be the best way to relocate 
Futenma to Camp Schwab as soon as possible. When we think about 
functions, there's no need in particular to relocate the airfield. 
If Futenma maintains its functions at the present level, its 
(deterrent) capabilities are enough. 
 
-- There are that many buildings near Futenma. Even so, do you think 
there is no problem about flying helicopters? 
 
Maher: The problem is that there's the noise problem, looking at it 
from the perspective in the surrounding area. We often hear that 
they are worried about safety or opposed to the airfield. We know 
that, so we think it would be better to relocate Futenma. The area 
is now densely populated, so there was a request from Okinawa at 
first. After hearing that request, the United States also judged it 
would be better to relocate Futenma as soon as possible so as not to 
trouble local communities. 
 
(3) US consul general's remarks show "no feeling for local 
residents"; Civic, peace groups angered; Local communities to 
protest, call for his resignation 
 
RYUKYU SHIMPO (Page 3) (Abridged) 
Eve., August 11, 2006 
 
 
TOKYO 00004548  003 OF 010 
 
 
US Consul General Kevin Maher, currently posted in Okinawa 
Prefecture, brought about a backlash today from local communities in 
the vicinity of the US Marine Corps' Futenma Air Station over his 
remarks in a recent Ryukyu Shimpo interview held nearly two years 
after the crash of a (Futenma-based) US military helicopter on the 
campus of Okinawa International University. "I don't think Futenma 
airfield is dangerous in particular," Maher said in the interview. 
"Actually," one local resident voiced his anger, "an accident took 
place." He stated, "The remark is unacceptable." A peace group in 
the prefecture also said, "The remark has fueled the anger of local 
people at the helicopter crash, so we will file a severe protest." 
With this, the group will strongly call for Maher to resign. 
 
Touching on the crash of a US military chopper at Okinawa 
International University in 2004, Zenji Shimada, who heads a group 
of local residents in a class action lawsuit against Futenma 
airfield's aircraft roars, noted that Maher must have been aware of 
the helicopter crash. "In extreme terms," Shimada said, "he is 
telling us to live in danger." He added, "That goes beyond a 
perception gap." He indicated he was infuriated. 
 
"Even Defense Secretary Rumsfeld recognized the airfield to be 
dangerous. So it's strange that the consul general here said such a 
thing. He doesn't think of people in the city of Ginowan as humans." 
This critical comment came from a local community chief of Ginowan 
City exposed to Futenma airfield's terrible noise. 
 
"A helicopter from Futenma base crashed at the university, and we 
were terrified," said a 46-year-old woman living along the fence of 
Futenma base. She went on, "No matter how many years may pass, this 
will remain a scar in our hearts." She added: "The Japanese and US 
governments have acknowledged the danger of Futenma base, and they 
have agreed to relocate the base. He has distorted the fact with the 
US government's selfish logic." 
 
A local peace group leader said, "A helicopter actually crashed, but 
he says the airfield is not dangerous." He continued: "It's 
outrageous to think that way. He means to say he wouldn't care even 
if people in the prefecture were killed by US military bases. He 
doesn't think over those incidents and accidents brought about by US 
military personnel in the prefecture. That's the US military 
first." 
 
(4) Interview with Taku Yamasaki, former LDP vice president: Prime 
minister's visit to Yasukuni Shrine on Aug. 15 would cause more 
trouble 
 
YOMIURI (Page 4) (Full) 
August 11, 2006 
 
Questioner: Rumor has it that Prime Minister Junichiro Koizumi will 
visit Yasukuni Shrine on Aug. 15. 
 
Yamasaki: Since the prime minister's Yasukuni visits cause many 
problems, I once said that he should not go. I think he is not at 
all aware he is doing something wrong and believes he has just 
implemented the pledge (to visit the shrine) he made in the Liberal 
Democratic Party (LDP) presidential election. He is acting based on 
his beliefs. 
 
Questioner: Chief Cabinet Secretary Shinzo Abe paid homage at the 
shrine in April. 
 
 
TOKYO 00004548  004 OF 010 
 
 
Yamasaki: I don't understand why he went there secretly. He might 
have thought that his Yasukuni visit would cause some problems. 
 
Questioner: China and South Korea have refused to hold summit 
meetings due to the prime minister's visits to Yasukuni Shrine. 
 
Yamasaki: That's their choice. Interference in internal affairs will 
change nothing. 
 
Questioner: How do you view a former Imperial Household Agency 
chief's memo writing that Emperor Showa expressed displeasure with 
the enshrinement of Class-A war criminals in Yasukuni? 
 
