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UNCLAS SECTION 01 OF 07 TOKYO 002898 
 
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 06/27/07-2 
 
 
North Korea problem: 
14) Distrust growing in government, political circles of US' 
conciliatory stance toward North Korea 
15) Government alarmed about the abduction issue with North Korea 
stagnating 
 
16) Japan-China talks of E. China Sea gas fields hang up over areas 
to be subject to joint development 
 
17) UN Ambassador Oshima resigns; successor will be Minister to US 
Embassy Takasu 
 
Political agenda: 
18) LDP, New Komeito issue joint election campaign pledges that 
stress pension issue, downplay constitutional revision 
19) Pension issue splits LDP with Koichi Kato critical of its 
political handling 
 
20) In order to stop leaks, MSDF to transfer personnel with foreign 
spouses to units not handling classified material 
 
21) Panel releases proposed revisions of the Anti-Monopoly Act, but 
the report did not unify the penalty system 
 
Articles: 
 
14) Abe's US diplomacy stumbling: Tokyo distrustful of Washington's 
conciliatory attitude toward DPRK over North Korean issue 
 
NIKKEI (Page 2) (Full) 
June 27, 2007 
 
"The important thing is for North Korea to fully first implement the 
first steps (toward abandoning its nuclear program)," Chief Cabinet 
Secretary Yasuhisa Shiozaki said yesterday regarding US Assistant 
 
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Secretary of State Christopher Hill's recent statement that the 
 
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United States wanted to start within the year four-party talks among 
North Korea, the United States, China, and South Korea to discuss a 
peace mechanism for the Korean Peninsula. Shiozaki's remark revealed 
a sense of alarm toward the move for setting a framework for talks 
on North Korea without Japan's participation. 
 
Creating a four-party framework to discuss how to build a peace 
system on the Korean Peninsula to replace the current truce is the 
long-cherished desire of North Korea, which has aimed at 
reconciliation with the US. No doubt North Korea strongly pushed 
Hill during his recent stay in the North to do so. 
 
However, no one at the Prime Minister's Official Residence (Kantei) 
was aware of Hill's statement as of yesterday morning, according to 
an aide to the prime minister. That was why Shiozaki was surprised 
when asked about it by reporters. In addition, it was the morning of 
June 21 that the Kantei was informed of the assistant secretary's 
plan to visit North Korea that day. Reportedly, the prime minister 
was surprised when he was informed of that plan. 
 
A Kantei official expressed discontent: "Mr. Hill is out of 
control." 
 
On the surface there is no change in the US government's 
consideration to Japan. "Upon arriving at Osan Air Base (in South 
Korea) after (the visit to North Korea), I first telephoned Ken 
 
TOKYO 00002898  002 OF 007 
 
 
Sasae," Hill said at a press briefing on June 25. By citing the name 
of Kenichiro Sasae, director-general of the Asian and Oceanian 
Affairs Bureau of the Foreign Ministry, Hill played up Japan-US 
cooperation. 
 
However, the Bush administration is revising its policy toward North 
Korea with an eye on its term of office, which is to expire in one 
and a half years. "We want to have six-party talks in early July and 
a six-party foreign ministerial in late July," Hill said. 
Overwhelmed by his "speed," all the Japanese side did was just to 
check him. Japan and the US are apparently out of step. 
 
Japan welcomes progress on the nuclear issue made in the recent 
US-North Korea talks, but it is becoming distrustful of America's 
conciliatory attitude toward North Korea, with one Japanese official 
noting, "We might be left in the dark." In the days of Prime 
Minister Junichiro Koizumi, who visited North Korea twice, the US 
was irritated at where Japan-DPRK relations would go, but now the 
situation has changed with the change of government in Japan. 
 
15) Government to urge US to respond carefully to four-party Korean 
Peninsula peace plan for fear of abduction issue being put on back 
burner 
 
YOMIURI (Page 2) (Full) 
June 27, 2007 
 
US Assistant Secretary of State Christopher Hill, US chief delegate 
to the six-party talks, has proposed a plan to establish a body 
composed of four countries -- the United States, China, South Korea, 
and North Korea -- to work toward restoring peace on the Korean 
Peninsula to replace the current Korean War armistice. This has put 
the Japanese government on alert, with one official speculating that 
the United States might have shifted its policy line toward dialogue 
with North Korea. Desperately wanting to avoid the envisaged 
four-party framework alone moving forward while leaving the 
six-party talks on the nuclear and abduction issues behind, Tokyo 
plans to call for Washington's cautious response. 
 
