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UNCLAS SECTION 01 OF 06 TOKYO 004704 
 
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 10/05/07 
 
 
Index: 
 
(1) First meeting of the Council on Economic and Fiscal Policy under 
Fukuda cabinet; Shift of policymaking power to ruling camp underway 
(Nikkei) 
 
(2) Bill amending Antimonopoly Law includes administrative 
surcharges against unfair labeling; Bullying subcontractors also to 
become subject to punishment (Tokyo Shimbun) 
 
(3) Interview with Defense Minister Ishiba: Government is 
accountable for fuel conversion allegations (Asahi) 
 
(4) Interview with Foreign Minister Masahiko Komura -- Dialogue and 
pressure policy will not change (Mainichi) 
 
(5) Keio University Prof. Masao Okonogi: Improvement in Japan-North 
Korea relations the next challenge (Sankei) 
 
ARTICLES: 
 
(1) First meeting of the Council on Economic and Fiscal Policy under 
Fukuda cabinet; Shift of policymaking power to ruling camp underway 
(Nikkei) 
 
NIKKEI (Page 5) (Full) 
October 5, 2007 
 
The government's Council on Economic and Fiscal Policy yesterday met 
for the first time after the Fukuda administration was inaugurated. 
In the meeting, Prime Minister Yasuo Fukuda indicated that his 
administration would continue the basic policy of the former Abe 
cabinet, emphasizing: "We will promote the two key challenges of 
stable economic growth and fiscal reconstruction." Under the current 
state of the reversal of strengths between the ruling and opposition 
parties in the House of Councillors, the weight of policymaking 
power has been gradually shifting from the government to the ruling 
camp. Some observers anticipate the Council on Economic and Fiscal 
Policy may lose its influence as the driving force for structural 
reforms. 
 
The prime minister spoke most earnestly about the task of preparing 
measures to support local communities. Local people are dissatisfied 
at the current state in which they cannot enjoy the fruit of 
economic growth. Such discontent brought about a crushing defeat to 
the ruling coalition in the Upper House election. Support for local 
community is as part of efforts to solicit local support in 
preparation for a snap election to be held after the House of 
Representatives is dissolved. 
 
Four private-sector panel members, reflecting the prime minister's 
desire, proposed formulating a plan to revitalize local economies, 
focusing mainly in four areas, such as the establishment of a local 
power reconstruction corporation. The plan was accepted in the 
meeting. The private-sector members also intend to listen to local 
voices. 
 
Even so, the Cabinet Secretariat, instead of the economic policy 
council, will be in charge of drawing up the plan. The secretariat, 
under the lead of Internal Affairs and communications Minister 
Hiroya Masuda, plans to compile an outline for the plan in November. 
One bureaucrat said: "It will be acceptable if a report is made to 
 
TOKYO 00004704  002 OF 006 
 
 
the panel in the final stage." 
 
Over social security and tax reforms, State Minister in Charge of 
Economic and Fiscal Policy Hiroko Ota said in a press conference 
held after the meeting that the panel would present several patterns 
regarding relations between pension and medical benefits and burdens 
such as tax and premium payments. The panel will also discuss a 
proposal by the Democratic Party of Japan (DPJ) to use tax money to 
finance the basic pension. 
 
The prime minister, however, has instructed officials to create a 
committee of the government and the ruling camp tasked with pushing 
ahead with tax and social security reforms. It remains to be seen 
how the proposed panel will be differentiated from the existing 
economic panel. An aide to the prime minister said: "Tax and social 
insurance are political matters. So nothing will move forward unless 
the ruling bloc is involved." 
 
The Council on Economic and Fiscal Policy served as the control 
tower for reforms under the Koizumi and Abe cabinets. Now that the 
opposition bloc has control in the Upper House, there is no 
guarantee for all decisions made in the council to be adopted in the 
Diet. Ota said: "We will steadily conduct discussion," but adding: 
"I cannot say what will be of the exit of policy." One 
private-sector member was overheard saying: "The best thing to do is 
to change the current policymaking panel into an advisory panel 
again." 
 
(2) Bill amending Antimonopoly Law includes administrative 
surcharges against unfair labeling; Bullying subcontractors also to 
become subject to punishment (Tokyo Shimbun) 
 
TOKYO SHIMBUN (Page 1) (Slightly abridged) 
October 5, 2007 
 
A Fair Trade Commission (FTC)-initiated bill amending the 
Antimonopoly Law was revealed on Oct. 4. A major feature of the bill 
is a focus on an expansion of trade practices subject to the 
administrative surcharge system, a system that is applied to 
bid-rigging and cartel practices. Following such incidents as Meat 
Hope's false labeling of food products, the FTC intends to protect 
consumers with strengthened disciplinary measures, by adding unfair 
labeling, such as advertising products with copies that differently 
represent the actual products, to the list of trade practices 
subject to the imposition of administrative surcharges. The outline 
includes the application of administrative surcharges to the abuse 
of dominant bargaining position, meaning that a company in an 
advantageous position pressures smaller companies to buy their 
products. The aim is to prevent large companies from bullying 
subcontractors. 
 