Yamasaki: I think it's significant in the sense that the memo makes 
it clear that the enshrinement of Class-A war criminals was the 
reason for (the Emperor Showa's cancellation of Yasukuni visits). I 
think Class-A war criminals should be unenshrined, but that's 
something for Yasukuni to decide on. Since there is a view in the 
Japan War-Bereaved Families Association calling for removing the 
Class-A war criminals from Yasukuni Shrine, I am watching 
developments. 
 
Questioner: You have advocated the need for a new memorial 
facility. 
 
Yamasaki: There is a limit to making Yasukuni Shrine the only 
national war memorial. Ordinary citizens who died in war are not 
enshrined in Yasukuni. I think it is good to have a national 
memorial at which everybody can pay homage without feeling 
uncomfortable. 
 
Questioner: One idea is that the Chidorigafuchi National Cemetery 
should be expanded. 
 
Yamasaki: Since the idea is designed to make the cemetery a park, I 
think that's a good idea. There are three candidate sites: 
Kitanomaru Park, Shinjuku-gyoen, and Chidorigafuchi. 
 
Questioner: How about the idea of turning Yasukuni Shrine into a 
nonreligious corporation? 
 
Yamasaki: We tried to do so by making the so-called Yasukuni Shrine 
Bill (designed to place the Shinto shrine under the state control). 
I think Yasukuni Shrine will oppose it. Doing so would also be 
constitutionally difficult. I think turning the shrine into a 
nonreligious corporation would be more difficult than unenshrining 
Class-A war criminals from the shrine. This is easier said than 
done, though. 
 
(5) As last resort LDP factions to back Abe in LDP presidential 
race, let members cast votes independently; Factions to lose 
substance unavoidably 
 
NIHON KEIZAI (Page 2) (Full) 
August 11, 2006 
 
With the lineup of candidates for the September Liberal Democratic 
Party (LDP) presidential election generally decided, LDP factions 
having no presidential candidate have made up their mind as to what 
kind of action they should take. As last resort to maintain 
factional unity, they have considered two measures: One is to back 
Chief Cabinet Secretary Shinzo Abe in the presidential race; and the 
other is to let their members cast their votes independently. Since 
 
TOKYO 00004548  005 OF 010 
 
 
factions are unable to get key posts as they used to in the old days 
in return for their support, the LDP's factions will inevitably 
further lose significance in the upcoming presidential race. 
 
"If Mr. Nukaga wants to run in the race at any cost, I will have to 
support him, but we should not let him do run," yesterday said Mikio 
Aoki, chairman of the LDP caucus in the House of Councilors and 
influential member of the Tsushima faction. Aoki revealed that 
Defense Agency chief Fukushiro Nukaga had all but given up on 
running in the race. Aoki and Yuji Tsushima, who heads a LDP faction 
to which Nukaga and Aoki belong, held a meeting with Nukaga and 
conveyed him the faction's policy, letting Nukaga determine whether 
he would run or not. The expectation is that Nukaga will soon 
announce his intention not to run and that the faction will let its 
members decide on how to vote. 
 
The Tsushima faction -- led at one time by such powerful prime 
ministers as Kakuei Tanaka and Noboru Takeshita -- has now 
completely changed. Since some junior and mid-level members have 
distanced themselves from the faction, the move to field Nukaga in 
the presidential race never became a mighty swell for uniting the 
faction. In a study session yesterday, the faction adopted a set of 
policy proposals, titled "Creation and Crystallization of New 
Power." 
 
Regarding the prime minister's visits to Yasukuni Shrine, the report 
points out that it is necessary to give consideration to those who 
died in the war, preventing the issue from becoming a diplomatic 
issue. It does not refer to the propriety of visits to Yasukuni 
Shrine by the prime minister, making it easy for its members to 
support Abe. It also emphasizes the need for measures for 
"single-seat constituencies" in the Upper House election next year. 
 
In a meeting yesterday of the Yamasaki faction, LDP acting policy 
chief stressed: "It is certain that an Abe government will be 
inaugurated. Our faction needs a communication channel to the new 
government. I will back Mr. Abe," Taku Yamasaki said, "I will listen 
to the faction's view." In the Yamasaki faction, in addition to 
Amari, LDP Secretary General Tsutomu Takebe and Yoshinori Ono have 
decided to back Abe. If Yamasaki runs in the race, the faction will 
unavoidably split. Yamasaki will therefore give up on running. He 
will announce in a faction meeting on Aug. 17 his intention not to 
run for the presidency. 
 