Chief Cabinet Secretary Yasuhisa Shiozaki at a press conference 
yesterday expressed a sense of displeasure with Hill's plan to build 
a new framework, saying: "First of all, it is essential for (North 
Korea) to completely implement the initial steps." 
 
In September 2005, the six countries agreed that countries that 
participated in the Korean War would discuss the establishment of a 
framework on permanent peace on the Korean Peninsula. A similar 
expression was included in the six-party agreement reached in 
February. Japan, as a country that did not participate directly in 
the Korean War, did not hope to join such a framework. 
 
However, given the North's call to exclude Japan from the six-party 
talks, there is a possibility that Pyongyang will try harder to 
remove Japan from the multilateral framework by exhibiting eagerness 
to join the four-party structure. 
 
Shiozaki suggested that Japan might seek membership in the envisaged 
new framework, saying: "Peace on the Korean Peninsula concerns the 
Japan-US security setup, as well. (Parties directly concerned) are 
not defined as the four countries, and things will be worked out 
through future discussions." 
 
 
TOKYO 00002898  003 OF 007 
 
 
16) Japan-China talks: Gaps exist over sea areas for joint 
development 
 
MAINICHI (Page 9) (Full) 
June 27, 2007 
 
Hiroko Akimoto 
 
Japan and China held the ninth round of working-level talks to 
discuss gas field development in the East China Sea in Tokyo 
yesterday. Discussion focused on the area of joint development, but 
there was no progress, with both sides being far apart. The two 
countries intend to continue talks to reach a conclusion by this 
fall, but it is unclear whether they will be able to do so. 
 
Joining the talks from Japan were Kenichiro Sasae, the director 
general of the Foreign Ministry's Asian and Oceanian Affairs Bureau, 
and Natural Resources and Energy Agency Director-General Harufumi 
Mochizuki. After the meeting, Sasae told reporters: "Both sides have 
deepened our understanding of each other but failed to reach 
agreement. . . . China appears eager to accelerate the talks, but 
their views do not match ours." 
 
In the talks, the Japanese side asserted that four gas fields, 
including Chunxiao (Shirakaba in Japanese), which is being developed 
independently by China near the Japan-China median line, should be 
jointly developed. Meanwhile, China reportedly again asserted that 
joint development should be carried out in waters near Japan. 
 
17) Ambassador to UN Oshima to resign; Takasu, deputy chief of 
mission in Washington, to be next ambassador 
 
ASAHI (Page 4) (Full) 
June 27, 2007 
 
The government yesterday informally decided to appoint Yukio Takasu, 
currently minister at the embassy in Washington, to be the successor 
to Ambassador to the UN Kenzo Oshima. Takasu's appointment will be 
decided in a cabinet meeting in July. 
 
Oshima has led Japan's UN diplomacy since November 2004. Although he 
aimed at an adoption of a resolution calling for reform of the UN 
Security Council along with three other countries, including 
Germany, he gave up on the idea since the United Stated did not 
support it. He made efforts to secure support from many counties for 
a sanction resolution on North Korea's missile test last October. 
 
Takasu entered the Ministry of Foreign Affairs in 1969. He has been 
serving in the current post since August 2006, after having served 
in such posts as director general of the International Cooperation 
Division and ambassador in charge of US reform. The government will 
review its strategy of requiring UNSC permanent membership under the 
leadership of Takasu. 
 