The FTC will undertake coordination of views with the government and 
the ruling parties and submit the bill to the regular Diet session 
around next March. It will aim at implementing it before the end of 
the next fiscal year, by securing Diet approval at an early date. 
However, business circles will likely oppose the proposal for 
strengthening the regulation. 
 
Disciplinary measures against unfair labeling currently include 
issuing warnings against and orders to halt unfair practices. 
Administrative surcharges will be added to those punitive measures. 
At present, the unfair labeling is regulated under the Law for 
 
TOKYO 00004704  003 OF 006 
 
 
Preventing Unjustifiable Extra or Unexpected Benefit and Misleading 
Representation (LPUEUBMR), but it would be incorporated into the 
amended law or the LPUEUBMR would be amended. 
 
Monopolization by way of pushing competitors out of the market would 
also become subject to administrative surcharges. Surcharges imposed 
on companies that played a leading role in cartels would also be 
increased. The administrative surcharge leniency system aimed at 
encouraging offenders to submit information on their illegal trade 
practices before coming under scrutiny would also be expanded so 
that surcharges applied to offenders can be reduced, if they 
cooperate for investigations by providing information even after 
violations came under scrutiny. 
 
According to the amendment to the law, a system of notifying the FTC 
of the acquisition of other companies' stocks by companies of a 
certain size would be changed from the present ex post facto system 
to a prior notification system as adopted in Europe and the US. The 
period of limitation of the application of the surcharge system 
would be extended from the current three years to five years as 
practiced in the US so as to ensure consistency with international 
rules. Exchange of information with overseas authorities would also 
be eased in order to improve a cooperative system for investigations 
into international cartels, which are on the increase. 
 
The bill will unlikely incorporate a hike in administrative 
surcharges, an issue discussed by government officials, and the 
scrapping of the umpire system as requested by business circles. 
 
(3) Interview with Defense Minister Ishiba: Government is 
accountable for fuel conversion allegations (Asahi) 
 
ASAHI (Page 4) (Full) 
October 5, 2007 
 
-- The major opposition Democratic Party of Japan (DPJ) remains 
opposed to continuing the Maritime Self-Defense Force's (MSDF) 
refueling operations in the Indian Ocean. 
 
"If both of us can share the perception that there is something 
Japan should do instead of maritime refueling, I think it is 
theoretically possible to create such a law. In response to the 
criticism that information disclosure is insufficient, we are 
maximizing our efforts and working hard to disclose information." 
 
-- What impact do you think the suspension of the refueling mission 
will have? 
 
"There would be an enormous impact. (Instead of Japan), another 
nation would have to engage in that mission. It would be a 
tremendous burden. I wonder whether it is really good to say 'Please 
secure the safety of this sea area. Please allow our country's 
tankers to navigate it.'" 
 
-- New legislation is unlikely to contain a requirement for Diet 
approval. Does this mean a backdown in civilian control? 
 
"Under the current Antiterrorism Special Measures Law, we can be 
engaged in operations of refueling, transportation, search or 
rescue. The cabinet has decided at its meeting what operations Japan 
will carry out and has obtained Diet approval. New legislation 
specifies what Japan will do and states a large part of a basic 
 
TOKYO 00004704  004 OF 006 
 
 
plan. So, I think that the Diet will be properly involved in the 
process of enacting the legislation into law." 
 
-- The amount of fuel Japan indirectly provided to a US carrier that 
later headed for the Iraq war was corrected from the initial 200,000 
gallons to 800,000 gallons. The provided fuel might have been 
converted for the Iraq war. 
 
"Then Chief Cabinet Secretary Fukuda said that '200,000 gallons 
would be used up in one day. (So the provided fuel would not have 
been used for the Iraq war).' That is correct. But the more speed 
goes up the more fuel is used. A number of factors, such as when the 
carrier arrived at where or the speed of the carrier, must be 
considered. I think the government is accountable to the public on 
the question of whether the fuel provided by Japan was used for the 
Iraq war or not, including information provided by the United 
States. Because the public also has a strong interest in the matter, 
I personally want to explain it before the start of Diet debate (on 
new legislation)." 
 
-- On the relocation of the US military's Futenma Air Station in 
Okinawa, the Okinawan residents are calling on the central 
government to change its current relocation plan so that the 
airfield will be constructed offshore. 
 
"I think the current relocation plan is the best one. There is no 
change in my position that no change will be made to the plan unless 
there is any rational reason. Although I have a good understanding 
of Okinawa's heavy military burden and its historical circumstances, 
I would like to (visit Okinawa) and hear firsthand voices of the 
Okinawan people." 
 