Bunmei Ibuki, who heads another LDP faction, told reporters 
yesterday that his faction would support Abe. The faction will 
formally decide in a meeting on Aug. 24 to back Abe. Prior to 
yesterday's meeting, Ibuki met with LDP Policy Research Council 
Chairman Hidenao Nakagawa, who is close to Abe, and explained his 
faction's policy proposals. Abe then told reporters yesterday that 
he could agree with policy proposals made by the Ibuki faction. 
 
In the Niwa-Koga faction, Makoto Koga, who was an active leader of 
the anti-Abe group, has now shifted to being an Abe supporter. Most 
of the faction members back Abe even though some support Finance 
Minister Sadakazu Tanigaki and Foreign Minister Taro Aso. At a 
meeting last night, junior and mid-level lawmakers from the 
Niwa-Koga, Tanigaki and former Kono factions confirmed that they 
would not hold any meeting before the presidential election. 
Economy, Trade and Industry Minister Toshihiro Nikai conveyed Takebe 
in early this month of his support for Abe. 
 
They appear to be trying to get key government and LDP posts by 
 
TOKYO 00004548  006 OF 010 
 
 
announcing their support for Abe. 
 
(6) Interview with University of Tokyo Professor Kiichi Fujiwara on 
foreign and security policies of Koizumi and successor 
 
ASAHI (Page 11) (Full) 
August 10, 2006 
 
Priority to US 
 
Koizumi uses US as tool for domestic affairs, foreign policy lacks 
strategy 
 
-- In the five years under the Koizumi administration, tectonic 
movement has taken place in international politics, as represented 
by the launch of the so-called long war by the Bush administration 
in the wake of the terrorist attacks on the United States on Sept. 
¶11. How do you evaluate the foreign policy of the Koizumi 
administration? 
 
To put it plainly, there has been no "Koizumi diplomacy." He is a 
politician with expertise on domestic policies. He is said to have 
contributed to strengthening relations with the US. Prime Minister 
Koizumi is often compared with former Prime Minister Nakasone, who 
also placed importance on the US. But Prime Minister Nakasone also 
succeeded in establishing favorable ties with China. He considered 
how to use the US as a "diplomatic tool" to enhance Japan's national 
interests. 
 
For Prime Minister Koizumi, though, the US is a "tool for domestic 
affairs." The prime minister winning trust from the US president can 
exert overwhelming influence over domestic politics in the nation. 
There is something deep in what Prime Minister Koizumi says 
regarding domestic politics. But foreign policy is low on his list 
of priorities, and his diplomatic approaches are makeshift. 
 
-- A former senior member of the Bush administration also said: "His 
diplomatic style lacks strategy." But the prime minister made 
important policy decisions; for instance, he changed the Japan-US 
alliance in nature. 
 
Japan's conventional foreign policy was based on the Yoshida 
doctrine of placing emphasis on light armaments and the Japan-US 
alliance. Japan depended on US nuclear deterrence in dealing with 
matters involving the Far East but implemented its own policy based 
on economic cooperation toward other regions. But Prime Minister 
Koizumi judged it necessary to use Washington's power in order for 
Japan to exert influence over other countries. Security and economic 
cooperation used to be the two main pillars in Japan's diplomacy, 
but Japan dropped the latter. In this respect, a historical change 
is taking place. 
 
-- Stressing "the Japan-US alliance in the global context," the 
government dispatched Self-Defense Force troops to Afghanistan and 
Iraq. 
 
Tackled under the Japan-US alliance and the Japan-US Security Treaty 
were issues involving China, Taiwan, and North Korea. The US was 
somewhat reluctant to deal with issues unrelated to these countries, 
such as peace construction. After 9/11, however, the US became eager 
to intervene in regional disputes, and the question emerged of how 
far Japan should be involved in conflicts in areas other than the 
Far East under the Japan-US alliance. Prime Minister Koizumi gave 
 
TOKYO 00004548  007 OF 010 
 
 
this very clear reply: "We will do it." 
 
If Prime Minister Koizumi said it is better to accept Washington's 
requests in order to maintain the Japan-US alliance or that he 
should not make the same mistake former Prime Minister Kaifu did in 
the 1991 Gulf War, he could convince me. But he believes that close 
military cooperation between Japan and the US is in Japan's national 
interest. I cannot understand this. 
 
-- Japan and the US agreed on common regional and global strategic 
goals for US force realignment and decided to carry out wide-ranging 
cooperation. 
 