18) Upper House election: Pension issue tops list of public 
commitments issued jointly by LDP and New Komeito; Specific argument 
on constitutional revision not included 
 
MAINICHI (Page 5) (Abridged) 
June 27, 2007 
 
The Liberal Democratic Party (LDP) and the New Komeito yesterday 
 
TOKYO 00002898  004 OF 007 
 
 
released a set of key policies as joint public commitments for the 
upcoming Upper House election. The package of key policy proposals 
focuses on the introduction of a card system starting in 2011, which 
allows public pension contributors to check their pension 
information at any time, following the missing pension premium 
payment records. Regarding a revision of the Constitution, the main 
focus of the prime minister's call for breaking free of the postwar 
regime, due to resistance from New Komeito, which is alarmed about 
the idea of revising Article 9, the report simply stated that a 
"broad-based national discussion should be deepened." 
 
Concerning the pension issue, the package stressed that efforts will 
be made so that every eligible pensioner can receive his or her due 
pension benefits. Though both parties' individual manifestos did not 
include the introduction of a card system, it was incorporated in 
the package following the prime minister's proposal for the 
introduction of a personal number covering the pension and medical 
services system. 
 
Regarding a timeframe for revising the Constitution, the package 
simply noted, "A Diet session in 2010 or after will be taken into 
mind." The LDP's manifesto mentions the initiation of constitutional 
revision in a Diet session in 2010. However, the New Komeito, whose 
manifesto says "a bill adding clauses to the Constitution will be 
drafted possibly in three years' time," was reluctant to mention a 
specific timeframe. 
 
The LDP-proposed wording "taking the lead in discussions by the Diet 
Constitution Screening Council" has been changed to "deepen 
discussions," with a senior New Komeito official noting, "Such words 
will give the impression that the ruling parties will railroad the 
bill through the Diet." 
 
The prime minister has a strong desire to reform the public servant 
system. The report notes that the lukewarm nature of trade unions 
should be rooted out. Thus the package included proposals with a 
strong awareness of opposition parties, which are supported by trade 
unions. 
 
19) Arguments over party leadership raised in ruling and opposition 
camps; LDP's Kato criticizes Machimura faction; Minshuto warns 
against optimism 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 27, 2007 
 
At a press conference yesterday, Koichi Kato, former secretary 
general of the ruling Liberal Democratic Party (LDP), criticized 
former Prime Minister Yoshiro Mori, a member of the Machimura 
faction (Seiwakai), to which Prime Minister Shinzo Abe used to 
belong, for saying that "there would be no need for the prime 
minister to take responsibility in the event the ruling coalition 
fails to keep its majority in the House of Councillors election." 
Kato referred to the July 29 Upper House election at the press 
meeting, saying, "There is one faction that historically has not 
taken responsibility even if the party is defeated in the 
election." 
 
The LDP suffered a crushing defeat in the 1998 Upper House election. 
Kato as secretary general along with Prime Minister Ryutaro 
Hashimoto stepped down from their posts to take responsibility for 
the loss. Referring to this, Kato commented about the Machimura 
 
TOKYO 00002898  005 OF 007 
 
 
faction: 
 
"I though it was only natural for me to resign. It is tradition for 
such factions with a strong sense of mainstream conservatism as 
Kochikai (to which Kato used to belong) and Keiseikai (currently 
Tsushima faction) to quit posts to take responsibility." 
 
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In the 2004 Upper House election, then Prime Minister Junichiro 
Koizumi, who belongs to Seiwakai (Machimura faction), did not step 
down, although the number of votes obtained by the LDP was less than 
that of Minshuto (Democratic Party of Japan). 
 
Minshuto lawmakers are also talking about the responsibility of 
President Ichiro Ozawa in case the party fails to force the ruling 
coalition into a minority in the Upper House race. 
 
Secretary General Yukio Hatoyama took this view at a press 
 
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conference: "It is only natural that arguments for the president to 
assume responsibility will come up if we fail to win. President 
Ozawa should announce how he plans to take responsibility." 
 
Appearing on a TV program, Supreme Advisor Kozo Watanabe clearly 
stated: "Should the opposition fail to secure a majority, Ozawa will 
resign as party president to assume responsibility." 
 
The largest opposition party now senses that it has a good chance to 
trade places with the ruling camp, seeing the results of recent 
various opinion polls backed by the pension record management 
fiasco. The arguments about Ozawa's responsibility are a part of 
Minshuto's strategy to run against Prime Minister Shinzo Abe, who 
has said, "I always assume the greatest responsibility." 
 