(4) Interview with Foreign Minister Masahiko Komura -- Dialogue and 
pressure policy will not change (Mainichi) 
 
MAINICHI (Page 5) (Full) 
October 5, 2007 
 
-- How are you going to proceed with talks with the Democratic Party 
of Japan (Minshuto or DPJ) on new antiterrorism legislation? 
 
Komura: The law now in force allows diverse activities, some 
requiring Diet approval. The new legislation will specify exactly 
what the troops will be doing. I will make utmost efforts so that it 
will be able to obtain support from the opposition parties. 
 
-- Mr. Foreign Minister, in a speech at the UN General Assembly, you 
expressed strong eagerness to normalize diplomatic relations with 
North Korea. How are you going to advance relations with North 
Korea? 
 
Komura: The North must disable its nuclear facilities, fully declare 
its nuclear programs, and settle the abduction issue. We will have 
to elicit major political decisions from the North by telling them: 
"We want to normalize diplomatic relations. We are ready to settle 
the past accounts." What North Korea refers to as "settling the 
past" specifically means large-scale economic cooperation. But Japan 
cannot give a large sum of money for settling the past under the 
current situation where the (mid-range ballistic missile) Rodong has 
Japan in its range. 
 
-- The Fukuda administration puts high priority on dialogue. How are 
 
TOKYO 00004704  005 OF 006 
 
 
you going to balance dialogue and pressure? 
 
Komura: The principle of dialogue and pressure will not change. 
Japan's response differs from when the North is intimidated by the 
labeling as an "axis of evil" nation by the United States from when 
it is in a pleasant mood. One must not pay attention only to the 
prospect that Japan's (response) will change because the Abe 
administration has been replaced by the Fukuda administration. 
 
-- What is your view of the recent six-party agreement? 
 
Komura: I cannot give it a perfect score, though it has moved a step 
forward. The deadline for the United States to delist North Korea as 
a state sponsor of terrorism has not been set out of consideration 
for Japan's standpoint. The roles to be played by the five countries 
(excluding North Korea) in the process of disabling North Korea 
nuclear facilities, including financial contributions, will be 
worked out in time. 
 
-- How are you going to settle the feud with China over gas 
exploration in the East China Sea to result in a visit to China by 
the prime minister? 
 
Komura: The matter is not a stumbling block to the prime minister's 
China visit. In the recent Japan-China foreign ministerial, I told 
my counterparty that China should go ahead and make a political 
decision and that Japan would respond to it flexibly. I will do my 
utmost for resolving this matter. 
 
-- Should the prime minister visit China before the end of the 
year? 
 
Komura: He should visit China at the convenience of the two 
countries. It does not matter if it is later this year or early next 
year. 
 
(5) Keio University Prof. Masao Okonogi: Improvement in Japan-North 
Korea relations the next challenge (Sankei) 
 
SANKEI (Page 7) (Full) 
October 5, 2007 
 
The joint declaration issued by the two Koreas has a strong 
impression of lining up with South Korean President Roh Moo Hyun's 
aim to regularize the expansion of South-North Korea relations while 
in office. The agreement includes detailed contents on political, 
economic and military areas, more specific than expected. It can be 
said that the agreement has built a framework that may constrain the 
next South Korean government. As for as the impact on the next 
presidential race in South Korea, it is not contents that will 
benefit a certain candidate over another, and will like not 
influence the election much. The contents bring no risk to North 
Korea. In South Korea, however, since it enters into specifics, the 
agreement will likely bring both expectations and backlashes. 
 
In particular, the two Koreas will not build a peace cooperation 
special zone in the Yellow Sea since they have remained at odds over 
the demarcation of a military boundary. The issue will likely be 
taken up in a meeting of the defense ministers in November. The 
expectation is that military officers will oppose the notion of 
creating a special peace-cooperation zone. 
 
 
TOKYO 00004704  006 OF 006 
 
 
On the other hand, the joint declaration between the two Koreas will 
have a great impact on the international community. The summit 
between the leaders of South and North Korea is apparently linked to 
the six-party talks. The release of the joint declaration the day 
after the six-party talks reached an agreement is aimed at taking 
advantage of that event. I think that if the six-party talks failed 
to come up with an accord, the joint declaration would not have 
included such detailed contents. North Korean leader Kim and South 
Korean President Roh probably share the view that the implementation 
of the joint declaration will give impetus to the six-party talks to 
realize its agreement. 
 
The hidden aim of the joint declaration is to help improve 
Japan-North Korea relations. Pyongyang has now worked on improving 
its relations with the United States and Seoul. The leaders of the 
two Koreas are expected to next work on improving relations with 
Japan. 
 
The reason for my saying that is the fact that the joint declaration 
does not mention infrastructure development in North Korea using 
South Korean aid. This is because Seoul and Pyongyang both expect 
Japan to provide such. Tokyo should be aware of this. 
 
DONOVAN