Even when the current President Bush's father was president, there 
was the perception that it was impossible to arrange a post-Cold War 
security system unless the state of the concentrated deployment of 
US military troops in Germany, South Korea, and Japan is changed. 
Although the US military will continue stepping back from Asia, 
Japan promised to offer cooperation in areas that have nothing to do 
with Asia's safety. This promise may impose a heavy burden on Japan 
in the future. 
 
Asia policy 
 
Using ASEAN to try to contain China 
 
-- Another element causing these tectonic shifts is an emerging 
China. 
 
China has long put in efforts for its military buildup. China has 
expanded its naval power and is now ready to even upgrade its 
nuclear force. Regarding China's role, a remarkable change has been 
observed in the economic arena. China is now Japan's largest trading 
partner, and though the members of the Association of Southeast 
Asian Nations (ASEAN) had close economic relations with Japan, they 
have now turned their attention to China. 
 
-- What was Japan doing while China was rapidly strengthening its 
influence in Asia? 
 
I think it was a blank period in Japanese politics. As a result of 
each country becoming more affluent, Japan's economic cooperation 
policy came to a standstill. Although Japan had to come up with a 
new strategy to replace its dependence on economic cooperation, the 
policy vacuum continued. In addition, the Yasukuni issue has 
worsened the situation further. 
 
-- Growing nationalism in Japan and China is one of the recent 
features. 
 
Nationalism in China has gradually changed. In the 1990s, China used 
the historical-perception issue as a means to win support for the 
Chinese Communist Party. It was not something that came from the 
grassroots. The situation is more serious now. Though China is not 
democratizing, it is becoming more complex, and that country is 
entering a volatile period. The people are calling on the government 
to take a tough stance toward Japan. But views in the Chinese 
government are split. For the People's Liberation Army and the 
Communist Party's Ideology Department, it is desirable to turn Japan 
into an enemy. Economic technocrats, though, would like to see their 
state turned into not a military power but an economic power, 
 
In Japan, on the other hand, those in business circles view the 
 
TOKYO 00004548  008 OF 010 
 
 
Yasukuni issue blocking policy talks between Japan and China as 
abnormal. For those who want to emphasize the "China threat," it is 
convenient to have China criticize Yasukuni Shrine. Inward-looking 
nationalism in both countries has worked to strengthen nationalism 
in the other. 
 
-- North Korea's nuclear and missile issues are also serious. When 
the North launched missiles in July, Japan took a tough stance in 
the United Nations Security Council (UNSC) and succeeded in having a 
resolution condemning Pyongyang. Some observers in Japan regard it 
as a victory for Japanese diplomacy. 
 
It cannot be regarded as a victory, though, because China did not 
come on board due to Japanese threats. The US, with no intention of 
making an enemy of China, worked to woo Beijing. Should China use 
its veto, the North Korea issue will not be resolved in the UNSC. 
The US determined that it would be better to draw China into the 
matter. There are differences in interest between Japan and the US, 
and Japan taking a hard-line stance was cleverly used by the US, I 
think. 
 
-- Prime Minister Koizumi signed the Pyongyang Declaration when he 
visited North Korea in 2002 and brought five abductees back to 
Japan. Later, their families were also taken to Japan. 
 
It was right to have brought the abductee families back to Japan. 
From the standpoint of international relations, though, it looks 
slightly different. North Korea unprecedentedly acknowledged it had 
been involved in the abductions. If the North had also made 
concessions on its nuclear and missile programs, Japan's approach 
would have been judged successful. 
 
-- What do you think is the most important diplomatic challenge for 
Koizumi's successor? 
 
I think it is China. In China, there are groups willing to respond 
to Japan's proposals. But their position has been weakened due to 
the Yasukuni issue. I think the best thing to do would be to create 
a national war memorial, but at the least Japan should separately 
enshrine Class-A war criminals and then start policy coordination 
with China. It is an abnormal state for the two major economic 
powers in Asia to have no policy talks. Such a situation is 
undesirable for the US and other countries. 
 
It is also imperative to deepen cooperation with ASEAN countries. 
Japan as a creditor nation has direct influence over debtor 
countries' economies. By taking the initiative in deregulating 
direct investment and opening its labor market, Japan would be able 
to bring ASEAN closer once again. ASEAN also fears China. Japan 
should make use of its relations with ASEAN and try to hold China in 
check. 
 
-- How about North Korea policy? 
 