The Minshuto leadership has warned party members not to assume the 
party will win an easy victory. Observers see Watanabe's remarks as 
a warning to Ozawa in preparation for a failure to score big gains 
in the election. 
 
However, Ozawa has yet to make his position clear about his 
responsibility, just saying, "I will reveal my view sometime soon 
before the election." 
 
20) MSDF to remove personnel with foreign spouse from intelligence 
posts 
 
SANKEI (Top play) (Abridged) 
June 27, 2007 
 
In the wake of recent Aegis data leaks, the Maritime Staff Office of 
the Maritime Self-Defense Force has now decided to transfer MSDF 
personnel from their current workplaces to other sections in case 
they have a foreign spouse and have access to highly confidential 
information, such as information falling under the category of 
"special defense secret" or "tokubetsu boei himitsu." There are 
about 10 MSDF members who are subject to transfer. Their transfer 
will be officially announced along with regular personnel changes 
taking place in August and later. The United States, which is 
Japan's ally, is turning a severe eye to Japan due to the leakage of 
Aegis data. The decision this time is a desperate measure intended 
to prevent classified information, which could undermine national 
defense, from leaking to foreign countries. 
 
According to an MSDF officer, the MSDF was under fire from the US 
 
TOKYO 00002898  006 OF 007 
 
 
Navy, US Forces Japan, and some US government officials for the 
leakage of Aegis data. In order for Japan to recover the United 
States' confidence, it is urgently necessary for Japan to 
investigate the case and prevent such an incident from recurring. 
The decision on their transfer can be taken as a measure for that 
purpose. 
 
The MSDF has a total of about 40,000 members. According to its 
in-house survey, about 150 MSDF members are married to foreign 
nationals. About 100 of them are Chinese, and about 50 are 
Philippine, South Korean, or other foreign nationals. 
 
The MSO will transfer about 10 personnel who are among those 
personnel and are currently assigned to workplaces that can access 
an extremely high level of classified information like defense 
secrets, such as the structure and performance of vessels and 
 
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airplanes provided by the United States. 
 
21) Amendment to AML: Administrative surcharges, penalties not to be 
unified; "Having two systems boosts constraint on violation of the 
law," notes study council's report 
 
MAINICHI (Page 2) (Almost full) 
June 27, 2007 
 
The Anti-Monopoly Law Basic Problems Discussion Council (chaired by 
Tokyo University honorary professor Hiroshi Shiono), which reports 
to the chief cabinet secretary, has looked into the possibility of 
revising the Anti-Monopoly Law (AML) and released a report 
yesterday. A major feature of the report is that it calls for 
stricter application of the law, including strengthened 
administrative surcharges to be imposed on companies that engaged in 
bid-rigging activities. However, the panel decided not to unify the 
administrative surcharge system and the criminal penalty system as 
requested by Nippon Keidanren (Japan Business Federation). Since the 
LDP has indicated a cautious stance toward strengthening 
regulations, coordination of views for revising the AML will likely 
encounter complications. 
 
The report noted that having both systems would be appropriate, as 
it boosts constraints on violation of the AML, declining a request 
filed by Nippon Keidanren that the two systems should be unified 
into the administrative surcharge system. Regarding the level of 
administrative surcharges, the report said that surcharges should be 
set at a level that discourages a motive to violate the law. 
However, since surcharges were raised only in January last year, the 
panel stopped short of making a specific proposal with Chairman 
Shiono noting, "We will leave the setting of figures to government 
officials and politicians to work out." 
 
Regarding the umpire system, under which the Fair Trade Commission 
(FTC) judges appeals against decisions it made, the report said, "It 
is appropriate to maintain the current system for the time being." 
The report thus turned down Nippon Keidanren's claim that it is 
distrustful of the system of the FTC serve as an adjudicator and an 
umpire, 
 
Concerning exclusion-type private monopolization, meaning companies 
shut out competitors from the market by such means as dumping, only 
an order to stop an unfair practice can by issued under the existing 
law. The report indicated a policy of applying the surcharge system 
to such a practice. 
 
TOKYO 00002898  007 OF 007 
 
 
 
SCHIEFFER