Top priority should be given to denuclearization. In the long run, 
it is necessary to denuclearize China as well. It is impossible to 
do it immediately, but in the 1970s, the US and the Soviet Union 
engaged in nuclear arms control, and the situation should be brought 
to this level. From the position of an atomic-bombed nation, Japan 
should insist on the need for denuclearization and take the 
initiative in dealing with North Korea. 
 
-- How about the alliance relationship with the US? 
 
TOKYO 00004548  009 OF 010 
 
 
 
That is difficult. Japan has promised a wide range of cooperation in 
areas outside the Far East and played too many of its cards. No 
country wants to send its troops to Lebanon, for example, but if the 
US asked Japan to send the Self-Defense Forces, what would Japan 
do? 
 
(7) Japan to propose East Asia EPA initiative with eye on 
establishment of economic zone comparable to NAFTA, EU: Japan 
desperate to take initiative; China, South Korea ahead of Japan 
 
MAINICHI (Page 9) (Full) 
August 11, 2006 
 
The government will formally propose an East Asia economic 
partnership agreement (EPA) initiative at an ASEAN+3 economic 
ministerial to be held in Malaysia later this month. The proposals 
is for 16 countries - the 10 ASEAN member nations together with 
Japan, China, South Korea, India, Australia and New Zealand - to 
sign an EPA to form an economic zone equal to the North American 
Free Trade Agreement (NAFTA) and the European Union (EU). However, 
China and some other countries will likely oppose the 
Japan-sponsored plan. Future talks on the issue will likely 
encounter complications. 
 
Economy, Trade and Industry (METI) Minister Toshihiro Nikai will 
attend the meeting. He will propose establishing a 
private-sector-level study panel to discuss the economic zone 
initiative. The proposal will likely be accepted. Japan wants to 
launch talks around 2009. 
 
The initiative was included in the global strategy METI mapped out 
this April. Japan has already signed EPAs with Singapore, Mexico, 
and Malaysia. METI has calculated that the initiative, if realized, 
would boost gross domestic product within the region by 
approximately 25 trillion yen. 
 
Behind the proposal is a sense of alarm that Japan is lagging behind 
China and South Korea in its drive to sign trade agreements. Both 
China and South Korea have already agreed with ASEAN to conclude 
FTAs. While Japan still in the process of holding negotiations, 
China and South Korea are gradually increasing their presence in the 
ASEAN market, which had long been Japan's stronghold. Japan is 
becoming impatient with the situation. 
 
There is also a move by China to propose a framework of the 10 ASEAN 
members plus Japan, China, and South Korea. However, convinced that 
this would involve the strong possibility of China dominating the 
group, Japan is aiming to check China's influence by offering its 
own plan that includes India, Australia, and New Zealand. 
 
However, there are many obstacles to clear before it is realized. A 
precondition for starting talks to discuss the proposal is that 
Japan has a stable economic relationship with China and South Korea. 
However, EPA talks between Japan and South Korea have been 
suspended. Regarding China, there are no prospects even for starting 
talks. It is difficult to start full-fledged talks as long as 
Japan's diplomatic relations with those countries remain cool. Many 
Japanese farmers are alarmed about possible liberalization of farm 
products if Australia takes part in the initiative. Also, ASEAN 
members are at different levels of development, making it difficult 
to set liberalization rules. 
 
 
TOKYO 00004548  010 OF 010 
 
 
Progress of EPA talks by Japan 
 
Partner 
Progress, Feature 
 
Already signed 
 
Singapore 
Came into effect in 2002. Japan's first EPA. 
 
Mexico 
Came into effect in 2005. Includes farm produce liberalization. 
 
Malaysia 
Came into effect in 2006. Tariffs on all mined and manufactured 
products effectively scrapped. 
 
Agreement in general principle 
 
Philippines 
Agreement in general principle reached in 2004. Includes acceptance 
of guest workers. 
 
Thailand 
Agreement in general principle reached in 2005. 
 
Under negotiation 
ASEAN 
Talks started in 2005. Agreement within two years aimed at. 
 
Indonesia 
Talks started in 2005. Discussions cover resources, such as natural 
gas. 
 
Brunei 
Talks started in 2006. Stable supply of oil aimed at. 
 
Chile 
Talks started in 2006. Stable supply of copper and other products 
aimed at. 
 
In preparation 
 
Gulf Cooperation Council members 
FTA talks expected to start in 2006. Importance placed on securing 
resources. 
 
India 
Preparatory meetings are over. Cooperation with a growing market. 
 
Vietnam 
Consideration started in 2006. Challenge is to consolidate 
investment environment. 
 
Talks suspended 
South Korea 
Talks have been suspended since 2004. 
 
SCHIEFFER